Home › Blog › What Can a Huge Settlement Against A California Clinic Teach Us?

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Can exaggerating your Clinical Outcomes get you in trouble? That’s what happened to a California “stem cell” clinic. So let’s review that today and what both patients and Providers can learn.

What Just Happened?

A clinic called “StemGenex” just paid a 3.65 million dollar settlement to the class action attorney who was suing them for fabricated patient outcome data. The interesting and concerning part for providers was that the clinic went bankrupt early on and most of these monies look like they’re being paid by the malpractice carrier for the Physician contractor and the E/O insurance for the clinic.

That last bit of information is interesting as it looks like the Physician who happened to be working at the clinic and hired by the owners took a huge direct hit to his Malpractice policy. That means that he was dangerously close to being taken out personally. It also means that the cost of his future Malpractice coverage just went way, way up.

Why Did This Happen?

One of the things that 99% of the clinics offering Regenerative Medicine fail to do is to collect and report real outcome data. Why? Well, it’s time-consuming and difficult to do, and sometimes it doesn’t support what the clinic is trying to sell. In the case of Stemgenix, it wasn’t even clinical data. Instead, they took a patient satisfaction survey that represented that 99% of them were satisfied with the service they got and instead claimed that this number represented the percentage of people cured by the therapy. A very clear bait and switch that ended up being an expensive Achilles heel.

A Concerning Trend for Employed Physicians

This clinic was owned by the Alexanders, a husband and wife team. However, the bulk of the settlement was paid by Andre Lallande, DO, a military doctor who was listed at several addresses in San Diego. Why did that happen? The clinic declared bankruptcy and appears to have opened under a new name. That left the Errors and Omissions policy for the clinic and the employed doctor’s Malpractice insurance as the two remaining financial targets.

StemGenex and the FDA

The clinic received an FDA warning letter in November of 2018. That document contained many different manufacturing problems including sterility breaches.

Transparency is Key

At Regenexx, we have always collected actual patient outcome data and reported it online for anyone to view. Hence, if you click here you can get to outcome data on tens of thousands of patients by body area. Nobody else does this or has been doing it as long as Regenexx.

One of the things you’ll see in our outcome data is that is doesn’t show that our procedures are perfect or that 99% of our patients recover. You’ll also see that in certain joints like hips, the outcomes aren’t as good as other joints like knees. That’s just the reality of how a particular joint responds.

The upshot? StemGenex manufactured fake patient outcomes and got caught. This has been done by countless scam Regenerative Medicine clinics around the country. Also, note that the employed Physician here took the brunt of this patient Class Action Settlement and not the clinic owners. That should serve as a warning for Physicians who allow themselves to be dragged into these crazy clinics.

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