The United States Attorney for the Southern District of New York, announced that a jury found Laura Perryman, founder and CEO of the medical device company Stimwave, guilty of conspiracy to commit healthcare fraud and wire fraud and substantive healthcare fraud in connection with her company’s creation and sale of a fake medical device component.
Stimwave was a medical device company that manufactured and distributed implantable neurostimulation devices. Perryman oversaw the design of the StimQ PNS System, a neurostimulator system designed to treat chronic pain by providing electrical currents to peripheral nerves.
The device included a component containing electrodes and a receiver component that acted as an antenna, transmitting energy from an external power source to the lead, also known as the Pink Stylet. From 2017 through 2020, Perryman, as Stimwave’s CEO, engaged in a multi-year scheme to design, create, manufacture, and market an inert, non-functioning component of the device called the White Stylet. The White Stylet was marketed as a receiver of radiofrequency energy, but it was made of plastic and could not function as a receiver.
“Laura Perryman brazenly created a dummy medical device component—made entirely out of plastic—to be implanted into patients,” said Damian Williams, US Attorney for the Southern District of New York. “She marketed that dummy component as a means for doctors to bill Medicare and private insurance companies approximately $18,000 for each implantation of the piece of plastic.”
Stimwave sold the device to doctors and medical providers for approximately $16,000 and instructed healthcare providers to bill medical insurance providers for implanting the device into patients through two separate reimbursement codes.
One code was for implantation of the stimulator portion of the lead, and a second was for implantation of a receiver. The billing code for implanting the lead provided for reimbursement at a rate of between approximately $4,000 and $6,000, while the billing code for implanting a receiver provided for reimbursement at a rate of between approximately $16,000 and $18,000.
However after development, it was discovered that the device and its lead, the Pink Stylet, would not fit inside of certain patients. Stimwave was unable to reduce the size of the Pink Stylet without inhibiting its functionality, which limited its marketability.
As a result the company created the dummy device, the White Stylet, as a more compact version that could be used as an alternative. The company told doctors that it was functionally the same as the Pink Stylet, acting as a receiver, when in fact the White Stylet was made entirely of plastic and could not.
As a result of these misrepresentations regarding the functionality of the White Stylet, Perryman caused doctors and medical providers to implant the White Stylet into patients and submit reimbursement claims for implantation of the White Stylet to health insurance providers, including Medicare.
Perryman, 55, of Delray Beach, Florida, was convicted of one count of healthcare fraud and one count of conspiracy to commit health care fraud and wire fraud, which each carry a maximum sentence of 20 years in prison.
