A Texas physician assistant, Ray Anthony Shoulders, has been found guilty of fraud and illegal billing for administering unapproved injections of amniotic fluid to patients for pain relief. This fraudulent scheme involved Shoulders submitting over $788,000 in fraudulent claims and receiving more than $614,000 from Medicare for these unapproved injections. This article examines the details of the case and highlights the potential harm caused to patients.
Shoulders, who worked at a Fort Worth pain management clinic, administered injections of an amniotic fluid product called Cell Genuity to patients, despite the fact that it was not approved by the FDA for any indication. Initially, some patients paid exorbitant amounts out of pocket for each shot, deterring many from undergoing the treatment. However, Shoulders discovered a way to exploit Medicare’s reimbursement system by connecting with a sales representative for another amniotic product called Fluid Flow, which had a unique code for reimbursement known as a “Q code.”
Although Shoulders never actually purchased any Fluid Flow, he used its reimbursement code, Q4206, to unlawfully bill Medicare for the Cell Genuity shots. By doing so, he ensured that more patients would opt for the treatment since it would be covered by insurance. This deceptive tactic allowed Shoulders to profit significantly, as he earned $1,200 per cc of Cell Genuity compared to the $400 per cc he would have earned for Fluid Flow. Between August and October 2020, Shoulders’ clinic submitted over 100 fraudulent claims for Fluid Flow to Medicare, receiving approximately $400,000 in reimbursement.
In November 2020, Shoulders temporarily stopped his fraudulent scheme due to concerns that the sudden increase in billing volume would trigger an investigation. However, when no repercussions emerged after 10 months, he resumed the illegal activity in October 2021 and continued until December of that year, according to prosecutors.
The case against Shoulders has broader implications for the field of regenerative medicine and the use of birth tissue products for unapproved indications. In February 2022, several regional Medicare Administrative Contractors announced their intention to recover losses from “birth tissue” claims dating back over two years, encompassing amniotic, placental, and umbilical cord injectables. The availability of specific reimbursement codes, such as the one used by Shoulders, facilitated the marketing of these products to doctors as being reimbursable.
Critics of birth tissue product companies, like Chris Centeno, MD, who owns stem cell clinics across the U.S., argue that many clinics have fraudulently billed Medicare for these products. Centeno suggests that while some clinics may face clawbacks of their payments, others may end up losing at trial. The involvement of the Department of Justice (DOJ) indicates the potential for criminal prosecutions in this area. In June 2021, the FDA issued a warning highlighting the lack of approval for various regenerative medicine therapies, including amniotic fluid and other birth tissue products.
The FDA has been actively working to regulate and oversee the use of unapproved cell therapies. In 2017, the agency issued guidance on regenerative medicine products, setting a deadline for full compliance in November 2020. However, due to the pandemic, the deadline was extended, and the regulations went into effect in June 2021. Manufacturers are now required to meet the FDA’s premarket approval or Investigational New Drug (IND) requirements before promoting these products to patients.
The conviction of Ray Anthony Shoulders for fraud and illegal billing highlights the risks associated with the administration of unapproved treatments and the exploitation of reimbursement codes. This case serves as a reminder of the importance of regulatory oversight and the need to protect patients from unscrupulous medical practitioners. Ultimately, it is crucial for healthcare professionals to prioritize patient safety and adhere to the guidelines set forth by regulatory authorities to ensure the highest standards of care.
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