Electrodiagnostic testing legitimacy

The most comprehensive and authoritative review of electrodiagnostic testing and procedure coding:
http://www.aanem.org/documents/recpolicy.pdf

Aetna's medical policy:
http://www.aetna.com/cpb/data/CPBA0485.html
(they don't seem to think too highly of these tests)

Local intermediary LCD:
http://www.medicarenhic.com//cal_prov/draft/nervousstudies.htm

An old Noridian LMRP:
http://www.noridianmedicare.com/provider/pubs/med_a/policy/final/mn/mn99.08a.html

A review article from a professional pain journal.
I'd encourage you read the whole thing because I think it explains exactly the practices and devices in your case. Although this information is somewhat credible,
keep in mind this is essentially an opinion from a (looks like)forward-thinking pain treatment practitioner, and shouldn't be necessarily accepted as standard practice, or evidence-based practice, or even accepted practice.
http://www.painphysicianjournal.com/2006/january/2006;9;69-82.pdf

I think if the testing is used and coded as described
in the AANEM guideline linked above, it is not fraud
in practice, or on a claim. That doesn't mean an
insurance carrier won't deny it as not medically
necessary/experimental. You have every reason to be
skeptical if it looks like this doctor is essentially
basing his whole practice on the use of this test or
machine - that doesn't sound like good medicine. Good
luck.