Orthofix’s Settlement of Medicare Probe Rejected by Judge (Business Week)
Orthofix International NV (OFIX)’s settlement of federal regulators’ accusations that the maker of bone-repair products defrauded Medicare by paying kickbacks to doctors was rejected by a judge.
U.S. District Judge William G. Young in Boston rebuffed an Orthofix unit’s agreement to plead guilty to a felony count of obstructing a government audit and pay a $7.8 million fine after concluding the deal unduly restricted his sentencing power.
“It seems in this case the court’s hands ought not be tied,” Young told prosecutors and lawyers for Orthofix today at a hearing. “I have extreme unease of treating corporate criminal conduct like a civil case.”
It’s unclear whether Young’s refusal to accept the plea also scuttles Orthofix’s agreement to pay $34.2 million to resolve civil claims first raised in a whistle-blower’s lawsuit that the company defrauded the federal Medicare program through payments to doctors who used its bone-growth stimulators.
Unusual Situation
“It’s an unusual situation,” David Schumacher, an assistant U.S. attorney handling the Orthofix case, said in an interview after Young rejected the plea.
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