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PROVIDENCE, R.I. (WPRI) — The former owner of a local chain of ophthalmology practices has agreed to pay nearly more than $1.1 million as part of a civil settlement involving kickback payments for cataract surgeries, according to U.S. Attorney Zachary Cunha.

Dr. Paul Koch, who founded Koch Eye Associates, is accused of sending kickback payments to optometrists in return for referrals for laser-assisted cataract surgeries between 2013 and 2017. The settlement resolves a complaint filed in federal court by two whistleblowers regarding the alleged scheme.

Cunha said patients paid up to $2,900 out-of-pocket per eye for the procedure. The complaint accused Koch of violating the federal anti-kickback statute, which prohibits payments for medical referrals that are reimbursed by federal health care providers, such as Medicare. 

The kickbacks resulted in the submission of false claims to Medicare, which also violates federal law, according to prosecutors.

“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.”

Cunha said Koch will pay the federal government $1,166,072 to resolve the claims, which is twice the amount paid by Medicare for claims associated with the illegal kickbacks. The whistleblowers will receive a $256,534 cut for bringing it to the federal government’s attention.

“Kickback schemes can undermine our healthcare system, compromise medical decisions, and waste taxpayer dollars,” FBI Boston Division Special Agent in Charge Joseph Bonavolonta said. “This settlement makes it clear that medical decisions by doctors should be based on what is best for each patient, not a doctor’s personal financial interest.”

John Tarantino, Koch’s attorney, said his client hasn’t been involved with Koch Eye Associates since his retirement.

Tarantino tells 12 News Koch denies the allegations against him, adding that this was in no way a kickback scheme.

He explained that Medicare typically pays a flat fee which covers both the surgery and follow-up appointments. In Koch’s case, Tarantino said he normally referred his patients back to their original optometrists for their follow-up appointments.

When he did that, Tarantino said Koch would give that portion of the fee to the optometrist conducting the follow-ups.

Tarantino said Koch only decided to pay the settlement so he could “put this case behind him.”

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