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Fort Worth PA Charged in Amniotic Fluid Pain Management Scam

The provider is accused of injecting patients with an unapproved amniotic fluid product while billing Medicare for hundreds of thousands of dollars for a different treatment.
Courtesy: iStock

A federal indictment says that physician assistant Ray Anthony Shoulders injected patients with amniotic fluid for pain management while he billed Medicare for a different product. He has been charged with 11 counts of healthcare fraud and conspiracy to commit healthcare fraud in federal court.

Amniotic fluid, which can be harvested after childbirth from willing mothers, assists wound care and accelerates cell growth, but some providers use the product to treat pain management. The Centers for Medicare and Medicaid doesn’t consider this use of amniotic fluid medically necessary and doesn’t cover the treatment.

Medicare will cover a different treatment called Fluid Flow, also used for tissue repair. Shoulders is accused of treating patients with an amniotic fluid product called Cell Genuity, which is significantly cheaper to purchase than Fluid Flow, and billing Medicare for Fluid Flow for 17 months in 2020 and 2021. “Shoulders and others knew the product that they were actually using and injecting into patients was not approved by Medicare for the treatment of pain and was not reimbursable under the program,” the indictment reads. “Patients were unaware that Shoulders and others were executing this scheme.”

Shoulders is a physician’s assistant who works for a Fort Worth clinic identified in court documents as SWSS. The website for a Fort Worth clinic with similar initials, Southwest Sports and Spine Center, has a page welcoming a physician assistant named Ray Shoulders to the clinic’s team. The clinic has two Fort Worth locations and one in Cleburne.

The indictment claims that Shoulders began by charging patients out of pocket for amniotic fluid injections into the location of the pain, but with each injection around $800 and the science unsure of its effectiveness for pain, patients began to balk. Shoulders and others then allegedly came up with the scheme to bill Medicare for another product while continuing to inject amniotic fluid into patients, meaning the patients who had Medicare would no longer have to pay out of pocket.

Had Shoulders used Fluid Flow in the treatments, the clinic would have profited $400 per injection. When the amniotic fluid was used, the profit per injection ballooned to $1,200, court documents say. During the 17 months of the scheme, the clinic fraudulently billed for $788,000, receiving $614,000 in reimbursements from Medicare “in an off-label attempt to relieve joint pain,” a release says. Documents say that Shoulders personally netted 35 percent of what was received from the scheme. The clinic only purchased 10 ccs of Fluid Flow during the scheme while billing for the injection of nearly 400 ccs of the product between October and December 2021 alone.

During the scheme, documents say, Shoulders and his co-conspirators paused the fraudulent charges, concerned that the increase in billing would attract suspicion. After 10 months, they allegedly re-engaged the fraud.

Amniotic fluid treatments for pain and orthopedic conditions have gained popularity in the last decade, and it has plenty of proponents. Often called regenerative medicine, a quick Google search will result in hundreds of orthopedic and pain clinics nationwide advertising amniotic fluid treatment for pain and recovery. Amniotic products have been used to treat wound and skin care for over a century, but a 2020 National Institutes of Health study says that clinical trials of the product are still limited with mixed outcomes and recommends further investigation despite positive effects in animal models.

Given the lack of data on the product, Medicare won’t cover the treatments for pain, meaning that if a patient wants an amniotic fluid product for that reason, they must pay out of pocket. The FDA has sent several consumer alerts warning patients not to use the product for orthopedic or pain treatment and says the products still need FDA approval or licensure before being administered. “FDA has received reports of blindness, tumor formation, infections, and more, detailed below, due to the use of these unapproved products,” the alert says.

Patients at SWSS were up for the treatment, especially if they didn’t have to pay out of pocket. Court documents show a sample of the billing schedule, with several patients receiving monthly injections that were billed to Medicare for $4,000 each.

“This defendant allegedly claimed that amniotic fluid – a product that has never been approved to treat pain – would alleviate his patients’ suffering. He allegedly told patients that the treatment was covered by Medicare, kindling false hopes. To add insult to injury, he allegedly scammed Medicare out of more than half a million dollars,” said U.S. Attorney Leigha Simonton.

If found guilty of all charges, Shoulders faces up to 10 years per count, or 120 years in federal prison.


Will Maddox

Will Maddox

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Will is the senior writer for D CEO magazine and the editor of D CEO Healthcare. He's written about healthcare…

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