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`Case 1:22-cv-01732-RDB Document 1 Filed 07/14/22 Page 1 of 37
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`IN THE UNITED STATES DISTRICT COURT
`DISTRICT OF MARYLAND
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`Civil Action No.: ________________
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`COMPLAINT
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`Jury Trial Demanded
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`RITU BHAMBHANI, LLC d/b/a COMPLETE
`CARE OF MARYLAND
`c/o Ritu Bhambhani, M.D.
`496 Rutland Drive
`Fallston, MD 21047
`
`BOX HILL SURGERY CENTER, LLC
`c/o Ritu Bhambhani, M.D.
`100 Walter Ward Boulevard, Suite 100
`Abingdon, MD 21009
`
`PAIN AND SPINE SPECIALISTS OF
`MARYLAND, LLC
`c/o Sudhir Rao, M.D.
`2702 Back Acre Circle, Suite 290B
`Mt. Airy, MD 21771
`
`SIMCARE ASC, LLC
`c/o Sudhir Rao, M.D.
`100 Walter Ward Boulevard, Suite 100
`Abingdon, MD 21009
`
`Plaintiffs,
`
`
`
`- v. -
`
`
`NEURAXIS, INC. f/k/a INNOVATIVE
`HEALTH SOLUTIONS, INC.
`829 S. Adams St.
`Versailles, IN 47042
`
`SERVE ON:
`
`Resident Agent
`
`829 S. Adams St.
`
`Versailles, IN 47042
`
`ACCLIVITY MEDICAL, LLC
`456 Glengarry Way
`Fort Wright, KY 41011
`
`SERVE ON:
`
`Resident Agent
`
`456 Glengarry Way
`
`Fort Wright, KY 41011
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`Case 1:22-cv-01732-RDB Document 1 Filed 07/14/22 Page 2 of 37
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`
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`JOY LONG
`2329 East 500 North
`Greenfield, IN 46140
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`
`
`
`
`
`
`Defendants.
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`Plaintiffs Ritu Bhambhani, LLC d/b/a Complete Care of Maryland and Box Hill Surgery
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`Center LLC (collectively, the “Bhambhani Practice Entities”), and Pain and Spine Specialists of
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`Maryland, LLC and SimCare ASC LLC (collectively, the “Rao Practice Entities”), for their
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`Complaint against Defendants Neuraxis, Inc. f/k/a Innovative Health Solutions, Inc. (“IHS”),
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`Acclivity Medical LLC (“Acclivity”), and Joy Long (“Long”) (collectively, “Defendants”) hereby
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`allege as follows:
`
`SUMMARY OF PLAINTIFFS’ ALLEGATIONS
`
`1.
`
`The Bhambhani Practice Entities and the Rao Practice Entities are medical
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`professional practice entities (collectively “Medical Providers”) that purchased a medical device
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`known as the Neuro-Stim System (“NSS”). The Medical Providers’ purchase of the NSS was
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`based on false and/or fraudulent representations concerning how to bill and collect health insurance
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`reimbursements (including Medicare) for the cost of the device and the services associated with
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`the NSS’s implantation.
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`2.
`
`Briefly, the NSS is a device purportedly designed to provide field stimulation to
`
`peripheral and cranial nerves in the auricle—that is, the outer ear—over a five-day period. It is
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`purportedly recommended for pre-operative, intra-operative, and post-operative pain therapy as
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`well as for the treatment of chronic pain. It is placed behind the patient’s ear and purportedly
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`connected to stimulation electrode “arrays” placed “percutaneously” in the auricle. However, the
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`NSS was cleared by the Food and Drug Administration (“FDA”) in 2014 merely for use in
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`acupuncture, not medical applications. In the 501(k)-premarket clearance application submitted to
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`Case 1:22-cv-01732-RDB Document 1 Filed 07/14/22 Page 3 of 37
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`the FDA, IHS explicitly described the device as an electro acupuncture device for use exclusively
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`in the practice of acupuncture by qualified practitioners of acupuncture as determined by the states;
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`not as an implantable medical device. See FDA 510(k) Clearance Letter K140530 at Exhibit 1.
`
`3.
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`Despite being approved only for acupuncture, IHS fraudulently sold and marketed
`
`the device as a surgically implantable medical device, not just a tool for acupuncture. IHS engaged
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`in this fraudulent scheme through a series of exclusive-rights sales-agent distributors (“Sales
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`Agents”), including but not limited to Acclivity. Acclivity is owned and controlled by its sole
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`member Ryan Kuhlman, who IHS now employs directly as its “National Director.” IHS and its
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`Sales Agents invested substantial sums in advertising and marketing the NSS throughout the
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`United States, including on websites, at trade shows, in brochures, in newsletters, in videos, on
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`phone calls, in emails, and in on-site presentations at physician offices and ambulatory surgery
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`centers.
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`4.
`
`For example, in a slide show presented to the Bhambhani Practice Entities by
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`Acclivity’s agent and “sub-distributor,” Innovative Healthcare Solutions LLC (“IHCS”), IHCS
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`explicitly referred to the NSS as being “FDA-approved,” and claimed that “NSS is the first and
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`only FDA approved electro-auricular, peripheral nerve stimulator currently on the market to treat
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`acute and chronic pain.” See IHCS Physician Power Point Slide Show at Exhibit 2. Those
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`statements were made directly to the Bhambhani entities. Notably, while the IHCS Physician
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`Power Point Slide Show cited to FDA 510(k) Clearance Letter K140530, no reference to
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`acupuncture or electro-acupuncture is made anywhere within the IHCS Physician Power Point
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`Slide Show.
`
`5.
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`Similarly, in a “FAQ Sheet for Clinicians” prepared by IHS (as evidenced by the
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`branding on the document) and provided to the Rao Practice Entities by Acclivity, the NSS is
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`Case 1:22-cv-01732-RDB Document 1 Filed 07/14/22 Page 4 of 37
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`referred to as “FDA cleared for targeting acute and chronic pain.” See FAQ Sheet for Clinicians
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`at Exhibit 3. Incredibly, nowhere in the 20-page FAQ Sheet for Clinicians does the word
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`acupuncture appear.
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`6.
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`Defendants promoted the NSS as a surgically-implantable nerve stimulator billable
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`to third-party payers, including Medicare, under a corresponding set of standardized national
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`medical billing codes. In that regard, Current Procedural Terminology (“CPT”) codes are the
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`national standard for how medical professionals document and report medical, surgical, radiology,
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`laboratory, anesthesiology, and evaluation and management services. All healthcare providers,
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`payers, and facilities (including Plaintiffs) are required to use CPT codes. These codes are used by
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`insurers to help determine the amount of reimbursement that a practitioner will receive for services
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`provided. CPT codes are developed, maintained, and copyrighted by the American Medical
`
`Association, and are mandatory under the transaction standards promulgated under the Health
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`Insurance Portability and Accountability Act of 1996 (“HIPAA”) for reporting the performance of
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`medical procedures when submitting electronic billing. In short, CPT is the uniform language of
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`medical providers, including Plaintiffs.
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`7.
`
`As a means of enticing the Medical Providers to purchase and use the NSS,
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`Defendants falsely promoted the billing of the NSS using a specific set of codes used to report
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`implantable nerve stimulators,
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`including CPT 64555, Percutaneous
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`Implantation of
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`Neurostimulator Electrodes at a Peripheral Nerve (the “NSS Coding Scheme”). This code, and the
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`ancillary codes billed with it covering both professional and facility charges, provided for between
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`$4,800.00 and $11,400.00 per patient in reimbursement from payers for a procedure with little
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`associated cost, that takes ten minutes to perform. Through the NSS Coding Scheme, Defendants
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`sold tens of thousands of NSSs throughout the United States and touted itself as the market leader
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`Case 1:22-cv-01732-RDB Document 1 Filed 07/14/22 Page 5 of 37
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`of the industry.
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`8.
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`The NSS Coding Scheme also involved IHS and its Sales Agents employing so-
`
`called independent coding consultants (“Coding Agents”), including but not limited to
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`DragonSlayer Strategies LLC (“Dragon Slayer”), which, prior to its dissolution in 2015, was
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`owned and controlled by Defendant Long, and Coleman Certified Medical Billing & Consultant,
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`LLC (“Coleman”). Coleman is owned and controlled by Kimberly Coleman.
`
`9.
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`For example, in a September 2015 email to one of the Rao Practice Entities’
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`employees, Dragon Slayer, through Long and on behalf of Acclivity, provided more than twenty
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`pages of attachments, including a coding memorandum and “template” procedure notes and letters
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`of medical necessity characterizing the NSS as a neurostimulator, reportable under CPT 64555,
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`and “clearly delineated from acupuncture” or electro-acupuncture. See September 22, 2015 Email
`
`with attachments from Joy Long at Exhibit 4. Similarly, in an August 2016 email to the Rao
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`Practice Entities, Coleman, through Kimberly Coleman and on behalf of Acclivity, purported to
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`provide additional research supporting billing CPT 64555 for the NSS, stating that the “NSS is a
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`percutaneous implantation neurostimulator electrode array that are applied and leads are placed
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`for specific nerves.” See August 5, 2016 Email with attachments from Kimberly Coleman at
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`Exhibit 5. These representations are knowingly false and were knowingly false when made.
`
`10.
`
`Defendants deliberately concocted the NSS Coding Scheme intending, or having
`
`reason to expect, that the substance of these billing, coding, and reimbursement misrepresentations
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`would be communicated and repeated to the Bhambhani Practice Entities, the Rao Practice
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`Entities, and other medical providers by and through IHS’s Sales Agents (including, but not limited
`
`to IHCS and Acclivity) and IHS’s Coding Agents (including, but not limited to, Dragon Slayer
`
`and Coleman). Defendants also intended their misrepresentations to induce the Bhambhani
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`Case 1:22-cv-01732-RDB Document 1 Filed 07/14/22 Page 6 of 37
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`Practice Entities, the Rao Practice Entities, to rely upon said misrepresentations and upon which
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`the Bhambhani Practice Entities, the Rao Practice Entities and other medical providers did, indeed,
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`justifiably rely to their detriment when deciding to purchase the NSS from IHS and/or its Sales
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`Agents.
`
`11.
`
`The Bhambhani Practice Entities and the Rao Practice Entities bring this action on
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`to redress the direct and substantial harm they suffered as a result of their reliance upon
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`Defendants’ deliberate misrepresentations concerning
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`the correct billing, coding, and
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`reimbursement for the NSS.
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`JURISDICTION AND VENUE
`
`12.
`
`This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §
`
`1332 because the matter in controversy exceeds $75,000.00, exclusive of interest and costs, and is
`
`between citizens of different states. See 28 U.S.C. § 1332(a)(1).
`
`13.
`
`This Court has subject matter jurisdiction over Plaintiffs statutory claims brought
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`under 18 U.S.C. §§ 1962 (c) and (d) of the Racketeer Influenced and Corrupt Organizations Act
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`pursuant to 28 U.S.C. § 1331 (federal subject matter jurisdiction) and 18 U.S.C. §§ 1965(b) and
`
`(d) (RICO).
`
`14.
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`This Court also has personal jurisdiction over Defendants because they are
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`authorized to do business and in fact do business in this state and District, and/or Defendants have
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`sufficient minimum contacts with this state and District, and/or Defendants otherwise intentionally
`
`avail themselves of the markets in this state and District through the promotion, marketing, and
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`sale of the NSS in this state, which renders the exercise of jurisdiction by this Court permissible
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`under traditional notions of fair play and substantial justice.
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`Case 1:22-cv-01732-RDB Document 1 Filed 07/14/22 Page 7 of 37
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`15.
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`Venue is proper in this District under 28 U.S.C. § 1391. Defendants do substantial
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`business in this state and within this District, advertise in this this state and within this District,
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`receive substantial compensation and profits from the sale of the NSS in this state and within this
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`District, and engaged in deliberately misleading representations concerning the correct billing,
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`coding, and reimbursement for the NSS in this state and within this District to subject Defendants
`
`to in personam jurisdiction in this District. Furthermore, the transactions between Defendants and
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`the named Plaintiffs occurred in this state and within this District.
`
`16.
`
`Plaintiffs were both members of the proposed class in a putative class action
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`previously filed in this Court under the caption Bhambhani, M.D., et al. v. Innovative Health
`
`Solutions, Inc. et al., No. 1:19-cv-00355-LKG. That case was dismissed by the Court on June 14,
`
`2022, based what the Court determined was a lack of standing of Dr. Bhambhani and Dr. Rao to
`
`pursue individual claims against the defendants in that action. As such, the statute of limitations
`
`for the Plaintiffs to assert their own claims here was equitably tolled as of the filing date of the
`
`since-failed putative class action on February 6, 2019.
`
`THE PARTIES
`
`17.
`
`Plaintiff Ritu Bhambhani, LLC d/b/a Complete Care of Maryland is a Maryland
`
`limited liability company with registered address at 496 Rutland Drive, Fallston, MD 21047.
`
`18.
`
`Plaintiff Box Hill Surgery Center LLC, a Maryland limited liability company with
`
`registered address at 100 Walter Ward Boulevard, Suite 100, Abingdon, MD 21009, which owns
`
`and operates a state-of-the-art ambulatory surgery center.
`
`19.
`
`Ritu Bhambhani, M.D. (“Dr. Bhambhani”) is the sole member of Plaintiff Ritu
`
`Bhambhani LLC and Plaintiff Box Hill Surgery Center LLC. She is a medical doctor practicing
`
`in Abingdon, MD. She is board-certified in both Anesthesiology and Pain Medicine and is
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`Case 1:22-cv-01732-RDB Document 1 Filed 07/14/22 Page 8 of 37
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`affiliated with multiple hospitals in the area, including MedStar Franklin Square Medical Center
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`and University of Maryland Harford Memorial Hospital. She received her medical degree from
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`Maulana Azad Medical College, completed both a residency and fellowship at the prestigious
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`Cleveland Clinic Foundation in Ohio, and has been in private practice for more than 20 years. Dr.
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`Bhambhani conducts her private medical practice through Ritu Bhambhani LLC d/b/a Complete
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`Care of Maryland and she performs many of her more invasive pain management procedure
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`through Box Hill Surgery Center LLC.
`
`20.
`
`Plaintiff Pain and Spine Specialists of Maryland LLC is a Maryland limited liability
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`company with registered address at 2702 Back Acre Circle, Suite 290B, Mt. Airy, MD 21771.
`
`21.
`
`Plaintiff SimCare ASC LLC is a Maryland limited liability company with
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`registered address at 100 Walter Ward Boulevard, Suite 100, Abingdon, MD 21009, which owns
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`and operates a state-of-the-art ambulatory surgery center.
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`22.
`
`Sudhir Rao, M.D. (“Dr. Rao”) is a medical doctor practicing primarily in Mount
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`Airy, MD, but also practicing in Elkridge, Ellicott City, Fredrick, Rockville, Germantown, and
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`Hagerstown, MD, as well as Harrisonburg, VA and several offices in the Commonwealth of
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`Pennsylvania. He is board-certified in Anesthesiology and Pain Medicine by the American Board
`
`of Anesthesiology and is affiliated with multiple hospitals in the tri-state area, including Frederick
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`Memorial Hospital and Highlands Hospital. He received his medical degree from St. George’s
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`University School of Medicine; completed an internship at the Greater Baltimore Medical Center;
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`completed a residency at Albert Einstein College of Medicine/Montefiore Medical Center; and
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`completed a fellowship at St. Sinai College of Medicine. He has since been in private practice for
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`more than 12 years, practicing interventional pain medicine. Dr. Rao conducts his private practice
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`through Pain and Spine Specialists of Maryland LLC, and he performs many of his more invasive
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`Case 1:22-cv-01732-RDB Document 1 Filed 07/14/22 Page 9 of 37
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`pain management procedures through Simcare ASC LLC. Dr. Rao is the sole member of both
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`entities.
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`23.
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`IHS is an Indiana corporation which at all relevant times herein, was and is engaged
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`in the business of marketing, selling, and distributing the NSS, as more fully described herein,
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`throughout Maryland and the United States, with a registered office at 829 S. Adams St.,
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`Versailles, IN 47042.
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`24.
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`Acclivity was a Kentucky limited liability company which at all relevant times
`
`herein, was and is engaged in the business of marketing, selling, and distributing the NSS, as more
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`fully described herein, throughout Maryland and the United States, with a registered office at 456
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`Glengarry Way, Fort Wright, KY 41011.
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`25.
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`Long was the sole member of Dragon Slayer until it was dissolved by the Secretary
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`of State of Indiana on May 14, 2014. Under Indiana law, therefore, Long is personally responsible
`
`for liabilities of Dragon Slayer relative to its participation in the NSS Coding Scheme, and the
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`misrepresentations it made to the Rao Practice Entities and others as a Coding Agent of IHS
`
`promoting the NSS. Long resides at 2329 East 500 North, Greenfield, IN 46140.
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`FACTS COMMON TO ALL COUNTS
`
`A.
`
`IHS’s Development and Sale of the NSS.
`
`26.
`
`Before developing the NSS, IHS was the exclusive U.S. distributor of the device
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`that was listed as the NSS’s primary predicate on FDA 510(k) Clearance Letter K140530, the “P-
`
`STIM.” The P-STIM was developed by Biegler GbmH, an Austrian Company. IHS invested
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`substantial sums into advertising and marketing its P-STIMs throughout the United States, through
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`Sales Agents and Coding Agents, including on its website, at trade shows, in brochures, in
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`newsletters, in videos, on phone calls, in emails, and during on-site presentations at physician
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`Case 1:22-cv-01732-RDB Document 1 Filed 07/14/22 Page 10 of 37
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`offices and ambulatory surgery centers. In just a few short years, IHS sold tens of thousands of P-
`
`STIMs to medical providers who treat patients suffering from acute or chronic pain.
`
`27.
`
`The success of its sales and marketing efforts relative to the P-STIM—based on the
`
`identical billing, coding, and reimbursement representations it adopted as part of the NSS Coding
`
`Scheme—led IHS to develop its own device, one that was “substantially similar” to the P-STIM
`
`both in functionality and outcomes. To do so, IHS engaged Key Electronics, Inc. (“Key
`
`Electronics”), an electronics manufacturing service provider of custom-built products, located in
`
`Jeffersonville, Indiana. Key Electronics is listed as the manufacturer of the NSS on FDA 510(k)
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`Clearance Letter K140530, but, upon information and belief, the development of the NSS was
`
`done on a “work for hire” basis, with ownership of all intellectual property associated with the
`
`NSS, including the trade-name and one or more utility patents, belonging to IHS.
`
`28.
`
`Once the FDA cleared the NSS to be marketed, IHS engaged multiple Sales Agents,
`
`including but not limited to IHCS and Acclivity, to market the NSS to medical providers treating
`
`patients suffering from acute or chronic pain. IHS largely employed the same sales and marketing
`
`tactics it used with the P-STIM—focusing on representations made through mail and electronic
`
`communications related to the billing, coding, and reimbursement of the devices. IHS provided
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`information and documents related to the billing, coding, and reimbursement it employed relative
`
`to the P-STIMs to the Sales Agents and Coding Agents it engaged to sell and market the NSS on
`
`behalf of IHS, including, but not limited to, IHCS and Acclivity. The Bhambhani Practice Entities
`
`and the Rao Practice Entities were two sets of medical providers that IHCS and Acclivity, as Sales
`
`Agents of IHS, promoted the NSS to using the information and documents IHS provided them as
`
`part of the NSS Coding Scheme.
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`Case 1:22-cv-01732-RDB Document 1 Filed 07/14/22 Page 11 of 37
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`29.
`
`A primary driver of IHS’s development of the NSS and subsequent fraudulent
`
`advertising and marketing effort was to escape the “negative stigma” of the P-STIM and to increase
`
`its use by medical providers. To accomplish this, IHS, both directly and through its Sales Agents,
`
`falsely promised that purchasing and dispensing the NSS to patients would be highly profitable to
`
`medical providers, including the Plaintiff Medical Providers in this case. IHS and its Sales Agents
`
`and Coding Agents worked together as an association-in-fact to build and market a false narrative.
`
`In 2011 the P-STIM had already been deemed not applicable to the coding sequence that IHS and
`
`its Sales Agents and Coding Agents promoted in written communications, presentations, and other
`
`materials to Plaintiffs and the Proposed Class. Further, in April 2011, the Centers for Medicare
`
`and Medicaid Services (“CMS”) created the Healthcare Common Procedure Coding System
`
`(“HCPCS”) code “S8930”: Electrical stimulation of auricular acupuncture points, each 15 minutes
`
`of personal one-on-one contact with the patient, specifically for devices such as the P-STIM and
`
`NSS. And electro acupuncture services reported to CMS under that code were excluded from
`
`coverage by most Medicare Administrative Contractors (“MAC”).
`
`30.
`
`Knowing all of this, IHS President Brian Carrico explicitly instructed IHS Sales
`
`Agents, including specifically IHCS and Acclivity, as follows: “It’s a peripheral neurostimulator.
`
`That’s how we sell this. Don’t ever use the word acupuncture or meridian point or anything like
`
`that.” The development of the NSS was specifically intended to circumvent the payer scrutiny
`
`focused on the P-STIM, and the NSS Coding Scheme was specifically intended to mirror the
`
`billing scheme IHS and other distributors of the P-STIM perpetrated previously.
`
`31.
`
`To try and further insulate itself from the NSS Coding Scheme, IHS used
`
`“independent” Sales Agents to distribute the NSS, with the country divided into exclusive sales
`
`territories. As Mr. Carrico explained it to IHS Sales Agents, even the IHS website was merely a
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`Case 1:22-cv-01732-RDB Document 1 Filed 07/14/22 Page 12 of 37
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`lead generator. If a medical provider attempted to purchase the NSS through the IHS website
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`directly, that prospective purchaser’s information would be provided to the Sales Agent with
`
`exclusivity over that territory, or as Mr. Carrico conceded, “if somebody orders on there,
`
`quote/unquote, ‘orders,’ that’s simply a lead. If the lead comes from Alabama then it goes to
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`[Daniel]. If it goes to Kalamazoo, it goes to Christa, and so on and so forth.”
`
`32.
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`Not only did IHS only sell the NSS through Sales Agents, but it provided and paid
`
`the Coding Agents to assist the Sales Agents by “confirming” the billing, coding, and
`
`reimbursement instructions that are at the heart of the NSS Coding Scheme. IHS directly
`
`compensated those Coding Agents $180 per “new account” to provide pre-populated “pre-cert
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`instructions,” “coding,” “diagnosis codes,” “post-op follow-up documentation,” and “dictation,”
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`or as Mr. Carrico told his Sales Agents, “everything like that that you need. They get that directly
`
`to your account, something you’ll never have to worry about.”
`
`33.
`
`The coding information being conveyed to potential NSS purchasers by Sales
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`Agents and Coding Agents very clearly originated from IHS. For example, materials provided to
`
`the Rao Practice Entities by Long via email in September 2015 used identical language to a
`
`subsequent email to the Rao Practice Entities from Acclivity in July 2016 purporting to quote “an
`
`excerpt from a former AMA advisor as the [] use of CPT code for NSS.” Compare Exhibit 4 with
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`July 14, 2016 email with attachments from Matthew Miller (“Miller”) at Exhibit 6. Incredibly,
`
`both Long and Acclivity opined that the NSS “is clearly delineated from acupuncture and other
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`neuro-stimulator treatments.” And the materials provided to medical providers by IHCS, Acclivity,
`
`and other IHS Sales Agents (such as Tomahawk Medical and Dixon Medical Distributors) were
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`all substantively identical in both form and substance.
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`Case 1:22-cv-01732-RDB Document 1 Filed 07/14/22 Page 13 of 37
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`34.
`
`IHS’s fraudulent characterization of the NSS as an implantable nerve stimulator,
`
`and the promise of “extraordinary reimbursement” to the Medical Providers was the spark that
`
`gave life to Defendants’ entire scheme. As Mr. Carrico admitted to his Sales Agents in his capacity
`
`as principal of IHS, that “You cannot go wrong by going to a physician because the reimbursement
`
`is so strong.”
`
`35.
`
`In truth, however, the NSS was no different than the “negative stigma” of the P-
`
`STIM. Indeed, in August 2016, Novitas published Local Coverage Advisory A55240, which
`
`specifically: (i) identified the NSS as electro acupuncture device; and (ii) noted that the NSS was
`
`not covered by the Medicare program. The NSS Coding Scheme was built on a house of cards.
`
`B.
`
`The Bhambhani Practice Entities’ Experience with the NSS Coding Scheme.
`
`36.
`
`The Bhambhani Practice Entities were originally contacted by IHCS on August 17,
`
`2015. Dr. Bhambhani, on behalf of her entities, received an email from Robert A. “Bobby” Smith
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`(“Smith”), Vice President of Sales and Marketing for IHCS, which introduced the NSS, and
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`enclosed the IHCS Physician Power Point Slide Show. Smith’s email stated:
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`Dr Bhambhani, My company has the exclusive rights to a recently FDA and VA
`approved device for acute and chronic pain. I live in Maryland and am selecting
`key practices now. We have launched with prominent Physicians and larger surgery
`groups throughout the U.S. I have attached the Slideshow above along with a short
`Science Video https://vimeo.com/user17291718/review/108118730/56e5ec2571.
`They feature the technology along with the extraordinary reimbursement for this
`treatment. Select practices can participate in our Full Service Program outlined on
`the attached PowerPoint.
`
`See August 17, 2015, Email from Smith, Exhibit 7.
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`37.
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`So, from the start, the false promise of extraordinary reimbursement and the IHCS
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`Physician Power Point Slide Show were the foundation of how IHS marketed, promoted, and sold
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`the NSS to the Bhambhani Practice Entities. Among the representations made in the IHCS
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`Physician Power Point Slide Show were the following:
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`Case 1:22-cv-01732-RDB Document 1 Filed 07/14/22 Page 14 of 37
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`a.
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`b.
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`c.
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`d.
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`e.
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`NSS is a patented, FDA approved peripheral nerve stimulator designed to
`provide field stimulation to peripheral and cranial nerves in the auricle over
`a 5-day period.
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`It is FDA approved for chronic and acute pain.
`
`NSS is the first and only FDA approved electro-auricular, peripheral nerve
`simulator currently on the market to treat acute and chronic pain.
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`NSS is reimbursed by Medicare when performed at an ASC.
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`The following Insurers pay for in office and ASC: Major health insurers;
`workers compensation insurers; and personal injury insurers.
`
`See Exhibit 2, 3, 12, 14.
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`38.
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`The IHCS Physician Power Point Slide Show promised guaranteed profits through
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`a “turn-key program” with “no upfront cost”:
`
`
`
`See Exhibit 2, 15.
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`39.
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`As to the guarantee of profits, IHCS offered two distinctly different programs: the
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`“Full Service Program” and the “Direct Purchase Program.” The difference between the two
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`programs was relatively straightforward. With the Full-Service Program, IHCS (or its affiliates,
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`including Acclivity) would provide “full-service” billing and collections services:
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`
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`See Exhibit 2, 18.
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`40. With the Direct Purchase Program, IHCS provided billing/collections protocols
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`they received from IHS as part of the Direct Purchase:
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`
`
`
`
`See Exhibit 2, 21.
`
`41.
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`These billing protocols, which were identical to the billing protocols IHS created
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`to promote the P-STIM included specific coding advice whereby the NSS was to be billed under
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`“CPT 64555, Percutaneous Implantation of Neurostimulator Electrodes at a Peripheral Nerve”:
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`
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`See Exhibit 2, 22.
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`42.
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`Regardless of which program, however, the touchstone of the sales pitch was
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`extraordinary reimbursement and high profit—just as it was when IHS promoted the P-STIM:
`
`
`
`
`
`See Exhibit 2, 26.
`
`43.
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`Incredibly, however, nowhere in the IHCS Physician Power Point Slide Show, or
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`any other information or document provided to the Bhambhani Practice Entities, was it disclosed
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`that the NSS was in fact cleared by the FDA as an electro acupuncture device for use in the practice
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`
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`of acupuncture by qualified practitioners of acupuncture.
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`44.
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`On September 8, 2015, Kristen Brannon (“Brannon”), Vice President of Operations
`
`for IHCS, sent an email to the Bhambhani Practice Entities attaching certain NSS “billing
`
`information,” including a Precertification and Billing Overview; an NSS Precertification Form;
`
`and an NSS Procedure Note Template, all of which were provided to IHCS by the NSS Enterprise.
`
`See September 8, 2015, Email from Brannon, Exhibit 8. Notably, the NSS Procedure Note
`
`Template referred to the NSS service by the CPT descriptor only, and again contained no reference
`
`to electro acupuncture.
`
`45.
`
`On September 9, 2015, Smith sent the Bhambhani Practice Entities two more email
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`solicitations. See September 9, 2015, Emails from Smith, Exhibit 9. The first contained certain
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`clinical studies purporting to extol the efficacy of the NSS, on which Mr. Carrico, as “one of the
`
`owners and pioneers of this technology,” was copied. The second included links to training videos
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`and an extensive list of applications for the device.
`
`46.
`
`In reliance upon IHCS statements concerning the efficacy of the NSS, as well as
`
`the corresponding reimbursement figures devised by IHS, the Bhambhani Practice Entities
`
`enrolled in the IHCS Full Service Program, at a cost of $900 per NSS; and made orders that were
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`fulfilled through Acclivity on September 14, 2015 and October 6, 2015. See Exhibit 10, 1, 2.
`
`47.
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`On September 28 and 29, 2015, Brannon sent emails providing additional coding
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`advice to the Bhambhani Practice Entities vis-a-vis the NSS. See September 28 and 29, 2015,
`
`Emails from Brannon, Exhibit 11. Specifically, Brannon stated that a modifier is no longer
`
`necessary to bill CPT code 64555 for the NSS service. She further guided the Bhambhani Practice
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`Entities on what to do when a Medicare claim is rejected and how to successfully “rebill” such a
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`claim.
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`48.
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`Again, on December 8, 2015, Brannon provided coding advice by stating the codes
`
`to use for workers compensation claims and confirmed the propriety of the same code sequence
`
`set forth on the IHCS Physician Power Point Slide Show. See December 8, 2015, Email from
`
`Brannon, Exhibit 12.
`
`49.
`
`In all, between September 2015 and June 2016, the Bhambhani Practice Entities
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`purchased 420 NSSs, for $264,000, all paid to Acclivity. See Exhibit 10.
`
`50.
`
`In or about August 2016, however, the Bhambhani Practice Entities’ reporting of
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`the code sequences explicitly provided by the Defendants prompted Novitas, the MAC responsible
`
`for administration of the Medicare program in Maryland, to initiate both post-payment and
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`prepayment audits of both the Bhambhani Practice Entities.
`
`51.
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`Upon learning that the audits were initiated due to the suspicion that the Bhambhani
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`Practice Entities and her entities were improperly submitting bills for electro acupuncture to the
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`Medicare program, Dr. Bhambhani attempted to return her remaining inventory of NSSs to IHS.
`
`52.
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`On or about September 1, 2016, Mr. Carrico responded to Dr. Bhambhani’s return
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`request with a bold-faced lie, telling her that “IHS has not and does not get involved in billing and
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`coding in any way.” See September 1, 2016, Email from Carrico, Exhibit 13. He went on to
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`suggest, rather, that IHS could not accept the device returns, but would be happy to assist her in
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`billing them to commercial insurance companies, and recommended a third-party billing services
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`that would “do a tremendous job of pre-authorizing and billing for the NSS which will allow you
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`to have 0 headaches, help patients, be very pro