Federal jury says Precision Lens, owner liable for paying kickbacks to surgeons

A federal civil jury has determined that a Minnesota-based medical distribution company and its owner are liable for violating the False Claims Act and Anti-Kickback Statute.

Tuesday, jurors returned a verdict saying Precision Lens, located in Shakopee, and its owner, Paul Ehlen, will have to pay millions of dollars for paying kickbacks to ophthalmic surgeons to get them to use Precision Lens’ products in their cataract surgeries that were reimbursed by Medicare.

The U.S. Attorney’s Office says Precision Lens’ kickbacks led to 64,575 false claims to the Medicare program from 2006 through 2015.

Some of the kickbacks provided by Ehlen and Precision Lens included trips and exclusive outings, like trips to New York for a Broadway musical or to Florida for the College Football National Championship Game. The company also maintained a slush fund specifically for its kickback scheme and used that money to finance multiple physician trips, the attorney’s office says.

“The False Claims Act and the Anti-Kickback Statute provide assurance to the United States and Medicare beneficiaries that healthcare decisions are made based on the best interest of the patient
and nothing else,” Assistant U.S. Attorney Chad Blumenfield said in a statement. “The jury’s verdict protects the integrity of the Medicare system for patients and those healthcare providers who operate fairly and legally. Companies may not use expensive trips and other items of value to persuade physicians to use their products, and physicians may not accept that remuneration. We thank the jury for its
service throughout this lengthy trial.”

With the verdict, Ehlen and Precision Lens will have to pay more than $43 million for their violations.

It comes after federal prosecutors previously announced a $12 million settlement with Sightpath Medical and TLC Vision Corporation for related allegations.

The attorney’s office says the case was originally brought by a whistleblower, which the government often relies on for fraud schemes that may otherwise go undetected. The whistleblower in this case is getting a percentage of the amount awarded at trial.