SLC medical company pays $7.5M to settle health care fraud case

SLC medical company pays $7.5M to settle health care fraud case

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SALT LAKE CITY — A Salt Lake medical equipment company will pay $7.5 million to settle allegations that it submitted false claims to Medicare and other federal health programs for power wheelchairs.

Sales representatives for Orbit Medical Inc. and its partial successor Rehab Medical Inc., of Indianapolis, Indiana, altered doctor prescriptions and supporting documents when they billed Medicare, the Federal Employees Health Benefits Plan and the Defense Health Agency, according to federal authorities.

"Taxpayers’ dollars paid for power wheelchairs not legitimately prescribed by a physician. Health care fraud is aggressively prosecuted in Utah and every effort is made to restore government funds taken through such conduct," U.S. Attorney for Utah Carlie Christensen said in a statement Wednesday.

The government alleged that Orbit sales reps falsified records — including doctors' prescriptions and chart notes — to make it look like patients qualified for wheelchairs when they did not. They also forged doctors' signatures on those documents.

Two former Orbit employees, Dustin Clyde and Tyler Jackson, filed a lawsuit as whistleblowers against the company under the federal False Claims Act. Under the law, a private party can sue for false claims on behalf of the government and share in any recovery. Clyde and Jackson will receive about $1.5 million.

The settlement does not resolve a criminal case against former Orbit vice president and sales manager Jake Kilgore. A federal grand jury indicted the Fruit Heights man on three counts each of health care fraud, false statements relating to health care matters and wire fraud in October 2013. He has pleaded not guilty.

Orbit billed Medicare for $20 million from October 2006 to June 2011, collecting $15 million in payments, according to the indictment.

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Dennis Romboy

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