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Press Release

Virginia Doctor Convicted On Perjury Charges In Orthofix Investigation

For Immediate Release
U.S. Attorney's Office, District of Massachusetts
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BOSTON – A Virginia doctor was convicted today of making a false declaration to a grand jury regarding her involvement in falsifying patient medical records.

Ilene Terrell, 65, of Fredericksburg, Va. pleaded guilty before U.S. District Judge Nathaniel M. Gorton to four counts of making a false declaration to a grand jury. Judge Gorton scheduled sentencing for April 17, 2014. Terrell faces a maximum of five years in prison, three years of supervised release and a $250,000 fine on each count.

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 if the medical supplier provides records demonstrating that fracture healing has ceased for three or more months. If the bone may heal on its own, Medicare will not pay for a stimulator, which can cost upwards of $4,000.

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 that was untrue and Medicare should not have paid the claim. On some occasions, Terrell prescribed a stimulator for a patient and the patient’s bone healed within the prohibited three-month window. When that occurred, Terrell, an Orthofix representative, and an employee at Terrell’s direction deleted references in chart notes that the patient was using the stimulator and was healing, and they created a new, fictitious note 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 to support the bogus claims.

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 to the grand jury, emphatically 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 that “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 sum total of the conversation was that the representative stated that he did not know what the investigation was about.

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

Updated December 15, 2014