A previous version of this story said the plaintiffs contended that DaVita boosted profits by prescribing and billing for vials of drugs that were larger than the doses actually administered. DaVita does not prescribe drugs, it administers them, and the suit reflected that.
Dialysis provider DaVita Kidney Care said it would pay up to $495 million to settle a whistleblower suit filed in Atlanta that dates back to 2007. The money consists of a settlement amount of $450 million and attorney fees and other costs of $45 million, the company said in its first quarter earnings report. DaVita Kidney Care, a division of DaVita HealthCare Partners, said that they have not yet signed a definitive settlement agreement, and cannot guarantee that the suit will not ultimately settle for a larger amount.
"We should be held to high standards of accountability," said Javier Rodriguez, CEO of DaVita Kidney Care. "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 was filed under the federal False Claims Act in 2007 on behalf of Dr. Alon J. Vainer, a board-certified nephrologist who was medical director for several of DaVita's dialysis clinics, and Daniel Barbir, a registered nurse who worked as a Cumming clinic director. The suit was amended in 2011.
The two former employees claimed that, for years, DaVita intentionally created waste when administering Zemplar and Venofer, and submitted claims for such waste for reimbursement, in violation of the False Claims Act.
"DaVita’s revenue maximizing decisions, including not to re-enter vials of Zemplar and Venofer and to choose Venofer over Ferrlecit, as well as mandating the most wasteful Zemplar vial combinations and adopting the most wasteful iron protocol, were revenue-based and not for clinical or efficiency purposes. Money, not clinical concerns, dictated protocols within DaVita," according to the complaint.
"Although we believe strongly in the merits of our case, we decided it was in our stakeholders' best interests to resolve it," said Chief Legal Officer for DaVita HealthCare Partners Kim Rivera. "The potential mandatory penalties for being found in the wrong in even a small percentage of instances were simply too large."
The dialysis provider paid $389 million in Oct. 2014 to resolve claims that it paid kickbacks to receive referrals of patients to its dialysis clinics. In 2012, the company paid $55 million plus attorneys' fees for litigation filed in 2002 in Texas that claimed DaVita double-billed Medicare for the anemia drug Epogen.
"Our current compliance program is already much more comprehensive than what we had five to 10 years ago," said Chief Compliance Officer for DaVita HealthCare Partners Jeanine Jiganti. "We will use this experience to take our effectiveness to a whole new level going forward."