DaVita To Pay $450 Million For Violating False Claims Act

DaVita Healthcare Partners, Inc., the largest provider of dialysis services in the United States, has agreed to pay $450 million to resolve claims that it violated the False Claims Act by knowingly creating unnecessary waste in administering the drugs Zemplar and Venofer to dialysis patients, and then billing the federal government for such avoidable waste.  Davita is headquartered in Denver, Colorado, and has dialysis clinics in 46 states and the District of Columbia.

“This settlement is an example of what can be accomplished as a result of the successful cooperation between the government and whistleblowers in protecting our vital federal health care programs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.

This civil settlement resolves allegations brought in a whistleblower action that DaVita devised and employed dosing grids and/or protocols specifically designed to create unnecessary waste of the drugs Venofer and Zemplar.  These drugs are packaged in single-use vials, which are intended for one-time use. Sometimes, the amount of the drug in the vials does not match the dosage specified by the physician, resulting in the remainder of the drug in the vial being discarded.

At the time of the alleged scheme, Medicare would reimburse a dialysis provider for certain waste if the dialysis provider – acting in good faith – discarded the remainder of the drug contained in a single-use vial after administering the requisite dose and/or quantity of the drug to a Medicare patient.

The whistleblowers’ complaint alleged that, to create unnecessary Zemplar waste, DaVita required its employees to provide Zemplar to dialysis patients pursuant to mandatory and wasteful “dosing grids.”  Zemplar, a Vitamin D supplement usually administered at every dialysis session, is packaged in single-use vial sizes of 2 mcg, 5 mcg, and 10 mcg. Davita allegedly created unnecessary waste by requiring its employees to provide Zemplar to dialysis patients pursuant to mandatory “dosing grids,” which were designed to maximize the amount of Zemplar administered to patients.  DaVita then allegedly billed the government not only for the amount of Zemplar administered to patients, but also for the amount “wasted.”
With regard to Venofer, an iron supplement packaged only in a single-use vial size of 100 mg during the relevant time period, DaVita allegedly enacted protocols that required nurses to administer this drug in small amounts, and at frequent intervals, to maximize wastage. For instance, in certain instances, DaVita’s protocol called for a patient to receive 25 mg of Venofer per week, which resulted in 300 mg of waste per month that was billed to the Government.  In contrast, if the order had been filled by giving the patient the entirety of a single 100 mg vial, once per month, no waste would have resulted.

In 2011, the Centers for Medicare and Medicaid Services changed the manner by which it reimbursed dialysis providers for such drugs.  As a consequence, wastage derived from single-use vials was no longer profitable, and, as a result, DaVita allegedly changed its practices and reduced its drug wastage dramatically.

“Through personal sacrifice and courage, two whistleblowers exposed knowingly wasteful dosing practices designed simply to increase profits and improperly drain the government’s resources,” said Acting U.S. Attorney John Horn of the Northern District of Georgia.  “This settlement returns hundreds of millions of dollars to the treasury that had been improperly obtained by DaVita through these wasteful practices.”

The allegations resolved today arose from a lawsuit filed and ultimately litigated to this succesful resolution by two whistleblowers, Dr. Alon Vanier and nurse Daniel Barbir, under the qui tam provisions of the False Claims Act.  Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.  The United States may intervene in the action or, as in this case, the whistleblower may pursue the matter.

Davita To Pay $495 Million

DaVita HealthCare Partners said Monday it will pay up to $495 million to settle a whistle-blower lawsuit accusing the Denver company of defrauding the federal Medicare program of millions of dollars.

The company, which said it does not admit any wrongdoing, has now settled its third whistle-blower lawsuit since 2012, with payouts totaling nearly $1 billion.

The civil suit, filed in Atlanta in 2011, revolves around a claim by Dr. Alon J. Vainer and nurse Daniel D. Barbir, who both worked for DaVita. They noticed that DaVita was throwing out good medicine that it then billed Medicare and Medicaid for, according to the lawsuit.

Vainer and Barbir, who could be paid up to $135 million as part of the settlement, said in court filings that they questioned DaVita about the waste and claimed the company submitted fraudulent claims for reimbursement between 2003 and 2010.

Lin Wood, the Atlanta-based attorney for the plaintiffs, and co-counsel Marlan B. Wilbanks did not return requests for comment on Monday.

DaVita Kidney Care CEO Javier Rodriguez said in a statement: "Our 67,000 teammates across 11 countries look forward to putting this behind us. We can now renew our focus on collaborating with regulators to avoid situations like this going forward."

The case began as a sealed lawsuit filed with the federal government in 2007. But, after two years of investigating, the government decided not to join the lawsuit, according to The New York Times.
Vainer and Barbir filed the case again under the False Claims Act in civil court in 2011.

The lawsuit cited DaVita's inefficient use and costly waste of the drugs Zemplar, or vitamin D, and Venofer, an iron supplement. If a patient, for example, needed 25 milligrams of Venofer, the physician would use that much and toss the rest of the 100 mg vial. Medicare would be billed for the 100 mg.

In other instances, if a patient needed 8 mg of Zemplar, DaVita doctors were instructed to a use a 10 mg vial, instead of four 2 mg vials.

According to the lawsuit, the National Centers for Disease Control and Prevention recommended against allowing multiple uses of the same vial in 2001, based on infection outbreaks caused by the re-entry of another drug, Epogen. But a year later, CDC changed its policy and allowed re-entry of single-use vials Epogen, Zemplar and Venofer if procedures were followed.

DaVita did not do this but "should have," according to the lawsuit, "but they (DaVita) intentionally did not do so in order to purposefully create and maximize their waste and receive significantly higher reimbursements and revenue for Venofer and Zemplar usage."

False Claims Act cases have the strongest whistle-blower protection in the U.S., according to the National Whistleblowers Center. Violators face huge penalties of $5,000 to $10,000 for each false claim. The whistle-blower could get between 15 to 30 percent of the settlement funds.

Because of its False Claims status, a DaVita loss during a jury trial could mean it must pay thousands of dollars per claim, which could be millions because it would count every instance a patient was given a dose of the drugs. DaVita announced the settlement in an April 15 Securities and Exchange Commission filing.

As part of the settlement, DaVita will pay the government $450 million, plus reserve an additional $45 million to cover fees. The government would then work with Vainer's and Barbir's lawyers to compensate the former DaVita employees.

"Although we believe strongly in the merits of our case, we decided it was in our stakeholders' best interests to resolve it," DaVita's chief legal officer Kim Rivera said in a statement Monday. "The potential mandatory penalties for being found in the wrong in even a small percentage of instances were simply too large."

Since the case was filed, DaVita has settled on two other lawsuits brought on by whistle-blowers. In 2012, DaVita agreed to pay $55 million to the federal government and others over fraud claims that it medically overused and double-billed the government for Epogen, an anemia drug. The suit was filed by Ivey Woodard, a former employee of Epogen-maker Amgen, in 2002.

In October, the company paid $389 million to settle criminal and civil investigations into whether DaVita offered kickbacks to kidney doctors for patient referrals. David Barbetta, a DaVita senior financial analyst, filed the suit in 2009. The company in January paid an additional $22 million to settle related claims by five states, including Colorado.

DAVITA TAKING ADVANTAGE OF DIALYSIS PATIENTS AS WELL AS MEDICARE & MEDICAID

DAVITA

 

 

 

This is a name I want you to remember.

 

This company has many major dialysis clinics across the US. It's so sad to find out that while we, the taxpayers, work hard everyday to be able to help support needed programs like Medicare and Medicaid-- that low life people like the Ken Theory CEO of DaVita are taking advantage of these programs and us.

 

 

This company has a $101 million office tower, that includes fountains, gardens, and even a ski gondola used for meetings. The CEO dresses as a Three Musketeer for his meetings and calls the participants his villagers. That should be our first clue something is wrong.  He is the highest paid CEO in Colorado.

 

 

A nurse and doctor whom work for one of the clinics said they had noticed a wasteful problem and tried to address it with supervisors. They were both told not to start trouble and follow the instructions they had been given.

 

What was happening is for example if a dialysis patient required 100 cc of iron throughout the week they would draw that amount from 3 separate 100 cc vials - rather than purchasing smaller sized dosages, then they would use 50% of the first one and toss the rest, later in the week they would open a new vile use 25% and toss the rest, then once again at the end of the week they would again open a new vial and use 25% and toss the rest. So theoretically they were using 100 cc out of 300 cc that was open. But that way they could charge insurance for all 3 of them.  Now take that and multiply it by their now 2000 clinics where 2/3 of their income was from Medicare or Medicaid.  It is estimated that this added up to approximately $800 million in fraudulent charges.

 

 

They have previously this year settled a $55 million suit for fraud in Texas. The real injustice is that it boils down to that if they are prosecuted and fine it's the investors that pick up the bill, if they are not prosecuted then it's us, the taxpayers that pick up the bill. But at no point are the people who are the true criminals making the decisions and profits are they every held accountable or prosecuted. This in my opinion is true fraud and injustice for all of us!