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Justice News

Department of Justice
U.S. Attorney’s Office
District of Massachusetts

FOR IMMEDIATE RELEASE
Thursday, January 24, 2013

Another Orthofix Defendant Sentenced For Committing Medicare Fraud

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BOSTON – A former Orthofix territory manager was sentenced yesterday for defrauding Medicare by forging patient medical records.

Michael J. McKay, 32, was sentenced by U.S. District Court Judge Denise J. Casper to one year of probation, with the first three months to be served in home confinement, and ordered to forfeit $10,000 and pay a fine of $3,000. In May 2012, McKay pleaded guilty to healthcare fraud.

Between 2008 and 2009 McKay was a territory manager for Orthofix, a company that manufactured and distributed bone growth stimulator medical devices that were intended to assist patients with bone fractures that did not heal properly. Medicare and many private insurance carriers have specific guidelines describing when it will pay for bone growth stimulators. When McKay received orders for patients that did not satisfy these guidelines, McKay frequently falsified the patients’ medical records to make it appear as though the order met Medicare’s rules so that Medicare would pay for a claim that otherwise would not be covered. Between 2008 and 2010, federal insurance carriers paid more than $70,000 for bone growth stimulators for claims where McKay falsified medical records. McKay altered physician’s chart notes, changing the dates of patient visits, describing patient visits that did not occur, and inserting false diagnoses. McKay also forged prescriptions and Medicare Certificates of Medical Necessity within the orders. Orthofix fired McKay after it discovered his fraud. Even after he was fired, however, McKay continued to submit orders for stimulators by submitting them to a colleague, Derrick Field, who split the commissions with Field. Even after he was fired, McKay continued to forge chart notes, prescriptions and CMNs in the orders he submitted to Field. On January 9, 2013, Field was sentenced to five months home confinement, two years of probation, and $44,000 in fines and forfeiture.

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

  • In December 2012, Orthofix 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;
  • On January 22, 2013, Tom Guerrieri, the former vice president of sales for Orthofix, was sentenced to eight months in prison and ordered to pay $50,000 in fines and forfeiture for paying kickbacks;
  • In July 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;
  • In December 2011, Mitchell Salzman pleaded guilty while he was a regional manager for Orthofix and is scheduled to be sentenced on Jan. 31, 2013; and
  • In September 2012, Brian Racey pleaded guilty to health care while he was a territory manager for Orthofix and is scheduled to be sentenced on Feb. 20, 2013 in the U.S. District Court for the Eastern District of Pennsylvania.

This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations; the Federal Bureau of Investigation Boston Field Division; and the Department of Defense, Defense Criminal Investigative Service – Boston Resident Agency. It was being prosecuted by Assistant U.S. Attorneys David Schumacher and Jeremy Sternberg of Ortiz's Health Care Fraud Unit.