Pain Management Physician's Assistant Charged in Amniotic Fluid Scam

A physician’s assistant who allegedly injected amniotic fluid into patients’ joints in a dubious attempt at pain management has been charged with healthcare fraud, announced U.S. Attorney for the Northern District of Texas Leigha Simonton.

Ray Anthony Shoulders, a 36-year-old physician’s assistant at a Fort Worth pain management clinic, was indicted on one count of conspiracy to commit healthcare fraud and eleven counts of healthcare fraud. He made his initial appearance Wednesday before U.S. Magistrate Judge Jeffrey Cureton.

“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. “The Northern District of Texas has always been tenacious in its fight against healthcare fraud, and this case is no exception. Medical professionals cannot be allowed to bill insurers for unreliable, unapproved, unreimbursable treatments.”

“The conduct alleged in this indictment put patients at risk,” said Jason E. Meadows, Special Agent in Charge at the Department of Health and Human Services, Office of Inspector General (HHS-OIG). "Protecting the safety of Medicare patients is crucial, and HHS-OIG is committed to ensuring that taxpayer dollars are not used for unapproved, potentially dangerous medical treatments."

According to the indictment, Mr. Shoulders and others allegedly submitted $788,000 in fraudulent claims and received more than $614,000 in reimbursements from Medicare for injecting amniotic fluid – the liquid that surrounds a growing fetus during gestation – into patients’ connective tissue in an off-label attempt to relieve joint pain.

Certain amniotic products have been approved by the U.S. Food and Drug Administration for wound care, but not for pain management. (In fact, the FDA has issued repeated consumer alerts warning that biologics 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.”) Because amniotic products have not been approved to treat pain, Medicare considers amniotic injections administered to treat pain medically unnecessary and does not reimburse for them. They do reimburse for some – but not all – amniotic injections administered to reduce inflammation of damaged tissue, as in a wound.

Mr. Shoulders primarily used “Cell Genuity,” an amniotic product for which Medicare would not reimburse, neither for wound care nor for pain. Initially, because the product was not covered by insurance, Mr. Shoulders allegedly asked patients to pay out of pocket more than $800 per injection. Due to the high cost and questionable efficacy, however, many patients refused.

In August 2020, Mr. Shoulders allegedly found an amniotic product, “Fluid Flow,” for which Medicare would reimburse for wound care. He spoke with a sales rep about Fluid Flow reimbursement rates and billing requirements but did not purchase any Fluid Flow, which was significantly more expensive than Cell Genuity

Instead, he allegedly continued to inject Cell Genuity into patients but billed the shots to Medicare under Fluid Flow’s unique code, Q4206. Because they were told insurance would cover the cost of the injections, more patients consented to the procedure.

Under the scheme, the pain clinic allegedly profited around $1,200 per cc of Cell Genuity they injected. (Had the clinic used Fluid Flow, they would have made only around $400 per cc.) From August to October 2020, the clinic submitted more than 100 bills for Fluid Flow to Medicare and received around $400,000 in reimbursements. Mr. Shoulders then received a cut of those reimbursements totaling over $200,00.   

The indictment further charges that, in November 2020, in an attempt to avoid detection, Mr. Shoulders suddenly halted the alleged scheme after he became concerned that a sudden increase in the volume of billings might attract the attention of investigators. With no repercussions over the ensuing 10 months, Mr. Shoulders allegedly re-engaged in the scheme in October 2021 and continued through December 2021.

In mid-October, he allegedly purchased 10ccs of Fluid Flow for $20,000 – the only recorded purchase of Fluid Flow by the clinic. He continued to purchase significant quantities of Cell Genuity. Despite purchasing only 10 ccs of Fluid Flow, Mr. Shoulders billed Medicare for approximately 394 ccs of Fluid Flow in the subsequent months.

An indictment is merely an allegation of criminal conduct, not evidence. Like all defendants, Mr. Shoulders is presumed innocent until proven guilty in a court of law.

If convicted on all counts, he faces up to 120 years in federal prison – 10 years per count.

The Department of Health & Human Services’ Office of Inspector General (HHS - OIG) conducted the investigation with the help of the Federal Bureau of Investigation’s Dallas Field Office. Assistant U.S. Attorney P.J. Meitl prosecuted the case.