Former owner of Rhode Island ophthalmology chain to pay $1.1 million in settlement of false claims inquiry by government

Paul S. Koch, MD, former owner of several ophthalmology practices in Rhode Island, agreed to settle civil allegations he paid kickbacks to optometrists who referred patients to his practices for cataract surgeries. (Image courtesy of Adobe Stock)

The U.S. Attorney’s Office, District of Rhode Island, recently reached an agreement with Paul S. Koch, MD, former owner of several ophthalmology practices in the state branded with his name, to settle civil allegations he paid kickbacks to optometrists who referred patients to his practices for cataract surgeries.

According to the agreement, which was announced by U.S. Attorney Zachary A. Cunha, Koch will pay $1,166,072 to settle the claims brought as part of a qui tam complaint filed in federal court in the District of Rhode Island by two whistleblowers.

According to a news release from the U.S. Attorney’s Office, from January 1, 2013, through December 31, 2017, Koch, Koch Eye Associates and Claris Vision, paid financial kickbacks to referring optometrists whose patients elected to receive laser-assisted cataract surgery, for which patients paid up to $2,900 out-of-pocket per eye.

The release noted the government contends the payments to the referring optometrists were illegal under the anti-kickback statute, a federal law that prohibits financial payments to entice medical referrals that are reimbursed by federal healthcare payors, like the Medicare program.

In the Koch case, U.S. attorneys maintain the kickbacks from optometrists led to the submission of false claims to Medicare in violation of the federal False Claims Act.

Through the settlement, U.S. attorneys are recovering twice the amount paid by Medicare for claims associated with the illegal kickbacks paid by Koch and his affiliates. Under the provisions of the False Claims Act, the whistleblowers will receive $256,534.84 out of the settlement payments.

“Patients should be able to feel secure that when their doctors make decisions that impact their health- whether about prescriptions, surgeries, or referrals- those decisions are based on sound medical judgment, and not illegal monetary incentives,” Cunha said in a statement. “When medical decision making is corrupted by kickbacks, at the expense of federal Medicare dollars, we will hold those responsible to account.”

Moreover, Special Agent in Charge Phillip M. Coyne of the U.S. Department of Health and Human Services, Office of Inspector General, pointed out kickback schemes damage the credibility of medical decisions and undermine the health marketplace, wasting taxpayer money along the way.

“We will continue to hold accountable those who refuse to play by the rules and provide illegal incentives to influence the decision making of health care providers,” Coyne said in the release.

Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division, agreed the schemes can compromise medical decisions.

“(This) settlement makes it clear that medical decisions by doctors should be based on what is best for each patient, not a doctor’s personal financial interest,” Bonavolonta, said in the statement. “This unscrupulous scheme orchestrated by Dr. Koch is just one example of how the FBI and are partners are working hard every day to protect patients and federal health care programs from fraud and abuse by removing the corrupting influence of money.”

The government’s case was litigated by Assistant U.S. Attorneys Dulce Donovan and Bethany N. Wong and was investigated by the U.S. Department of Health and Human Services, Office of Inspector General.