Clinic Settles $380,000 Medicare Fraud Case Over Pain Treatment Claims

A Wisconsin-based patient care facility has reached a settlement exceeding $380,000 with federal authorities over allegations it systematically billed Medicare for treatments that failed to meet medical necessity requirements, including vitamin injections marketed as pain relief solutions.

The U.S. Department of Justice announced that Apple Medical Clinic and its owner, Dr. Michael Johnson, engaged in misleading advertising practices by promoting a combination of electric stimulation devices, nerve density testing, and vitamin injections as a comprehensive chronic pain treatment program.

According to court documents, the clinic marketed these services to vulnerable patients as “life-changing” treatments and a “last hope” for those suffering from chronic pain. Critically, the clinic falsely assured patients that the treatments were “covered by most insurances and Medicare.”

Federal investigators determined that Medicare explicitly excludes coverage for the combined treatments as administered by Apple Medical. The electrical stimulation devices in question, manufactured by Nevada-based RST-Sanexas, carried FDA clearance only for specific applications that did not match how they were being used at the clinic.

“National Coverage Determinations clearly state that electrical nerve stimulation treatments provided in physician offices, therapy settings, or outpatient clinics are excluded from Medicare coverage,” noted Justice Department officials in court filings.

The case extends beyond simple billing improprieties. Investigators revealed that Dr. Johnson operated as a “major national distributor” of the electrical pain signal blocking devices, creating what authorities describe as a clear conflict of interest. This arrangement allegedly violated federal anti-kickback statutes since Johnson received compensation from Sanexas while simultaneously prescribing their devices to his patients.

The settlement is part of a broader federal crackdown on fraudulent practices involving electrical stimulation devices in the pain management sector. The medical device manufacturer Sanexas faces its own legal challenges and has been named as a defendant in several related lawsuits.

In December 2025, Sanexas and its owners—Richard, Lisa, and Morhea Sorgnard—agreed to a $1.5 million settlement over allegations they caused Medicare claims to be falsely submitted through a sophisticated kickback arrangement. Federal prosecutors contended that healthcare providers using Sanexas devices submitted improper reimbursement claims to Medicare based on false information provided by the company regarding coverage eligibility.

Healthcare fraud experts note that this case highlights ongoing concerns about the marketing of unproven pain treatments to vulnerable patients, particularly elderly individuals covered by Medicare. The pain management sector has faced increased scrutiny as authorities work to combat fraud while ensuring legitimate pain treatments remain available to patients.

The settlement also underscores the complex relationship between medical device manufacturers and healthcare providers. When physicians have financial incentives to recommend specific treatments or devices, patient care decisions may be influenced by factors beyond clinical necessity.

“The marketing language used by Johnson and Apple Medical closely mirrored Sanexas’s own promotional materials,” according to legal documents, suggesting a coordinated approach to marketing these treatments despite their questionable efficacy and reimbursement status.

The Apple Medical settlement represents just one element of the federal government’s broader efforts to combat healthcare fraud, which costs taxpayers billions annually. The False Claims Act continues to serve as a powerful tool for addressing Medicare and Medicaid fraud, with settlements and judgments recovering billions for government healthcare programs each year.

Neither Apple Medical Clinic nor Dr. Johnson admitted wrongdoing as part of the settlement agreement, though they have agreed to enhanced compliance measures moving forward.