WASHINGTON, D.C.—Essilor has agreed to pay $16.4 million to the U.S.  to resolve allegations that the company violated the federal False Claims Act by causing claims to be submitted to Medicare and Medicaid that resulted from violations of the Anti-Kickback Statute. The Anti‑Kickback Statute prohibits offering or paying anything of value to induce the referral 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.

The settlement, announced Tuesday by the U.S. Department of Justice, is part of a $22 million settlement that Essilor International, Essilor of America, Essilor Laboratories of America and Essilor Instruments USA agreed to pay the U.S. and the states participating in Medicaid. It is the result of a six-year investigation into promotional activity by the Justice Department that VMAIL first reported in July, 2016.
The settlement agreement represents neither an admission of liability by Essilor nor a concession by the U.S. that the claims are not well-founded.
According to the settlement agreement, the U.S. alleges that between Jan. 1, 2011, and Dec. 31, 2016, Essilor, through its Strategic Alliance, Practice Builder Loyalty, Practice Builder Elite, and Growth Financing programs “knowingly and willfully offered or paid unlawful remuneration to Providers to induce Providers to order and purchase Essilor products in violation of the Anti-Kickback Statute.”
In an Aug. 23 press release issued by the Justice Department, U.S. Attorney Chad Meacham of the Northern District of Texas, whose office participated in the settlement agreement with Essilor, said “The Anti-Kickback Statute was designed to ensure doctors make medical decisions with only their patients’ best interests in mind. We are pleased to see Essilor taking financial responsibility for their conduct.”
In connection with the settlement agreement, Essilor entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA requires, among other things, that Essilor hire an independent review organization to review its systems, policies, processes and procedures for ensuring that any discounts, rebates, or other reductions in price offered to providers comply with the Anti-Kickback Statute.
The CIA also requires Essilor to implement a new written review and approval process to ensure all existing and new discount arrangements comply with the Anti-Kickback Statute.
“Kickback schemes can impact medical judgment, eroding the trust of both patients and taxpayers,” said Lisa M. Re, acting chief counsel for HHS-OIG. “Essilor’s Corporate Integrity Agreement is intended to establish policies and practices so it complies with the Anti-Kickback Statute moving forward.”
In response to the Justice Department announcement, Essilor of America issued the following statement to VMAIL:
“Essilor of America has always been a company that operates with integrity, fairness and with the intent to comply with all applicable laws.
“As is common practice across the vision care industry, Essilor of America has historically offered a number of promotional programs intended to provide accessibility and affordability with regard to its lens products. While we believe these industry standard promotions were appropriate and compliant, the government expressed concerns about certain programs in place prior to 2017. In an effort to ensure that its activities are compliant in all respects, Essilor of America has refined its approach to compliance generally and its promotions specifically and has worked with the government to reach a resolution.
Following our discussions with the government, Essilor of America reached an agreement to settle the government’s claims, which includes the execution of a Corporate Integrity Agreement, which will add another layer to our already strong compliance program. We look forward to serving our customers in the most impactful way possible while maintaining our commitment to compliance.”