The federal government has recently made clear its intention to go after healthcare providers who provide amniotic injections to certain Medicare and Medicaid recipients. Over recent years, the federal government has initiated several cases of healthcare fraud involving providers who administer amniotic fluid injections. Additionally, given the manner in which these healthcare fraud laws are phrased, the federal government is also targeting companies that assist with promoting these injections.

That being the case, providers who administer amniotic injections, and related businesses, must ensure that they comply with all United States healthcare fraud laws as well as Medicare and Medicaid billing and coding requirements to avoid unnecessary exposure to liability.

Are Amniotic Fluid Injections Approved for Medicare and Medicaid Recipients?

Yes and no. While the Centers for Medicare and Medicaid Services (CMS) has approved amniotic fluid injections for some uses, they have not been approved to treat certain conditions. Notably, CMS has not approved these injections for pain management.

How Is the Government Targeting Providers?

So far, it appears as though the federal government is initiating amniotic fluid injection fraud cases through the use of a civil investigative demand. A civil investigative demand (CID) is a powerful tool used by state and federal agencies to gather information used to investigate and prosecute individuals, corporations, physicians, and executives for violations of the law.

Typically, the federal government issues CIDs to those who are in possession of information it believes is relevant to an ongoing federal investigation.

CIDs operate similar to a subpoena in that they compel the production of documents, testimony, or other written answers. However, unlike a subpoena, the federal agency issuing a CID does not need to obtain judicial approval.

However, while CIDs do not require judicial approval, they are subject to judicial enforcement. Thus, those receiving a CID are obligated to respond or face being held in contempt of court. Any contempt charges brought by the court are in addition to any civil or criminal liability resulting from the underlying allegations.

Which Providers and Businesses Are at Risk of an Amniotic Fluid Investigation?

The nature of federal healthcare fraud investigations is that they are often kept secret until the government is ready to file formal charges. However, there have been reports of several individual providers and businesses receiving CIDs pertaining to the administration of amniotic fluid injections. While the scope of the federal government’s interest in prosecuting these cases is still being fleshed out, it appears that most investigations pertain to the promotion and administration of amniotic injections for pain management—an unapproved use under Medicare.

The following violations are those the federal government is most likely to pursue against providers and businesses engaged in the prohibited billing of amniotic fluid injections:

False Claims Act Violations

Providers have an obligation only to submit claims to Medicare for reimbursement for services that are deemed medically necessary. The ultimate determination of whether a service is medically necessary rests with the federal government. This often leaves providers guessing as to how to effectively comply with Medicare billing requirements. Providers who bill for a product or service that is not approved for the specific purpose it was used for are in violation of the False Claims Act.

To qualify as “medically necessary” under Medicare billing requirements, a service must be “needed to diagnose or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine.” CMS advises healthcare providers to maintain documentation of medical necessity for all billed services. This includes keeping records of clinical evaluations, physician evaluations, hospital records, consultations, progress notes, home health agency records, physician’s office records, nursing home records, records from other healthcare professionals and test reports.

Providers providing pain management services are often at the center of federal investigations, given the many novel treatments. However, it appears that providers who administer amniotic fluid injections are at particular risk of raising the federal government’s eyebrow. Thus, even if a doctor provides an amniotic fluid injection for a permitted use, it is imperative they retain all records to justify the use of this service.

Illegal Kickback Relationships

While physician referral relationships are quite common throughout the healthcare industry, the federal government imposes strict regulations on when referrals are appropriate. For example, The Stark Law, the Anti-Kickback Statute, and the Eliminating Kickbacks in Recovery act (EKRA) all prohibit healthcare providers from paying or receiving anything of value for patient referrals when Medicare foots the bill.

Additionally, EKRA and the Anti-Kickback Statute apply not only to physicians but also to the party on the other end of the referral relationship; most often, the party paying the referral. As a result, businesses such as marketing agencies, healthcare providers, and telemedicine companies may incur federal scrutiny for offering, soliciting, paying, or accepting unlawful payment in relation to the promotion of amniotic injections.

Notably, under the Anti-Kickback Statute, in particular, there may be safe harbors available to providers and businesses in certain situations. A safe harbor carves out an exception to what would otherwise be prohibited conduct, provided certain conditions are met.

Medicare Billing Fraud

Federal investigators are privy to the fact that amniotic fluid injections are widely used for pain management, even though CMS does not approve them for this purpose. Thus, the federal government is likely to closely scrutinize the billing records of any providers who bill for these injections. These investigations may lead to claims of Medicare billing fraud such as those involving:

• False claims that an amniotic injection was provided for a permitted use when in fact it was provided for pain management; and,
• Billing for amniotic injections under other covered services.

Providers who find themselves at the center of a Medicare billing fraud claim related to the use of amniotic injections will need to provide the government with proof of a compliance program. The government will want to see that a provider has an effective compliance program on the books and that they are making a good-faith effort to remain in compliance. This includes addressing the risk of both intentional and unintentional billing errors.

A provider's failure to have a comprehensive Medicare billing compliance program will very likely indicate to federal investigators that the provider is not serious about compliance, which may lead to unfavorable results.

What Should Providers Do if They Receive a CID Related to an Amniotic Injection Investigation?

The best way to deal with a federal investigation is to avoid it in the first place or head it off early by maintaining a comprehensive compliance program. However, unfortunately, this is no longer an option for many providers finding themselves at the center of an amniotic injection investigation. However, there are still important steps providers can and should take to protect their interests throughout the course of an investigation.

Place a Legal Hold

Once a provider receives a CID, the first thing they should do is to institute a legal hold to preserve all records that may be relevant to the federal investigation. While this may seem counterintuitive, the receipt of a CID triggers an affirmative duty to preserve evidence, and a provider’s failure to do so will not only raise further questions but may also result in additional charges against a provider.

Conduct an Internal Audit

The best way to prepare for an impending federal investigation is to conduct an informal internal audit. That way, a provider knows what, if anything, federal investigators will uncover. The focus of the audit should pertain to the specific charges brought against the provider. For example, providers being investigated for illegal kickbacks should conduct a comprehensive review of all referral relationships, and providers who bill Medicare should assess their Medicare billing compliance practices.

Consider Challenging the CID

While the possibility of successfully challenging the issuance or scope of CID is low, it is still worth looking into. Discussing the specifics of a CID with an experienced healthcare fraud attorney should be done early on in the process before responding to the CID.

Prepare for the Investigation

If a CID is valid in form and scope, a provider must begin preparing for the federal investigation. This entails compiling all responsive documents, such as billing procedures, documentation of all referral relationships, compliance programs, and anything else that may be relevant to the investigation.

Defend Against the Investigation

While it is normal to initially focus a defense on challenging the CID itself, it is important to remember that the CID is only the first step in the investigatory process. Thus, providers at the center of a federal investigation should simultaneously develop a defense to the underlying allegations.

Facing a federal investigation based on concerns of healthcare fraud related to amniotic injections is a serious matter, deserving of a provider’s full attention. Those finding themselves at the center of this type of investigation must ensure that the attorney-client privilege protects all communications and work products. Along those lines, whenever possible, subjects of an investigation should assert their Fifth Amendment privilege against self-incrimination to avoid providing investigators with information that may not otherwise be within their possession.

Dr. Nick Oberheiden, a federal healthcare fraud attorney who routinely handles amniotic injection investigations, explains,

Given the government’s recent interest in pursuing healthcare fraud investigations against providers who administer amniotic injections, it is imperative that all providers—not just those currently at the center of an investigation—take steps to protect themselves. This includes reviewing current protocol and developing a comprehensive compliance program. However, it is also important for those already under investigation to understand their options and how best to defend against the case. In most cases, something can be done to mitigate a provider’s exposure to liability.

Providers who administer amniotic injections face significant civil and criminal liability if they violate federal healthcare fraud laws. Thus, every step must be taken early on in the process to limit the scope of an investigation. This can create a more favorable legal landscape for the rest of the investigation, which may result in the conclusion of the investigation without the filing of any formal charges.