Atlanta Whistleblowers Could Receive $110 Million in Settlement of Fraud Case

An Atlanta doctor and nurse could receive a payment of more than $110 million in a settlement involving their employer’s scheme to defraud the federal government in reimbursements for two dialysis drugs.

The whistleblowers pursued their lawsuit for nearly eight years against DaVita Healthcare Partners, the largest provider of dialysis services in the United States, the Atlanta Journal-Constitution (AJC.com) reports.

Last week the U.S. Attorney’s Office for the Northern District of Georgia announced that DaVita Healthcare Partners, Inc., 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 has dialysis clinics in 46 states and the District of Columbia, according a news release from the U.S. Attorney.

DaVita was accused of a scheme to collect higher reimbursements by wasting drugs. The company ordered staff to use oversized vials of the vitamin D supplement Zemplar and the iron drug Venofer, then throw away the unused portion. The intentional waste cost the government hundreds of millions of dollars, the suit alleged. “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,” Benjamin C. Mizer, head of the Justice Department’s Civil Division, said in announcing the settlement. John Horn, acting U.S. Attorney for the Northern District of Georgia, noted that the doctor, nurse and their attorneys had engaged in an “exceptional and extensive” effort. The whistleblowers “exposed knowingly wasteful dosing practices designed simply to increase profits and improperly drain the government’s resources,” Horn said in a news release.

At the time of the alleged scheme, Medicare would reimburse a dialysis provider for a certain amount of waste if the dialysis provider using a single-use vial discarded the remainder of the drug after administering the required dose. In their complaint, the whistleblowers alleged that, to create unnecessary waste, DaVita required employees to follow a wasteful “dosing grids” when administering Zemplar to dialysis patients. Zemplar, usually administered at every dialysis session, is packaged in single-use vial sizes of 2 mcg, 5 mcg, and 10 mcg and DaVita’s dosing grids maximized the amount of waste when Zemplar was administered. DaVita allegedly billed the government not only for the amount of Zemplar administered, but also for the amount discarded, according to the news release. For the iron supplement Venofer, packaged only in a single-use vial size of 100 mg during the relevant time period, DaVita devised protocols that required nurses to administer the drug in small amounts, and at frequent intervals, to maximize wastage.

The lawsuit was brought under the federal False Claims Act, which allows private parties to bring suit on behalf of the federal government and to share in any monies recovered. Those who bring successful suits may receive 15 to 25 percent of any settlement amount and an award to cover attorneys’ fees.

 

 

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