Dallas Medical Manufacturer settles $42 million in Medicare Fraud Suit

The latest settlement in the federal government’s investigation into Medicare fraud resulted in a Dallas-area medical manufacturer agreeing to pay $42 million in penalties. The company made fraudulent claims to federal healthcare programs, including Medicare.

Orthofix Inc., that sold bone growth stimulator devices, will pay nearly $35 million under a civil lawsuit regarding the False Claims Act. It’s alleged that Orthofix Inc. had oversights that resulted in overpayments by federal healthcare programs. Also mentioned were alleged kickbacks to physicians and staff. In addition to the civil suit, Orthofix Inc. faced criminal charges, including a felony charge of obstructing a government audit. The felony charges carried a nearly $8 million fine. The civil suit was considered a whistleblower suit, which was filed by a co-owner of a company that provided billing services and compliance programs to healthcare industries. The whistleblower will receive more than $9 million as a result of the settlement.

The federal government has ongoing investigations into Medicare fraud and has recovered more than $7.5 billion over the past 3 years. Each year Medicare fraud costs taxpayers an estimated $60 billion to $90 billion.