Bone Growth Stim Convictions Mount

The drip, drip, drip of former Orthofix, Inc. employees convicted of cheating Medicare to sell bone growth stimulator devices continues.

Hunter Rigsby Pleads Guilty

On May 14, 2013, the U.S. Attorney’s Office in Massachusetts announced that Hunter Rigsby, a former territory manager, pled guilty to health care fraud and paying kickbacks from 2005 through 2011 while selling Orthofix bone growth stimulators in Tennessee.

According to the announcement, Medicare only pays for “long bone” stimulators when at least 90 days have elapsed without clinically significant healing, and it only covers certain types of injuries. Rigsby was well aware of these guidelines, having received training on these guidelines at Orthofix. On numerous occasions, doctors in Rigsby’s territory ordered bone growth stimulators that did not satisfy Medicare’s guidelines.

Forged Records and Physician Signatures

For instance, some doctors prescribed the device before 90 days had elapsed without any healing, and other doctors prescribed the device for patients who had injuries that were not covered under Medicare’s guidelines. When this occurred, Rigsby often forged the patient’s medical records to make it appear as though the claim was payable under Medicare’s guidelines, when in fact Medicare should not have paid the claim. Rigsby falsified doctors’ chart notes to make it appear as though Medicare’s 90-day rule was satisfied.

Rigsby also deleted portions of physicians’ chart note that described patients’ injuries which were not covered by Medicare and changed the note to make it appear as though the patients had injuries that were covered. On some occasions, Rigsby submitted orders where the physician had not ordered a bone growth stimulator at all. Rigsby also forged physicians’ signatures on prescriptions and Medicare Certificates of Medical Necessity.

Fired, But Continues Fraud

Orthofix fired Rigsby in July 2009 after discovering the fraud.

Rigsby and Orthofix sales personnel then “devised a scheme” to allow Rigsby to continue to submit bone growth stimulator orders to Orthofix through a new front company that Rigsby created. Rigsby took numerous steps to conceal his affiliation with the front company so that Orthofix compliance personnel would not detect that he was still doing business with the company. Rigsby continued to submit orders for stimulators, sending the orders in through separate individuals.

Even though Rigsby had been fired for falsifying medical records, he continued to manipulate patient medical records and forge physicians’ signatures until Orthofix finally severed its relationship with him in 2011. Through his scheme, Rigsby caused Medicare and other federal insurance programs to pay more than $400, 000 for bone growth stimulators that should not have been paid.

Kickbacks

According to the announcement, Rigsby also paid kickbacks to health care professionals to induce them to order Orthofix stimulators. For instance, Rigsby paid the person who was responsible for ordering stimulators at one of the largest medical practices in Tennessee. Rigsby approached this person and asked if he could pay this person in return for steering stimulator orders to Orthofix. The person agreed, and Rigsby left an envelope with $200 in cash at the person’s house. In another instance, Rigsby entered into an arrangement to pay a nurse in Morristown, Tennessee, each time that the surgeon who employed her ordered an Orthofix stimulator. Rigsby left an envelope of cash, between $200-$300, in the back of the nurse’s truck after the surgeon began to order stimulators.

Conviction Scorecard

Six other individuals have been convicted and sentenced for committing fraud in relation to Orthofix bone growth stimulator sales. In December 2012, the company was convicted of obstruction of a federal audit and ordered to pay $42 million in criminal fines and civil payments, and was sentenced to probation for five years.

Sentencing is scheduled for August 9, 2013. The maximum penalty for health care fraud is ten years in prison, followed by three years of supervised release, a fine of $250, 000 or twice the loss or gain resulting from the crime, whichever is greater, forfeiture, restitution, and a mandatory special assessment. The maximum penalty for paying kickbacks is five years in prison, followed by three years of supervised release, a fine of $250, 000 or twice the loss or gain resulting from the crime, whichever is greater, forfeiture, restitution, and a mandatory special assessment.