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Healthcare Fraud

Fort Worth PA Convicted of Fraud in Amniotic Fluid Pain Relief Scheme

Patients received a product that wasn't covered by Medicare while the provider billed for another product.
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Doctor syringe

A Fort Worth physician assistant who injected amniotic fluid into patients’ joints in an attempt to deliver pain relief has been convicted of conspiracy to commit healthcare fraud after being charged last summer.

Less than an hour of deliberation followed a five-day trial, and the jury returned with a guilty verdict for Ray Anthony Shoulders. Prosecutors said the crime was not only defrauding taxpayers to scam Medicare out of hundreds of thousands of dollars, but it also endangered patients by injecting a drug that had not been improved for pain relief.

“In a very real way, he sought to profit off of his patients’ pain for his financial benefit, and I am proud of our federal law enforcement partners and our experienced prosecutors for bringing him to justice,” said U.S. Attorney for the Northern District of Texas Leigha Simonton.

Shoulders is a physician 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, had 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.

Evidence in the trial showed that Shoulders and conspirators submitted $788,000 in fraudulent claims and received more than $614,000 from Medicare for injecting amniotic fluid to relieve joint pain. 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.

Amniotic fluid treatments for pain and orthopedic conditions have gained popularity in the last decade, and 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.

The FDA has provided consumer alerts that products like amniotic fluid “have not been approved for the treatment of any orthopedic condition, such as osteoarthritis, tendonitis, disc disease, tennis elbow, back pain, hip pain, knee pain, neck pain, or shoulder pain,” nor for “chronic pain or fatigue.”

Medicare will reimburse some amniotic injections to reduce inflammation of wounded tissue. Shoulders used a product called Cell Genuity, which Medicare does not cover, and asked patients to pay $800 per injection. The high cost caused many patients to refuse the treatment, so Shoulders decided to bill Medicare for another product called “Fluid Flow,” which was more expensive and covered by Medicare while continuing to administer Cell Genuity to patients.

The scheme allowed the clinic to profit $1,200 per cc of injected product (as opposed to $400 per cc of Fluid Flow). For several months in 2020, the clinic submitted more than 100 claims for Fluid Flow to Medicare and received $400,000. Court documents say that Shoulders personally netted 35 percent of what was received from Medicare. 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.

Worried about alerting authorities with a sudden spike in claims, Shoulders halted the activity for 10 months. When no repercussions came, he began the scheme again and now faces up to 240 years in prison, 20 years for each of the 12 counts of healthcare fraud.


Will Maddox

Will Maddox

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

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