DaVita Pays $450 Million for Drug Wastage Fraud, Largest Unjoined Whistleblower Settlement in History

DaVita Healthcare Partners agrees to pay $450 million (ultimately $495 million) to resolve False Claims Act allegations that it knowingly created unnecessary waste in administering dialysis drugs Zemplar and Venofer, then fraudulently billed Medicare and Medicaid for the avoidable waste. Whistleblowers Dr. Alon J. Vainer and Nurse Daniel D. Barbir discovered in 2011 that DaVita was systematically discarding partially used drug vials that could have been reused for other patients, billing the government for entire vials while throwing away usable medication. The scheme maximized DaVita’s reimbursement by ordering single-dose vials instead of multi-dose vials, ensuring maximum billable waste. This represents the largest settlement of any whistleblower claim in which the federal government declined to intervene, with whistleblowers standing to earn up to $135 million under the qui tam provisions. The settlement brings DaVita’s total fraud penalties to nearly $1 billion over three years: $55 million in 2012 for overbilling for anemia drug Epogen, $350 million in 2014 for physician kickbacks, and now $450-495 million for wastage fraud. The pattern reveals systematic Medicare fraud as a core business model under CEO Kent Thiry’s leadership (1999-2019), who earned up to $20 million annually while the company defrauded taxpayers. DaVita’s fraud occurs in an industry where profit extraction is built on exploiting Medicare’s fixed reimbursement rates and steering patients from Medicare ($250 per treatment) to commercial insurance ($1,000+ per treatment). The wastage fraud specifically targeted vulnerable dialysis patients who depend on these medications for survival, demonstrating how profit maximization in healthcare directly harms patients while extracting wealth from public programs serving the most vulnerable Americans.