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Whistleblower lawsuit accuses Orthofix of kickbacks scheme

Fri, 08/10/2012 - 1:32pm
Mass Device

A recently unsealed whistleblower lawsuit in Florida accuses Orthofix of helping to file 'thousands' of false Medicare claims beginning in 2002 as part of a 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 Ara Jason Deukmedjian and Bharat Patel were using technology "so outdated it could not [emphasis theirs] make a real-time Internet connection," meaning no doctor was actually monitoring patients' neurological activity during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.

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