May 26, 2015

Settlement believed to be largest without government help in history

DaVita HealdavitathCare Partners Inc., the parent company of DaVita Kidney Care, announced that it will pay up to $495 million to settle a False Claims Act whistleblower case arising from wastage billing fraud allegations. Dr. Alon Vainer and Daniel Barbir, the whistleblowers, alleged that DaVita routinely and illegally billed Medicare and Medicaid full reimbursement rates for discarded renal care supplements. DaVita operates more than 1,800 dialysis clinics nationwide and 11 outpatient dialysis centers internationally that serve patients with end-stage renal disease. While The Cochran Firm, D.C., represents health care whistleblowers, we did not represent the whistleblowers in this claim.

Dr. Vainer, a nephrologist, was the medical director for several DaVita dialysis clinics. Barbir was a registered nurse with DaVita. The False Claims Act lawsuit claimed that DaVita billed Medicare and Medicaid for entire medicine vials of Zemplar and Venofer even when vials were discarded and not actually used. This illegal billing practice is known as billing for drug waste or wastage.

Even more remarkable than the settlement amount is the fact that the government did not intervene in this whistleblower case. If the government declines to intervene in a False Claims Act case, securing a successful recovery is significantly more challenging. The DaVita settlement is believed to be the largest of any whistleblower claim in which the government declined to intervene.

The False Claims Act was created during the Civil War.  It was meant for private citizens to prevent fraud, waste, and abuse of government money.  Under the act, private citizens (known as relators) can file civil lawsuits against perpetrators of fraud and can receive between 15% to 30% of money recovered for the government, depending on the circumstances of the case.

DaVita has paid almost $1 billion in settlements over the last three years.  In 2012, it paid a $55 million settlement after a whistleblower brought suit alleging DaVita overbilled the government for the anemia drug Epogen.  In October 2014, DaVita paid the federal government a $389 million settlement for its involvement in paying doctors kickbacks for medical referrals.