Home › Blog › Birth Tissue Injection Medicare Clawback Quickly Expands to the ENTIRE Nation

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Yesterday I discussed that the Medicare Administrator for the state of Florida had decided to claw back all payments for birth tissue injections going back to 2019. I theorized that it wouldn’t be long until the other Medicare regions did the same. Well here we are a day later and I have now learned that every single Administrator in all 50 states has initiated the same clawback. This is a HUGE problem if you billed Medicare for this stuff and probably an even bigger problem if you were injected as a patient. Let’s dig in.

What’s Going On?

Since about 2019 we have noted several shady birth tissue vendors who were selling Amniotic, Placental, and Umbilical Cord “stem cells” were directing Physicians to bill these injections to Medicare for the treatment of things like painful knee arthritis or spinal problems. This made little sense, as while the companies had been able to pull a fast one by getting reimbursement Q-codes issued in error, the Medicare guidelines for each region (called an LCD) didn’t say that this stuff was covered. Despite that, these companies hired one of several billing firms to game the Medicare system to get these products paid.

Another problem is that based on independent research conducted by our lab, CSU, Cornell, and UC Davis, there were no living and functional stem cells in these products. However, while that’s simple fraud both on the part of the vendors and clinics, there’s a much bigger problem with billing Medicare for stuff that’s not covered. First, it’s illegal and punishable by 10 years in federal prison for each bill submitted and paid in error (assuming you knew that it wasn’t covered). Second, anything that Medicare pays you is subject to repayment (called a “clawback”).

The Birth Tissue Injection Clawback Is Now the ENTIRE Nation

As of yesterday, I believed that the clawback was just the state of Florida. However, I was contacted by a Medicare insider who informed me that EVERY Medicare region has issued the same clawback notice (called a Denial-links to all regional policies below):

• WPS (Midwest)
• NGS (New England)
• CGS (Ohio and Kentucky)
• Novitas (Texas, CO, NM, AR, LA, OK, MS)
• Noridian (Western half of US)
• Palmetto (Southeast)
• First Coast (Florida)

Yikes!

What this Means

This is nothing less than a country-wide takedown of these billing practices. It’s very difficult to get many different MACs to agree on everything, but these clawbacks are all singing from the same sheet music. Given the precision and coordinated strike here, we can expect that the next shoe to drop will be the Justice Department. Because of the immense scale of this fraud (in the 300-500+ million USD range), there is no way that the feds are going to let everyone get off with just a repayment. Especially since it was very clear that these companies knew that what they were doing was dancing on the dangerous edge of Medicare fraud statutes.

What Can I Do if I Fell for this Song and Dance?

If you’re a provider and you were paid by Medicare, you probably owe an immense amount of money back. First, contact a qualified healthcare Attorney with experience in defending Medicare fraud cases. Also, begin to get your financial house in order to repay every dime you were paid. Finally, count your blessings if your demand letter only discusses repayment and not criminal charges.

If you’re a patient, it all depends on a document called an Advance Beneficiary Notice or ABN. If you signed that document in the new patient paperwork, you owe every dollar paid by Medicare back to the clinic. That’s going to be painful as that’s $4,000 per body part injected. Hence, if the clinic injected both knees and a shoulder in one visit and later injected an ankle and a wrist, that’s $20,000 that you are legally obligated to repay to the clinic. That money will be used to repay Medicare.

If you never signed an ABN, then you owe nothing and this is the clinic’s problem. Meaning it’s illegal for the clinic to bill you. 

Hence, if you’re a patient, your first call should be to the clinic that performed the injections. Ask if they have an ABN on file for you. If the answer is “NO”, you’re good. If the answer is “YES” then that’s a serious problem.

If you suddenly owe tens of thousands of dollars back to a clinic that scammed you into thinking you were getting a “stem cell” injection covered by Medicare then my next move would be to call my State Attorney General’s office. If enough people complain, my guess is that these state offices will begin to file criminal charges or civil lawsuits against these clinics and you likely won’t owe anything back.

What If I’m a Sales Rep Caught Up in All of This?

One of the disturbing trends I noticed in this scam was that the sales reps for the Amniotic and Umbilical Cord vendors weren’t experienced medical sales professionals. Instead, just looking at their Linkedin pages you could tell that their last job was usually something like a bartender or hostess. Why? The experienced medical sales pros knew that this was a keg of dynamite just waiting to explode.

If you’re a medical salesperson who was duped into believing that Medicare covered this stuff, my first move would be to call an Attorney. In addition, contacting the Justice Department and agreeing to provide information on the sales operation and company executives could help. In the meantime, you may be liable for civil actions and lawsuits. Why? It’s unlikely the providers you convinced to bill Medicare will be able to recoup this money from the vendors. Perhaps being a government witness will provide some measure of protection? Either way, whatever reputation you had with these doctors and clinics is now destroyed, so it may be time to consider another type of sales.

The upshot? The birth tissue injection clawback is now nationwide. Expect to see many more fireworks in the near future. These should include Justice Department indictments, birth tissue vendors and clinics declaring bankruptcy, and likely civil suits filed by providers who suddenly owe Medicare millions of dollars.

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