By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law
On February 28, 2023, a federal civil jury returned a verdict against an ophthalmology group in favor of the United States for more than $43 million for violations of the False Claims Act (FCA) and Anti-Kickback Statute (AKS). During the six-week trial, the jury found that the defendants, The Cameron-Ehlen Group d/b/a Precision Lens and its owner, paid kickbacks to ophthalmic surgeons to sway them to purchase and use certain products in cataract surgeries reimbursed by Medicare. The case was tried in the U.S. District Court for the District of Minnesota. Additionally, the jury found that the defendants’ kickbacks caused the submission of 64,575 false claims to the Medicare program between 2006-2015. With the additional fines and penalties for each separate false claim, the final judgment is expected yo be in the hundreds of millions of dollars.
Luxury Kickbacks.
The methods of enticement varied but tended to be in the form of high-end vacations or travel experiences such as luxury fishing, hunting, skiing, or golfing getaways, according to the government. Other incentives included expensive, gourmet dining adventures and discounted tickets to live shows, theaters, and other entertainment venues. Finally, among the offerings were discounts on purchasing their frequent flyer miles for award travel at a reduced rate. In addition, the defendants allegedly transported physicians to their destinations on private jets for many of the trips. Yes, these are all things of value and constitute illegal kickbacks. So think three times before accepting such “gifts” and “favors” from any vendor.
To take it one step further, the United States also proved that Precision Lens maintained a secret fund, referred to internally as a”slush fund,” to further its kickback scheme. According to the DOJ, they used money from the secret fund to finance many luxury physician trips. (Hint: If you know your employer or the company you do business with maintains what it refers to as a “slush fund” run. Run fast!)
For more information, click here to read the press release from the U.S. Attorney’s Office District of Minnesota.
Qui Tam Provisions of the False Claims Act.
This civil lawsuit was originally brought by a Relator, or whistleblower, under the qui tam provisions of the FCA. This allows private parties to bring suit on behalf of the government for false claims and to share in any recovery. The government often relies on whistleblowers to bring fraud schemes to light that might otherwise go undetected. The whistleblower in this matter will receive a percentage of the amounts awarded at trial. Under the FCA, whistleblowers stand to receive 15% to 25% of proceeds in cases that the DOJ joins, depending on their contributions.
In this case, under the FCA, damages could be tripled to approximately $130 million. During the 2006-2015 period covered by the complaint, every false claim could trigger penalties of $5,500 to $11,000, working out to a range of $355 million to $710 million. That would equate to total damages and penalties of roughly $485 million to $840 million. Click here to view the complaint in full.
To learn more about qui tam and whistleblower cases, click here to read one of my prior blogs.
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The attorneys of The Health Law Firm represent licensed ophthalmologists, optometrists, medcial doctors and medical groups, in Medicare and Medicaid audits, integrity audits, and CMS audits throughout Florida and across the U.S. They also represent them in complex healthcare litigation in state or federal courts. They also represent physicians, dentists, nurse practitioners, mental health professionals, therapists, home health agencies, pharmacies, and assisted living facilities, and other healthcare providers in Medicare and Medicaid investigations, audits, recovery actions, and termination from the Medicare or Medicaid Program.
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Sources:
Overly, Jeff. “DOJ Wins Kickback Verdict Threatening $485M Liability.” Law360. (February 28, 2023). Web.
Coleman, Tracey. “DOJ Reaches $12M False Claims Act Settlement of Medicare Kickback Claims.” Top Class Actions. (March 7, 2018). Web.
Press Release. “Federal Jury Finds Precision Lens and Owner Paul Ehlen Liable for Paying Kickbacks in Violation of the False Claims Act.” US Attorney‘s Office District of Minnesota. (February 28, 2023). Web.
About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. www.TheHealthLawFirm.com The Health Law Firm, 1101 Douglas Ave., Suite 1000, Altamonte Springs, FL 32714, Phone: (407) 331-6620 or Toll-Free: (888) 331-6620.
Attorney Positions with The Health Law Firm. The Health Law Firm is always looking for qualified attorneys interested in the practice of health law. Its main office is in the Orlando, Florida, area. If you are a member of The Florida Bar and are interested, forward a cover letter and your resume to: [email protected] or fax to: (407) 331-3030.
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