N.Y. man defrauds Medicare of $70,000 in medical device reimbursements

BOSTON – Michael McKay, 32, of Saratoga Springs, N.Y.. pleaded guilty in district court on May 11 for forging physician’s chart notes to make Medicare or private carrier claims qualify for reimbursements for bone growth stimulator medical devices.

According to the Office of the Inspector General (OIG), between 2008 and 2010, McKay collected $70,000 in false Medicare claims.

District Judge Denise Casper has scheduled McKay’s sentencing for Sept. 6, 2012. McKay faces up to 10 years in prison, to be followed by three years of supervised release; a $250,000 fine; asset forfeiture and restitution.

Had the case proceeded to trial the government’s evidence would have proven that between 2008 and 2009 McKay was a territory manager for a company that manufactured and distributed bone growth stimulator medical devices, according to the OIG. McKay’s territory included New York, Pennsylvania and Ohio.

The device that McKay sold was intended to assist patients with bone fractures that did not heal properly, according to the OIG. Medicare has specific guidelines describing when it will pay for this device for one of its beneficiaries. Many private insurance carriers follow these guidelines as well. McKay often received orders for patients that did not satisfy these guidelines. When this happened, McKay forged the patients’ medical records to make it appear as though the order met Medicare or private payer guidelines.

McKay altered physician’s chart notes, changing the dates of patient visits and inserting false diagnoses, officials from the OIG said. McKay also created phony medical chart notes, describing patient visits that did not occur.

The medical device company fired McKay after it discovered his fraud, OIG officials said. After that, McKay’s supervisor and another territory manager, Derrick Field, concocted a scheme in which McKay continued to submit orders from doctors in his former territory, but he submitted them through Field.

Field, who was also convicted for healthcare fraud in a similar scheme, submitted the orders to the device company and split the commissions with McKay. McKay continued to forge patients’ medical records even after he was fired by the company for this conduct, according to the OIG.