DaVita to Pay $450 Million to Resolve Allegations that It Sought Reimbursement for Unnecessary Drug Wastage

Written June 29, 2015 by Robert Lu

On Wednesday, June 24, 2015, the U.S. Justice Department announced that DaVita Healthcare Partners Inc., the largest provider of dialysis services in the United States, has agreed to pay $450 million to resolve claims that it violated the False Claims Act.

The settlement resolves allegations brought by a whistleblower action, which said that DaVita devised and employed dosing grids and/or protocols specifically designed to create unnecessary waste of the drugs Venofer and Zemplar. These drugs are typically packaged in single-use vials, which are intended for one-time use by patients. Sometimes, the amount of the drug in the vials does not match the dosage specified by the physician, resulting in the remainder of the drug in the vial being discarded.

At the time of the alleged scheme, Medicare would reimburse a dialysis provider for certain waste if the dialysis provider – acting in good faith – discarded the remainder of the drug contained in a single-use vial after administering the requisite dose and/or quantity of the drug to a Medicare patient. According to the scheme alleged by the whistleblower action, DaVita instructed its employees to provide Zemplar to dialysis patients pursuant to mandatory and wasteful “dosing grids,” in order to maximize the amount of dosage prescribed to patients, thus maximizing Medicare reimbursements for DaVita.

The allegations resolved in the settlement arose from a lawsuit filed by two whistleblowers, Dr. Alon Vanier and nurse Daniel Barbir, under the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.

The lawsuit is captioned United States ex rel. Alon J. Vainer, M.D., F.A.C.P. and Daniel D. Barbir, R.N., Plaintiffs v. DaVita, Inc. and Gambro Healthcare, Inc., and their respective subsidiaries and affiliated companies, Defendants, No. 1:07-cv-2509-CAP (N.D. Ga.). The claims settled by this agreement are allegations only; there has been no determination of liability.

For additional information about the False Claims Act, and the Firm’s services and resources for whistleblowers in general, please visit the Robbins Geller Rudman & Dowd LLP whistleblower site.