Essilor International, Essilor of America Inc., Essilor Laboratories of America Inc., and Essilor Instruments USA, manufacturers and distributors of eye care products, will pay $16.4 million to resolve allegations that they violated the False Claims Act. The case stemmed from whistleblower claims from three former Essilor district sales managers: Laura Thompson, Lisa Brez, and Christie Rudolph.
The qui tam provisions of the False Claims Act enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery, if one occurs.
According to the settlement agreement, “Essilor International is an international company that, through its various affiliates, designs, manufactures, markets, and distributes eye care equipment and products, including optical lenses, and provides various eye care services.” Essilor of America, Inc. and Essilor Laboratories of America, Inc., are “wholly owned subsidiaries of Essilor International that, among other things, manufacture and distribute optical lenses to independent eye care providers” throughout the country. During the time period in question in the case, “Essilor Instruments USA was an affiliate of Essilor International that, among other things, manufactured and distributed edging and finishing equipment, as well as other optical instruments, for in-store retail use by” independent eye care providers, or “Providers,” as they are called in the settlement agreement.
The whistleblowers alleged, among other things, that Essilor, what the various entities are referred to collectively, “offered unlawful kickbacks to Providers in exchange for the Providers’ agreement to order optical lenses from Essilor,” the settlement agreement states. According to the U.S. Department of Justice (DOJ) press release, the government “alleged that between Jan. 1, 2011, and Dec. 31, 2016, Essilor knowingly and willfully offered or paid remuneration to eye care providers, such as optometrists and ophthalmologists, to induce those providers to order and purchase Essilor products for their patients, including Medicare and Medicaid beneficiaries, in violation of the Anti-Kickback Statute.”
The Anti-Kickback Statute outlaws the payment of kickbacks “to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs.” Laws like this one aim to maintain the integrity of the federal health care programs and ensure that healthcare professionals are making decisions based on the patients’ best interest and not on any remuneration they might receive.
The U.S. also alleges “that Elissor knowingly caused Providers to submit false claims to Medicare and Medicaid for Essilor products that were tainted by kickbacks that Essilor offered or paid to Providers” who were involved in “Threshold Programs” between January 1, 2011 and December 31, 2016. The Threshold Programs were named Strategic Alliance, Practice Builder Loyalty, Practice Builder Elite, and Growth Financing.
According to the settlement agreement, the three whistleblowers in the case “claim entitlement…to a share of the proceeds of this Settlement Agreement and to Relators’ reasonable expenses, attorneys’ fees and costs.” The document states that “Essilor reserves the right to challenge Relators’ entitlement” to the aforementioned items.
Essilor will pay $22 million to the U.S. and the Medicaid Participating States. $16,433,345.01 will go to the U.S., as per the settlement agreement.
Essilor has also “entered into a five-year Corporate Integrity Agreement (CIA)” with the Department of Health and Human Services Office of Inspector General. The agreement requires Essilor to “hire an independent review organization to review its systems, policies, processes and procedures for ensuring that any discounts, rebates, or other reductions in price offered to providers comply with the Anti-Kickback Statute.” To comply with the CIA, Essilor must also “implement a new written review and approval process to ensure all existing and new discount arrangements comply with the Anti-Kickback Statute.”
Whistleblowers are key to uncovering corruption and misconduct in the healthcare industry: fraudulent schemes can be particularly harmful to patients and erode trust in the medical system. In Fiscal Year 2021, qui tam whistleblowers helped the DOJ recover $1.6 billion in settlements. The DOJ highlighted health care fraud as “the leading source of the department’s False Claims Act settlements and judgments.”