In another blow to Marietta-based MiMedx, the Veterans Affairs Medical Center in Minneapolis has parted ways with four podiatrists and a dermatologist over improprieties with the company’s biopharma products, a VA spokesman confirmed for The Atlanta Journal-Constitution.
The company is under fire amid accusations of “channel stuffing” by ex-employees — lobbying friendly doctors and medical staffers to overstock and over-use products, thereby inflating revenue reports and driving up stocks.
In May, three South Carolina VA workers were indicted on federal health care fraud charges, accused of excessive use of MiMedx products on veterans after accepting gift cards, meals and other inducements from a company representative. Two of the three workers were also charged with accepting bribes.
The company has launched an internal investigation, and in June, MiMedx announced that it will revise more than five years of financial statements. In July, prominent Atlanta businessman Parker "Pete" Petit stepped down as the company's CEO and chairman. The company remains under scrutiny from the U.S. Department of Justice, the U.S. Securities and Exchange Commission, the Food and Drug Administration and the Department of Veterans Affairs.
The details behind the Minneapolis doctors’ departures aren’t clear. The spokesman, Ralph Heussner, said the VA proposed terminating all five, but each opted to resign or retire. He confirmed that the proposed terminations involved issues with MiMedx products.
Huessner explained in an email that the doctors “engaged in behavior that is not in line with the norms and values of the department.
“VA has made clear that it will hold employees accountable when they to fail to live up to the high standards taxpayers expect from us,” the email said, “and that’s exactly what we’re doing in this case.”
This is a developing story. Check back at MyAJC.com for updates.
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