PROVIDENCE – The former owner of a chain of Rhode Island ophthalmology practices accused of running a kickback scheme has agreed to pay a $1.1 million settlement to resolve the claims against him, U.S. Attorney for the District of Rhode Island Zachary A. Cunha announced Thursday. 

Dr. Paul S. Koch is accused of paying kickbacks to optometrists who referred patients to him and his practices for cataract surgeries between Jan. 1, 2013, and Dec. 21, 2017. It is alleged that Koch, Koch Eye Associates and Claris Vision paid financial kickbacks to referring optometrists whose patients elected to receive laser-assisted cataract surgery, spending up to $2,900 out of pocket per eye.  

The government alleged that these payments to the referring optometrists were illegal under the anti-kickback statute, a federal law that prohibits financial payments to induce medical referrals that are reimbursed by federal health care payors, such as the Medicare program. 

“Patients should be able to feel secure that when their doctors make decisions that impact their health – whether about prescriptions, surgeries, or referrals – those decisions are based on sound medical judgment, and not illegal monetary incentives,” Cunha said in a statement. “When medical decision making is corrupted by kickbacks, at the expense of federal Medicare dollars, we will hold those responsible to account.” 

In this case, the government alleged that the kickbacks resulted in the submission of false claims to Medicare under the federal False Claims Act. Through this settlement, the government is recovering twice the amount paid by Medicare for claims associated with the illegal kickbacks paid by Koch and his affiliates, according to a news release.

Under the agreement, Koch will pay $1.1 million to resolve claims brought as part of a complaint filed in federal court in the District of Rhode Island by two whistleblowers. The whistleblowers will receive $256,534.84 out of the settlement payment per the provisions of the False Claims Act. 

“Kickback schemes undermine the integrity of medical decisions, subvert the health marketplace and waste taxpayer dollars,” Special Agent in Charge Phillip M. Coyne of the U.S. Department of Health and Human Services, Office of Inspector General, said in a statement. “We will continue to hold accountable those who refuse to play by the rules and provide illegal incentives to influence the decision making of health care providers.”