Our Los Angeles Employment Attorneys Discuss the Whistleblower Lawsuit Against Dialysis Company DaVita

Denver-based DaVita Inc., one of the nation’s largest dialysis companies, stands accused of Medicare fraud on a massive scale in a pending whistleblower lawsuit. According to CNN, Dr. Alon Vainer and nurse Daniel Barbir were discussing clinic procedures when they noticed that clinic workers, following company protocol, were throwing away expensive medicine. According to the two men, this practice was DaVita’s way of defrauding the government by overbilling Medicare and Medicaid. In terms of how much money the company pocketed from the alleged fraud, Vainer says, “we’re talking in the hundreds of millions, easily.”

According to CNN, the alleged fraud uncovered by Vainer and Barbir started in about 2003 and continued through 2010, occurring at the company’s more than 1,800 clinics around the country and involving tens of thousands of patients. DaVita has grown into a $7 billion business that now runs approximately 2,000 clinics nationwide, and the company recently moved into a brand new office tower with a price tag of $101 million. CNN reports that more than two-thirds of DaVita’s revenue comes from Medicare and Medicaid payments.

Vainer and Barbir say the company disposed of hundreds of millions of dollars worth of medicine that was paid for by taxpayers. If the allegations prove to be true, this case could end up being one of the largest cases of Medicare fraud in U.S. history. As Vainer explained to CNN, if a patient required 100 milligrams of the iron drug Venofor, instead of having nurses “administer 100 milligrams, waste nothing, and charge Medicare for 100 milligrams,” DaVita would instruct nurses to administer portions of different vials. Thus nurses would administer 50 milligrams from one vial, throw the rest of that vial away, administer 25 milligrams from another vial, throw the rest of that vial away, and then administer 25 milligrams from yet another vial, throwing the rest of that vial away. The company could then bill for three vials when one would have been sufficient.

According to CNN, Vainer and Barbir were “told to stop causing trouble and to continue following the company’s protocols” when they tried to bring attention to the issue and to stop the widespread waste. Barbir says he quit his job rather than work where fraud was occurring. Vainer claims the company retaliated against him by refusing to renew his medical directorship or his practice, which resulted in “a significant loss of revenue.”

On Nov. 30, the two men filed a False Claims Act lawsuit against DaVita on behalf of the federal government. The False Claims Act allows ordinary citizens to file lawsuits to recover monies stolen from the government through fraud. To compensate whistleblowers for the risk and effort involved in filing such a lawsuit, the False Claims Act allows them to receive a portion of the funds recovered. Vainer and Barbir reportedly stand to receive millions of dollars if the lawsuit against DaVita is successful. According to CNN, DaVita “vows to fight the case in court,” although the company settled a similar case in Texas last year for $55 million.

Employees who possess knowledge that their employer is defrauding the government or otherwise acting illegally should contact an experienced Los Angeles employment attorney to discuss their case. A qualified Los Angeles employment lawyer can protect your rights under state and federal whistleblower laws.

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