A doctor and nurse who used to work for DaVita Healthcare Partners, Inc. could collect up to $135 million from a $450 million settlement the company paid to resolve False Claims Act allegations.
The allegations arose from a lawsuit filed by former DaVita employees Dr. Alon Vainer and nurse Daniel Barbir under the qui tam provisions of the False Claims Act.
Under the FCA, private citizens can sue on behalf of the government for false claims and share in any recovery. The United States may intervene. The DOJ declined to join the suit against DaVita and the plaintiffs went ahead on their own.
The whistleblowers’ final award can be up to 30 percent of DaVita’s payout, according to court filings.
In a statement Wednesday about the case, the DOJ didn’t discuss the size of the final whistleblower payout. The plaintiffs haven’t issued a statement.
DaVita agreed to pay $450 million to resolve claims that it violated the False Claims Act by knowingly creating unnecessary waste in administering drugs to dialysis patients, and then billing the federal government for the avoidable waste.
Denver, Colorado-based Davita has dialysis clinics in 46 states and the District of Columbia. The company’s biggest shareholder is Warren Buffett’s Berkshire Hathaway, which holds about 18 percent.
As part of Wednesday’s settlement, DaVita will reserve an additional $45 million to cover attorneys fees and costs for the plaintiffs.
The whistleblowers filed their complaint in 2007. Vainer was then a medical director at DaVita and Gambro dialysis clinics, and Barbir was a former clinic director for Gambro and DaVita. DaVita acquired Gambro in 2004.
The complaint alleged that DaVita intentionally wasted dialysis drugs by using oversized vials of Zemplar and Venofer. The company then allegedly billed the government not only for the amount of the drugs given to patients, but also for the amount “wasted.”
“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,” the DOJ’s Benjamin C. Mizer said.
Vainer and Barbir said in court filings that they questioned DaVita about the waste and claimed the company submitted fraudulent claims for reimbursement between 2003 and 2010.
In 2011, the government changed the way it compensated for wasted doses, making DaVita’s prior alleged practices unprofitable.
“Through personal sacrifice and courage, two whistleblowers exposed knowingly wasteful dosing practices designed simply to increase profits and improperly drain the government’s resources,” acting U.S. Attorney in Atlanta John Horn said.
The lawsuit was 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 DOJ said the claims settled Wednesday are allegations only and there has been no determination of liability.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.