May 29, 2015

DOJ Catch Of The Week — Orbit Medical/Rehab Medical

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “catch of the week” goes to Orbit Medical Inc. and its partial successor, Rehab Medical Inc.  On Wednesday, these durable medical equipment suppliers agreed to pay $7.5 million to settle False Claims Act charges that Orbit submitted false claims to federal health care programs for power wheelchairs and accessories.  See DOJ Press Release.

Medicare pays for power wheelchairs for beneficiaries who need more than a cane, walker or power scooter to go about their daily activities.  To qualify for coverage, a physician must conduct a face-to-face exam of the patient and provide a written prescription for a power wheelchair within 45 days of the exam, along with documentation that supports the medical necessity of the device.  The prescription must be completed by the physician who performed the exam and must include the beneficiary’s name, the exam date, the diagnoses and conditions the wheelchair is expected to accommodate, the length of need and the physician’s signature.

According to the government, Orbit sales representatives knowingly altered physician prescriptions and supporting documentation to get Orbit’s power wheelchair and accessory claims paid by Medicare, the Federal Employees Health Benefits Plan and the Defense Health Agency.  This allegedly included changing or adding dates to physician prescriptions and chart notes to falsely document that the prescription was sent to the supplier within the 45 day window; changing the physician prescription to falsely establish medical necessity; creating or altering chart notes and other documents to falsely support the claimed medical necessity; forging physician signatures on prescriptions and chart notes; and adding facsimile stamps to supporting documentation to make it appear as though the physician’s office had sent the documents to Orbit.

The allegations were first raised in a whistleblower lawsuit filed by former Orbit employees, Dustin Clyde and Tyler Jackson, under the qui tam provisions of the False Claims Act.  They collectively will receive a whistleblower award of approximately $1.5 million.  Their original whistleblower suit also named as a defendant Jake Kilgore, the former vice president and sales manager at Orbit Medical for the Western region of the United States.  The settlement does not resolve the pending claims against Kilgore.  Separately, on Oct. 23, 2013, a federal grand jury in Utah indicted Kilgore on three counts of health care fraud, three counts of false statements related to health care and three counts of wire fraud.

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