Former Orthofix manager sentenced to 3 months home confinement

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The U.S. Justice Dept. this week sentenced another former Orthofix (NSDQ:OFIX) manager in connection with Medicare fraud, marking the 3rd such ruling handed down in connection a larger company investigation.

Former Orthofix territory manager Michael McKay was sentenced to 1 year of probation, the 1st 3 months of which he must serve under home confinement, and ordered him to pay a total of $13,000 in fines and penalties.

McKay last year pleaded guilty to charges that he committed healthcare fraud, admitting that he falsified patient medical records to justify Medicare reimbursements for Orthofix’s growth stimulator. McKay alone was responsible for more than $70,000 in inappropriate Medicare payments, according to a DOJ statement.

Orthofix fired McKay when the company discovered the fraud, but he continued submitting falsified records by channeling them through another Orthofix employee, Derrick Field, who split the commissions with him.

Earlier this month Fields, who defrauded Medicare for more than $250,000, was sentenced to 5 months of home confinement as part of his 2 years of probation, and was ordered to pay $44,000 in fines and forfeiture.

The recent rulings are part of a long list of allegations against Orthofix, its former employees and a physician’s assistant.

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.

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