Doctor Kickback Scheme: Twin Cities-Based Precision Lens To Pay $12M

BLOOMINGTON, MN — Bloomington-based Precision Lens has agreed to pay the U.S. $12 million in connection to an alleged massive scheme involving kickbacks to doctors.

The judgment is down from the $487,000,000 payment the court initially sought.

On Feb. 27, 2023, a federal civil jury found that Precision Lens illegally paid kickbacks to ophthalmic surgeons to use Precision Lens products in cataract surgeries reimbursed by Medicare.

Months later, Precision Lens majority owner Paul Ehlen died piloting a World War II vintage P-40E, the Star Tribune reported.

Precision Lens provided kickbacks to physicians in the form of travel and entertainment, including high-end ski trips, fishing, golfing, hunting, sporting, and entertainment vacations, often at exclusive destinations, according to prosecutors.

Physicians were transported to luxury vacation destinations on private jets, including trips to New York City to see a Broadway musical, the College Football National Championship Game in Miami, Florida, and the Masters Tournament in Augusta, Georgia, authorities said.

Precision Lens also sold frequent flyer miles to its physician customers at a significant discount, according to prosecutors.

Precision Lens’s conduct resulted in $43,694,641.71 in fraudulent claims submitted to Medicare, investigators said.

The court entered a $487,048,705.13 judgment against the company and its owner, but "following post-trial motions, the court reduced the judgment to $216,675,248.55," states the U.S. Attorney’s Office for the District of Minnesota.

"After the United States conducted a review of the defendants’ financial position and ability to satisfy the judgment, the parties entered into a settlement agreement which requires Precision Lens and the estate to immediately pay $12 million to resolve the United States’s claims."

In a statement to MPR News, attorneys for Precision Lens denied ever providing kickbacks and said their clients chose to settle "so that they can move on with their lives."

"Paul was a lifelong aviator who enjoyed traveling with friends, some of whom were physicians. The government characterized those trips (and other entertainment) as ‘kickbacks’ even though the evidence showed that the costs were split fairly, the surgeries were all medically necessary, no doctors selected any products as a result, and Medicare did not pay a penny more than it should have."