DaVita whis­tle-blow­ers win $450M case alone

Modern Healthcare - - NEWS - By Lisa Schencker

The $450 mil­lion DaVita Kid­ney Care set­tle­ment in a False Claims Act case last week re­flects grow­ing suc­cess among health­care whis­tle-blow­ers who choose to carry on alone when the fed­eral gov­ern­ment de­clines to join them. It’s thought to be the largestever set­tle­ment in a false-claims case the gov­ern­ment turned down.

The whis­tle-blow­ers, Dr. Alon Vainer and Daniel Bar­bir, filed suit against DaVita in 2007. Vainer was 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. They al­leged that DaVita dial­y­sis clin­ics rou­tinely over­billed Medi­care and Med­i­caid be­tween 2003 and 2010. The com­pany’s clin­i­cians, they said, would use par­tial vials of the drugs Zem­plar, Venofer and Epogen and then dis­pose of the rest but bill the gov­ern­ment pro­grams for the full vol­ume of the vials. The com­pany changed its prac­tice af­ter the CMS re­vised its pay­ment pol­icy on so-called wastage, they al­leged.

The gov­ern­ment of­fi­cially de­clined to get in­volved in the case in 2011, and Vainer and Bar­bir filed an amended com­plaint to con­tinue pur­su­ing the case on their own.

In a writ­ten state­ment, DaVita Chief Legal Of­fi­cer Kim Rivera said: “Although we be­lieve strongly in the mer­its of our case, we de­cided it was in our stake­hold­ers’ best in­ter­ests to re­solve it.”

In the past, it was usu­ally as­sumed a case was doomed if the gov­ern­ment chose not to get in­volved, said Marc Ras­panti, a part­ner with Pi­etra­gallo Gor­don Al­fano Bosick & Ras­panti in Philadel­phia who rep­re­sents whistle­blow­ers. That’s no longer true. “The trend has been steadily grow­ing that th­ese cases are mov­ing for­ward with- out the gov­ern­ment, and the re­cov­er­ies are in­creas­ing,” Ras­panti said.

Pa­trick Burns, co-direc­tor of the Tax­pay­ers Against Fraud Ed­u­ca­tion Fund, a not-for-profit partly funded by whis­tle-blow­ers and the law firms rep­re­sent­ing them, said it’s be­com­ing more com­mon for the gov­ern­ment to in­ter­vene only to­ward the very end of a case.

That can be a dou­ble-edged sword for a whis­tle-blower. The gov­ern­ment can help the par­ties work through some of the more dif­fi­cult is­sues, Ras­panti said. On the other hand, it can mean less fi­nan­cial re­ward for the whis­tle-blow­ers.

It’s not yet clear ex­actly how much money the whis­tle-blow­ers in the DaVita case will get for their ef­forts. Burns said he thinks Vainer and Bar­bir will get the full 30% share of the set­tle­ment al­lowed by the False Claims Act.

In ad­di­tion to the $450 mil­lion, DaVita has set aside $45 mil­lion in at­tor­ney fees and other costs.

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