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pennsylvania man pleads guilty to health care fraud

October 31, 2012


PHILADELPHIA – A former manager for a company that manufactures and distributes bone growth stimulator medical devices pleaded guilty today to health care fraud, in connection with his scheme to submit $250,000 in fraudulent claims for bone stimulators that did not meet Medicare’s guidelines. Brian Racey, 42, of North Wales, PA, was a territory manager for Orthofix, Inc. in Pennsylvania, New Jersey and Delaware from April 2004 until he resigned on March 31, 2011.

The device that Racey sold was intended to assist patients with bone fractures that did not heal properly. Medicare has specific guidelines describing when it will pay for this device. At today’s guilty plea hearing, Racey admitted that between 2004 and March 31, 2008, he received orders for Medicare patients that did not meet these guidelines. When this happened, Racey forged the patients’ medical records and altered doctors’ prescriptions to make it appear as though the orders met Medicare’s guidelines, and then caused fraudulent claims to be submitted to Medicare to pay for the devices.

Racey will be sentenced on February 6, 2013 by the Honorable Timothy J. Savage. Racey faces a maximum possible sentence of ten years imprisonment, a $250,000 fine, and a $100 special assessment, along with restitution and forfeiture.

The case was investigated by the United States Department of Health and Human Services, Office of Inspector General, Office of Investigations (HHS-OIG) and the United States Food and Drug Administration, Office of Criminal Investigation (FDA-OCI), and is being prosecuted by Assistant United States Attorney Mary E. Crawley.

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PATTY HARTMAN, Media Contact, 215-861-8525


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