Orthofix Inc. has agreed to pay $42 million to settle a whistleblower civil lawsuit under the False Claims Act for bone stimulators sold as Orthofix Spinal-Stim, the Orthofix Cervical-Stim and the Orthofix Physio-Stim. This included both civil and criminal fines. The company was alleged to waive co-pays and give kickbacks to doctors. The company pleaded guilty to a felony charge of obstruction of a federal audit, for which a $7.8 million criminal fine was paid. The hero whistle-blower, Jeffrey J. Bierman, provided billing services to doctors. Bierman will receive more than $9 million as his share of the civil settlement. Estimates are as high as $90 million annually for Medicare fraud. We commend anyone who steps forward to battle unbridled greed harming taxpayers. The Massahusetts Department of Justice's specif claims were "namely obstruction of a federal audit. As set forth in the Information, for years Orthofix manipulated Certificates of Medical Necessity, an important form required by Medicare to be signed by a physician attesting that the bone growth stimulator was medically necessary. Medicare accounted for approximately 25% of Orthofix's bone growth stimulator business. Orthofix manipulated these Certificates of Medical Necessity in a number of different ways, including:
- Having Orthofix sales representatives fill out the entire form, including the medical necessity section;
- Forging physicians' signatures in the section of the form certifying the physician's belief that the device was medically necessary;
- Filling out or improperly coaching the physicians' staff to fill out the estimated length of need field as "9 months" for every patient without regard to the physician's medical judgment about an individual patient's estimated length of treatment.