Good Health and DaVita Settles Another Lawsuit Amidst Accusations of "Managing Witnesses to Provide False Testimony," After Justice Department Lost Interest in Participating. Elvonda

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Title : Good Health and DaVita Settles Another Lawsuit Amidst Accusations of "Managing Witnesses to Provide False Testimony," After Justice Department Lost Interest in Participating. Elvonda
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Good Health and DaVita Settles Another Lawsuit Amidst Accusations of "Managing Witnesses to Provide False Testimony," After Justice Department Lost Interest in Participating. Elvonda

The Latest Case

Less than a year since its last big settlement (look here), DaVita HealthCare Partners, the big for-profit dialysis provider, has to settle again.  The basics, according to the Denver Post, were:


DaVita HealthCare Partners said Monday it will pay up to $495 million to settle a whistle-blower lawsuit accusing the Denver company of defrauding the federal Medicare program of millions of dollars. 

The company, which said it does not admit any wrongdoing, has now settled its third whistle-blower lawsuit since 2012, with payouts totaling nearly $1 billion.

The civil suit, filed in Atlanta in 2011, revolves around a claim by Dr. Alon J. Vainer and nurse Daniel D. Barbir, who both worked for DaVita. They noticed that DaVita was throwing out good medicine that it then billed Medicare and Medicaid for, according to the lawsuit.

The details of the allegations about how the government was defrauded were:


The lawsuit cited DaVita's inefficient use and costly waste of the drugs Zemplar, or vitamin D, and Venofer, an iron supplement. If a patient, for example, needed 25 milligrams of Venofer, the physician would use that much and toss the rest of the 100 mg vial. Medicare would be billed for the 100 mg.

In other instances, if a patient needed 8 mg of Zemplar, DaVita doctors were instructed to a use a 10 mg vial, instead of four 2 mg vials.

According to the lawsuit, the National Centers for Disease Control and Prevention recommended against allowing multiple uses of the same vial in 2001, based on infection outbreaks caused by the re-entry of another drug, Epogen. But a year later, CDC changed its policy and allowed re-entry of single-use vials Epogen, Zemplar and Venofer if procedures were followed.

DaVita did not do this but 'should have,' according to the lawsuit, 'but they (DaVita) intentionally did not do so in order to purposefully create and maximize their waste and receive significantly higher reimbursements and revenue for Venofer and Zemplar usage.'

The US Department of Justice did not seem interested.

The case began as a sealed lawsuit filed with the federal government in 2007. But, after two years of investigating, the government decided not to join the lawsuit, according to The New York Times.


As is de rigeur in such cases, a company spokesperson proclaimed that the company only settled to avoid the expense and uncertainty of a trial,

'Although we believe strongly in the merits of our case, we decided it was in our stakeholders' best interests to resolve it,' DaVita's chief legal officer Kim Rivera said in a statement Monday. 'The potential mandatory penalties for being found in the wrong in even a small percentage of instances were simply too large.'

As best as I can tell, the penalties were only monetary, and accrued only to the company as a whole, not to any individuals who authorized, directed, or implemented the alleged misbehavior.

Meanwhile, as reported by Forbes this week,  DaVita CEO Kent Thiry's most recent yearly compensation was $17,099,257, and he continues to feel comfortable pontificating

'They don�t care how much you know,' he tells FORBES, 'until they know how much you care.'

The Forbes piece's timing may have not been coincidental, perhaps designed to put a smiling face on the company after yet more evidence of ethical problems.  If only Mr Thiry would show how much he cares about the ethics of his company's operations.

The company's integrity is particularly an issue since vulnerable patients entrust it with their care.  For example, the company's kidney care division claims it cares for 174,000 dialysis patients.  

However, there is still more to the story.


DaVita's Past Record 

We have often noted that big health care organizations get relatively lenient treatment from law enforcement compared to, say, small time Medicare and Medicaid fraudsters (e.g., look here.)  In this case, law enforcement was not just lenient.  The government law enforcers simply stepped away from the case, leaving it to proceed privately.  

What makes this particularly striking is DaVita's past record.  The Denver Post article included,


Since the case was filed, DaVita has settled on two other lawsuits brought on by whistle-blowers. In 2012, DaVita agreed to pay $55 million to the federal government and others over fraud claims that it medically overused and double-billed the government for Epogen, an anemia drug. The suit was filed by Ivey Woodard, a former employee of Epogen-maker Amgen, in 2002.

In October, the company paid $389 million to settle criminal and civil investigations into whether DaVita offered kickbacks to kidney doctors for patient referrals. David Barbetta, a DaVita senior financial analyst, filed the suit in 2009. The company in January paid an additional $22 million to settle related claims by five states, including Colorado

In fact, as we noted in a post last year, Gambro Inc, a company with which DaVita had a joint venture, and which was later acquired by DaVita, made multiple settlements, of alleged kickbacks and health care fraud, from 2000 - 2004.  And the proposed acquisition by DaVita of Gambro provoked charges by the Federal Trade Commission of anti-competitive practices.  

The federal authorities ought to have known about at least the 2000 - 2005 settlements and allegations, and the case filed in 2002 that was settled in 2012, at the time it decided not to pursue the current case.  So their conduct here seemed even more lenient than usual.

Questions of Witness Manipulation

Despite the company's protestations that it settled as a matter of expediency, there is reason to think there might have been other motivation.  A blog post on Reuters by Alison Frankel stated

[Plaintiffs' attorneys] Wood, Wilbanks and their team persuaded the judge overseeing the case, U.S. District Judge Charles Pannell of Atlanta, that DaVita had orchestrated what Judge Pannell called 'a disturbing pattern of alterations in witness testimony.'

At the time the case settled, the judge was contemplating a motion by the whistleblowers to lift attorney-client privilege under the crime-fraud exception. Even DaVita, in a post-hearing brief filed on March 31, conceded that 'regrettable mistakes have been made in this case.'

Those mistakes began to emerge in November 2013, when Wood and the other whistleblower lawyers filed a motion for sanctions against DaVita. They claimed, among many other things, that the witness DaVita designated as its expert on a computerized dosage system gave false testimony at his deposition in October 2012 and only admitted his mistakes when plaintiffs� lawyers confronted him with contradictions a year later. According to the sanctions motion, DaVita�s lawyers also improperly coached witnesses to change their deposition testimony about the dosage system. DaVita responded that its expert witness had corrected his testimony as soon as he realized his mistake, long before plaintiffs threatened sanctions. The company called the plaintiffs� coaching and conspiracy theories 'facially incredible and a complete fiction.'

Nevertheless, after discovery that Judge Pannell called 'a series of protracted fights resulting in furious rounds of briefing, hearings, and accusations' and a three-day hearing before the judge in July 2014, Pannell concluded the evidence of forgetfulness and changed testimony from several witnesses was 'highly suspect.' At best, he said, DaVita tacitly led the whistleblower lawyers astray by letting erroneous testimony from its computer expert stand for a year.

At worst, Pannell wrote, 'the defendants purposely manipulated the evidence and witnesses to hide the truth from the (plaintiffs) and the court.' He ordered discovery to be reopened and instructed DaVita to pay plaintiffs� lawyers their fees and costs for the sanctions litigation and the newly ordered discovery.
DaVita�s troubles still weren�t over, however. According to a November 2014 motion by the whistleblowers� lawyers, a former DaVita clinical services specialist admitted in a post-sanctions deposition that she lied under oath at one of her previous depositions. She said she couldn�t say why without revealing privileged communications, which prompted plaintiffs� lawyers to ask Judge Pannell to lift the privilege. 'DaVita�s scheme of managing witnesses to provide false testimony,' they wrote, 'will now collapse like a house of cards.'

The judge was sufficiently concerned to order an in camera review of communications between DaVita lawyers and three DaVita witnesses who changed their deposition testimony about the computer dosage system through errata filings or cited privilege in refusing to answer questions about it. He also held four days of hearings on the whistleblowers� crime-fraud motion, including in camera testimony from those three witnesses and from two DaVita defense lawyers.

So the judge in this case thought there were serious suspicions that DaVita lawyers manipulated witnesses.  If true, this would be a whole other order of unethical behavior. Yet again this case was not considered big enough to become a "federal case."

Summary

So yet again we see a large health care company settling a lawsuit that alleged unethical acts, and in this case, generated further allegations of unethical acts during the litigation itself.  The settlement was for what seemed a lot of money, but actually little money compared to the corporation's revenues.  The settlement did not take into account previous legal and ethical allegations against the company.  The settlement did not involve any negative consequences for any individual who might have authorized, directed or implemented any of the apparent bad behavior.

We have seen such settlements again and again in the US health care sphere, and indeed in other spheres, such as finance.  They appear, as I have said before, to be part of a larger, mannered Kabuki play, in which rituals are performed to show some symbolic acceptance of ethics and morality, but without any true deterrent effect on bad behavior.

Perhaps the origin of the script was in some neoliberal fantasy that big corporations and their leaders ought to be exempt from even slightly harsh justice because of their economic importance, e.g., that they are Too Big to Jail.  A recent review of the book "Too Big to Jail" in the Washington Monthly noted that Mr Eric Holder, the current US Attorney General has urged leniency for big, and hence economically powerful corporations,


a memo written by Holder in 1999, during his stint as deputy U.S. attorney general. The document, 'Bringing Criminal Charges Against Corporations,' urged prosecutors to take into account 'collateral consequences' when pursuing cases against companies, lest they topple and take the economy down with them. Holder also raised the possibility of deferring prosecution against corporations in an effort to spur greater cooperation and reforms�a policy, unsurprisingly, later supported by the Bush administration.

The attorney general angered many last year when he reiterated those concerns at a congressional hearing, admitting 'that the size of some of these institutions becomes so large that it does become difficult for us to prosecute' because of the potential nasty economic effects of a major company failure.

Relieving large corporations and their leaders from the need to follow the law is a recipe for impunity, if not oligarch, and goes against the fundamental spirit of the US Constitution.  But, hey, who's counting?

The impunity of large corporations and their leaders has become so routine as not to even be news anymore.  I cannot find any coverage of the current DaVita settlement so far beyond a few regional news outlets, and one business wire service.  The national media and as been as blase as was the Justice Department.  A short version of the story, similar to that in the Denver Post, did appear in a nephrology news service, but I saw nothing in the national medical news media.  Legal settlements like this remain relatively anechoic

So yet another marcher in the parade of legal settlements could inspire boredom.  However, the cumulative procession of demonstrations that neither the US government, the news media, the medical and health care literature, nor any medical societies, patient advocacy groups, accrediting organizations, health care foundations and the like seem to care about continuing, repeated unethical behavior by large health care organizations should chill the hearts of patients and health care professionals.  If we do not stand up for ethical, honest health care, what kind of swamp will health care become?

As I have said again, again, again,...  Leadership that cares not for honesty, transparency, or accountability, and that puts short term revenue, and usually personal enrichment ahead of patients' and the public's health may be the single most important reason that US health care is so dysfunctional.  Yet hardly anyone even dares discuss the damning facts about health care leadership, much less propose solutions.  If we do not reform our health care leadership so that it is transparent, honest, accountable, unconflicted, and it puts patients' and the public's health over personal enrichment, our health care system will continue to founder.  



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