A federal judge this week sentenced physician assistant Ray Anthony Shoulders to seven years in federal prison for injecting amniotic fluid into patients’ joints to provide pain relief.
Shoulders was indicted in July 2023 and convicted in January of one count of conspiracy to commit healthcare fraud and 12 counts of healthcare fraud. U.S. District Judge Terry R. Means also ordered Shoulders to pay $614,235 in restitution.
Evidence at trial showed that Shoulders and his partners submitted nearly $800,000 in fraudulent claims and received more than $614,000 in reimbursements from Medicare for the amniotic fluid treatment. Shoulders injected amniotic fluid into patients’ connective tissue to relieve joint pain.
Amniotic fluid is a topic of much discussion in the medical field and is used for pain treatment in many clinics. However, the FDA has only approved the products for wound care, not pain management. Amniotic products have been used to treat wounds and skin care for over a century, but a 2020 National Institutes of Health study says that clinical trials of the product are still limited with mixed outcomes and recommends further investigation despite positive effects in animal models.
Despite pain management clinics all over the country offering amniotic fluid treatment for pain, the FDA has a campaign alerting patients that it has not been approved for this purpose and is thus ineligible for reimbursement from Medicare.
Shoulders used a product called Cell Genuity, which Medicare does not cover. At first, he asked patients to pay $800 per injection. The high cost caused many patients to refuse the treatment, so Shoulders found another product for which he could bill Medicare called “Fluid Flow,” which was more expensive and covered by Medicare. However, he continued to administer Cell Genuity to patients while billing for Fluid Flow. When told that Medicare covered the treatment, patients signed up.
Shoulders attempted to avoid detection by pausing the scheme in 2020 but continued it 10 months later. The scheme allowed the clinic to profit $1,200 per cc of injected product (as opposed to $400 per cc of Fluid Flow). For several months in 2020, the clinic submitted more than 100 claims for Fluid Flow to Medicare and received $400,000. Shoulders personally netted $200,000 from the scheme. The clinic only purchased 10 ccs of Fluid Flow during the scheme while billing for the injection of nearly 400 ccs of the product between October and December 2021 alone.
This isn’t Shoulders first brush with medical discipline. He was disciplined by the New York State Board of Professional Medical Conduct and the Texas Physician Assistant Board for failing to meet the standard of care when he continued to treat patients for pain management and prescribe patients controlled substances despite abnormal urine samples showing they may have been addicts. The test results went to his supervising physician and many of them were discussed with the physician, who approved all treatment. He was forced to be monitored by a physician for eight months, prepare selected patient records, and implement corrections suggested by the Compliance Division. He also had to pay a $1,000 fine, underwent a competency evaluation, and additional continuing education courses.
“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.”
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