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Former medical device CEO convicted for medical device fraud
After an 11-day trial, a jury in the Southern District of New York convicted Laura Perryman of healthcare fraud.
In a press announcement published on March 6, 2024, the United States Attorney’s Office of the Southern District of New York revealed that Laura Perryman, founder and former CEO of Stimwave, was convicted on one count of healthcare fraud and conspiracy to commit healthcare fraud. The charges carry a maximum sentence of 30 years; however, Perryman has yet to be sentenced.
Stimwave was a medical device manufacturer and distributor that focused on selling neurostimulation devices, including the STimQ PNS System. STimQ PNS System was marketed as an implantable neurostimulator that could mediate chronic pain through electrical stimulation of the peripheral nerves. The original design included a receiver component called the “Pink Stylet,” which transmitted energy from an external source to the electrodes.
However, the Pink Stylet was too large to implant comfortably in some cases.
According to the press release, the company initially advised providers to bill the device implantation with two reimbursement codes. The code indicated for implanting the leads billed insurers for $4,000–6000, while the reimbursement code for implanting the receivers resulted in $16,000–18,000 in reimbursement. But, in cases where the receiver could not be implanted, the company was at risk of substantial financial losses because providers would lose profits on the device and may opt not to implant them.
Perryman was accused of marketing a “White Stylet” component as a smaller radiofrequency receiver to be an alternative to the “Pink Stylet” even though it served no function.
Throughout the 11-day trial presided over by US District Judge Denise L. Cote, multiple pieces of evidence supported the jury’s decision. Perryman engaged in this fraudulent scheme from 2017 to 2020, charging providers roughly $16,000 for a component that served no purpose.
The evidence revealed that Perryman knowingly directed Stimwave to create a fraudulent device component, marketed and misrepresented it to providers, conducted training to support the use of the fraudulent receiver, and made employees vouch for its efficacy.
“Laura Perryman brazenly created a dummy medical device component — made entirely out of plastic — to be implanted into patients. 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. She did this so that she could entice doctors to buy her device for many thousands of dollars. Perryman recklessly used patients as tools for financial gain, and this jury’s unanimous verdict sends a resounding message that individuals who defraud healthcare programs will be held criminally accountable,” said US Attorney Damian Williams in the press release.