PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that the Honorable Mitchell S. Goldberg of the Eastern District of Pennsylvania entered a default judgment against Timothy Warren of Wichita, Kansas and his company, Titan Medical Compliance, LLC (“Titan”), in the amount of $15,270,066, for violations of the False Claims Act (“FCA”).
This judgment is the latest action in the national investigation into the scheme of improper billing involving P-Stim electro-acupuncture devices. P-Stim is also branded as, among other things, ANSiStim, Stivax, NeuroStim, and NSS-2 Bridge. Federal healthcare programs do not reimburse for P-Stim devices, whether they are characterized as an electro-acupuncture device or as an implantable neuro-stimulator. The Eastern District of Pennsylvania has led the national Department of Justice effort to pursue and resolve various FCA cases against P-Stim providers, marketers, distributors, and coders, recovering tens of millions in the last two years.
As alleged in the Complaint, Timothy Warren, a chiropractor in Wichita, Kansas, along with his company, Titan, falsely promoted auricular electro-acupuncture devices as reimbursable by Medicare and other federal insurers, and as approved by the Food and Drug Administration (“FDA”). Warren promoted himself to providers as a medical reimbursement consultant, and his company, Titan, as a compliance consulting firm. As a result, various marketers and distributors of P-Stim devices paid Warren a monthly fee to provide coding recommendations to customers. Certain providers also paid Warren directly for coding guidance.
Beginning in 2014, Warren promoted P-Stim devices as reimbursable by Medicare and other federal healthcare programs and provided instructions on what codes to bill. Those codes, generating a high amount of reimbursement, however, were 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 by someone with minimal training. During this time, Warren and Titan had knowledge that the P-Stim devices were not reimbursable by federal healthcare programs, but continued to promote the non-surgical devices anyway.
The U.S. Attorney’s Office for the Eastern District of Pennsylvania filed a Complaint against Warren and Titan on October 14, 2021, and has litigated the case since then, including defeating a motion by Warren and Titan to transfer the case to the District of Kansas. The United States moved for a default judgment after Warren’s and Titan’s counsel withdrew and the defendants then failed to respond. Judge Goldberg granted the motion and entered a default judgment, finding, among other things, that the United States “has stated cognizable claims under the False Claims Act against Defendants, and Defendants have failed to present any litigable defense.”
Warren and Titan are now responsible for statutory penalties totaling $15,270,066, for causing approximately 1,200 claims to be falsely submitted to the federal healthcare programs in violation of the FCA. Given inability-to-pay concerns and the default nature of the judgment, Judge Goldberg recognized this “appropriate” approach to damages in that the United States sought only minimum statutory penalties, rather than actual damages under the FCA, which were far more significant.
“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.”
The Warren and Titan cases in this District were investigated by the U.S. Department of Health and Human Services Office of the Inspector General. These cases have been handled by Assistant U.S. Attorneys Deborah W. Frey and Matthew E. K. Howatt, as well as former Assistant U.S. Attorney John T. Crutchlow, Auditor Dawn Wiggins, and Investigator Frank O’Connor.
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| Component | USAO - Pennsylvania, Eastern; |
| OIG | Department of Health and Human Services OIG |