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Press Release

Virginia Doctor Indicted For Perjury In Orthofix Investigation

For Immediate Release
U.S. Attorney's Office, District of Massachusetts
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BOSTON – A Virginia woman was charged today with making a false declaration to a grand jury.

Ilene Terrell, 65, of Fredericksburg, Va., was indicted with making a false declaration to a grand jury.

The indictment alleges that Terrell, a podiatrist, and representatives of Orthofix, Inc., manipulated 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. When Terrell was asked about these matters before the grand jury, she lied, claiming that she was not aware that any records had been manipulated. 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 manipulated 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. 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 and her role in obstructing an audit performed by Orthofix when the company requested that she provide medical records related to claims for bone growth stimulators.

If convicted, Terrell faces a statutory maximum penalty of five years in prison, to be followed by three years of supervised release and a $250,000 fine on each count.

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

The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Updated December 15, 2014