Healthcare company Davita, Inc. was accused last month of defrauding the federal government and in the process costing taxpayers approximately $800 million. Davita, one of the largest dialysis companies in the nation, operates dialysis service centers around the country. Most of its revenue is derived from Medicaid and Medicare reimbursements.
The fraud case against DaVita originated from two whistleblowers, a doctor and a nurse, who filed a whistleblower lawsuit against the company under the U.S. False Claims Act on behalf of the U.S. government. According to the whistleblowers, the company’s policy has been to throw away enormous amounts of medicine in order to over-charge the Medicaid and Medicare programs. CNN reported that Davita has a practice of using only a small portion of a vial of medication in dispensing doses and that it then throws away the remainder of the vial without administering the entire dose to the patient. The patient’s remaining dose would then be taken from additional vials.
Essentially, this practice allegedly allows Davita to charge for multiple vials of medication when far fewer vials are actually needed to meet a particular patient’s dosage level. The whistleblowers reported that the more vials Davita used, the more the company was able to bill the government. If the whistleblowers’ allegations are true, the company threw away hundreds of millions of dollars of medicine and the taxpayers paid for it.
More and more companies are defrauding the government by overbilling Medicare and Medicaid in order to make big bucks. Massive fraud cases involving these programs have implications for all Americans, especially since the programs are funded by U.S. taxpayers. The False Claims Act is the single most important tool taxpayers have to recover the billions of dollars stolen through corporate fraud each year. The Act allows private citizens to sue those that commit fraud against government programs. The Act provides for treble damages and also provides awards of 15% to 30% of recoveries for those bringing the cases. Additionally, many states even have their own versions of the False Claims Act. A great deal of fraud against the government occurs on a daily basis in our country. The companies that are committing the fraud must be held responsible for their wrongdoing and the resulting damages to the government and ultimately to taxpayers.
Our firm has been actively involved in the AWP fraud litigation for several years. Lawyers in our firm continue to fight on behalf of states whose Medicaid programs were defrauded. Our firm currently represents the citizens of Alaska, Alabama, Hawaii, Kansas, Louisiana, Mississippi, South Carolina, and Utah. We are seeking to recover billions of dollars in overpayments as a result of various drug manufactures’ fraudulent practices involving Medicaid. These cases have made a significant social change in the way our Medicaid program operates. The federal government has actually revamped its pricing formula as a direct result of the litigation. If you need additional information about any of the above, contact Alison Hawthorne, a lawyer in our Consumer Fraud Section, at 800-898-2034 or by email at Alison.Hawthorne@beasleyallen.com.
Source: CNN and Taxpayers Against Fraud
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