May 1, 2023–SouthEast Eye Specialists, together with SouthEast Eye Surgery Center and the Eye Surgery Center of Chattanooga (SEES), agreed to pay the United States and Tennessee $17,000,000 to resolve allegations that they violated the Anti-Kickback Statute by illegally inducing primary-care eye doctors (optometrists) to refer – or steer –patients to SEES for cataract surgeries by providing optometrists a variety of forms of financial remuneration. Those optometrists provided referrals to SEES for cataract surgeries reimbursed by Medicare and TennCare, resulting in alleged violations of the False Claims Act.
Represented by Phillips & Cohen LLP and Morgan Verkamp LLC, two whistleblowers alleged in a False Claims Act lawsuit that SEES used a variety of approaches to secure a stream of referrals by inducing optometrists to refer patients to SEES, including continuing education, meals, sporting events, and inappropriate pre-arranged co-management agreements with optometrists.
When cataract surgery is co-managed, the surgeon performing the surgery retains 80% of the Medicare reimbursement, and the referring optometrist doing the post-operative exam receives 20% of the payment. When done appropriately, co-management is decided on a case-by-case basis with considerations for patient health, patient convenience, and patient choice.
The settled complaint alleged that SEES corrupted this relationship by using it to serve its own interests and the interests of its referring optometrists over the interests of the patients: Under the SEES model, referrers and referees blanketly pre-arranged for patients to have their surgery performed by SEES and to have it co-managed. When legitimate patient-centered co-management decisions are corrupted by the financial interests of the surgical practice and their referring providers, this may violate the Anti-Kickback Statute.
The Anti-Kickback Statute prohibits providing remuneration to induce the recommendation or referral of patients. The law is meant to protect patients from medical judgment being clouded by improper financial considerations and to protect government healthcare programs like Medicare and TennCare from the potential for abuses that increase costs to taxpayers. It also serves to prevent unfair competition that shuts out competitors who are unwilling to pay or get paid for referrals.
The False Claims Act allows private citizens to bring cases in the name of the government against government contractors charged with fraud. Such cases—also called qui tam cases—recover damages back to the government for false claims made to government programs, including Medicare and TennCare. The complaint in this case was filed in Tennessee in 2017 by Ross Lumpkin, O.D. and Gary Odom. Dr. Lumpkin is an optometrist in Tennessee, and Mr. Odom served as an executive in the statewide optometric association for decades. Together, they alerted the government to their allegations of SEES’ anti-competitive business model of using inappropriate pre-arranged co-management and other forms of remuneration as a revenue opportunity for referring optometrists.
“Dr. Lumpkin and Mr. Odom 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. When healthcare providers pay kickbacks to obtain business from other providers, honest companies and honest providers cannot compete, and the entire system suffers,” said Jennifer Verkamp of Morgan Verkamp.
As Amy Easton of Phillips & Cohen said, “This case will help to ensure that patients receive medical care that is in their best interests and that medical decisions are not impacted by the offer or provision of kickbacks.”
This case exemplifies the strong public-private partnership created by the False Claims Act. The government tried but was not permitted to intervene in the case, but the working partnership contemplated by the False Claims Act enabled Morgan Verkamp and Phillips & Cohen to litigate the matter and work with the government to recover fraudulently obtained money back to the United States and Tennessee treasuries. The United States was represented by Assistant United States Attorneys Kara Sweet and Ellen Bowden McIntyre from the United States Attorney’s Office for the Middle District of Tennessee, and the state of Tennessee was represented by Nathan Casey, Assistant Attorney General.
Dr. Lumpkin and Mr. Odom were represented by Amy Easton and Jeffrey Dickstein of Phillips & Cohen and Jennifer Verkamp, Chandra Napora, and Jonathan Lischak of Morgan Verkamp. They were supported by local counsel Michael Hamilton of Provost Umphrey Law Firm.
The case, filed in the United States District Court for the Middle District of Tennessee, is captioned United States ex rel. Odom, et al. v. SouthEast Eye Specialists, PLLC, et al., and the case number is 17-00689.
Phillips & Cohen and Morgan Verkamp represent whistleblowers nationwide: morganverkamp.com; phillipsandcohen.com.
The complaint can be found here: 1665  First Amended Complaint SEES