March 20, 2023
A federal jury found Precision Lens and its owner, Paul Ehlen, (collectively “Precision”) liable for more than $43 million in violations of the False Claims Act. During the six-week trial in Minnesota, the government proved that Precision submitted 64,575 false claims to Medicare between 2006-2015. In addition, Precision was found liable of violating the Anti-Kickback Statute. Because the False Claims Act provides for treble damages and penalties, Precision Lens is potentially liable for over $800 million. The Department of Justice has requested that the Court enter Judgement for $490 million
During the trial, the government proved that Precision paid improper remuneration in the form of lavish trips and entertainment to ophthalmic surgeons. In return, the surgeons used Precision’s products in cataract surgeries reimbursed by Medicare. In its Complaint, the government provided examples of the luxury vacations afforded to the surgeons. Some examples included trips on private jets to the Masters golf tournament, the college football championship game, and a Broadway musical. Precision’s wrongdoing was initially brought to light by whistleblower, Kipp Fesenmaier, in a qui tam lawsuit. The government later intervened in the lawsuit in 2018.
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.
-Assistant U.S. Attorney Chad Blumenfield.
The Federal Jury found that Precision Lens’ conduct had led to $43 million in false billings to the government. The Jury also determined that Precision Lens caused the submission of 64,575 false claims. However, the False Claims Act provides for triple damages and the assessment of penalties for each violation. False Claims Act penalties are adjusted periodically for inflation. From 2006 to 2015, the period of most of Precision’s violations, False Claims Act penalties ranged from $5,500 to $11,000. The penalty for violations after November 2015 are determined by the date the penalties are imposed. Approximately 410 of Precision Lens’s violations occurred after November 2015 and as such the 2023 False Claims Act penalty is $13,508 to $27,018. As such, Precision Lens’s total potential liability is $131 million (3 times $43.6 million) plus 64,575 penalties totaling $358 million to $715 million.
On March 17, 2023 the DOJ prosecutors requested that the court impose a total judgment of $490 Million. As the prosecutors explain, the plain language of the False Claims Act requires that the $43.6 million dollar damages verdict be trebled to $131 million. Additionally, the False Claims Act requires that the Court impose a minimum penalties award of $358 million. Most of Precisions Lens’s penalties would be assessed at $5,500 per violation. The 400 violations in December 2015 are assessed at the current penalty amount of $13,508 per violation. Thus, in total the government seeks approximately $490 million dollars.
On May 12, 2023, Judge Wilhelmina M. Wright entered judgment in the amount of $487.05 million against Precision Lens and its owner Paul Ehlen. precision-lens-decision
In announcing the Judgment, Bahram Samie, Deputy Civil Chief for the United States Attorney’s Office for the District of Minnesota said:
This judgment affirms Congress’ intent to hold individuals and companies accountable when they use illegal kickbacks to defraud federal healthcare programs. 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. This office is committed to investigating misconduct and recovering funds unlawfully obtained from federal healthcare programs.
The Whistleblower Law Collaborative LLC represents clients nationwide in bringing actions under state and federal False Claims Acts. In addition, the firm assists clients in bringing claims in other whistleblower programs such as the SEC and IRS Whistleblower Programs. Among the firm’s many successes is a $234 million settlement earlier this year with Mallinckrodt for Medicaid rebate fraud.