Kansas man to pay $15.2 million for national insurance fraud scheme

Published: Nov. 6, 2022 at 11:29 AM CST
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PHILADELPHIA (WIBW) - A Kansas man has been ordered to pay more than $15.2 million for a national insurance fraud scheme.

The U.S. Attorney’s Office for the Eastern District of Pennsylvania says that on Thursday, Nov. 3, the Honorable Mitchell S. Goldberg entered a default judgment against Timothy Warren, of Wichita, and his company Titan Medical Compliance, LLC. He was ordered to pay a total of $15,270,066 for violations of the False Claims Act.

The Office noted that this is the latest action in the national investigation into a scheme of improper billing involving P-Stim electro-acupuncture devices. P-Stim is also branded as ANSiStim, Stivax, NeuroStim, and NSS-2 Bridge. Federal healthcare programs do not reimburse for these devices.

As alleged in the complaint, Warren - a Wichita chiropractor - and his company falsely promoted auricular electro-acupuncture devices as reimbursable by Medicare and other federal insurers as approved by the Food and Drug Administration. He promoted himself as a medical reimbursement consultant and his company as a compliance consulting firm.

As a result, the Office indicated that various marketers and distributors of P-Stim devices paid Warren a monthly fee to provide coding recommendations to customers. Providers also paid him directly for coding guidance.

Beginning in 2014, court records indicate that Warren promoted the devices as reimbursable and provided instructions on what codes to bill. Those codes, which generated a high amount of reimbursement, were actually meant for legitimate, surgically implanted neurostimulators to manage chronic pain. P-Stim on the other hand could be applied in a few minutes in an office setting without anesthesia and minimal training.

During this time, the Office also said that Warren and his company did in fact know that the P-Stim devices were not reimbursable by federal healthcare programs, but continued to promote the non-surgical devices regardless.

The Office noted that it filed its complaint against Warren on Oct. 14, 2021, and has litigated the case since then - including defeating a motion by Warren to transfer the case to the District of Kansas. The U.S. moved for default judgment after Warren’s counsel withdrew and the defendants failed to respond.

According to the judgment, Warren and Titan are now responsible for penalties that total $15.2 million for causing about 1,200 claims to be falsely submitted to the federal healthcare programs in violation of the FCA.

“This office has led the national charge to hold individuals and entities responsible for P-Stim fraud,” said U.S. Attorney Romero. “With Warren’s judgment, our office has held accountable those responsible for the tainted claims paid by federal healthcare programs. Even those who never applied P-Stim themselves can be held accountable for causing others to submit false claims through marketing and disseminating fraudulent coding advice.” She continued with a warning to other providers and medical device marketers: “If a scheme seems too good to be true, it probably is—and you should be wary.”

For more information about the judgment, click HERE.