A Texas Physician Assistant Convicted of Fraud for Unapproved Injections

In a shocking case of medical fraud, a physician assistant from Texas has been convicted for giving patients unapproved injections of amniotic fluid. The fraud also involved illegal billing of Medicare for these injections. The consequences of this illegal activity can have severe implications for the patients’ health, as well as the financial burden it places on the healthcare system. The convicted physician assistant, Ray Anthony Shoulders, now faces a lengthy prison sentence.

Ray Anthony Shoulders operated out of a pain management clinic in Fort Worth, Texas, and administered injections of an amniotic fluid product called Cell Genuity to his patients. It’s important to note that this product has not been approved by the FDA for any indication. Initially, patients had to pay out of pocket for these injections, with each shot costing more than $800. However, due to the high price tag, many patients declined the treatment. This led Shoulders to seek an alternative approach to recoup his costs.

Shoulders connected with a sales representative for another amniotic product called Fluid Flow. This product had a unique reimbursement code known as a “Q code”. While Shoulders did not purchase Fluid Flow due to its high cost, he used its reimbursement code, Q4206, to bill Medicare for the Cell Genuity shots. By doing so, he exploited the insurance coverage provided by Medicare, leading to an increase in patients opting for the injections.

Prosecutors revealed that Shoulders made $1,200 per cc of Cell Genuity, significantly more than the $400 per cc he would have earned from Fluid Flow. As a result, between August and October 2020, Shoulders’ clinic submitted over 100 fraudulent claims for Fluid Flow, resulting in a reimbursement of around $400,000.

Temporary Halt and Resumption of the Scheme

As Shoulders grew concerned about potential investigation due to the sudden increase in billing volume, he temporarily ceased the fraudulent scheme in November 2020. However, after no repercussions for ten months, he resumed the scheme in October 2021 and continued until December of that year.

Rise in Criminal Prosecutions

The case involving Shoulders adds to a growing number of criminal prosecutions related to the fraudulent billing of amniotic, placental, and umbilical cord injectables. Several U.S. regional Medicare Administrative Contractors have recently announced their intention to recover losses from “birth tissue” claims dating back over two years. The DOJ is becoming involved in these cases, highlighting the seriousness of the issue.

Critique of the Birth-Tissue Product Industry

Medical professionals, such as Chris Centeno, MD, have been critical of birth-tissue product companies that promote their products for unapproved orthopedic indications. The use of these products without FDA approval, in addition to fraudulent billing, raises concerns about patient safety and the integrity of medical practices. Centeno believes this case is only the beginning and that many more clinics may be fraudulently billing Medicare for these products.

The FDA has long been trying to regulate unapproved cell therapies and put an end to the marketing of these treatments. In 2017, the agency issued guidance on regenerative medicine products, with a deadline for full compliance set for November 2020. However, due to the ongoing pandemic, the deadline was extended, and compliance became mandatory in June 2021. Manufacturers must now obtain FDA premarket approval or meet IND requirements before promoting these products to patients. Furthermore, companies are prohibited from marketing the products for uses outside of the IND.

The conviction of Ray Anthony Shoulders, a Texas physician assistant, for the fraudulent administration of unapproved injections serves as a stark reminder of the potential dangers posed by medical fraud. This case not only highlights the financial impact on the healthcare system but also the risk it poses to patient health and safety. The involvement of the DOJ and the increased focus on prosecuting similar cases is a step forward in combating medical fraud. However, more efforts are needed to ensure that unapproved treatments are no longer marketed and administered, safeguarding patients and maintaining the integrity of the healthcare industry.


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