For years, the knowledge and discussion of potential uses and benefits of medical treatments based on human amniotic tissue and fluids were limited to the healthcare community.  However, the potential benefits of such treatments have moved to the forefront of public awareness and are sometimes presented as a miracle treatment for various illnesses.  But the scientific community currently only recognizes limited uses of human amniotic tissue – though research continues.  CMS and commercial payors also recognize amniotic-based treatments as medically necessary in limited circumstances.  For example, CMS recognizes the limited use of amniotic membrane for treatment in venous stasis ulcers and diabetic foot ulcers. 

Despite the limited use of amniotic-based treatments, there has been increasing off-label use and claims associated with off-label use, often not yet backed by scientific evidence.  Some advertisements and pitches create ambiguity as to whether the amniotic product contains stem cells, whether the treatment is approved by the FDA, and whether the treatment is covered by CMS or commercial insurances.  A common ambiguity involves the purported assignment of Q-codes by CMS, which to the unwary, could appear to be CMS approval of off-label uses.   

The assignment of a Q-code alone does not render a treatment reimbursable or approved by CMS for broad and off-label use.  CMS’ Healthcare Common Procedure Coding System (HCPCS) Level II Coding Procedures, which describes the procedures CMS follows to process HCPCS codes and to make coding decisions, explains that “the Q codes are established to identify drugs, biologicals, and medical equipment or services not identified by national HCPCS Level II codes, but for which codes are needed for Medicare claims processing.”  Any advertisement or pitch relying exclusively on Q-code assignment should be scrutinized, especially where a Local Code Determination (LCD) has not and cannot be provided.  An LCD is a determination by a Medicare Administrative Contractor (MAC) on whether to cover a particular service on a MAC-wide basis, and coverage criteria are defined within each LCD.   The LCD associated with amniotic-based treatment is LCD L36690 Wound Application of Cellular and/or Tissue-Based Products, Lower extremities.  Notably, CMS contractors have started early discussions focusing on amniotic product injections for musculoskeletal indications (non-wound).

Despite early discussions of broader uses of amniotic-based treatments, off-label uses pose significant risks to providers and businesses.  LCD L36690 cautions providers that “it is not appropriate to bill Medicare for services that are not covered (as described by this entire LCD) as if they are covered.… Compliance with the provisions in this policy may be monitored and addressed through post payment data analysis and subsequent medical review audits.”  In October 2020, CGS, a CMS contractor, published a warning that amniotic-based treatments outside of the labeled use and as defined in L36690 are considered off-labeled and may not be a covered service. Similarly, Noridian, also a CMS contractor, issued a Local Coverage Article (LCA A56156) in 2018 noting that it received no evidence-based peer-reviewed clinical literature to support off-label uses of amniotic-based treatments and considers such use unreasonable and unnecessary.  Noridian also explained that the “FDA has clarified for Medicare Contractors that all injectable amniotic and/or placental-derived products fall under FDA section 351 of the Federal Food, Drug, and Cosmetic Act” and some off-label advertisements could be considered false advertising.  

Noridian’s warnings are substantiated.  The Federal Trade Commission returned nearly $515,000 to consumers who paid for deceptively advertised amniotic stem cell therapy from Dr. Bryn J. Henderson.  According to the FTC, Dr. Henderson advertised that amniotic stem cell therapy could treat serious diseases, including Parkinson’s disease, autism, macular degeneration, cerebral palsy, and other significant illnesses; however, the FTC found that Dr. Henderson lacked the scientific evidence needed to support the claims.

Beyond potential false advertisement risks, providers may face culpability under fraud, waste, and abuse laws.  For example, knowingly billing Medicare for services not covered, such as non-reimbursable amniotic injections or those that are not medically necessary, may violate the False Claims Act (FCA), which CG attorneys have discussed extensively.  The FCA, in part, prohibits any person from knowingly presenting or causing to be presented, a false or fraudulent claim for payment to the federal government.  For civil violations, penalties can amount to over $23,000 per claim, plus treble damages, which can be astronomical for healthcare providers due to the volume of claim submissions.  31 U.S.C. § 3729(a)(1)(G).  Individuals may also face criminal prosecution for violating the FCA, which may result in fines and/or jail time. 

Another concern related to amniotic-based treatments is the relationship between the provider and the amniotic product supplier.  Like any relationship between a provider and supplier, providers should ensure the relationship does not violate the Anti-Kickback Statute (AKS).  The AKS prohibits offering, paying, soliciting, or receiving any remuneration in exchange for federal healthcare program referrals.  AKS violations carry potential criminal, civil, and administrative consequences, including monetary penalties and possible exclusion from federal healthcare programs.  Similarly, providers must ensure their relationship with an amniotic product supplier does not violate the relatively new Eliminating Kickbacks in Recovery Act (EKRA).  EKRA, in relevant part, makes it a federal crime to knowingly and willfully (1) solicit or receive any remuneration in return for referring a patient to a recovery home, clinical treatment facility, or laboratory; or (2) pay or offer any remuneration to induce a referral of an individual to a recovery home, clinical treatment facility, or laboratory; or in exchange for an individual using the services of that recovery home, clinical treatment facility, or laboratory. Each violation of EKRA is punishable by up to a $200,000 fine, 10 years in jail, or both.  Although EKRA uses similar language to the existing federal AKS, it is broader than the AKS.  For example, unlike the AKS, which applies only to federal healthcare programs, EKRA applies to both federal healthcare programs and commercial health plans. 

Providers may also run afoul of commercial payor fraud, waste, and abuse policies.  In December 2020, the Blue Cross and Blue Shield of Illinois Special Investigations Department issued a warning after it “become aware of several instances involving experimental, investigational and/or unproven applications of human amniotic membrane products.”   Blue Cross and Blue Shield of Illinois reminded providers that its policy provided for limited use of human amniotic membrane products.  Several commercial payors have taken similar positions. 

Providers and businesses must be cautious regarding their communication related to new medical treatments that have not obtained widely accepted approval from the science community and the government – including amniotic-based treatments.  Providers must also be especially careful billing payors (government and commercial) for amniotic-based treatments.  Applicable medical guidelines and government policies should be consulted and followed.  As suppliers and providers increase advertising of off-label medical treatments, especially amniotic-based treatments, so will government scrutiny increase.  Bottom line: providing and billing for off-label medical treatments or treatments not yet recognized by the government may increase government scrutiny and make a provider or business vulnerable to government enforcement action(s). 

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with government investigations, including fraud investigations and prosecutions.  If you need assistance with such a matter, please contact us today.