SouthEast Eye Specialists to Pay $17 Million to Resolve Anti-Kickback and False Claims Act Allegations

It was recently announced that SouthEast Eye Specialists (SEES), along with affiliated surgery centers SouthEast Eye Surgery Center and the Eye Surgery Center of Chattanooga, reached a $17 million settlement to resolve allegations that they violated the federal Anti-Kickback Statute by illegally inducing optometrists to refer patients to SEES for cataract surgeries by providing the optometrists a variety of forms of financial remuneration. Those cataract surgery referrals were reimbursed by Medicare and TennCare (the Tennessee Medicaid program), resulting in alleged violations of the False Claims Act.

The settlement is the result of a qui tam lawsuit filed by two whistleblowers who alleged that SEES used multiple approaches to secure a stream of referrals by inducing optometrists to refer patients to SEES. Some of the ways that SEES secured the referrals was through free continuing education, meals, sporting events, as well as improper and pre-arranged co-management agreements (with fee splitting, promising primary eye care billing, and cutting checks for premium lenses) with the optometrists.

A co-management agreement means that the optometrist who is referring the procedure receives 20% of the Medicare/Medicaid reimbursement for cataract surgery while the ophthalmologist/surgeon receives 80%. While these agreements can be done appropriately through Medicare/Medicaid, they typically need to take into consideration patient health, patient convenience and patient choice. Additionally, the financial interests of the healthcare providers should not be considered when deciding whether a co-management agreement is appropriate. Instead, participating optometrists and SEES pre-arranged for patients to have their surgery performed by SEES and have it co-managed, in violation of the Anti-Kickback Statute.

Additionally, internal documents at SEES and presentations made to optometrists regarding co-management do acknowledge the rules for legal co-management. These documents include the understanding that it is not to be automatic or routine, but that it must be the patient’s choice and the decision made in the best interests of the individual patient.

SEES allegedly “ruthlessly tracked” the referrals and payments made, so that they could evaluate its return on “investment” and target the high referrers with more payments and opportunities.

Whistleblowers

The whistleblowers were Ross Lumpkin, O.D., an optometrist in Tennessee, and Gary Odom, a former long-serving executive in the Tennessee optometric association. Lumpkin and Odom together “exposed fraud on the government and the taxpayers by shining a light on what happens when a permissible practice is corrupted by financial interest rather than staying focused on patient need,” said Jennifer Verkamp of Morgan Verkamp, one of the attorneys for the whistleblowers.

The whistleblowers are expected to receive a portion of the total settlement for their role in resolving this matter.