September 16, 2003 Orthofix Inc.
Medical device manufacturer Orthofix Inc., has agreed to pay over $1.5 Million Dollars to settle a qui tam case filed by one of its former employees, Karen Neel. The allegations of the case were that Orthofix knowingly submitted claims to TRICARE (the military’s health care system) for payment for Physio-Stim devices which were sold for an unapproved use on the cervical spine. Under TRICARE’s coverage and prohibition and policy manual, TRICARE does not pay for the use of medical devices which have not been approved, or which are used for a purpose that has not been approved. Physio-Stim products fit on certain parts of the body and have been approved by the FDA to be used to induce healing of fractures of long bones, such as an arm or leg, through electrical bone growth stimulation. The FDA has not approved any electrical bone growth stimulation device for use on the cervical part of the spine.
See U.S. Dept of Justice Press Release 9/16/03