Fredericksburg Doctor Sentenced in Orthofix Medicare Fraud Scheme

by | Dec 13, 2014 | Government

By Susan Larson

A Fredericksburg podiatrist has been sentenced for making a false declaration to a grand jury regarding her involvement in falsifying patient medical records.

Ilene Terrell, 65, was sentenced to five months in prison, five months of home confinement, and two years of supervised release.  U.S. District Court Judge Nathaniel M. Gorton also ordered Terrell to pay a $15,000 fine. In January 2014, Terrell pleaded guilty to four counts of making false declarations to a grand jury, the U.S. Justice Department (DOJ) said in a press release.

“Terrell 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,” the DOJ said.

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.  A bone growth stimulator 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,” DOJ said. “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, the DOJ said.

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,” said the DOJ. “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, the DOJ said. “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.”

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