Viceroy activates ‘The Honeypot’ – Parker H. Petit & MiMedx caught red-handed

New insights on MiMedx instructions to physicians on how to fraudulently increase compensation.

Following the release of our previous report titled “Viceroy release MiMedx EOB emails”, Viceroy Research has been contacted by physicians corroborating MiMedx’s role in distributing EOB to fraudulently increase Medicare reimbursement. This occurs through the reclassification of AmnioFix products as EpiFix products in order to obtain Medicare reimbursements.

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MiMedx’s recent nonsensical responses to our research have been evasive and does not acknowledge that at its core, the practice construes Medicare fraud. In order to demonstrate this, Viceroy set a Honeypot. MiMedx in their desperation to mislead investors, have taken our bait.

While the issue of reclassifying MiMedx product to exploit federal billing facilities was a major issue, there was another underlying element to the EOB.

Consider the following: in principle, Medicare reimbursements cover 80% of the cost of any treatment used as well as 80% of the Medicare application fee. Typically, this means a reduced payment for the patient, however by utilizing a larger graft than is necessary a physician can be reimbursed more than the cost of treatment.

Per the Rosenberger email, how can MiMedx justify physicians PROFITING from Medicare when system is intended to cover a PORTION of costs?

Viceroy yesterday showed MiMedx has zero credibility regarding their statements. Previously MiMedx had state to investors AvKare wasn’t an intermediary, controlled sales and it was all lies. MiMedx know full well what the implications of Mike Carlton’s deposition under oath means. There is no commentary, statements issued by MiMedx are purely intended to manipulate a situation where blind and naive analysts continue to promote the stock.

MiMedx continue to consciously mislead investors, defame Viceroy and Marc Cohodes

AvKare just “made it easier” for former Advanced BioHealing agents to stuff federal customers with MiMedx product

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Viceroy present indisputable proof that Parker H. Petit has been misleading investors and defaming Marc Cohodes & Viceroy.

Mike Carlton, VP of Global Sales, was under oath giving a deposition about MiMedx’s relationship with Mid-South Biologics, who are suing MiMedx regarding contractual issues. Parker H. Petit and MiMedx attorneys would have known that during the deposition, Mike Carlton said this:

 

“AvKare didn’t sell the product. They didn’t do anything. They just made it easier to sell.”

Interestingly, when Viceroy and Marc Cohodes echoed this statement, we were met by a barrage of lies and a law suit from MiMedx who want to falsely asset our reports are factually inaccurate.

For the analysts that can find ‘no credible evidence of wrong-doing’, we recommend they review filings for all cases MiMedx are involved in.

Today’s focus is on case is Mid-South Biologics LLC (Pla) Vs. MiMedx Group Inc (Def) – Reference: Case 2:17-cv-02028-JTF-egb   Document 43-3   Filed 12/04/17. The deposition was taken on the 13th Day of October 2017.

Parker H. Petit and Mike Carlton are advised that we have forwarded this information to the SEC. Investors should be aware of the lengths MiMedx will go to mislead and misinform its shareholders

As a recap:

Analysts who can blindly find no credible evidence of wrong-doing should seriously review Viceroy’s reports and MiMedx’s own documentation showing channel-stuffing, fake revenue recognition, ‘free evaluation products’, breaches to anti-kickback statutes and many more violations.

As previously reported, MiMedx is being investigated by Regulators, it would be prudent for the sellside to conduct their own investigation instead of relying on a “binary outcome” in relation to allegations of fraud.

Viceroy release MiMedx EOB emails

Viceroy has obtained emails instructing physicians how to falsify MiMedx Q-codes to fraudulently increase reimbursement.

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Viceroy have obtained printouts of emails sent from MiMedx employees specifically instructing physicians on how to fraudulently increase Medicare reimbursement.

An EOB document titled “EpiFix – Made Easy” has been sent to Viceroy, which appears to be advice from MiMedx to physicians on how to receive Medicare reimbursements for their product.

One problem: this advice was provided to surgical clients; whose products are ineligible for Medicare reimbursement.

MiMedx now under investigation by DOJ enforcement & VA

Viceroy has received responses to two Freedom of Information Act (FOIA) requests lodged after the publication of our initial report, one from the Department of Veterans Affairs and the other to the Department of Justice.

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Both agencies withheld all requested documents under 5 U.S. Code § 552 5(b)(7)(A), which provides an exemption for agencies to make available public documents as it could “reasonably be expected to interfere with enforcement proceedings.”

Viceroy now believe MiMedx is under formal investigation by the DOJ, the DVA and the SEC.

MiMedx caught red-handed circumventing VA regulations

Viceroy’s latest report reveals emails between the VA and MiMedx show MiMedx employees were instructed to circumvent VA policy regarding consignment agreements.

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Viceroy obtained a series of emails between MiMedx employees and VA personnel. These emails are focused on the arrangement of consignment inventory, contrary to VA hospital regulations at the time. The issue comes to a head when a VA supervisor decides to hold MiMedx responsible for repeatedly sending product that was not ordered. The VA have been made aware of these and other emails with a report of concern.

MiMedx vendors soliciting up-coding of Medicare incentives.

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MiMedx emails to former employees in clear violation of federal law: settlements contingent on retracting statements to regulatory bodies.

Viceroy has obtained from a physician an email sent from MiMedx employees to physicians to fraudulently exploit the reimbursement system to financially benefit both the physician and MiMedx. This is done through manipulation of Q-codes which denote the form of treatment in which a product was used. The aim is for all treatments using MiMedx products to be coded as “wound care” in order to fraudulently maximize reimbursement. This type of Medicare fraud is referred to as ‘up-coding’.

In addition to this Viceroy present recent court filings and emails showing that MiMedx engaged in illegal settlement terms in its legal actions against former employees. MiMedx has sent legal material to former employees requesting that they do not contact regulatory authorities and has stipulated in its settlement agreements that former employees retract their statements to any regulatory body. This is a violation of the United States Code of Federal Regulations.

As a reminder of MiMedx selective statements to its investors, it’s by no coincidence that MiMedx are now blatantly cloaking their conduct in public courts relating to former employee proceedings on confidentiality grounds.

Viceroy continue to be contacted by physicians, former employees, former and current VA employees all speaking on a similar theme when explaining MiMedx conduct. We thank these brave individuals for fighting back against the unnecessary, aggressive, and retaliatory actions of MiMedx.

Viceroy were informed by various physicians that they had reported their concerns to the Office of Inspector General U.S. Department of Health & Human Services .

We are also led to believe that MiMedx’s statement of assisting the Department of Veterans Affairs with its on-going investigation is incomplete, if not deceptive, via omission. Viceroy believe investors should have been told of these investigations and what information was requested by VA investigators.

The more MiMedx management continue to lie to its investors through press releases and responses to short seller articles, the more disillusioned and harassed former employees send Viceroy evidence countering their claims.

Emails with the VA & new Whistleblower counter-claims

Emails obtained by Viceroy between MiMedx employees and a Department of Veterans Affairs hospital further evidence channel stuffing. New whistleblower counterclaim reveals blatant, systematic fraud across what appears to be the entirety of the MiMedx corporate structure.

Part 15 – Emails to VA facility & Counterclaim

Viceroy have obtained an email exchange between a number of MiMedx sales employees and a VA Medical Center, showing that MiMedx employees attempt to circumvent hospital policy on consignment inventory to prevent tracking of MiMedx product usage.

Additionally, Viceroy has obtained court filings between MiMedx and former employee Michael Fox that have been recently filed.

Annexed to this article are the transcripts of recordings of phone calls between Jess Kruchoski, former MiMedx employee; Steve Blocker (Area VP) and Lou Roselli (Director of National Sales, aka “5 Levels Lower” Lou). The three openly discuss end-of-quarter channel stuffing activity directed by Pete Petit and Chris Cashman.