Home › Blog › Amniotic Medicare Billing Scams are Now Blowing Up

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Let’s say you’re on Medicare and you attend a seminar that says that a chiropractic office can fix your knee arthritis by injecting an amniotic product and it’s covered by Medicare! Likely tens of thousands of Medicare beneficiaries pulled the trigger on these procedures and now, Medicare is deciding to go after those providers that billed them for this stuff. How does that impact you if you had one of these injections? Let’s dig in.

What’s Going On?

Amniotic fluid and tissue is what surrounds a baby. It’s usually birth waste, but a number of companies have been bottling this stuff and selling it to doctors for years. It does have growth factors, so that’s good. The problem was when these companies began claiming the products had live stem cells, which was false. In fact, after that, amniotic tissues sales took a dive until a new scam was thought up called Q-codes. The story sold by more sales reps than I can count was that since there was a product reimbursement code, you could bill Medicare for this stuff and get paid big bucks to inject a knee. How did that work? The companies would sell the stuff to doctors for $800 less than Medicare reimbursed, hence the doctor pocketed $800 per cc injected!

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The problem is that when you send a bill to Medicare with the right codes, even if it’s something that they’re not supposed to pay, they will pay that bill. That’s why Medicare has a HUGE operation for finding these errors and asking for their money back. That’s called a clawback.

My History with Amniotic Medicare Billing

I first heard about this scam in the spring of 2020. Frankly, I was floored when I first saw it, given that messing with Medicare billing is one of the most dangerous things you can do as a physician. Meaning, many physician practices have been bankrupted by Medicare billing errors that have caused huge clawbacks.

I investigated this issue with billers and attorneys and it very quickly became clear this was a scam. Interestingly, I was eventually contacted by Medicare Fraud and Abuse contractors who read my blogs on this topic. I was able to help these groups find lots of information on what was happening on the ground.

Despite raising the alarm to many physicians through blogs and Linkedin posts, I was even more astounded as this practice actually grew month over month. Surprisingly, I would also continue to get approached by physician colleagues getting hit up by shaky sales reps who were still telling doctors that they could do this. Webinars were still put on every month advertising it. Frankly, I finally got so worn out trying to educate doctors that this was illegal, I had to take a break this past two months.

The CMS Hammer Begins to Fall

Yesterday, a legal site reported that Medicare has begun to send investigative demand letters to the medical providers billing for amniotic tissue injections. This is what they reported:

“Among other means of enforcement, the DOJ has begun sending civil investigative demands (CIDs) to health care providers suspected of improperly billing Medicare for amniotic injections. These are administrative subpoenas that do not require judicial approval, but are subject to judicial enforcement. CMS is also instructing its fee-for-service auditors to pay attention to providers’ amniotic injection billings; and, due to the limited purposes for which these injections are eligible for Medicare reimbursement, many providers that have high volumes of these billings are at risk for facing substantial recoupment liability (in addition to other civil or criminal penalties).”

Translation? Medicare is on to this scam and is beginning to ask for the medical records of patients that were treated with amniotic injections that were billed to them. Meaning if a doctor gets one of these letters, they’re hiring an attorney.

However, there’s another VERY SCARY dimension here. The legal site states:

“CMS and the DOJ are also using audits and CIDs to target providers for violations of the Anti-Kickback Statute (AKS) and Eliminating Kickbacks in Recovery Act (EKRA) in relation to amniotic injections. These statutes prohibit health care providers from offering, paying, accepting, or receiving any prohibited form of “remuneration” for referrals of Medicare beneficiaries. They also prohibit payment of compensation for using or promoting particular services covered by Medicare.

In the context of amniotic injections, the primary issue on which CMS and the DOJ are focusing is whether physicians are accepting unlawful payments from amniotic product suppliers. Accepting payments in exchange for recommending certain products to Medicare beneficiaries can lead to liability under both the AKS and the EKRA.”

Translation? Remember that $800 the doctor got to pocket that I discussed above? Yeah, that’s totally illegal. The anti-kickback statute has criminal liability teeth. Meaning, if you don’t get an orange jumpsuit award from billing for things you should have never billed, you may get one for receiving a kickback from an amniotic fluid company.

What Does This Mean If You’re a Patient Who Got One of These Injections?

It’s likely that the doctors getting these letters will send you a bill. Meaning they’re going to have to come up with hundreds of thousands to millions to pay back to Medicare plus their legal fees and you probably signed an agreement that allows them to send you a bill if they have to pay your insurer back. So I would be calling Medicare asap as to whether you need to pay that money back or not.

The upshot? I hate to say I told you so, but I’ve been sounding this alarm for more than a year. It is illegal to bill Medicare for an amniotic injection of a knee, hip, shoulder, ankle, hand, or the spine! Those that ignored those warnings are now in some serious hot water.

Chris Centeno, MD is a specialist in regenerative medicine and the new field of Interventional Orthopedics. Centeno pioneered orthopedic stem cell procedures in 2005 and is responsible for a large amount of the published research on stem cell use for orthopedic applications. View Profile