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DaVita to Pay $450 Million to Settle Wasted Medication Allegations

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On June 24, 2015, DaVita Kidney Care, a division of DaVita Healthcare Partners and one of the largest U.S. kidney dialysis providers, agreed to pay the U.S. government nearly half a billion dollars to settle allegations brought by two former employees that it violated the False Claims Act by intentionally wasting dialysis medications in order to receive higher Medicare payments.

In 2007, two whistleblowers – Dr. Alon Vainer and nurse Daniel Barbir – brought a qui tam action against DaVita after observing that DaVita was throwing out good medicine for which it then billed Medicare. In March 2011, the Justice Department decided not to intervene in the case, but the whistleblowers continued to litigate the case. This settlement is one of the largest recoveries in which the Justice Department did not intervene. The whistleblowers are entitled to 25% to 30% of the nearly half a billion dollar settlement. DaVita’s settlement comes on the heels of two other recent settlements by the company: one in 2014 for $350 million for alleged kickbacks, and one in 2012 for $55 million for the alleged overbilling of a drug.

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