Innovative Health Solutions Neuro-Stim NSS Device Doctors’ Class Action

Innovative Health Solutions (IHS) and its distributor, Acclivity Medical, LLC, marketed the NSS medical device to doctors for the treatment of chronic pain, with promises of high reimbursements. However, the complaint for this class action alleges, the companies did not reveal that the device was approved for use only by acupuncturists. 

The class for this action is all healthcare providers in the US who bought one or more NSS device from IHS or Acclivity, during the longest statutory period allowed before the filing of this case up until its judgment.

The NSS, or Neuro-Stim System, was purportedly designed to stimulate nerves in the outer ear over a five-day period. It is intended to treat chronic pain and pain before, during, and after operations.

According to the complaint, HIS referred to the device as being “FDA-approved” and said that “NSS is the first and only FDA approved electro-auricular, peripheral nerve stimulator on the market to treat acute and chronic pain.” 

In 2015, HIS sent a marketing e-mail about the NSS to plaintiff Dr, Ritu Bhambhani, who is board-certified in anesthesiology and pain medicine. It claimed, “We have launched with prominent Physicians and larger surgery groups throughout the U.S.” and came with a slideshow introducing the device. The complaint claims that neither the slideshow nor the e-mail mentioned that the device was intended for use by acupuncturists. 

The complaint also alleges that IHS and Acclivity claimed that the device used a set of medical billing codes that provided for between $4,800 and $11,400 reimbursement per patient from insurers. This was for a procedure that took ten minutes to perform with few up-front expenses. The complaint says that treatment with the device was reimbursed by Medicare, major insurers, workers compensation insurers, and personal injury insurers.

Treatment was supposed to be billed under a particular medical code, and the marketing materials reproduced in the complaint show it was supposed to result in a large profit for the doctor. 

Unfortunately, the complaint says that the Centers for Medicare and Medicaid Services (CMS) had already instituted a new code for the procedure in April 2011 and decided not to cover it. The complaint claims that the companies already knew this when they promoted the NSS to Dr. Bhambhani and others. 

Between September 2015 and June 2016, Dr. Bhambhani bought 420 of the devices, at a cost of $246,000, from Acclivity. However, her use of the devices and code caused Novitas, the organization responsible for Medicaid in her state, to begin audits of her own medical practice and the surgical center where she worked. Eventually, Novitas demanded over a million dollars in refunds from her for the Medicare program. 

IHS would not accept return of the devices, the complaint says and claimed that it did not get involved in coding. 

The complaint claims fraudulent misrepresentation and intentional misrepresentation by concealment, among other things.

Article Type: Lawsuit
Topic: Medical Devices
Tags: False or Misleading Information, Marketed Differently than FDA-Approved, Medical Devices