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A $63.7 million settlement has been reached in a healthcare fraud qui tam lawsuit over alleged violations of the False Claims Act. Two whistleblowers will receive approximately $2.1 million.
Defendant DaVita Rx LLC is a nationwide pharmacy that mainly serves people suffering from severe kidney disease. The pharmacy settled allegations that it conducted inappropriate billing practices and dealt in illegal financial incentives at the expense of federal health programs.
According to this healthcare fraud qui tam lawsuit, DaVita billed federal health programs for medications that were either never shipped or were shipped and later returned. The company allegedly did not follow federal requirements that include documentation of proof of delivery, refill requests, or patient consent.
The healthcare fraud qui tam lawsuit additionally alleged that DaVita paid improper financial incentives to federal healthcare program beneficiaries, which is a violation of the Anti-Kickback Statute. Instead of collecting copayments from Medicare beneficiaries, DaVita allegedly accepted manufacturer copayment discount cards. The pharmacy allegedly wrote off unpaid beneficiary debt and administered discount to those who paid by credit card.
DaVita ultimately self-disclosed these financial aberrations and subsequently faced the whistleblower lawsuit.
According to the healthcare fraud qui tam lawsuit settlement, Davita agreed to pay a total of $63.7 million to resolve the allegations. Approximately $22.2 million was repaid to federal healthcare programs and an additional $38.3 million will go to the U.S. government. A total of $3.2 million will go to Medicaid program claims made by states that wish to participate in the settlement. Each state’s Medicaid program receives funding from both federal and state governments.
Employees Filed Healthcare Fraud Qui Tam Lawsuit
The healthcare fraud qui tam lawsuit was filed by two former DaVita Rx employees who saw evidence the pharmacy had submitted false claims for government funds. The employees filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allows private individuals to sue on behalf of the federal government when they find reason to believe defendants have defrauded the U.S. government.
“Improper billing practices and unlawful financial inducements to health program beneficiaries can drive up our nation’s health care costs,” said Civil Division Acting Assistant Attorney General Chad Readler in a press release. “The settlement announced today reflects not only our commitment to protect the integrity of the healthcare system, but also our willingness to work with providers who review their own practices and make appropriate self-disclosures.”
“The conduct being resolved in this matter presents serious program integrity concerns” said C.J. Porter, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “DaVita Rx’s cooperation in the investigation of this matter was necessary and appropriate to reach this resolution.”
The Healthcare Fraud Qui Tam Lawsuit is United States ex rel. Allian v. DaVita Rx LLC, Case No. 3:16-cv-0943-B in the U.S. District Court for the Northern District of Texas.
In general, whistleblower and qui tam lawsuits are filed individually by each plaintiff and are not class actions. Whistleblowers can only join this investigation if they are reporting fraud against the government, meaning that the government must be the victim, and that the alleged fraud should be a substantial loss of money.
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If you believe that you have witnessed fraud committed against the government, you may have a legal claim. Whistleblowers can only join this investigation if they are reporting fraud against the government, meaning that the government must be the victim, and that the alleged fraud should be a substantial loss of money.
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