Minneapolis eye surgery company agrees to pay $12M for alleged kickbacks to doctors

Special report: Homegrown fraud task forces promote collaboration
A Minneapolis company agreed to pay $12 million to settle allegations it paid kickbacks to doctors.

A Minneapolis company and its former CEO have agreed to pay more than $12 million to resolve allegations it made kickbacks to doctors in exchange for their business.

The settlement was reached with Sightpath Medical and TLC Vision Corporation and their former CEO James Tiffany to resolve kickback allegations under the False Claims Act, according to the U.S. Attorney’s Office for the District of Minnesota. The office said in the announcement it will also pursue claims against Precision Lens, its owner Paul Ehlen and Jitendra Swarup, M.D.

According to a complaint brought by a whistleblower, Sightpath and Precision Lens paid kickbacks to physicians in various forms, including travel, entertainment and improper consulting agreements. The trips included luxury ski vacations and high-end fishing, golfing and hunting trips. The complaint alleges the items were provided in order to get physicians to use Precision Lens’ and Sightpath Entities’ products and services.

RELATED: Doctor pleads guilty to bilking VA for hundreds of procedures never performed

Sightpath and Precision Lens supply intraocular lenses, as well as ophthalmic surgical equipment and services to medical facilities. Their products and services are used by ophthalmologists in eye surgeries, including cataract surgeries performed in ambulatory surgery centers and hospitals for which federal payers, including Medicare, provide reimbursements, the announcement said.

According to the settlement agreements, the kickbacks were paid to doctors for nearly a decade from 2006 to 2015. Sightpath also entered into lucrative consulting agreements with physicians and physician practices for services that were never performed or not properly documented, resulting in payments in excess of fair market value.

“Medicare beneficiaries depend on their physicians to make decisions based on sound medical judgment,” Assistant U.S. Attorney Chad Blumenfield said in the statement. “Our office will take decisive action to address allegations that medical providers are receiving improper financial benefits that could influence medical decision-making.”

RELATED: Doctor's office tied to $67M healthcare fraud case

The settlements resolve allegations filed in a civil lawsuit originally brought by a whistleblower, who was a former employee, the U.S. Attorney’s office said. The Office of Inspector General of the U.S. Department of Health and Human Services and the FBI investigated the case.

In a statement made to the Minneapolis Star Tribune, Sightpath Medical said it agreed to the settlement to avoid litigation and it did not admit to any wrongdoing.