DaVita whistle-blowers win $450M case alone

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.