Doc convicted of perjury in Orthofix investigation

January 16, 2014 by Brad Perriello

A Virginia podiatrist is convicted of lying to a grand jury about her involvement in a scheme to defraud Medicare by collecting reimbursement for procedures using Orthofix's bone growth stimulator.

Doc convicted of perjury in Orthofix investigation

Virginia podiatrist Ilene Terrell was convicted today of lying in a federal probe of Orthofix International (NSDQ:OFIX) and its bone-growth stimulators. Terrell copped to 4 counts of making a false declaration to a grand jury, according to the office of the U.S. district attorney for Masschusetts.

Terrell faces up to 5 years in prison, 3 years of supervised release and a $250,000 fine for each count, according to a press release.

Federal investigators accused Terrell of falsifying patient medical records in order to justify Medicare reimbursement for procedures using the Orthofix stimulators. Terrell denied her involvement in or awareness of any tampering during her testimony before a grand jury, according to a statement from the office of the DA, Carmen Ortiz.

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Terrell's case is part of a larger investigation into Orthofix and accusations of illegal marketing of its bone-growth products. The government alleges that Orthofix sales reps falsified the certificates of medical necessity required for Medicare reimbursement for its Spinal-Stim, Cervical-Stim and Physio-Stim bone-growth stimulators.

The company agreed to plead guilty to concealing the scheme during a 2008 Medicare audit. The settlement would have included a criminal fine of nearly $7.7 million and another $34.2 million plus interest, but no admission of wrongdoing in the civil portion of the case.