Whistleblowers Collect $1.5 Million in Orbit Medical Healthcare Fraud Lawsuit

Orbit Medical Inc. and its partial successor, Rehab Medical Inc., agreed to pay $7.5 million to settle a Medicare fraud lawsuit. Whistleblowers Dustin Clyde and Tyler Jackson alleged the power wheelchair suppliers submitted false claims to federal health care programs for wheelchairs and accessories. Clyde and Jackson will split a $1.5 million whistleblower award for bringing the allegations to light.

Whistleblowers Collect $1.5 Million in Orbit Medical Healthcare Fraud Lawsuit

Clyde and Jackson Allege Orbit Forged Medical Records to Defraud Medicare

Tyler Jackson and Dustin Clyde, two former employees of Orbit Medical, filed allegations of healthcare fraud under the Federal False Claims Act. Orbit Medical and Rehab Medical are medical equipment suppliers based in Utah and Indiana. Dustin Clyde and Tyler Jackson alleged that Orbit sales representatives adjusted physician prescriptions to get Medicare to pay power wheelchair and accessory claims.

Medicare provides power wheelchairs for individuals who can’t perform daily activities using a walker, cane or other device. To qualify, physicians must perform a face-to-face patient exam, then provide the supplier with documentation supporting medical necessity and a written prescription within 45 days of the exam.

In their whistle blower lawsuit, Clyde and Jackson alleged that Orbit sales reps altered dates on prescriptions to falsely represent they were written within the required 45 day time limit. In addition, Orbit Medical employees allegedly changed prescriptions to falsely establish medical necessity, forged physician signatures and added false facsimile stamps.

Former Orbit VP Jacob Kilgore Indicted: Three Employees Plead Guilty

The initial whistleblowers’ suit identified Orbit Medical’s former vice president Jacob Kilgore as a defendant. The Orbit and Rehab settlement did not resolve pending charges against Kilgore.

In a separate 2013 criminal case, a federal grand jury indicted Kilgore on counts of health care fraud, false statements related to health care, and wire fraud. Three former Orbit sales representatives pled guilty to involvement in a conspiracy to commit health care fraud and are awaiting sentencing.

Federal Dollars Taken From Wheelchair-Dependent Individuals

“Power wheelchair suppliers must bill federal healthcare programs accurately and honestly to ensure that federal dollars are used for individuals who truly need these mobility devices,” said Benjamin C. Mizer of the Justice Department’s Civil Division. “The Justice Department is committed to pursuing those who seek to abuse taxpayer-funded programs.”

Whistleblowers Split $1.5M of $7.5M Wheelchair Supplier FCA Settlement

Orbit Medical and Rehab Medical agreed to pay $7.5 million to settle these allegations of healthcare fraud. This settlement did not determine any liability. Under the False Claims Act, a private party can sue for false claims on behalf of the government and share in any recovery. Clyde and Jackson will collect $1.5 million, 20 percent of the recovered amount.

“The resolution of this case helps to restore funds taken from the Medicare trust fund through the use of falsified records and billings,” said U.S. Attorney Carlie Christensen of the District of Utah. “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.”

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