UPDATE: DaVita Health Settles Allegations of Medicare Fraud for $495 Million

On the heels of its recent $350 million illegal kickback settlement with the Department of Justice, Denver’s DaVita Healthcare Partners, Inc. has opted to set aside another $495 million to settle additional claims under the False Claims Act involving fraud against government health insurer Medicare.

The claims arose thanks to two whistleblowers working in one of DaVita’s facilities, who promptly reported their original information in a confidential and sealed qui tam lawsuit in 2011. The pair, who is expected to share $135 million, reported that from 2003 through 2011, the company was allegedly engaging in highly wasteful practices with its prescription medication and thereafter billing Medicare for the drugs that were never actually used to treat patients.

The company has not admitted any wrongdoing; however, this is its third government settlement since 2012, totaling nearly $1 billion in payouts. A DaVita spokesperson 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.”

Details of the alleged misconduct by DaVita

Filed on July 25, 2011, the complaint against DaVita raises several alarming factual allegations. As background, DaVita is one of the major providers of renal dialysis in the United States and operates thousands of facilities across the globe to treat patients enduring renal failure.

Many of the patients attending DaVita clinics are Medicare-eligible and rely on government reimbursement for the various medications used during the process. More specifically, the relators’ claims revolve around the use of Epogen, vitamin D, and iron – all of which are an essential component to the renal dialysis process.

Under Medicare guidelines, unavoidable waste of vitamin D and iron may be reimbursable nonetheless, provided the facility can honestly certify these drugs were wasted through no fault of the practitioner. However, wasted Epogen is not reimbursable and facilities are required to absorb the costs of this drug in the event extra is needed during a dialysis treatment.

According to allegations, DaVita intentionally wasted both vitamin D and iron, thereby increasing reimbursements and padding profits. Moreover, the relators claim that DaVita exaggerated claims of wasted vitamin D and iron in order to receive double reimbursement for a single dose.

By contrast, relators claim that DaVita’s approach to the Epogen hormone was designed to ensure “not a drop was wasted.” More specifically, DaVita limited the use of Epogen to precisely fit doses into existing vial sizes, required practitioners to combine multiple single-use vials (sometimes of different concentrations), and mandated the use of the entire contents of an Epogen vial. In other words, DaVita knew of ways to preserve resources, should it so choose.

Contact a reputable whistleblower attorney today

If you are aware of wasteful practices at your place of employment, we encourage you to contact Berger Montague right away to discuss your rights under the False Claims Act.