Ophthalmology group to pay nearly $3 million to resolve optometrist referral kickback allegations

According to the U.S. Attorney’s Office news release, the Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. (Image credit: Adobe Stock/wutzkoh)

A Texas ophthalmology provider group will pay nearly $3 million to resolve allegations that it offered and paid kickbacks to optometrists to induce patient referrals who were candidates for cataract surgery.

The U.S. District Court for the Eastern District of Texas then dismissed the civil action.

According to a news release from the United States Attorney’s Office, Eastern District of Texas, Arlington Ophthalmology Association, P.L.L.C. doing business as Kleiman Evangelista Eye Centers (K&E), with offices located in Arlington, Dallas, Plano, Southlake, Mount Pleasant, and Gun Barrel City, Texas, agreed to pay $2,902,505 to resolve False Claims Act allegations that it offered and paid kickbacks to optometrists to induce referrals of patients who were candidates for cataract surgery in violation of the False Claims Act and Anti-Kickback Statute.

“The Eastern District of Texas is committed to looking beyond labels and examining providers' actual conduct. Although co-management can be a legitimate practice, merely applying that label does not give providers carte blanche to remunerate referring providers in order to secure business,” Eastern District of Texas U.S. Attorney Brit Featherston said in the news release. “We are committed to investigating any financial incentives offered to secure referrals, which cloud providers' medical judgement, and violate the Anti-Kickback Statute.”

“Paying kickbacks to providers incentivizes doctors to treat patients based on illegitimate financial gain, rather than the patient's needs and best interests,” said Korby Harshaw, acting Special Agent in Charge with the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “HHS-OIG will not tolerate kickback arrangements, which undermine medical responsibility, put patients at risk, and can waste taxpayer dollars.”

According to the U.S. Attorney’s Office news release, the Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. The statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

According to the U.S. Attorney’s Office, K&E frequently engaged in the practice of co-management of cataract surgery patients with optometrists who referred patients to the practice. Patients who undergo cataract surgery require post-operative monitoring and care. When postoperative care is rendered by another provider other than the surgeon, such as an optometrist outside the surgeon’s practice, this practice is generally referred to as co-management.

The settlement, announced on March 24, 2023, resolves certain allegations that K&E’s remunerative arrangement with referring optometrists who co-managed patient care with K&E violated the Anti-Kickback Statute. The United States contends K&E provided remuneration to referring optometrists when it paid referring optometrists money untethered to actual non-Medicare and non-Medicaid covered services for referring cataract patients who received premium intraocular lenses (IOLs) or laser-assisted cataract surgery, guaranteed the automatic return of patients referred, provided optometrists free continuing education courses, rewarded top referring optometrists with expensive dinners, and invited referring optometrists, their family, and staff to Texas Rangers stadium games at the company suite.

U.S. attorneys said the fees paid to referring optometrists for patients who received premium lenses or laser-assisted cataract surgery were in addition to the reimbursement already received by the optometrists from Medicare and Medicaid for performing post-operative cataract care and were not tied to or commensurate with actual post-operative services specifically attributed to premium IOLs or laser-assisted cataract surgery rendered, and thus constituted unlawful remuneration under the Anti-Kickback Statute.

As part of the settlement, K&E has agreed to cooperate with the Department of Justice’s investigations of and litigation against other parties involved in the alleged violations, according to the news release.

U.S. attorneys noted the investigation originated from a civil lawsuit filed by a Relator, or whistleblower, under the qui tam provisions of the False Claims Act, which allows private parties to bring suit on behalf of the government for false claims and to share in any recovery. The whistleblower in this matter will receive a percentage of this civil settlement.

In a statement, Kleiman Evangelista said it agreed to settle the civil action in order to avoid the cost of protracted litigation.

“As the government acknowledges, the claims resolved by the settlement are allegations only, and there has been no determination of liability,” the company said in the news release. “The allegations concerned marketing activities of taking referring optometrists to dinners and Rangers games that were discontinued years ago; offering free continuing education courses, which was also previously discontinued; and a disputed allegation that the practice shared fees with co-managing optometrists for post-operative cataract care in excess of fair market value.”

The practice also noted in its statement the government acknowledges that co-management of patients is a legitimate, recognized, and legal practice. Kleiman Evangelista maintains its co-management of cataract patients has been and will continue to be conducted in a compliant manner, vetted by experienced legal counsel specializing in health care regulatory matters.

“Kleiman Evangelista is committed to compliance and always puts patient care first. Our patients can continue to choose to have their cataract care co-managed,” the practice said in its statement. “We are committed to optimizing patient outcomes while continuing to work with our patients’ valued optometrists when our patients choose to have their care co-managed.”

The practice also noted in its statement it makes patient care decisions on an individual, case-by-case basis.

“Patients are fully informed and consulted about their care options,” it said in the statement. “Patients may then choose, when clinically appropriate, whether to have their post-operative cataract care co-managed by qualified optometrists. Kleiman Evangelista will continue to assess and refine its processes in co-managed cataract care cases to ensure compliance and high-quality patient care.”