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DaVita Whistleblowers Win $450 Million Without Federal Participation

In what is believed to be the largest settlement ever reached in a whistleblower case in which the government declined to intervene, DaVita Kidney Care, a division of Denver-based DaVita HealthCare Partners Inc., one of the largest U.S. kidney dialysis providers, has agreed to pay $450 million, and set aside an additional $45 million in attorneys’ fees, to settle claims that it routinely overbilled Medicare and Medicaid between 2003 and 2010.
The terms of the settlement, first filed in federal district court in Atlanta on April 16, 2015, became public on May 4 when DaVita reported a first-quarter loss that reflected a significant after-tax charge for the settlement.
The whistleblowers in the case, Dr. Alon Vainer, a nephrologist who worked in dialysis clinics in Georgia, and Daniel Barbir, a registered nurse in Georgia, are entitled under federal law to as much as 30% of the money that is recovered for the government.
Vainer and Barbir claimed that the company’s clinicians used partial vials of drugs but billed the government programs for the full volume of the vials. Their complaint alleged that DaVita, “in order to purposefully create and maximize their waste and receive significantly higher reimbursements and revenue”, implemented a company-wide protocol by systematically using larger-than-necessary medicine vials or unnecessarily spreading medicine dosages across multiple treatments.
The case began as a sealed lawsuit filed with the federal government in 2007. However, after two years of investigation, the government decided not to join the lawsuit, and Vainer and Barbir filed an amended complaint under the False Claims Act (FCA) in civil court in 2011 to continue pursuing the case on their own.
The case is part of a growing trend that finds whistle-blowers and their attorneys increasingly willing to move forward with cases even after the government decides not to intervene. In October 2014, for example, a Texas jury awarded $175 million in case brought under the FCA against Trinity Industries, the highway guardrail maker alleged to have sold systems that can malfunction during crashes and slice through cars, a case notable not only for the size of the award (which could triple to $525 million under federal law) but because the government declined to intervene.
DaVita has settled two other whistle-blower lawsuits that were brought since Vainor and Barbir’s case was filed. 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 an anemia drug in a suit filed by a former employee of the drug’s manufacturer Amgen in 2002.
And in October 2014, resolving a suit filed by a DaVita senior financial analyst in 2009, DaVita paid $389 million to settle criminal and civil investigations into whether the company offered kickbacks to kidney doctors for patient referrals. In January of this year the company paid an additional $22 million to settle related claims by five states, including Colorado.
DaVita operates approximately 2,100 dialysis clinics in the United States, and has entered into about 300 ventures with doctors. The company treats about 170,000 patients at outpatient dialysis centers throughout the country.

Under Federal law, individuals who report fraud to the government are sometimes entitled to monetary awards. If you are aware of wrongdoing and would like to know more about your rights, please click here.


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