Virginia Doctor Sentenced For Lying To Grand Jury About Medicare Fraud Scheme

BOSTON – A Virginia podiatrist was sentenced yesterday for making false declarations to a grand jury about her participation in a Medicare fraud scheme.

U.S. District Court Judge Nathaniel M. Gorton sentenced Ilene Terrell, 65, of Fredericksburg, Va., to five months in prison, five months of home confinement, and two years of supervised release. He also ordered her to pay a $15,000 fine. In January 2014, Terrell pleaded guilty to four counts of making false declarations to a grand jury.

Terrell, a podiatrist, lied to the grand jury about her role in falsifying patient medical records to induce Medicare to pay for claims for Orthofix bone growth stimulator medical devices that did not meet Medicare’s payment guidelines. Bone growth stimulators are externally-worn medical devices that help regenerate bone cells and are used to assist the healing of broken bones. Medicare only pays for a bone growth stimulator, which costs approximately $4,000, if the medical supplier provides records demonstrating that fracture healing has ceased for three or more months.

On numerous occasions, Terrell prescribed a stimulator for a patient where the claim would not have met Medicare’s guidelines. When this occurred, the Orthofix territory manager, Terrell, and an employee at Terrell’s direction often falsified the patient’s medical records, making it appear as though the stimulator was not prescribed until three months had elapsed without healing, when in fact that was not true and Medicare should not have paid the claim. For instance, they deleted references in chart notes that the patient was using the stimulator and was healing, and they created new, fictitious notes at the end of the 90- day period stating that the bone was still broken and that a stimulator would be ordered. Terrell also created fictitious prescriptions and signed Medicare Certificates of Medical Necessity falsely stating that she had ordered the stimulator at the end of the 90-day window, when in fact the patient had received the device months previously. These medical records were altered solely to ensure that Medicare paid Orthofix for bone stimulator claims that did not satisfy the program’s payment rules.

On May 22, 2012, Terrell testified before the grand jury. She was asked several times if she was aware that patient records had been manipulated. Terrell lied, denying that she manipulated patient records or that she was even aware that anyone had done so. Terrell lied about other matters as well, including her communications with an Orthofix representative about the government’s investigation. Terrell discussed the government’s investigation at length with the Orthofix representative and instructed him “you and I have not talked.” She also threatened him, stating, “If you guys take me out you are never going to live to hear the end of it. If I roll on this, I am serious, heads are going to roll, heads are absolutely gonna roll.”

In the grand jury, Terrell was asked if she had recently spoken with the Orthofix representative. Terrell lied, stating that she only spoke with him briefly and that the representative stated that he did not know what the investigation was about.

Subsequent to her testimony, after learning that her practice administrator had provided truthful, damaging testimony to the grand jury, Terrell fired this employee after 23 years of service.

In addition to the Terrell sentence, the Orthofix investigation has to date resulted in a number of felony charges against employees and contractors of Orthofix, including the following:

• On Dec. 14, 2012, Orthofix was convicted of obstruction of a federal audit and paid approximately $42 million in criminal fines and civil payments, and was sentenced to probation for five years;
• On Jan. 22, 2013, Thomas Guerrieri, the former Orthofix Vice President of Sales, was sentenced to eight months in prison and was ordered to pay $50,000 in forfeiture and fines for paying kickbacks to health care professionals;
• On July 19, 2012, Michael Cobb, a physician’s assistant, was sentenced to six months in prison, six months home confinement and ordered to forfeit $10,000 and pay a $3,000 fine for accepting kickbacks from Orthofix;
• On Aug. 9, 2013, Hunter Rigsby, a former Orthofix Territory Manager, was sentenced to eight months in prison and ordered to pay $75,000 in criminal fines and forfeiture for committing Medicare fraud and paying kickbacks;
• On Jan. 31, 2013, Mitchell Salzman, a former Orthofix Regional Manager, was sentenced to three months of home confinement and one year of probation for committing perjury;
• On Jan. 9, 2013, Derrick Field, a former Orthofix Territory Manager, was sentenced to five months of home confinement as part of a two year probation sentence, in addition to paying $44,000 in forfeiture and fines for committing health care fraud;
• On Jan. 23, 2013, Michael McKay, a former Orthofix Territory Manager, was sentenced to three months home confinement, one year probation and paid $13,000 in forfeiture and fines for committing health care fraud;
• On Sept. 28, 2012, Brian Racey, a former Orthofix Territory Manager, was sentenced to one day in prison, six month of home confinement, two years of supervised release, and a $2,500 fine for committing health care fraud; and
• Michael Jenkins, a former Orthofix Territory Manager, has agreed to plead guilty to committing health care fraud.

United States Attorney Carmen M. Ortiz and Philip Coyne, Special Agent in Charge of the Department of Health and Human Services, Office of Inspector General, Office of Investigations, made the announcement. The case is being prosecuted by Assistant U.S. Attorneys David S. Schumacher and Miranda Hooker of Ortiz’s Health Care Fraud Unit.