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.
Viceroy is pleased to release its research report on Steinhoff International Holdings NV.
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Steinhoff (SNH) has long been under scrutiny for seemingly inexplicable factors including:
- A long string of acquisitions of stagting or deteriorating businesses whose performance seems to miraculously improve post-acquisition, even if only on paper.
- Cash flow trends that do not correspond to EBITDA.
- Investigations into senior executives for tax-evasion, document forgery and fraud.
- Rampant and dilutive equity raising.
Viceroy’s investigation into Steinhoff has revealed several concerning activities surrounding a number of at least two off-balance sheet, undisclosed related party entities:
- Campion Capital
- Southern View Finance
While the existence of some of these entities has been reported by the media, their activities have not. Viceroy’s analysis suggests Steinhoff uses these off-balance sheet vehicles to artificially inflate earnings:
- Steinhoff has issued expensive loans to and booked interest revenue against Campion subsidiaries for the purchase of loss-making Steinhoff subsidiaries. These revenues will never translate to cash.
- Steinhoff has moved two loss-making and predatory consumer loan providers to off-balance sheet entities: JD Consumer Finance and Capfin.
- Steinhoff negotiated the re-purchase of the only profitable portions of JD and Capfin (loan administration and debt collection facilities) while allowing losses to be incurred at off-balance sheet, related party entities under Campion Capital.
Given these loss-making entities, such as Southern View Finance UK, are being round tripped back to Steinhoff, Viceroy believe it is possible that Steinhoff are ‘repaying’ Campion’s outlays through acquisition premiums (i.e. losses are being capitalized through round-trip transactions with related parties).
Viceroy believes that, based on the contents of this report, Steinhoff should consolidate Campion Capital and its subsidiaries given that Steinhoff bears full economic liability for these entities through loan arrangements and exert total control through overlapping management.
Viceroy believes the facts presented in this report will bring Steinhoff’s behavior to the attention of regulatory authorities.
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.
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.
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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 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.
Part 14 – Halloween Special
Viceroy have discovered legal proceedings against MiMedx vendor RedMed for their alleged role in a kickback scheme and False Claims act violations. In addition to this Redmed’s principal Jeff Hannes is also involved with several other Physician Owned/related Distributors (PODs).
Viceroy will also highlight MiMedx sales to another POD whose physician is no longer alive and the LLC deregistered.
Viceroy will release details of further PODs shortly.