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Press Release

Government Intervenes in Lawsuit Against Medical
Equipment Supplier Orbit Medical Inc. and Former
Vice President Jake Kilgore

For Immediate Release
Office of Public Affairs

The government has intervened in a False Claims Act lawsuit against Orbit Medical Inc. and Jake Kilgore alleging that Orbit Medical’s sales representatives boosted power wheelchair and accessory sales by altering and forging physician prescriptions and supporting documentation, the Justice Department announced today. Orbit Medical is a durable medical equipment supplier based in Salt Lake City, Utah. Jake Kilgore is the former vice president and sales manager at Orbit Medical for the Western region of the United States.


“Medical equipment suppliers must bill federal health care programs accurately and honestly to ensure that federal dollars are used for individuals who truly need mobility devices,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Justice Department is committed to pursuing those who seek to abuse taxpayer-funded programs.”


Medicare pays for power wheelchairs for beneficiaries who cannot perform mobility- related activities of daily living in their home using other mobility assistance equipment, such as a cane, walker or power scooter. To qualify for reimbursement, a physician must conduct a face-to-face examination of the beneficiary and provide the supplier with a written prescription for a power wheelchair within 45 days of such an encounter, 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.


The lawsuit alleges that Orbit Medical sales representatives, at Kilgore’s direction and encouragement, knowingly altered physician prescriptions and supporting documentation to get Orbit Medical’s power wheelchair and accessory claims paid by Medicare, the Federal Employees Health Benefits Plan and the Defense Health Agency. In particular, the lawsuit alleges that Orbit Medical sales representatives created documents to falsely establish that physicians examined beneficiaries in person; changed physicians’ prescriptions to falsely establish medical necessity for the power wheelchair or accessory; created or altered chart notes and other documents to falsely establish the medical necessity of the power wheelchair or accessory; forged physicians’ signatures on prescriptions and chart notes and added facsimile stamps to supporting documentation to make it appear as though physicians’ offices had sent the documents to Orbit Medical.


On Oct. 23, 2013, a federal grand jury in Utah indicted Jake Kilgore on three counts of health care fraud, three counts of false statements related to health care and three counts of wire fraud, all arising from his tenure with Orbit Medical.


“The government is intervening in this matter seeking to restore Medicare trust funds taken through the alleged use of falsified records and fraudulent billings, among other things,” said U.S. Attorney for the District of Utah David B. Barlow. “Health care fraud is aggressively pursued in Utah. Every effort is made to restore taxpayers' dollars taken through fraudulent conduct.”


“Our agency is dedicated to investigating health care fraud schemes such as this, which divert scarce taxpayer funds meant to provide for legitimate patient care,” said Gerald T. Roy, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General.

The allegations against Orbit Medical and Kilgore in this lawsuit were filed under the False Claims Act by two former Orbit employees, Dustin Clyde and Tyler Jackson. Under the act, private parties can sue for false claims on behalf of the government and share in any recovery. The act also permits the government to intervene in the whistleblowers’ suit, as the government did here.


The government’s intervention illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19.1 billion through False Claims Act cases, with more than $13.6 billion of that amount recovered in cases involving fraud against federal health care programs.


This case was a coordinated effort among the U.S. Attorney’s Office for the District of Utah, the Civil Division of the Department of Justice, the Department of Health and Human Services Office of the Inspector General, the Federal Bureau of Investigation, the Office of Personnel Management and the Defense Health Agency. The lawsuit is captioned United States ex rel. Clyde; Jackson v. Orbit Medical; Kilgore, No. 2:10-CV-00297 (D. Utah).


The claims pursued by the government are allegations only; there has been no determination of liability.

Updated September 15, 2014

Press Release Number: 14-379