St. Michael’s Eye & Laser Institute, an ophthalmology practice in Largo, Florida, and its owner, Dr. John Michaelos, have agreed to pay $350,000 to resolve allegations that they caused false claims to Medicare for brain blood-flow tests tied to kickbacks, the U.S. Attorney’s Office in Boston announced September 11. Prosecutors said an outside testing company paid the practice for referring patients for the tests, even though its contracts called for payments to cover rent, staff and utilities. As part of the settlement, the practice and Michaelos admitted to and accepted responsibility for the facts underlying the agreement.
Brain blood-flow tests ordered at an eye clinic
The tests at the center of the case were transcranial doppler tests, known as TCDs. According to the Justice Department’s announcement, a TCD is a non-invasive diagnostic test that estimates blood flow through certain blood vessels in the brain by bouncing high-frequency sound waves off blood cells.
From September 2015 through December 2020, St. Michael’s had contractual agreements with Eyecuity, PLLC, an independent medical diagnostics company. Under the admitted facts in the settlement agreement, Eyecuity rented space from the practice, provided an on-site technician, and signed an administrative services agreement with St. Michael’s that was purportedly meant to cover the use of staff and utilities at the office.
The Eyecuity technician performed the TCD tests on site at St. Michael’s using Eyecuity’s equipment, and Eyecuity sought reimbursement from Medicare for the tests that St. Michael’s physicians ordered. The government said the claims went to Medicare and to the Veterans Health Administration.
Tests that do not fit the visit. A brain blood-flow test billed after an eye appointment is the kind of line item worth checking against a doctor’s orders, and keeping costs and coverage paperwork organized makes that easier with The Medicare Cost & Coverage Protection Kit.
Payments tied to referrals, not rent
The heart of the case was how the money flowed. The contracts said Eyecuity would pay St. Michael’s based on the cost of office space, staff and utilities. Instead, according to the facts the practice and its owner admitted, Eyecuity paid them based on the volume of patients referred for testing.
That distinction matters under the federal Anti-Kickback Statute, which prohibits health care providers from knowingly and willfully soliciting or receiving anything of value in return for referring a patient for a Medicare-reimbursed diagnostic test or for ordering one. A flat payment for real office costs can be lawful. A payment that rises with each patient sent for a test is the kind of arrangement the law targets.
The diagnoses on the test orders drew scrutiny as well. To document the medical necessity of the TCDs, the order forms Eyecuity submitted to Medicare indicated that patients had Vertebro-Basilar Syndrome or Vertebrobasilar Insufficiency, known as VBI. The settlement agreement describes VBI as a very rare condition, outside the typical scope of ophthalmic diagnosis, that causes inadequate blood flow in the brain. St. Michael’s physicians did not have reason to believe the patients had VBI, according to the admitted facts.
The United States contends that the claims Eyecuity submitted for the tests were false because St. Michael’s received payments from Eyecuity that violated the Anti-Kickback Statute, and that the arrangement led to referrals of Medicare patients for medically unnecessary TCDs.
What the $350,000 settlement covers
Under the agreement, St. Michael’s and Michaelos must pay $350,000 plus interest at 4.5 percent a year from July 27, 2026, within 15 days after the agreement takes effect. Of that amount, $175,000 is designated as restitution.
In return, once the payment is received, the United States releases the practice and its owner from civil and administrative monetary claims for the covered conduct under the False Claims Act, the Civil Monetary Penalties Law, the Program Fraud Civil Remedies Act and several common-law theories. The agreement specifically reserves other claims, including any criminal liability and any administrative action such as exclusion from federal health care programs.
U.S. Attorney Leah B. Foley and Roberto Coviello, Special Agent in Charge of the Health and Human Services Office of Inspector General, announced the settlement. The Department of Veterans Affairs Office of Inspector General assisted, and Assistant U.S. Attorney Charles B. Weinograd of the office’s Affirmative Civil Enforcement Unit handled the case. The announcement did not name any patients.
What older patients can watch for on eye-care bills
Most Medicare beneficiaries see an eye doctor regularly for cataracts, glaucoma, macular degeneration or routine diabetic eye exams. Those visits can involve legitimate imaging and diagnostic tests, and most patients reasonably assume that any test ordered during the appointment is part of their eye care. The St. Michael’s case shows how an unrelated test can be folded into an eye appointment, performed on site by a different company and billed under a diagnosis the patient may never have heard.
The Medicare Summary Notice, or the Explanation of Benefits from a Medicare Advantage plan, lists each service billed in a beneficiary’s name along with the diagnosis and the provider. A brain or vascular test after a routine eye exam, a diagnosis a doctor never discussed, or a charge from a company the patient does not recognize are all reasons to call the doctor’s office and ask who ordered the test and why. Veterans who receive care through the VA can raise the same questions about tests billed to the Veterans Health Administration.
Improper tests also carry a cost for patients. Part B generally requires beneficiaries to pay coinsurance after the annual deductible, so an unnecessary diagnostic test can add to out-of-pocket spending even when Medicare pays most of the bill.
Concerns about billing can be reported to the HHS inspector general by phone at 800-HHS-TIPS (800-447-8477) or online. Keeping copies of test orders, visit summaries and Medicare notices makes it easier to spot a charge that does not belong.
Sorting routine eye care from charges that need a second look
A civil settlement with one practice does not tell a patient whether a specific test on their own statement was appropriate. That judgment starts with comparing what was billed against what the doctor actually discussed and ordered.
The Medicare Cost & Coverage Protection Kit includes a medication and cost tracker for keeping out-of-pocket costs in one place, the prior-authorization appeal steps for disputed coverage decisions, and 51 state Medicare cost-help packs.
Keep a visit-by-visit record with The Medicare Cost & Coverage Protection Kit.
This article was prepared with AI assistance and reviewed against the linked official sources.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
