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Is Amniotic Stem Cell Therapy Covered by Insurance?

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amniotic stem cell insurance coverage

One of the more bizarre twists in the amniotic “stem cell” scams out there is that certain physicians claim to be able to get an insurance company to reimburse for the procedure. I’ve also seen the same with the Lipogems system. Is this true? Nope, what’s really happening is an illegal misuse of billing codes that can potentially wind the doctor or surgery center staff in a federal prison. Let me explain.

Amniotic “Stem Cell” Therapy

Amniotic tissues come from the delivery of the baby and are usually birth waste. They include everything from the birth sac (amniotic membrane) to the fluid that surrounds the baby (amniotic fluid). The fluid contains quite a bit of baby pee and poop in the last trimester, so while this stuff has growth factors in it, like platelet-rich plasma, it also has baby waste.

More importantly, while these tissues can be helpful when used as scaffolding in a real cellular therapy, they do not contain live and viable stem cells. However, they are fraudulently being billed as a “stem cell therapy” by both chiropractors and physicians. For more info, see my video below:

Understanding How Insurance Billing Works

A few years back, I met a woman online who had a Lipogems procedure that was ineffective, and she told me her Blue Cross Blue Shield plan covered the cost of the “stem cell procedure” ($7,500). I asked her to send me the billing info from her insurer, and what I saw was just another fraudulent use of billing codes. To understand how that works, you need to learn a bit more about insurance on the doctor side of the equation.

First, you need to understand that doctors and hospitals get paid by using insurance billing codes. These come in two flavors. One for the diagnosis (called an ICD-9 or ICD-10 code) and one for the procedure (called a CPT code). When an insurance company’s computer system decides what to pay, it matches up the ICD code with the CPT code and is programmed to know which ones should go together.

Because payment happens fast, doctor and hospitals are always the honor system as to which codes they choose. Meaning, whether or not a bill gets paid simply depends on which codes they use. However, the codes for a product, like amnion, can only be used in a narrow set of clinical circumstances (ICD codes). The same applies to a physician taking fat (a liposuction procedure). Meaning, the clinical context in which these codes are used determine whether the codes can be legally billed or are being used incorrectly. Hence, you must choose the right ICD code that describes the diagnosis and the right CPT code that describes the procedure.

To help you really understand this, I’ll have to give you some examples. First, an expensive amnio product will only be paid by an insurer if it’s being used to treat a nonhealing skin or surgical wound. It will not be paid for if it’s used for any other reason, like to treat knee arthritis or back pain. However, the insurer doesn’t usually have the clinical notes to check what it was actually used for, and these days payments happen electronically. Hence, if a doctor wants to get amnion covered, all he or she needs to do is to submit the wrong code (in this case for wound care for a nonhealing skin ulcer in a knee arthritis patient) and the insurer will pay.

The same holds true for our example of a Lipogems fat procedure getting paid. When I looked at the codes used, they had nothing to do with a liposuction being used to get fat to treat knee arthritis, but they were surgical codes having to do with liposuction for breast reconstruction! Hence, the surgery center in this case just submitted the wrong code that had nothing to do with what was being done and was paid.

Another one I’ve seen in regenerative medicine is bone marrow stem cell therapy and the use of bone marrow transplant codes. These codes are meant to be used for a cancer patient who had their bone marrow irradiated and as a result, needs a bone marrow transplant from another person. They have nothing to do with using bone marrow to treat knee arthritis. However, I have seen them used and reimbursed.

Why Would My Insurance Company Pay This if It’s Being Billed Wrong?

Again, submitting payment codes and getting paid happens at the speed of electrons flowing across the Internet. Meaning, the insurance companies pay anything where the two codes are approved in their system for payment. So if a provider matches the wrong diagnosis code with the wrong procedure description (one that has nothing to with what’s actually being done), payment is instant.

However, there is a system in place for an insurer to go back months or years later to audit a provider to see if the correct code was used. This happens more and more often each year, as insurance companies have found that using the wrong codes is rampant and they can often recover huge money from the provider for pennies on the dollar by using any one of a hundred firms that specialize in these coding audits. You should also know that submitting the wrong codes to a government-run program, like Medicare, Tricare, or Medicaid, is a federal criminal offense. In addition, many states have criminalized doing the same with a health insurer.

What’s My Liability as a Patient?

One is losing a doctor. Many a medical practice has been taken down and the physicians sanctioned for this kind of billing fraud. Second, if the provider has a contract with you as part of the paperwork you sign when you start seeing that doctor, then he or she can come after you for the money. Meaning, you may be getting a bill for thousands of dollars from your doctor several months or years later.

Didn’t Regenexx Say It’s Starting to Get Insurance Coverage?

Yes, but in this case, we are going to self-insured companies and signing contracts to get reimbursed for our regenerative medicine procedures. Meaning that the insurers are aware of what we’re doing to save them money and welcome adding our well-researched procedures to their health plans. We then establish specific billing codes that accurately describe the Regenexx procedure being used so the insurer knows what’s being paid.

The upshot? Billing for regenerative medicine treatments like amnion and Lipogems is illegal. While many of these bills get paid, you can be on the hook for big bucks if there’s a provider audit. Given the popularity of these therapies, I would expect that we will see many more provider audits in the future as it would be an easy thing for companies to flag codes, like the ones used for amnion in wound care and breast reconstruction, and index those by provider type. For example, it could easily flag a pain management doctor who says that he or she is treating chronic skin wounds or an orthopedic surgeon claiming to perform breast reconstruction. So as I always say, buyer beware. It’s nuts out there!


Update 8/14/18-Large insurer confirms that billing for amniotic tissue for treatments like hair loss, errectile dysfunction, and osteoarthritis is not appropriate.

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1 thought on “Is Amniotic Stem Cell Therapy Covered by Insurance?

  1. KM

    As a former agent and coding specialist, federal insurance programs on audit will take their money back if they determine “erroneous” coding. The provider may then appeal and try to use a plausible excuse for their error (read fraud). The patient will not even know this is happening until they receive a copy of the response to the provider appeal which will read something like this, “We have reviewed your appeal and find the procedure does not meet our guidelines. Attempting to code for an amniotic procedure for a wound (read needle stick) caused by your injection of prp would not be a covered procedure. YOU MAY NOT BILL THE PATIENT”. In other words, they will let a provider know that they are not stupid, ONCE. But not smart to get caught with say hundreds of these “coding errors”. I have not seen this with private insurers, so the patient will be on the hook unless the patient has the fraud documented, talking covertly recording provider encounters here, legal in 23 “one party states”. Then the provider might find it in their interests to write that bill off. Been there, done that.

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