Former Walter Reed O&P Staff Charged

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Two former Walter Reed National Military Center employees received federal indictments after allegations that one failed to report financial gains and gifts he received from people and companies doing business with the hospital, and the other allowed his orthotist certification to be used to fraudulently bill Medicare.

David Laufer, the chief of the Prosthetics and Orthotics Department at Walter Reed in Bethesda until May 2019, was charged with five counts of making false statements by not disclosing money he received from an outside O&P company. Timothy Hamilton, an orthotist in the Walter Reed P&O department from 1991 to 2017, pleaded guilty to conspiracy to commit health care fraud and to acts affecting a financial interest.

Laufer's job required him to complete a financial disclosure form reporting all sources of outside income greater than $200, any business outside the US government he or his spouse was an employee or consultant, any agreements about past, present or future employment, travel-related reimbursement or gifts totaling more than $350 from any one source. Although the indictment didn't specify dollar amounts, it alleged Laufer failed to report money he received from a Germantown, Maryland, company that provided O&P materials to Walter Reed, according to CBS Baltimore. The company's owner regularly communicated with Laufer about business between the company and Walter Reed, federal officials said.

Hamilton admitted that beginning in 2009 he allowed a person to use his orthotist certification to help their business gain national accreditation as a part of the needed documentation for Medicare credentialing. This allowed that person's company to "bill insurers for medical treatment that required the involvement of a certified orthotist, even though Hamilton was not providing those services in the vast majority of cases," according to the charges.

Hamilton received monthly financial payments from the person from 2009 until October 2015 totaling more than $45,000. From 2011 to 2015, the company used Hamilton's credentials to submit more than 225 fraudulent insurance claims of more than $150,000, the indictment said. He also received $15,000 in gift cards, checks, and other benefits such as tickets and lodging from another company that did business with Walter Reed. While Hamilton was receiving money from the companies, he ordered products from the companies on behalf of Walter Reed.

Hamilton faces a maximum of ten years in prison for conspiracy to commit healthcare fraud and a maximum of one year in prison for acts affecting a financial interest. Laufer faces a maximum sentence of five years in prison for each of the five counts of making a false statement.