Nationwide Pharmacy to Pay $63.7M for Medical Billing Fraud

DaVita Rx is a nationwide pharmacy that specializes in serving patients with severe kidney disease. The company agreed to pay a total of $63.7 million to resolve False Claims Act allegations. A whistleblower came forward to report that the company used improper billing practices to gain financial benefits from defrauding federal healthcare programs.

About the False Claims Act

In 1863 to combat fraud in Union contracts during the Civil War, Congress passed the Whistleblower or Qui Tam statute. It was not until 1986 before Congress modernized the Whistleblower statute and renamed it to the False Claims Act (FCA). It became the government’s primary tool to combat fraud. Individuals who report government-program fraud bring the lawsuit on behalf of the government.

DaVita & Medical Billing Fraud

A whistleblower came forward to report fraudulent billing practices. The Texas-based company, DaVita RX billed federal health care programs for prescription medications, however, they never shipped them. When the company did ship medications, many came back to the office since they did not comply with requirements for documentation of proof of delivery, refill requests, or patient consent.

Additionally, DaVita RX paid financial inducements to Federal health care program beneficiaries in violation of the Anti-Kickback Statute.  The company would accept manufacturer copayment discount cards in lieu of collecting copayments from Medicare beneficiaries. Also, DaVita RX routinely wrote off unpaid beneficiary debt, and also extended discounts to beneficiaries who paid for their medications by credit card.

DaVita Rx has agreed to pay a total of $63.7 million to resolve the allegations in the whistleblower’s lawsuit.  The company also repaid approximately $22.2 million to federal health care programs along with an additional $38.3 million to the Department of Justice.

Medical Billing Fraud Hurts Everyone

Many feel that defrauding a large medical agency like Medicaid or Medicare doesn’t harm anyone. This is false. These practices like improperly billing or unlawful financial inducements can drive up everyone’s health care costs.  Consumers pay higher premiums and companies pay more to cover their employees.

Over the last two years, the Centers for Medicare & Medicaid Services (CMS), an agency within the U.S. Department of Health and Human Services (HHS), has implemented high-tech anti-fraud tools. However, the agency depends upon whistleblowers the most to stop fraud. These courageous people are paramount to helping our healthcare system stay fair and affordable.

The Law Protects and Rewards a Whistleblower

When a knowledgeable attorney like those found at The Michael Brady Lynch Firm files a False Claims Act lawsuit, he or she files it under a seal. This means it is completely confidential. There is also a full disclosure statement in the suit, which details the evidence collected by a whistleblower.

After we file your suit, the Department of Justice will review the evidence before deciding to step in and decide if they want to prosecute the case. The government’s fraud investigator will work closely with you, the whistleblower to identify all responsible for the fraud.

You could be entitled to 15-30% of the funds recovered. In order to receive the reward, you must be the first one to file a case under the False Claims Act. This is why it is key to pick an experienced attorney to work quickly to get your compensation. Contact us today for more information.

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