California Investigation Leads to $23.8 Million Settlement over Unlawful Incentives for Eyecare Products

California Insurance Commissioner Ricardo Lara announced that Essilor Laboratories of America Inc. agreed to a $23.8 million settlement in a lawsuit that alleged the company violated the Insurance Frauds Prevention Act.

The lawsuit alleged Essilor provided kickbacks and other unlawful incentives to eye care providers that ultimately hurt consumers by unfairly driving them toward more expensive services.

Essilor manufactures, markets, and distributes optical lenses and equipment used to produce optical lenses throughout California and the nation.

The settlement brings to a close a 2016 whistleblower lawsuit brought against Essilor. After investigating the allegations, the commissioner filed a complaint in intervention in 2021.

The lawsuit alleged that Essilor provided unlawful kickbacks to eye care providers, with an up-front payment of sometimes hundreds of thousands of dollars in exchange for providers promising to send business to Essilor for a period of between three to five years.

The lawsuit also alleged Essilor further provided kickbacks to California eye care providers through a program called “PracticeBuilder,” in which providers were given cash payments for using Essilor lenses and laboratory services.

The payments through the PracticeBuilder program were done to reward the eye care providers who prescribed and dispensed Essilor’s more expensive lenses and coatings and to use its laboratory services.

The lawsuit further alleges Essilor knowingly submitted false claims to California private payors, including insurance companies, health care savings plans, and vision benefit organizations.

The resolution is the result of a collaborative prosecution between the commissioner and the whistleblower’s counsel, Baron & Budd, P.C., The Weiser Law Firm, and Keller Grover, LLP.

Topics California