Whistleblower lawsuit accuses Orthofix of kickbacks scheme

Orthofix International

Orthofix (NSDQ:OFIX) allegedly participated in a scheme to defraud Medicare and state health programs with a kickbacks scheme designed to lure doctors into using the company’s neurological monitoring devices during orthopedic surgeries, according to a whistleblower lawsuit unsealed this week.

The lawsuit, revealed August 8 in the U.S. District Court for Middle Florida, alleges that Orthofix and its Blackstone subsidiary, a hospital and 2 doctors bilked the system by filing reimbursement claims for services that were never performed or were performed by unauthorized personnel.

Jason Schiff, the whistleblower, was asked to bid on a contract with the Parrish Medical Center in Florida to provide intraoperative neurophysiological monitoring services. In researching his bid, Schiff alleges, he discovered that a Blackstone sales rep named Mark Blair and Drs. Ara Jason Deukmedjian and Bharat Patel were using technology "so outdated it could not [emphasis theirs] make a real-time Internet connection," meaning no doctor was actually monitoring patients’ neurological activity during procedures.

"As a result, literally thousands of fraudulent IOM billings were submitted to Medicare / Medicaid and other government programs by the defendants, including and especially the ‘reading doctor,’ in most instances, Patel," according to the lawsuit. "There was no real-time reading of IOM data, Blair did not communicate telephonically with Patel from the operating room and Patel was not present at the hospital to read the IOM data in person."

Blair was also seen allegedly giving a cash-stuffed envelope to Deukmedjian and was later heard to brag that "it cost me over 20k to get Deuk’s business – but it was worth it,” according to the lawsuit. Parrish Medical Center and its administrators knew of the alleged arrangement between Blair and Deukmedjian, whose wife Sun Deukmedjian also allegedly participated in the scheme.

The lawsuit seeks a jury trial, a cease and desist order against the defendants’ allegedly illegal scheme, triple damages, civil penalties including $26,000 for each false claim and legal fees. Schiff is entitled to as much as 25% of any proceeds from the case.

RSS From Medical Design & Outsourcing

  • MIT’s MultiFab presents a stark challenge to incumbent 3D Printer manufacturers’ hardware, software, and business Models
    MIT’s Computational Fabrication Group recently announced the MultiFab, a low-cost 3D printer that can combine up to 10 different resins in one part and also includes a 3D scanning system to identify and fix errors during production. According to Lux Research, these capabilities are rare in commercial 3D printers today due to the manufacturers’ need […]
  • AVX releases Accu-P MP medical grade film chip capacitors for medical devices
    AVX Corporation, a leading manufacturer of passive components and interconnect solutions, has released a new series of thin film chip capacitors specifically designed to meet the demanding performance specifications for implantable medical devices. Delivering extremely tight capacitive tolerances, exceptionally repeatable performance, and remarkably low ESR and high Q at high frequencies—including VHF, UHF, and RF […]
  • RIVANNA commences manufacturing of its Accuro device
    Rivanna Medical announced that it has begun manufacturing its FDA-cleared Accuro device, a handheld and untethered smart-phone-sized device that is designed to guide spinal anesthesia with automated 3D navigation technology in addition to ultrasound imaging of abdominal, musculoskeletal, cardiac and peripheral vascular anatomies. The product will be launched at the ASA annual meeting in San […]
  • FDA seeks public input on Quality Metrics guidance
    by Oliver Wolf, Senior Product Manager, MasterControl In line with the general shift towards risk-driven approaches in the quality management world, FDA is now taking steps towards applying those same principles to its own auditing schedule. At the end of July, the Center for Drug Evaluation and Research (CDER) and the Center for Biologics Evaluation […]
  • First ‘Ear Wear’ for Active Adults Debuts with MDHearingAid FIT
    If you’ve burned out your ears with earbuds, headphones or decades of other audio abuse but aren’t ready for your grandmother’s hearing aids, not to worry! The new MDHearingAid FIT gets you back in the game with a tiny, FDA-registered, one-size-fits-most solution that doesn’t block your ear canal like old-fashioned in-the-ear hearing aids. The FIT feels […]
  • CardioGenics enters into manufacturing agreement with Ontario-based Plasticap
    CardioGenics Holdings, developer for the In-Vitro-Diagnostics (“IVD”) testing market, announced that it has entered into a manufacturing agreement with Plasticap of Ontario, Canada, pursuant to which Plasticap will manufacture CardioGenics’ proprietary self-metering cartridges for its QL Care analyzer. The term of the agreement is three years and the purchase price for each cartridge shall be […]
  • MTD Micro Molding releases micro materials menu
    MTD Micro Molding, a long-time leader in micro-injection molding, has released an updated “Materials Menu” of materials that can be successfully micromolded to help guide engineers at medical device companies. Material selection is a crucial step in product manufacturability. The correct material drives tolerance, dimension, strength, usabality, speed-to-market, design, critical features, and cost. Through MTD’s […]
  • MedTech Chat: Elastic technology for drug delivery
    Dr. Zhen Gu and Dr. Yong Zhu from North Carolina State University are both co-senior authors of a research paper describing their recent work. Dr. Gu, Dr. Zhu and other researchers from North Carolina State University and the University of North Carolina at Chapel Hill have developed a drug delivery technology that consists of an […]
  • B. Braun’s OEM Division offers large bore normally closed low-pressure check valves
    Infusion therapy and pain management device manufacturer B. Braun said today it is offering normally closed large-bore low-pressure check valves through its valve-focused contract manufacturing OEM division. The valves, offered by Bethlehem, Pa.-based B. Braun, are designed for the intermittent injection of fluids during medical treatment and open automatically when pressure is applied. The newly […]
  • Continuous 225W with natural convection for medical type BF power supply
    Powerbox, a European power supply company, introduces new Medline 225 series ac and dc single output open frame converters for medical type BF applications. The new OFM225 with its 3 x 5 in. footprint and 1.5 in. height is designed for a continuous output power of 225W with natural convection and 40°C ambient temperature, increasing to […]
  • Using data science to achieve ultra-low dose CT image reconstruction
    Prof. Jeff Fessler and Prof. Yong Long, Ph.D. of the University of Michigan-Shanghai Jiao Tong University (UM-SJTU) Joint Institute are collaborating on a project to develop a dramatically improved approach to low-dose X-ray CT image formation by extracting and using information from a big-data corpus of regular dose X-Ray Computed Tomography (CT) images. The research is […]

Leave a Reply