Headlines that Matter for Companies and Executives in Regulated Industries
Lens Manufacturer Agrees To Pay $16.4 Million To Resolve Alleged Violations of the False Claims Act and Anti-Kickback Statute
Essilor International, Essilor of America, Inc., Essilor Laboratories of America Inc., and Essilor Instruments USA (collectively, Essilor), which manufacture, market, and distribute optical lenses and equipment used to produce optical lenses, have agreed to pay $16.4 million to resolve alleged violations of the False Claims Act and the Anti-Kickback Statute initiated by former Essilor district sales managers. According to the qui tam complaint, Essilor knowingly and willfully offered or paid remuneration to optometrists and ophthalmologists (and other eye care providers) in return for ordering and purchasing Essilor products for their patients, including Medicare and Medicaid beneficiaries. The kickback scheme allegedly spanned January 1, 2011, through December 31, 2016. As part of the settlement, Essilor entered into a five-year Corporate Integrity Agreement requiring an independent review organization to review and ensure that Essilor’s policies and procedures relating to payments of discounts, rebates, and other price reductions comply with the Anti-Kickback Statute.
“When medical equipment manufacturers provide kickbacks to referring providers, it can compromise the integrity of medical decision-making,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will continue to pursue violations of the Anti-Kickback Statute to ensure that patient care is not influenced by improper financial incentives.”
The DOJ press release is here.
Cockerell Dermatopathology will pay $3.75 million, including $1,875,000 in restitution, to settle allegations that it violated the False Claims Act. The government filed suit against the clinic and Dr. Clay Cockerell, its owner and principal physician, alleging that Dr. Cockerell knowingly permitted Progen, a laboratory management company, to use the clinic’s lab license to submit false claims to TRICARE and other federal health insurance programs for medically unnecessary tests. In return, Progen allegedly paid Dr. Cockerell 20% of the net revenue from those tests. The government further alleged that Dr. Cockerell and the clinic knowingly concealed their obligation to repay the government.
The DOJ press release is here.
The US Attorney’s Office for the Southern District of Texas announced that Familia Health Care Services Inc. d/b/a Del Cielo Hospice and Palliative Care will pay $990,478.46 to resolve False Claims Act allegations. A qui tam whistleblower alleged that between May 12, 2017, and January 31, 2022, the hospice knowingly submitted false claims for hospice services for patients who were not eligible for, and did not qualify for, the claimed hospice benefits. To be eligible for Medicare hospice benefits, a patient must be “terminally ill,” in that the patient has a medical prognosis that their life expectancy is six months or less.
The USAO’s press release is here.
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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