DaVita to Pay $450 Million to Settle Record Unjoined False Claims Act Case

DaVita will pay $495 million to settle a False Claims Act case — a record for a case not joined by the Department of Justice. Four years ago, the Justice Department declined to join the case.

Patrick Burns of Taxpayers Against Fraud says that the underlying fraud in the case involved the company systematically dumping renal care supplements — Zemplar and Venofer —  down the drain in order to be able to increase billing to Medicare and Medicaid.


“DaVita simply could not allow those facts to come out, and so they and their legal team embraced a ‘scorched earth’ defense of denying everything,” Burns said.

This DaVita case was brought by whistleblowers Alon Vainer and Daniel Barbir who worked for DaVita renal clinics in Georgia.

A previous False Claims Act case against DaVita,  involving kickbacks paid to doctors, was brought by whistleblower David Barbetta and was settled in October of 2014 for $350 million.

“DaVita is now telling the world they have ‘felt the heat and seen the light’ and that compliance will be the watchword going forward,” Burns said.

“If DaVita is serious, then real changes in behavior are likely to have a real impact on the bottom line line going forward,” Burns said.

“Dialysis is not a new business, and there are no new mechanicals,” says Burns. “The nation is slowly aging, but that alone will not move the bottom line from year to year. There are no real economies of scale in renal care.  DaVita built its business on buying patients with kickbacks and price-gouging Medicare and Medicaid on services. That’s one reason the company could afford to pay CEO Kent Thiry as much as $20 million a year, and how they could afford to give their compliance officer, a former attorney for the U.S. Department of Justice, a $2 million bonus.”

“I’m not a betting man, but if I were, I would bet we will see DaVita engage in chicanery again. If we think of fraud as an infection, and the False Claims Act as an antibiotic, then whistleblowers are the white blood cells that fight to make the system healthy again. A good hard dose of antibiotics will knock an infection down, but so long as corporate managers do not pay a personal price – and are in fact very handsomely rewarded — the infection comes back, albeit perhaps in a slightly different form.”

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