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Azizulah “Aziz” Kamali and his medical corporation, Aziz Kamali, M.D. Inc., have agreed to pay $1,963,953 to resolve allegations that they violated the False Claims Act by submitting millions of dollars of false claims to Medicare for surgically implanted neurostimulators and paying kickbacks to sales marketers, U.S. Attorney Phillip A. Talbert announced today.

Dr. Azizulah Kamali is an internal and geriatric medicine physician practicing on 1947 N California Street, in Stockton California. As part of his practice, Kamali offers “auricular electro-acupuncture” using a battery-operated device that provides intermittent electrical stimulation to the inside of a patient’s ear.

According to the settlement, Kamali and his medical corporation admitted that they submitted claims to Medicare for surgically implanted neurostimulator devices even though they did not perform surgery or implant neurostimulators.

Dr. Kamali and Kamali Inc. admitted that they instead taped a disposable electroacupuncture device called “Stivax” to their patients’ ears. Stivax devices do not require surgical implantation and are not reimbursable by Medicare. The government alleges that this conduct violated the False Claims Act.

Stivax is an electric acupuncture device that, pursuant to manufacturer’s instructions, is affixed behind a patient’s ear using an adhesive. Needles are inserted into the patient’s ear and affixed using another adhesive. Once activated, the device provides intermittent stimulation by electrical pulses. It is a single-use, battery-powered device designed to be worn for several days until its battery runs out, at which time the device is thrown away.

Medicare does not reimburse for acupuncture or for acupuncture devices such as Stivax, nor does Medicare reimburse for it as a neurostimulator or as implantation of neurostimulator electrodes.

Other brand names for this device include P-Stim, NeuroStim, ANSiStim, E-Pulse, and NSS-2 Bridge.

Dr. Kamali and his medical corporation also admitted that they paid a marketing company a percentage of the reimbursements they received from Medicare for billing implantable neurostimulators, in return for the marketing company arranging for and recommending that patients order Stivax from them. The United States alleges that this conduct violated the Anti-Kickback Statute and the False Claims Act.

In addition to paying the civil settlement, Dr. Kamali and Kamali Inc. have agreed to enter into an Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The Integrity Agreement requires that Dr. Kamali and Kamali Inc. implement specific compliance measures, including training on applicable health care fraud laws and contracting with an Independent Review Organization that will conduct third-party audits of the medical necessity of their Medicare claims.

In October 2020, unrelated disciplinary charges were filed against Kamali by the Medical Board of California involving “Negligent Acts” while treating two patients for pain. The charges were resolved in August 2021 by a Stipulated Settlement and Disciplinary Order.

Over the last several years, there have been several enforcement actions against practitioners who fraudulently billed for these devices. In 2019 Ron Sisco, a Pennsylvania chiropractor resolved claims pay paying nearly $100,000. In 2021 Kevin Cooper M.D., a Mississippi physician and his family medical practice, Cooper Family Medical Center, agreed to pay $375,000 to resolve allegations over billing for the P-Stim device.And there are more examples.

According to an article published by Medpage TodayProviders across the country have been billing more frequently for neurostimulator implantation, a surgical procedure for patients with chronic pain. The problem is, they may not actually be doing it.

The federal government has litigated at least 15 false claims cases involving auricular electroacupuncture devices within the last few years, across states including Pennsylvania, Texas, Tennessee, and Georgia. Eight of the cases have been resolved in the Eastern District of Pennsylvania, according to the DOJ.”

Providers were urged to bill CPT code 63650 for P-Stim procedures, which describes a percutaneously implanted neurostimulator, however no surgical procedure was involved.