RST-Sanexas, Inc., a manufacturer and marketer of electric stimulation devices based in Las Vegas, Nevada, and its principal owners—Richard Sorgnard, Lisa Sorgnard, and Morhea Sorgnard—have agreed to pay $1.5 million to resolve allegations that they violated the False Claims Act by causing false claims to be submitted to Medicare. The United States Attorney’s Office for the Eastern District of Pennsylvania announced the settlement, which also involves certain related entities.
The allegations concern claims made between September 2017 and May 2022 for electrical muscle stimulation, vitamin injections, and other services deemed not medically reasonable or necessary. Some services were also alleged to have been tainted by illegal kickbacks. The settlement amount was determined based on the defendants’ ability to pay.
“Our office continues to lead the national charge to hold alleged fraudsters accountable for improper Sanexas billing,” said U.S. Attorney David Metcalf. “We will continue working closely with our partners at CMS’s Center for Program Integrity, the Department of Health and Human Services Office of Inspector General, the Justice Department’s Civil Division, and U.S. Attorney’s Offices around the country to hold accountable any other providers who inappropriately billed for these devices and caused false claims to be submitted.”
Maureen R. Dixon, Special Agent in Charge for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), stated: “Accurately billing for services provided to Medicare enrollees is required of all health care providers participating in the program. Alongside our law enforcement partners, HHS-OIG will continue to evaluate and pursue allegedly inaccurate billings of Sanexas and similar devices.”
Sanexas produces a device called the “RST Sanexas neoGEN-Series,” cleared by the Food and Drug Administration (FDA) for electrical nerve stimulation in limited circumstances related to neuropathy and chronic pain. However, federal authorities allege that Sanexas marketed its device beyond those approved uses—for acute pain treatment, improving nerve health, regrowing nerves, and as a combination product with vitamin injections—which are not covered by FDA clearance or Medicare.
Medicare does not cover some treatments involving Sanexas devices or vitamin injections when used as marketed by Sanexas or its customers. National Coverage Determination 160.7.1 specifically excludes coverage for certain electrical nerve stimulation treatments performed in offices or clinics; local coverage determinations similarly state that vitamin injections are not considered medically reasonable or necessary when used as a nerve block.
Authorities also contend that RST-Sanexas encouraged provider customers to submit false claims for epidermal nerve fiber density (ENFD) testing following use of their device—even though it is not cleared for healing or regrowing nerves—and such additional testing was neither medically reasonable nor necessary.
Further allegations include violations of the Anti-Kickback Statute through volume-based discounts offered to distributorships owned by medical providers using Sanexas devices; commissions paid based on business generated; and receipt of commissions from a diagnostic laboratory tied to ENFD testing referrals.
This settlement resolves certain claims brought under whistleblower provisions of the False Claims Act in lawsuits filed in Wisconsin and Pennsylvania federal courts. These provisions allow private individuals (“relators”) who report fraud against federal programs to share in any resulting recoveries.
The resolution involved coordination among multiple agencies including the Justice Department’s Civil Division; United States Attorney’s Offices for Eastern/Western Districts of Pennsylvania and Eastern District of Wisconsin; investigative support from HHS-OIG; as well as several Assistant U.S. Attorneys and trial counsel.
Prior settlements related to this national initiative can be found at:
https://www.justice.gov/usao-edpa/pr/two-doctors-and-their-medical-practice-pay-more-181000-resolve-false-claims-act
https://www.justice.gov/usao-edpa/pr/us-attorney-announces-two-additional-civil-settlements-part-national-effort-combat
https://www.justice.gov/usao-edpa/pr/us-attorney-announces-additional-civil-settlement-chiropractor-and-his-practice-part
Additionally, a recent consent judgment was entered against Joseph M. Childs, DC; Charles H. Durr, DC; and Active Integrated Medical Centers PC regarding breach of payment obligations under a previous $1.9 million settlement related to Sanexas billing.
Officials emphasize ongoing efforts against healthcare fraud using tools like the False Claims Act. The public can report suspected fraud or abuse via 800-HHS-TIPS (800-447-8477).
The government notes that these are only allegations; no determination of liability has been made.
