Minneapolis eye surgery company will pay $12 million in alleged kickbacks case

A Minneapolis mobile ophthalmic company and its former CEO have agreed to pay $12 million to resolve allegations that it lured physicians with illegal kickbacks in exchange for their business for nearly a decade, the U.S. attorney's office announced Monday.

The settlement comes after a whistleblower sued Sightpath Medical, Inc., and a Bloomington surgical equipment provider over allegations that Sightpath took prospective clients on luxury skiing vacations and high-end fishing, golfing and hunting trips to persuade them to use its services.

According to the U.S. attorney's office, Sightpath provided the kickbacks for nearly a decade, from 2006 to 2015, in a way that greatly expanded its payments from government health care programs such as Medicare. The government also accused the company of entering into consulting agreements with physicians and their practices for services that were either never performed or not properly documented.

"Medicare beneficiaries depend on their physicians to make decisions based on sound medical judgment," Assistant U.S. Attorney Chad Blumenfield said in a statement Monday. "Our office will take decisive action to address allegations that medical providers are receiving improper financial benefits that could influence medical decisionmaking."

Acting U.S. Attorney Greg Brooker said Monday that the settlement is the third major False Claims Act case resolved by his office in as many months.

In a statement to the Star Tribune, Sightpath Medical said it was "pleased to resolve this civil matter and move forward with a focus on helping our physicians and facilities provide exceptional patient care." Sightpath said it cooperated with the government's probe and "did not admit any wrongdoing as part of the settlement agreement."

The Office of Inspector General of the U.S. Department of Health and Human Services and the FBI investigated the case, which started as a whistleblower suit brought by former employee Kipp Fesenmaier in 2013. Fesenmaier will receive 19.5 percent of the funds recovered as part of the settlement, the U.S. attorney's office said Monday.

The U.S. attorney's office also intervened in an underlying lawsuit against the Cameron-Ehlen Group, Inc., which does business as Precision Lens. Sightpath and Precision Lens supply surgical equipment and services for ophthalmologists, including tools used in cataract surgeries performed in "ambulatory surgical centers."

Former Sightpath CEO James Tiffany — who held that position from 2010 to 2013 — also was named in the lawsuit, and the U.S. attorney's office said he allegedly directed much of the kickback activity. Tiffany was "directly involved" in brokering several of the trips with physicians who were either Sightpath customers or potential customers, even tagging along for some of the excursions. The government also accused Tiffany of helping set up the "lucrative consulting agreements."

"Jim Tiffany paid nothing for this settlement," said Chris Madel, Tiffany's attorney. "His portion of the settlement was paid entirely by Sightpath, and he's pleased to have this all over."

As part of the settlement, Sightpath also agreed to enter into a five-year "corporate integrity agreement" with the OIG. In its statement Monday, Sightpath said it reached the agreement to avoid the "delay, expense and uncertainty of litigation." The company said it is "continually reviewing and enhancing our compliance and conduct policies and procedures to meet the expectations of our customers and the requirements of our industry."

Stephen Montemayor • 612-673-1755

Twitter: @smontemayor