US Ophthalmic Company to Pay US$487 Million in Penalties for Kickback Scheme

Published: 17 May 2023

Eye TestAn ophthalmic supply company was ordered to pay $487 million for its role in a conspiracy to pay kickbacks to eye surgeons. (Photo: IAPB/VISION 2020, Flickr, License)

By Henry Pope

An ophthalmic supply company was ordered by a U.S. federal court on Monday to forfeit US$487 million for paying kickbacks to eye surgeons performing cataract surgeries.

Precision Lens, and its owner Paul Ehle, violated the U.S. False Claims Act as well as the Anti-Kickback Statute by paying kickbacks to ophthalmic surgeons to promote the company's products for cataract surgeries.

A federal jury concluded that the defendants were linked to 64,575 fraudulent health insurance claims, amounting to a bill of $43,694,641.71. As all the claims were eventually reimbursed by Medicare, the American government's national health insurance program, the total cost ultimately came at the taxpayers' expense.

The False Claims Act, also known as the "Lincoln Law," makes it illegal for individuals and entities to defraud the U.S. federal government. The minimum civil penalty is $5,000 per false claim, plus three times the amount the government was defrauded by.

In this instance, Precision Lens and Paul Ehle are liable for just under $360 million in statutory penalties and just over $130 million in trebled damages, resulting in a total fine of $487 million and change.

As part of their conspiracy, the defendants bribed ophthalmic surgeons in various ways, such as paying for trips that included skiing, fishing, and golfing, often at exclusive destinations. Transportation for the physicians, which was often by private jet, was also paid for.

To further grease the wheels, Precision Lens sold frequent flier miles to the eye surgeons at a significant discount, enabling them to plan personal and business trips at rates well below market value.

Not only that, but prosecutors also proved during the trial that the defendants had established a slush fund dedicated to financing the company's kickback scheme.

Authorities did not comment on whether any action would be taken against the physicians who accepted these bribes.

"This judgment affirms Congress' intent to hold individuals and companies accountable when they use illegal kickbacks to defraud federal healthcare programs," said Bahram Samie, Deputy Civil Chief for the United States Attorney's Office for the District of Minnesota. "Medicare beneficiaries are entitled to know with certainty that their physicians' decision-making has not been compromised by a private flight, expensive ski trip, or any other unlawful inducement."