Fallout from Orthofix's Medicare kickback scandal takes down a VA podiatrist

Another person involved with Orthofix International's ($OFIX) kickback scandal a few years back has been convicted in the case.

Ilene Terrell, a podiatrist based in Fredericksburg, VA, pleaded guilty in federal court to four counts of making a false declaration to a grand jury over her alleged involvement in the company's Medicare bone growth stimulator payment scandal. The U.S. Attorney's Office in Massachusetts disclosed the conviction, noting she'll be sentenced on April 17 and could face up to 5 years in prison, a $250,000 fine on each count and 3 years of supervised release.

Orthofix, plus Orthofix managers and others, had been charged with relying on kickbacks to encourage doctors to use its bone growth stimulator device products, essentially committing Medicare fraud in the process. Texas-based Orthofix itself pleaded guilty at the end of 2012 to a single felony count of obstructing an audit and paid a $7.6 million criminal fine. Also, the company paid $34.2 million plus interest to settle a number of civil claims relating to the case that came up in a whistleblower lawsuit.

Since then, a number of former executives have either entered pleas or been sentenced, and the company now faces a shareholder lawsuit for misstating revenue for fiscal 2011, fiscal 2012 and the 2013 first quarter.

In Terrell's case, the U.S. Attorney's office said that Terrell lied to the grand jury about the role she played in fudging patient medical records to ensure Medicare would pay for Orthofix bone growth uses that didn't meet Medicare payment guidelines. They said that she'd prescribe the product for patients even though Medicare wouldn't have ordinarily covered it. Prosecutors claimed that Terrell, working with an Orthofix representative and en employee, often falsified patients' medical records to make it appear if the prescription was done according to the Medicare requirement.

Prosecutors asserted that Terrell lied to a grand jury on May 22, 2012, telling it that she did not fudge patient records to ensure Medicare coverage. What's more, they accused Terrell of threatening the Orthofix representative about testifying.

- read the U.S. Attorney's Office release

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