Judge orders Precision Lens, owner to pay $487M for Medicare kickback scheme

A federal judge ruled that a Bloomington-based medical distribution company found guilty in an illegal kickback scheme will have to pay more than 10 times what it stole in penalties.

According to Minnesota U.S. Attorney Andrew Luger, Precision Lens and its owner, Paul Ehlen, paid kickbacks to eye surgeons to get them to use the company’s products in their cataract surgeries that were reimbursed by Medicare.

In all, jurors found that the kickbacks led to 64,575 false claims to the Medicare program from 2006 through 2015, totaling $43.7 million in damages to Medicare.

Under the False Claims Act, violators must pay a minimum of $5,000 per false claim and three times the amount of damages. The court found Precision Lens must pay $358,445,780 in statutory penalties and another $131,083,925 — triple the amount that was defrauded from Medicare — for a total of $487,048,705.

The kickbacks provided by 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.