Essilor Laboratories of America Inc. has agreed to settle a lawsuit alleging the company violated the State of California Insurance Frauds Prevention Act.
The $23.8 million settlement follows a lengthy California Department of Insurance investigation after a whistleblower lawsuit was filed in 2016.
Essilor allegedly gave eyecare providers kickbacks and other incentives in return for steering business Essilor’s way. The lawsuit alleged that up-front payments from Essilor to ECPs ranged from tens of thousands of dollars to upwards of hundreds of thousands of dollars. Providers allegedly were allowed to use the money however they wanted. They just needed hit benchmark numbers for a period between three and five years.
After its investigation, the California Department of Insurance filed a complaint in intervention in 2021 after deeming these payments “ultimately hurt consumers by unfairly driving them toward more expensive services.”
The lawsuit alleged other unlawful incentives as well:
- Essilor provided kickbacks to California ECPs through its “PracticeBuilder” program. Providers allegedly “were given cash payments for using Essilor lenses and laboratory services.”
- “Essilor knowingly submitted false claims to California private payors, including insurance companies, health care savings plans, and vision benefit organizations.”
According to a press release from the California Department of Insurance, “Unlawful incentives, like those alleged in the lawsuit, are prohibited under the Insurance Frauds Prevention Act as these illegal acts can, and do, influence medical decision making.”
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You can read the full settlement agreement here.
