Eyeglass Lens Manufacturer Insurance Fraud Case Leads to $23.8 Million Settlement
A former employee of Essilor, an eyeglass lens manufacturer, had a duty to fulfill: Leave the company and reveal to the world its huge kickback scheme that cost private insurers and their insureds big time.
The scheme itself involved Essilor paying “hundreds of millions of dollars in kickbacks and other incentives to eye care providers in exchange for selling its expensive lens products.”
Essentially, the whistleblower claimed, payments through this “PracticeBuilder” program were made to reward the ophthalmologists who prescribed and dispensed Essilor’s more expensive lenses and coatings and utilized its laboratory services.
In 2016, Baron & Budd, a plaintiff’s law firm, took the whistleblower’s case and sued Essilor.
In the lawsuit, Baron & Budd also alleged the company “engaged in a far-reaching scheme including the offer and/or payment of both ‘classic’ kickbacks — vast amounts of cash, trips, and lavish entertainment — as well as free and/or reduced-cost professional services including marketing support and business consulting. Essilor offered and/or provided these kickbacks to eyecare professionals for the purpose of buying loyalty and rewarding those who switched to Essilor products and optical laboratory services.”
Because the scheme had a wide reach, eye care insurance companies and their insureds across the nation fell victim to higher premium prices and bigger out-of-pocket expenses.
In California, where the whistleblower and the company reside, the California Insurance Frauds Prevention Act would protect Essilor’s former employee as they went public with this information.
In a December 2022 trial, California Insurance Commissioner Ricardo Lara prosecuted the case alongside Baron & Budd.
In the end, Essilor agreed to a $23.8 million settlement.
Scorecard: It was determined that Essilor violated the Insurance Fraud Prevention Act. The eyeglass lens manufacturer would pay $23.8 million as part of its settlement.
Takeaway: Insurance fraud isn’t new, but the industry must always find fresh ways to stop it before money, time and resources are lost. &