O’Connor Medical Supply: The False Letter Behind the Upcoded Claims

In the O’Connor Medical Supply fraud case, the operator agreed to an $898,523 civil settlement over allegations that he billed Medicare and Medicaid for more expensive equipment than patients received. In his guilty plea, he admitted supplying a false letter of medical necessity during the investigation to conceal an upcoded Medicare claim. For someone inside a durable medical equipment business, that is the revealing part of this case: the document offered to explain a claim became evidence of the effort to hide it.

The business operated in Clive, Iowa. In its June 2017 announcement of the settlement and guilty plea, the Department of Justice described the civil allegations and the operator’s separate admission about the false letter. A private citizen had brought the civil allegations through a False Claims Act whistleblower lawsuit.

What the Court Found About the Upcoded Claims

In the criminal case, the court found that the conduct involved at least 3,375 upcoded durable medical equipment claims between 2011 and 2015. The Department of Justice’s November 2017 account of the court’s findings also reported that the operator had passed an audit and had cut, copied and forged doctors’ signatures.

The civil allegations concerned ankle foot orthoses, walking boots, knee braces and wrist finger orthoses. The government alleged that the operator billed Medicare and Medicaid for more expensive models than he furnished.

A worker who knew which model left the store could see a difference that would be invisible from the billed description alone.

He passed an audit while the upcoding was still going on. A file carrying a doctor’s signature could look supported even when the supplier had manufactured that support.

A False Document During the FCA Investigation

In his guilty plea, the operator admitted providing a false letter of medical necessity to the U.S. Attorney’s Office in response to a formal demand for information during its civil False Claims Act investigation. He admitted that the letter was intended to conceal a previous Medicare claim for a more complex and more expensive orthotic device than the patient actually received.

The letter reached beyond an inflated billing description. It supplied apparent medical support for the equipment on the claim. The operator was answering an investigation into the billing with a document meant to conceal it.

How the Durable Medical Equipment, Code and Paperwork Fit Together

In durable medical equipment billing, the product description connects the physical item to the payment. Medicare pays for orthotics and prosthetics as purchases. In this case, the alleged overbilling concerned which model the supplier furnished, from walking boots to wrist finger orthoses.

In his guilty plea, the operator admitted that the false letter was meant to conceal the mismatch between the device billed and the device supplied.

The false letter in this case targeted that connection. It purported to support the more complex device on a claim after the supplier had provided something else. A letter can make the paperwork agree with the bill without changing what the patient received. That is why we look at the product, the claim and the document’s history together.

Congressional testimony collected in Waste, Fraud, and Abuse, published by the U.S. Government Printing Office in 2003, described equipment payments tied to suppliers’ historical charges rather than current market prices. It also described upcoding as billing for something more expensive than what was actually provided. Those observations explain the incentive: the claim seeks the payment assigned to the more expensive item, while the supplier furnishes the cheaper one. In the Iowa guilty plea, the false letter was the admitted effort to conceal that difference.

The Civil Settlement and the Whistleblower’s Share

The civil settlement resolved the government’s allegations about the more expensive models billed to Medicare and Medicaid. The whistleblower who raised those allegations received 25% of the recovery, according to the Department of Justice’s November announcement.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Here, the whistleblower lawsuit brought the equipment allegations forward, and the government’s investigation also exposed the false response. The person who knows the billing business can contribute more than an account of an overcharge. They may know how an order was obtained, what equipment was furnished, or why the version sent outside the business differs from the one they handled.

Other Durable Medical Equipment Cases Show the Same Document Problem

Altered medical paperwork can support an inflated claim or conceal the difference after someone starts looking. Other durable medical equipment cases show both uses, through allegations about prescriptions and patient charts.

In the Orbit Medical case, the government alleged that sales representatives altered physician prescriptions and supporting documentation to get power wheelchair and accessory claims paid. The allegation placed the changes inside the supplier’s sales operation. A physician’s original prescription and the document used to obtain payment could tell different stories about the same patient.

The whistleblower’s complaint against QMES alleged that the company billed Medicare for ventilators while providing BiPAP devices and falsified patient records to justify the upcoding. It also alleged an attempt to make an insurer discard charts that revealed the billing. The complaint described the instruction this way:

According to that complaint, the whistleblower refused the instruction. The alleged effort to withdraw revealing charts adds another dimension to the Iowa case’s false letter: what a business does with records after they reach an investigator or payer can expose what it knows about the underlying claims.

What Evidence Is Needed to Report Medicare Fraud?

We work with you to identify the evidence that connects the equipment furnished, the claim and the documents used to support it. In an upcoding case like this one, we want to understand where those accounts diverge and who knew about the difference.

The Iowa case is particularly revealing because the admitted false letter came during the investigation. An employee’s knowledge of the paperwork can reach beyond the original claim to the explanation the business later gives for it. That is the account our whistleblower experts want to hear.

You Know How the Letter Was Made

You may know why the equipment, billing or medical paperwork tells a different story from the one your company gave investigators. Speak to one of our Whistleblower Experts about how that letter was made. We build your strongest durable medical equipment whistleblower case with you and bring in durable medical equipment fraud whistleblower lawyers who understand both healthcare claims and the records used to support them.