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Health Care Policy & Politics

Whistleblowers file suit against dialysis provider DaVita Inc.

July 27, 2011
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Lawyers for two whistleblowers filed an amended complaint Monday afternoon in Federal court in Atlanta accusing dialysis providers DaVita Inc. and Gambro Healthcare Inc. of deliberately wasting hundreds of millions of dollars of medications in order to fraudulently boost reimbursements from Medicare and Medicaid. A complete copy of the amended complaint can be found here.

According to the suit, the companies designed multiple sets of directly conflicting internal
protocols dictating how specific drugs should be administered based on how the costs for such drugs were reimbursed by the government. The suit also charges that these "dosing grids" were designed to increase volume rebates and discounts to the defendants from the manufacturers of the medications.

"The complaint makes clear that for years, DaVita has used different sets of rules to game the Medicare system and illegally inflate their government reimbursements at taxpayer and patient expense," said L. Lin Wood, attorney for the whistleblowers. "Taxpayers and patients should feel a sense of outrage when they read the complaint and learn how DaVita has become a multi-billion dollar business due in large part to corporate strategies and protocols focused on extracting every dollar possible from the government rather than on improving the care of chronically ill patients."

The scheme centered on three drugs routinely administered to patients during dialysis: Venofer, Zemplar, Epogen.

In the case of Venofer and Zemplar, the suit alleges that the government reimbursed the defendants for "necessary wastage," such as medication that remained in a vial after the vial dose was administered. According to the suit, company protocols were designed to maximize the amount of drug wasted because the government paid DaVita for the amount of drug administered to the dialysis patients and the amount intentionally wasted and thrown away. For example, instead of using three 2 mcg vials to administer a 6 mcg dose of Zemplar with no waste, DaVita’s protocols required employees to use a 10 mcg vial, the suit alleges. The patient received 6 mcgs, and the remaining 4 mcgs were discarded but still billed to the government.

Reimbursement rules for Epogen, on the other hand, made clear that no waste would be reimbursed. As a result, the DaVita dosing grids were formulated to guarantee that every available drop of medication in every vial was used and billed for, including any excess medication, or overfill, for which they had not paid.

After the ESRD bundle was implemented, DaVita immediately put in place new protocols that effectively eliminated iron waste and significantly reduced vitamin D waste, according to the suit.

According to the suit, DaVita and Gambro engaged in similar fraudulent practices prior to the merger. Afterward, DaVita selectively implemented additional fraudulent practices at the clinics it acquired and adopted some of Gambro’s wrongful practices and procedures at its own legacy facilities. The suit alleges that the post-merger goals of DaVita were to increase wastage whenever possible for Vitamin D and iron drugs where the government paid for the wastage while ensuring that there was no waste of EPO.

"There is nothing new in the amended complaint filed by the plaintiffs. These are old claims, dating back to 2007, which the government has already reviewed and declined to pursue," a representative from DaVita told NN&I.

"In fact, the DoJ and CMS fully investigated the plaintiffs’ claims, as they are legally obligated to do, and the DoJ publicly announced that it declined to pursue the claims earlier this year. DaVita never required physicians to prescribe a particular dose of any medication at any level, at any time."

The suit was filed on behalf of the U.S. government under the False Claims Act in the United States District Court for the Northern District of Georgia by a former Gambro/DaVita clinic director, Daniel D. Barbir, R.N., and Alon J. Vainer, MD, a nephrologist who served as Medical Director of Gambro and DaVita dialysis clinics in Georgia.

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