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Attorney General Marty Jackley

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Attorney General Mark Vargo announces settlement of Medicaid kick-back suit

FOR IMMEDIATE RELEASE: Wednesday, Aug. 31, 2022                                                                                  

CONTACT: Stewart Huntington, 605-773-6878

PIERRE, S.D. -- South Dakota Attorney General Mark Vargo announced today that South Dakota has joined 34 other states in settling allegations of kickbacks paid to referring providers against Essilor International, Essilor of America Inc., Essilor Laboratories of America Inc., and Essilor Instruments USA (Essilor), headquartered in Dallas. Essilor manufactures, markets, and distributes optical lenses and equipment used to produce optical lenses.  Pursuant to the settlement, Essilor will pay the United States and 35 states a total of $22 million plus interest.

The settlement resolves allegations that between Jan. 1, 2011, and Dec. 31, 2016, Essilor knowingly and willfully offered or paid remuneration to eye care providers, such as optometrists and ophthalmologists, to induce those providers to order and purchase Essilor products for their patients, including Medicaid beneficiaries.  The government alleges that the Essilor’s conduct violated the Federal False Claims Statute and South Dakota statutes, and resulted in the submission of false claims to the South Dakota Medicaid program.  The settlement is neither an admission of liability by Essilor, nor a concession by South Dakota that its claims are not well founded.

The total value of the settlement is $12,500,000.00, consisting of $5,566,654.99 for the states pursuant to the Agreement and $6,933,345.01 for the United States pursuant to the Federal Settlement Agreement.

The total settlement amount recovered by South Dakota is $56,009.03, of which $31,286.18 will be retained by the federal government for the federal Medicaid share.  The remaining $24,722.85 will go to the state general fund to offset alleged Medicaid damages in this case.

This settlement arises from two whistleblower lawsuits filed in the United States District Court for the Northern District of Texas and the Eastern District of Pennsylvania. A team from the National Association of Medicaid Fraud Control Units (“NAMFCU”) participated in the settlement negotiations on behalf of the states.  The NAMFCU Team included representatives from the Offices of the Attorneys General for the states of California, Colorado, Indiana, Pennsylvania, and Texas.

The South Dakota Medicaid Fraud Control Unit and the South Dakota Department of Social Services assisted in recovering the settlement money. 

The South Dakota Medicaid Fraud Control Unit received 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $531,980 for Federal Fiscal Year 2022.  The remaining 25 percent, totaling $177,322, is funded by South Dakota.