DOJ sentences another former Orthofix employee for Medicare fraud

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A federal judge this week handed down a sentence to a former Orthofix (NSDQ:OFIX) employee who admitted to years of patient medical record falsification.

Derrick Field, an Orthofix manager between 2005 and 2011, falsified more than 100 Medicare claims that defrauded the agency for more than $250,000 in reimbursement for Orthofix’s bone growth stimulator, according to a statement from the U.S. Justice Dept.

District Court Judge Joseph Tauro sentenced Field to 5 months of home confinement as part of his 2 years of probation, according to the release.

"Field created phony medical chart notes, describing patient visits that did not occur and altered the physicians’ actual chart notes by inserting false diagnoses and descriptions of the patients’ medical history," according to the DOJ. "Medicare has specific rules describing when it will pay for this device. When Field received bone growth stimulator orders for Medicare patients that did not meet these rules, Field forged the patients’ medical records to make it appear as though the order met the rules to induce Medicare to pay for claims that otherwise would not be covered."

Field’s lawsuit is just 1 in a long list of allegations against Orthofix, its former employees and a physician’s assistand who pleaded guilty to accepting kickbacks from the company.

Late last year the device maker was convicted of "felony obstruction of a federal audit," with a federal judge in Boston penalizing the company with $43 million in fines as well as a 5-year probation period.

In September 2012 another former manager, Brian Racey, pleaded guilty to healthcare fraud during his stint at Orthofix. He was similarly charged with defrauding Medicare for $250,000 by forging patient records to justify reimbursements for Orthofix’s Physio-Stim bone growth stimulator.

The DOJ also provided a list of other Orthofix investigations. According to the agency:

  • In April 2012, Thomas Guerrieri pleaded guilty to paying kickbacks while he was vice president of Orthofix.
  • In December 2011, Mitchell Salzman pleaded guilty while he was a regional manager for Orthofix.
  • In July 2012, Michael Cobb, a physician’s assistant, was sentenced to 6 months in prison to be followed by 2 years of supervised release, 6 months of which under home confinement and ordered to pay $10,000 in forfeiture. Cobb previously pleaded guilty to accepting kickbacks from Orthofix.
  • In May 2012, Michael McKay pleaded guilty to health care fraud while he was a territory manager for Orthofix.

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