DaVita cashed in on waste, ex-workers say

Two former employees of national dialysis provider DaVita say in an amended federal whistle-blower lawsuit that between 2003 and 2010, the company systematically increased the amount of medication it threw in the trash as a way to profit from federal payment policies that rewarded inefficiency.

A DaVita spokesman said the company denies the allegations of wrongdoing, and that the CMS approved of its treatment protocols.

In an amended False Claims Act lawsuit filed Monday in U.S. District Court in Atlanta, the former workers say DaVita officials created company-wide treatment regimens and an internal computer program called Snappy to maximize payments from Medicare and Medicaid that reimbursed companies for “wastage”—medications that are opened but not completely used.

Nephrologist Dr. Alon Vainer and registered nurse Daniel Barbir say DaVita executives created policies that encouraged the opening of multiple single-use vials of three drugs—Venofer, Zemplar and Epogen—that deliberately resulted in unused doses being thrown away. When CMS policies changed in January 2011 to stop payments for wastage, DaVita officials changed their dosage protocols to minimize waste, they said.

A news release from a publicist representing the whistleblowers says the alleged fraud amounts to “hundreds of millions of dollars” of reimbursement for unused medications.

Court records say the Justice Department investigated the claims in the FCA lawsuit and declined to intervene in the case, which was first filed in 2007. Government officials typically join the plaintiffs in roughly 20% of FCA lawsuits filed each year, federal officials have said.

DaVita spokesman Bill Myers said in a written statement that CMS officials did not object when the dosing procedures were presented to them. He added that physicians decide treatments based on individual patients' needs, not corporate policy, and that sometimes dosing choices are made to either minimize the number of injections or to give some drugs in smaller doses.