Bracker & Marcus LLP is pleased to announce that the United States and the State of Texas have settled a lawsuit brought by their client, Dr. Carrie L. Morris, against a large ophthalmology group, Arlington Ophthalmology Association, P.L.L.C., doing business as Kleiman Evangelista Eye Centers, with offices in Arlington, Dallas, Plano, Southlake, Mount Pleasant, and Gun Barrel City, Texas. The United States press release may be found here.
Our client alleged that optometrists who referred their patients to Arlington for cataract surgeries were offered 20% of the patient’s global surgery fee and a guarantee that the patient would return to the optometrist without competition for future routine eye care.
In addition, referring optometrists also receive a flat fee payment if their patients choose to upgrade to a premium lens. This flat payment comes from the funds collected from the patient (or secondary/supplemental insurance) and is based on which level of upgrade the patient selects.
Defendants structured their 20% kickback under the “co-management” provisions for cataract surgeries, which basically are set up so that if a patient has to travel to have the surgery, they don’t have to travel back and forth for post-operative care.
Instead, they see the surgeon for the presurgical exam and the surgery, and then their care is managed by their own optometrist, who (presumably) is more conveniently located. When an optometrist performs this “co-management” of post-operative care, they are paid 20% of the global fee.
This arrangement, which on its face seems acceptable, rules afoul of the Anti-Kickback Statute because these arrangements are “blanket” and “routine,” instead of being offered at patient request or for patient convenience. In fact, in many instances, the optometrist was further away than the surgical center.
Sometimes, the scheme was even implemented despite a patient requesting to see the surgeon again instead of her optometrist.
You might be wondering why the Defendants were willing to give away 20% of their global surgical fee. Well, as usual with kickbacks, the “quid pro quo” is more than worth it. For each of these improperly induced surgeries, Defendants not only keep 80% of the global surgery fees, they also got to bill for each patient’s initial exam and ancillary testing fees.
Defendants also have a significant ownership interest in the Ambulatory Surgical Centers where all of the surgeries are performed, so each cataract surgery also allowed them to bill for facility fees, professional fees, anesthesia, and other ancillary fees—fees that likely exceed all the professional fees combined.
As part of its investigation, the Government also found that the very productive referring optometrists were given a lot of other goodies as well: free continuing education courses, expensive dinners, suite tickets to Texas Rangers stadium for them, their families, and their staff, and some were also paid “speaking fees.”
This was Bracker & Marcus LLC’s first case in the Eastern District of Texas, but it isn’t our last! We truly enjoyed working with Betty Young, the lead Assistant US Attorney on the matter, as well as her fellow AUSAs James Gillingham and Adrian Garcia. Investigator Ann Williams and paralegal Christina Cate were also very helpful and knowledgeable. We already have several other matters pending there and would love to bring more.
If you have allegations about kickbacks and improper incentives in the medical context, please contact us at Bracker & Marcus LLC for a free consultation.