Two N.Y. eye practices to pay $2.3 million to settle false claims allegations

Two New York ophthalmology practices have agreed to pay a combined $2.3 million to settle allegations that they violated the False Claims Act by billing federal health care programs for medically unnecessary testing through an alleged kickback arrangement, the Justice Department announced.

Mark D. Fromer, P.C., doing business as Fromer Eye Centers, and Floral Park Ophthalmology P.C. allegedly submitted or caused the submission of false Medicare claims for trans-cranial doppler ultrasounds, or TCDs, according to the Justice Department. Fromer Eye Centers also allegedly submitted or caused the submission of false Medicaid claims. The Estate of Mark Fromer, the former owner of Fromer Eye Centers, joined in the settlement with the practice.

The United States alleged that the practices worked with a third-party testing company to identify patients as having a serious diagnosis that could qualify them for TCD reimbursement before the patients had received their test results. However, the government alleged that nearly all patients who underwent the tests never had that diagnosis and that it was not reflected in their medical histories or TCD results.

Floral Park Ophthalmology also allegedly received remuneration from the testing company to induce referrals of Medicare and Medicaid patients. The department specified that its allegation involving the submission of false Medicaid claims applied to Fromer Eye Centers.

The government alleged that the scheme resulted in false claims for TCDs that were medically unnecessary, were premised on false diagnoses and resulted from violations of the Anti-Kickback Statute and the Stark Law.

“The integrity of healthcare decision-making depends on sound medical advice that is free from undue influence of illegal kickbacks and other improper arrangements,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The Department will continue to hold accountable healthcare providers who engage in such schemes.”

U.S. Attorney Gregory W. Kehoe for the Middle District of Florida and Special Agent in Charge Isaac M. Bledsoe of the Department of Health and Human Services Office of Inspector General also emphasized the government’s commitment to combating health care fraud and kickback arrangements.

Under the settlements, Fromer Eye Centers and the Estate of Mark Fromer will pay $1.8 million, while Floral Park Ophthalmology will pay $500,000, the Justice Department said. Of the total amount, $384,000 will be paid to New York for its share of Medicaid funding.

The case originated from a whistleblower lawsuit filed under the False Claims Act’s qui tam provisions, which allow private parties to sue on behalf of the United States and share in a portion of the government’s recovery. The whistleblower will receive approximately $132,000 in connection with the Fromer Eye Centers settlement, according to the Justice Department.

Both practices have agreed to cooperate with the Justice Department’s ongoing investigations of other participants in the alleged scheme. The settlements resolve allegations only, and there has been no determination of liability.