Precision Lens, the Bloomington-based eye lens distributor, must pay $487 million in civil damages for funding a kickback scheme that included flying doctors on private jets to Broadway musicals and the Masters golf tournament in Georgia.
Federal judge orders Bloomington-based Precision Lens, owner to pay $487M for kickback scheme
Judge says the lens company must pay damages for free luxury trips and experiences used to induce doctors to use its product in cataract surgeries.
May 16, 2023 at 4:03PM
U.S. District Judge Wilhelmina Wright entered the judgment on Friday, effectively agreeing with federal prosecutors' request to amplify damages first established in February when a jury found the Cameron-Ehlen Group, and Precision Lens majority owner Paul Ehlen, guilty of violating the False Claims Act.
In February, a jury found Precision Lens had operated a lucrative slush fund, paying eye surgeons via lavish ski vacations and trips to exclusive sporting events, such as the college football national championships, with the goal of inducing them to use Precision Lens products in cataracts surgeries that were reimbursed by Medicare.
Such kickbacks, the jury concluded, helped win the company millions of dollars of business. This also resulted in the submission of 64,575 false claims to the Medicare program between 2006 and 2015.
While the jury originally returned a $43 million judgment, defendants who violate the False Claims Act are liable for triple the amount of damages. This led prosecutors with the U.S. Attorney's Office in Minnesota to ask for a more severe finding. Wright agreed, noting in a filing on Friday she anticipated the defendants to appeal the decision.
"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," Bahram Samie, an attorney with the U.S. Attorney's Office in Minnesota, said in a news release.
Before Wright's order, attorneys for the medical device company argued in court filings that any judgment exceeding $20 million would be "overly punitive."
"Plaintiffs should not have been allowed to seek recovery for every claim associated with these medically necessary surgeries, but at most only those claims that reimbursed for products supplied by [Precision Lens]," wrote Joseph Dixon, Thomas Beimers and Sara Silva, attorneys for Precision Lens.
In a statement attributed to Precision Lens, the company called the award an "unconscionable windfall," adding the "very same products would have been used in the very same medically necessary procedures with or without the conduct at issue."
The company plans to appeal the judgment.
Pioneering surgeon has run afoul of Fairview Health Services, though, which suspended his hospital privileges amid an investigation of his patient care.
