Precision Lens ordered to pay $487M for kickbacks to eye surgeons in Medicare false-claims case

Dive Brief:

Precision Lens, a Bloomington, Minn.-based seller of eye surgery products, and owner Paul Ehlen must pay $487 million after a jury found the company violated the False Claims Act and paid kickbacks to doctors for using its products.
The company offered physicians free travel and entertainment tickets for using its products, the U.S. Attorney’s Office for the District of Minnesota said in a statement on its website Monday. The gifts included trips to see a Broadway musical, the Masters golf tournament and private jet travel to luxury vacation destinations.
“Medicare beneficiaries are entitled to know with certainty that their physician’s decision-making has not been compromised by a private flight, expensive ski trip, or any other unlawful inducement,” Assistant U.S. Attorney Chad Blumenfield said in the statement.

Dive Insight:

Precision Lens and its owner must pay a total of more than $487 million, not including interest and attorney’s fees, Wilhemina Wright, a U.S. District Judge in Minnesota, ruled in a judgment entered on May 12.

A jury found in February that the company had submitted more than 64,000 false claims to Medicare, causing more than $43 million in damages. Under the False Claims Act, a company can be liable for $5,000 per false claim and triple the amount of damages sustained by the government.

Precision Lens sells products for eye surgery, including intraocular lenses, which are implanted in the eye in cataract procedures. Besides paying for travel and tickets to events, it also kept a secret fund to finance multiple physician trips, prosecutors said.

The case is based on a broader whistleblower lawsuit that was brought in 2013 against Precision Lens and Sightpath Medical, a company that sells cataract surgery and LASIK services, whose predecessor was also founded by Ehlen. The U.S. reached a separate, $12 million settlement with Sightpath and its former CEO.

Whistleblower Kipp Fesenmaier, who used to work for Sightpath, alerted the government that the companies provided trips, private flights, and tickets to events to ophthalmologists to incentivize them to use its products for cataract surgeries, according to the statement.

"Our firm is honored to represent Mr. Fesenmaier, who took significant personal and professional risk to expose this fraud on the government, which is, in essence, fraud on the taxpayers,” Chandra Napora, a partner with law firm Morgan Verkamp, said in a March statement after the jury delivered its verdict.

Fesenmaier will receive a portion of the amount awarded, the Justice Department said.

Precision Lens plans to appeal the verdict, according to report in the Minnesota Star Tribune.