Photo: Stock Image
Insurance fraud has become a frequently reported crime. Insurance Commissioner Ricardo Lara recently stated, “Health insurance fraud causes billions of dollars of premium losses annually, resulting in increased cost to Californians. “
One such case of insurance fraud is the case of Essilor Laboratories of America, Inc. Essilor is a manufacturer who markets and distributes optical lenses and equipment used to make optical lenses throughout California.
In 2016 a whistleblower lawsuit was filed against insurance agency Essilor and a complaint was filed by the Commissioner after an investigation. The investigation showed that Essilor provided kickbacks to eye care providers. They paid the providers an upfront payment of tens of thousands of dollars and in some cases hundreds of thousands. The funds were not regulated and the providers could spend the money in any way they saw fit. In exchange, the providers agreed to send clients to Essilor for anywhere between 3-5 years.
The lawsuit also alleged that Essilor provided further kickbacks to the providers with a program named “PracticeBuilder”. Providers were given cash if they used Essilor lenses and lab services. It was a reward for selling their clients the more expensive lenses and coating Essilor provides.
These types “incentives” are illegal under the Insurance Frauds Prevention Act as they influence medical decision making instead of doing what is in the best interest of the patient.
Further allegations includes that Essilor knowingly falsified claims and sent them to private payers, insurance companies, and healthcare savings plans.
On December 5th a settlement of $23.8 million was reached with Essilor. This is the end result of a joint effort between the Commissioner and the whistleblower’s counsel, Baron & Budd, P.C., The Weiser Law Firm, and Keller Grover, LLP. The Department of Insurance and the State of California will receive around $12.7 million to cover the Departments investigation and to be used in future investigations. The remaining amount will be given to the whistleblower per the Insurance Frauds Prevention Act.
