The O’Connor Medical Supply Inc. owner has pleaded guilty to giving false documents to the United States Attorney’s Office, and has agreed to pay nearly $900,000 to resolve False Claims Act lawsuit.

The owner of the durable medical product store had reportedly provided these faulty documents to the United States Attorney’s Office during a civil False Claims Act lawsuit investigation. Iowa resident James O’Connor was convicted of one count of Making and Using False Documents, which is in violation of federal law.

According to the plea agreement made to settle the False Claims Act lawsuit, O’Connor admitted to providing a false Letter of Medical Necessity to cover up a previous claim he made to Medicare. The letter requested a complex and expensive orthotic device when he had provided the beneficiary something much cheaper.

As part of his sentencing, O’Connor further admitted that he caused almost $350,000 in loss from Medicare. He had provided the letter after receiving a Civil Investigation Demand from the attorney’s office, which was in conjunction with a civil False Claims Act lawsuit investigation.

O’Connor also agreed to a settlement payment of $898,523.08 to resolve the False Claims Act lawsuit investigation, with O’Connor reportedly submitting various claims to Medicare and Medicaid for extensive compensation for expensive durable medical equipment.

Overview of False Claims Act Lawsuit Investigation

According to the False Claims Act lawsuit, O’Connor had provided beneficiaries much cheaper and lower quality variants of medical equipment than what the Medicare and Medicaid claims asked for.

The equipment O’Connor asked compensation for included ankle foot orthoses, walking boots, knee braces and wrist finger orthoses. In addition to the settlement, O’Connor has been ordered to pay the whistleblower who filed the False Claims Act lawsuit.

The whistleblower will reportedly receive $224,630.77, which is 25% of the almost $900,000 settlement. The whistleblower’s legal team will receive $51,476.92 from O’Connor, also as part of the terms of the settlement.

Special Agent in Charge of the United States Department of Health and Human Services Steve Hanson stated that “in order to protect our Medicare and Medicaid programs from unscrupulous health care providers, our office will continue to work with our law enforcement partners to pursue those who overbill our programs for services they did not provide to our beneficiaries.”

This False Claims Act lawsuit investigation is one of at least 20 financial settlements the United States Attorney’s Office of Northern Iowa has reached with healthcare providers since June 2013. This is also the second successful settlement that had resulted from a whistleblower lawsuit during this period.

In both cases, individual whistleblowers had shared their discoveries of fraud with the federal government. For O’Connor’s False Claims Act lawsuit, the sentencing will be conducted at the hands of U.S. District Court Judge Linda R. Reade after a presentence report is ready.

O’Connor remains free on a bond amount previously set, with the possibility of five years in prison. This False Claims Act lawsuit was investigated by the United States Department of Health and Human Services, the Federal Bureau of Investigation, and Iowa’s Medicaid Fraud Control Unit.