Bloomington, Minnesota-based Precision Lens, which makes lenses used in cataract surgery, is accused of running an illegal kickback scheme for eye doctors.
In a complaint filed by Minnesota's U.S. Attorney Gregory Booker on Thursday, Precision Lens and its owner Paul Ehlen are accused of laying on luxury trips for doctors, apparently as an inducement for them to use Precision Lens products and services.
What kind of kickbacks?
According to a press release from the U.S. Attorney's Office, Precision Lens and Ehlen are accused of organizing luxury trips for doctors including skiing vacations, and "high-end fishing, golfing and hunting vacations."
In many of these trips, doctors were take to their destinations on private jets. Precision Lens and Ehlen are also accused of selling frequent flyer miles to doctors at a steep discount, allowing them to make trips well below market value.
The government alleges Precision Lens kept a slush fun to finance trips "with key physician customers and sales targets."
"Federal health care beneficiaries should have confidence that the health care they receive is unaffected by kickbacks provided to their medical providers," said United States Attorney Gregory Brooker.
"Companies are not permitted to use expensive trips and other remuneration in order to persuade physicians to use products supplied by those companies, and physicians may not accept such remuneration in exchange for patient referrals."
Speaking to the Star Tribune, an attorney for Precision Lens says the company disputes the government's version of events, saying it "took care to follow all relevant laws and regulations regarding its interactions with health care professionals.
"The allegations in the complaint are without merit, and Precision Lens looks forward to being vindicated through the courts."
This case is related to another case recently settled with the government, in which North Carolina eye doctor Jitendra Swarup agreed to pay $2.9 million for participating in another payment scheme.
Between 2006 and 2015, the government states Swarup received illegal payments from Precision Lens, Ehlen and a related business called Sightpath Medical.
Authorities were alerted to this by a whistleblower, who is entitled to 19.5 percent of the settlement Swarup has agreed to pay as well as the $12 million settlement agreed with Sightpath.