Texas Business Report: Orthofix Settles Medicare Fraud Case
The Lewisville-based company agreed to pay $42 million for accepting "overpayments by federal programs," U.S. Airways dances the acquisition tango with American, and more Texas business news.
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The Texas economy is one of the most robust in the world. Wildly profitable companies and ingenious entrepreneurs call this state home, and what happens here influences businesses around the nation. Here’s a slice of the profits, losses, big deals, and backroom decisions happening across Texas this week.
Lewisville-based medical manufacturer Orthofix Inc. agreed this week to pay $42 million to settle a federal Medicare fraud case, Businessweek reports. The Justice Department said the company “improperly waived patient co-payment” when selling bone growth stimulator devices, “resulting in overpayments by federal programs.” The lawsuit also accused Orthofix of offering kickbacks to physicians and obstructing a federal audit—a felony offense.
The Bottom Line: Orthofix’s billing services provider filed the civil lawsuit after discovering the company’s suspicious Medicare billings. The whistleblower will be awarded $9.2 million of the settlement for coming forward with the information.
Come Buy With Me
US Airways is upping the ante in discussions of a prospective attempt to acquire American Airlines, announcing that it has been contacted by several investors interested in partnering up for the deal. US Airways CFO Derek Kerr told the Fort Worth Star-Telegram, “We have people knocking down the door trying to be a part of this transaction, if we need to raise cash.”
Fort Worth private-equity firm TPG has emerged as one potential partner in the potential bid to purchase AMR, American’s financially troubled parent, according to a recent Reuters report.
The Bottom Line: While US Airways has not extended an official offer, it has “reached conditional labor agreements with American’s three largest unions, which are supporting a possible merger,” according to the Star-Telegram. It has also presented American’s creditors with a plan to save $1.2 billion if the merger does occur.
Exxon Mobil announced on Wednesday that it will relocate its refining headquarters from Virginia to a new Houston campus within three years, bringing 2,100 employees along with it. The Irving-based company is still consolidating its corporate offices following the 1999 merger of Exxon and Mobil, which was previously based in Fairfax, Businessweek reports.
The Bottom Line: About 10,000 employees will work at the Houston campus, which is currently under construction. Exxon representatives told Businessweek that “the company does not expect any significant staffing reductions as a result of the move.”
Steady Stealing Still Straining Stores
A new report from the National Retail Federation shows that Dallas and Houston rank among the top ten areas in the U.S. for organized retail crime, the Dallas Business Journal reported this week. Organized retail crime—which the DBJ defines as “the theft of large amounts of merchandise by organized gangs who seek to resell the stolen goods to fund their criminal enterprises”—is on the rise nationally. The NRF survey of 125 retail executives found that 96 percent of respondents had been victimized at least once in the past year.
The Bottom Line: Retailers are pushing for tougher federal legislation to combat the problem, arguing that the stolen merchandise is often shipped out of state, making it more difficult for individual states to catch criminals on their own.
Winner of the Week: Texas Startups
Dell gave a boost to Texas entrepreneurs on Thursday, announcing the creation of a $100 million fund “to provide startups with capital and technology,” the Austin Business Journal reports. Round Rock-based Dell’s Innovators Credit Fund will offer venture-backed companies up to $150,000 in credit to grow their business, as well as support from Dell sales teams and resident experts.
Loser of the Week: Tuesday Morning Corp.
Dallas-based thrift chain Tuesday Morning fired CEO Kathleen Mason this week, following a period of poor financial performance. The Dallas Business Journal reported the company took a net loss of $4.2 million last quarter, compared to $3.6 million in the same period a year ago. Revenue from existing stores also dropped by more than three percent. Investors had raised concerns to Tuesday Morning’s board of directors on the same day that Mason was fired.