December 2, 2012

A Denver, Colorado-based company called DaVita Inc. (“DaVita”) is a $7 billion company and one of the largest dialysis companies in the United States, with about 2,000 dialysis centers located throughout the United States. DaVita recently moved into its own office tower in Denver that reportedly cost $101 million to build and is lavishly furnished with fountains and gardens. The flamboyant CEO of DaVita is reportedly paid about $15 million per year. More than two-thirds of DaVita’s revenues come from Medicare and Medicaid.

A former medical director and a former nurse employed by DaVita have filed a federal case under the U.S. False Claims Act against DaVita claiming that DaVita over-billed Medicare and Medicaid as much as $800 million. Their federal false claims lawsuit alleges that DaVita purchased 100 mg vials of Venofor, an iron drug commonly given to those undergoing dialysis treatment, and would administer 100 mg doses to patients that would be taken not from a single vial of 100 mg Venofor but from as many as four different vials (such as 25 mg from each vial) and then throw away the vials that still contained the remaining amounts of the drug. As a result, Medicare and Medicaid were billed and paid for many thousands of wasted vials of Venofor. Other dialysis companies used smaller vials of Venofor and when necessary, smaller combinations of vials, thereby reducing the number of vials that were thrown away that were not fully used and substantially reducing the amounts billed to the government.

When the former director and former nurse brought the wasted medication issue to the attention of the management of DaVita, they were allegedly told to keep quiet and continue following DaVita’s protocols regarding the administration of Venofor.  The nurse later quit his job and the former medical director’s position was not renewed by the company.

DaVita, which settled a similar claim in Texas for $55 million, has denied the allegations of wrongdoing in the federal False Claims Act lawsuit. DaVita’s attorney has responded to the allegations in the lawsuit by saying, “…. “Well that’s just wrong. If you look at the facts of the case, first of all, the doctors make the dosing decisions …. When you look at what the practices were — decisions being made by doctors, based on what was in the best interest of their patients. And they took into account a variety of things. You can’t just look at one issue. You have to look at things like infection control, what the patient’s going to do, how the patient’s going to do with particular doses. And so, during that entire time what we did, what the doctors did, was appropriate.”

A spokesperson for the public watchdog group “Taxpayers Against Fraud” has stated, “The way it’s set up right now, if the fraud is not caught, then taxpayers foot the bill. If the fraud is caught, stockholders foot the bill,” noting that if a company gets caught cheating the government, the company pays the fines and then continues with business as usual, without the executives of the companies facing any punishment.


Whether the DaVita federal False Claims Act lawsuit is the largest Medicare fraud case to date remains to be seen — we will have to wait until the case is tried or settled. What is evident is that the U.S. False Claims Act’s incentive for whistleblowers to bring to the attention of authorities acts of alleged fraud by providing them with a share of the amounts recovered is a powerful tool to uncover Medicare and Medicaid fraud, as well as other false claims submitted to the U.S. government.

If you have information regarding possible false claims submitted to the U.S. government involving Medicare and/or Medicaid, you may wish to consult with a local False Claims Act attorney who may be able to investigate and evaluate your claim for you and represent you in a False Claims Act lawsuit, if appropriate.

Click here to visit our website or telephone us toll-free at 800-295-3959 to be connected with whistleblower lawyers (false claims lawyers) in your state who may be able to assist you with your possible whistleblower claim.

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