Clive medical supply owner convicted of filing false Medicare, Medicaid claims

Owner also settled civil suit for over $898,000

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The owner of an orthotics medical supply store in Clive was convicted of submitting false Medicare and Medicaid claims Monday in federal court.

James T. O’Connor, 64, of West Des Moines and owner of O’Connor Medical Supply, Inc., which does business as a “See the Trainer” franchise in Clive, pleaded guilty to one count of making and using false documents in U.S. District Court.

He waived his right to a grand jury proceeding and agreed to be charged by information.

O’Connor faces up to five years in federal prison, a fine of twice the gross gain or loss or up to $250,000, whichever is greater, and victim’s restitution.

O’Connor admitted during the hearing that he submitted a document with false statements to the U.S. Attorney’s Office of the Northern District during a False Claims Act civil investigation.

The information shows prosecutors were investigating allegations that O’Connor was “upcoding” claims submitted to Medicare and Medicaid — billing for more expensive items when less items were actually provided and creating false documents to support those claims. An employee told investigators that O’Connor was forging doctors’ signatures, who prescribed certain orthotic devices such as knee and ankle braces, by cutting, copying and pasting the signatures from one document to another. This made it appear as if the doctors had prescribed a more “expensive, custom orthotic device to be medically necessary,” the information shows.

O’Connor admitted during the hearing that he included for one patient on June 6, 2016 a “Letter of Medical Necessity” signed by a doctor that said the patient had been prescribed a bilateral custom knee brace for osteoarthritis. O’Connor admitted this document was false and the copied, cut, and pasted version with the doctor’s signature was submitted to Medicare. The patient received a much cheaper, non-custom knee brace, the information shows.

Prosecutors said O’Connor also entered into a settlement agreement on the False Claims Act investigation and will pay $898,523 to resolve these allegations. As part of that investigation, prosecutors alleged O’Connor submitted Medicare and Medicaid claims for four more expensive models of durable medical equipment than what he actually provided to patients — ankle foot orthosis, walking boots, knee braces and wrist finger orthosis.

A civil lawsuit was also brought by a whistleblower and O’Connor has agreed to pay the whistleblower’s law firm an additional $51,477 in fees, prosecutors said. The whistleblower is entitled to receive 25 percent or about $224,631 of the nearly $900,000 recovery pursuant to the provisions of the False Claims Act. Those provisions permit private individuals with knowledge of wrongdoing to bring suit on behalf of the government for false claims and share in any recovery.

“This result shows that our office will use every available tool to ensure Medicare and Medicaid beneficiaries receive the care to which they are entitled and government funds are well spent,” Acting U.S. Attorney Sean Berry said. “Our office encourages citizens to report fraudulent conduct by health care providers to help us ensure fair and efficient health systems throughout the district.”

l Comments: (319) 398-8318; trish.mehaffey@thegazette.com

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