DaVita Healthcare, facing OIG subpoena, to pay $450 million in fraud settlement over drug waste
Dialysis clinic operator alleged devised a scheme to maximize the amount of drugs it waste, billing Medicare for the price of the dose and the waste.
According to the U.S. Department of Justice, DaVita devised a scheme to maximize the amount of drugs it waste, billing Medicare for the price of the dose and the waste.
Denver-based dialysis services provider DaVita Healthcare Partners will pay $450 million to settle claims that it ran an elaborate scheme to bill Medicare for dialysis drugs that it purposefully wasted.
According to the U.S. Department of Justice, DaVita devised a scheme to take advantage of dosing limitations for the drugs Zemplar and Venoflar, which come in doses that are often more than a doctor prescribes so the excess is wasted. The company allegedly created “dosing grids” designed to make sure that the group maximized the amount of waste, and billed Medicare for the price of the dose and the waste.
[Also: DaVita HealthCare sets aside $495 million to cover fraud claims]
“Two whistleblowers exposed knowingly wasteful dosing practices designed simply to increase profits and improperly drain the government’s resources,” said Acting U.S. Attorney John Horn of the Northern District of Georgia in a statement. “This settlement returns hundreds of millions of dollars to the treasury that had been improperly obtained by DaVita through these wasteful practices.”
DaVita, which runs dialysis clinics in 46 state, allegedly stopped the fraud in 2011, when Medicare changed its reimbursement process for waste to make it no longer profitable to healthcare providers.
[Also: Running list of notable 2015 healthcare frauds]
The whistleblowers, Dr. Alon Vanier and nurse Daniel Barbir, will receive a share of the settlement.
The news came one day after the Department of Health and Human Services’ Office of Inspector General subpoenaed DaVita for its Medicare coding records going back from 2008 to the present.
"We believe that the request is part of a broader industry investigation into Medicare Advantage patient diagnosis coding and risk adjustment practices and potential overpayments by the government," DaVita said in an Securities and Exchange Commission filing.
Twitter: @HenryPowderly
