Life Science Compliance Update

October 30, 2017

Getting Serious About Fraud - The DOJ Charges 412

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With the new administration, there appears to be a renewed commitment to enforcing anti-kickback rules against healthcare providers committing fraud against the government insurance programs. In July 2017, the Department of Justice and Department of Health and Human Services announced the largest-ever fraud takedown in the health care arena. This article outlines the announcement, and what it may mean for the future of health care.


It has long been a topic of discussion among life science compliance professionals that when it comes to anti-kickback enforcement, the government favors prosecuting manufacturers and healthcare institutions over individual providers. The speculation was that those two categories were favored because of their deep pockets. However, that old rubric just may have changed.

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September 05, 2017

DOJ Announces Another FCA Settlement - Sightpath Medical and TLC Vision Corporation

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In late August 2017, the United States Department of Justice (DOJ) announced a $12 million settlement with Sightpath Medical and TLC Vision Corporation, as well as the former CEO of both entities, James Tiffany. The suit was brought by Kipp Fesenmaier, former vice president of the company, in 2013 for allegedly violating the False Claims Act and the Anti-Kickback Statute. Fesenmaier claimed that Sightpath knowingly took advantage of Medicare by using extravagant trips and social events to entice doctors to use its products and services, which were then billed to government healthcare programs.

The complaint alleges that the companies paid kickbacks to physicians in various forms, including travel, entertainment, and improper consulting agreements. The complaint specifically refers to examples of trips such as luxury skiing vacations and high-end fishing, golfing, and hunting trips. The complaint alleges that these various items of value were provided to induce the physicians to use products and services supplied by the company. The companies supply intraocular lenses, as well as ophthalmic surgical equipment and services to medical facilities. The products and services are used by ophthalmologists for eye surgeries, including cataract surgeries.

The United States further alleged that James Tiffany directed much of the conduct at issue, particularly between 2010 and 2013 when he was CEO of Sightpath and TLC, and that he was directly involved in setting up and participating in several of the trips with physicians who were either Sightpath customers or potential customers. In addition, Tiffany directly participated in establishing and continuing the lucrative consulting agreements with physicians and physician practices.

According to the settlement agreements, from 2006 to 2015, the Sightpath Entities provided physicians items of value to induce the use of Sightpath Entities’ products and services, which resulted in the submission of false claims to the United States for ophthalmological products and services. Additionally, the Sightpath Entities entered into consulting agreements with physicians and physician practices for services that were never performed or not properly tracked, resulting in payments in excess of fair market value.

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.”

As part of the FCA Agreement and in exchange for a release of OIG’s permissive exclusion authority, Sightpath has agreed to enter into a 5-year corporate integrity agreement (CIA) with OIG. Although not a signatory to the CIA, TLC is participating in the CIA as a “covered person.” 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.”

Tiffany's lawyer told the Business Journal that his portion of the settlement would be paid by the company. In a statement, Sightpath — which admitted no wrongdoing in the deal — 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."

May 02, 2016

Do Gold-Standard CIAs Get Blue Ribbon Approval?

Corporate Integrity Agreements are thought to set the standard for compliance programs, but when viewed against the norms set out by a new report from the Ethics and Compliance Initiative's Blue Ribbon Panel, CIAs fall short. This article is the first in a series examining the gap between the compliance programs outlined in CIAs and the Blue Ribbon Panel ethics and compliance (E&C) guidelines, and what companies can do to move their program from a CIA-standards based program to a Blue Ribbon "high-quality" E&C program.

Corporate integrity agreements have long set the standard for comprehensive and effective compliance programs within the life science community. It also is where those seeking to stay ahead of government enforcement look for guidance on how to build their programs. Given that in the event of an investigation, federal officials will look for these elements, they are important considerations for companies looking to maintain an effective compliance program that is eligible for mitigating credit under the Federal Sentencing Guidelines. However, when viewed against the standards set out in the Ethics and Compliance Initiative's (ECI) new report, CIAs fall short of meeting the "exemplary" standard set out by the ECI's Blue Ribbon Panel of practitioners, former enforcement officials, academics, legal experts and public officials. The draft special report issued by ECI's Blue Ribbon Panel in December guides organizations wishing to improve their ethics and compliance ("E&C") programs, identifying what panelists believe to be the characteristics of "exemplary" E&C efforts.8 According to the Blue Ribbon Panel, there are five principles of a high-quality E&C program ("HQP")

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