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One of the biggest providers of kidney dialysis deliberately wasted medicine in order to gain hundreds of millions of dollars in extra payments from Medicare, according to a whistleblower lawsuit filed by a former clinic nurse and doctor. They claim DaVita (NYSE:DVA) used unnecessarily large vials of different meds because Medicare would pay for unused portions of each vial if these were deemed unavoidable waste, The New York Times writes. DaVita denies the accusations.

The charges, the paper notes, underscore how financial incentives may have prompted overuse of drugs in the dialysis business, which DaVita dominates. In January, though, Medicare changed payment systems and now pays for overall treatment and instead of paying separately for drugs, the Times writes, adding that clinics could make a profit because Medicare would reimburse at levels higher than what clinics paid to buy the drugs.

As an example: instead of giving an entire 100-milligram vial of the Venofer iron drug once or twice a month, DaVita clinics gave 25-milligram doses more frequently, according to the lawsuit. But since the drug came only in a 100-milligram vial, Medicare was billed for 100 milligrams for each dose, even though 75 milligrams were wasted (here is the lawsuit).

Daniel Coyne, a nephrologist at Washington University School of Medicine who treats some patients at DaVita clinics, tells the Times it was “absolutely true” the iron drug was given in small increments to make more money. “How could it possibly be that patients in DaVita facilities were getting so much more iron than patients in other facilities and not getting iron overload?” he tells the paper. “The answer is the iron wasn’t going into them. It was being thrown away to make a profit.”

The feds investigated the claims, but declined last April to join the lawsuit, which was first filed in 2007 and was more recently unsealed. Bill Myers, a DaVita spokesman, tells the Times that the decisions by the feds not to pursue the lawsuit suggested the accusations were weak, and that Medicare had approved the dosing plans, although he could not provide proof until presented in court.

One of the men who filed the lawsuit was Daniel Barbir, a nurse who worked from 2000 to 2006 as director of a dialysis clinic in Cumming, Ga., that was owned by Gambro, a dialysis chain acquired by DaVita in 2005, the Times writes. He resigned in 2006 after complaining about the practices, according to the lawsuit.

Another plaintiff is Alon Vainer, a nephrologist who was a medical director at Gambro and DaVita clinics in Georgia, who says his jobs were not renewed after he filed the lawsuit. Barbir “saw how ridiculous the whole thing was,” but could not get the system changed. “He tried on his level but had to cave in, and I tried on my level and got zero, zero, zero response,” Vainer tells the Times.

So why did DaVita have a protocol if doctors choose the doses? “For many reasons, treating physicians asked for a stronger clinical application tool for iron therapy and we were able to offer one contemporaneously with the new billing system,” the DaVita spokesman wrote the Times in an email. Makes perfect sense, yes?

Source: DaVita Wasted Drugs to Make Big Money Off Medicare