Ex-federal prosecutor: Could take 'many years' to understand DaVita RX settlement ramifications

By Angela Underwood | Dec 22, 2017

Former federal prosecutor Nick Oberheiden knows health care fraud.

The managing partner and founder of Oberheiden & McMurray, a team of former federal prosecutors who specialize in health care compliance and fraud defense, discussed the DaVita Rx LLC $63.7 million settlement that resolved False Claims Act allegations that the Texas-based business conducted indecorous billing practices and unlawful financial incentives to federal health care program recipients with the Northern California Record

Oberheiden explained how the lawsuit, filed by DaVita Rx former employees Patsy Gallian and Monique Jones under whistleblower provisions of the False Claims Act, directly benefits the ex-staffers, who will collect $2.1 million from the federal recovery.  

“The people that bring the lawsuit that they filed on behalf of the United States are called relators,” Oberheiden said, adding the case, which is investigated by the U.S. Attorney’s Office and the Office of the Inspector General, is first filed under seal so nobody will know a whistle was blown.  “The reason it stays sealed is it gives the federal government time to look into it and investigate the matter.” 


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Oberheiden said it can take several months and "sometimes many years" to essentially confirm and verify the allegations made with whistleblower lawsuits. Records are then analyzed by federal prosecutors, who review then review subpoenaed information, usually followed by a defense lawyer stepping in on behalf of their client, according to the attorney.

"The mere submission of a fraudulent submission or false claim under the False Claims Act is the offense so to speak, even though it is a civil statue, and the penalty for the False Claims is 11,000 dollars for every false claim submitted,” Oberheiden said, adding that is why the calculated damages easily could reach hundreds of millions of dollars.  “It doesn’t take you too many claims to get to that point because the penalties are so high.” 

A Department of Justice Dec. 14 news release highlighted the financial damages to DaVita, reporting the nationwide health care pharmacy “agreed to pay $63.7 million to resolve the allegations in its self-disclosures and the whistleblower lawsuit.” 

Unlike DaVita, Oberheiden said many businesses do not have the hundreds of millions to pay out in for health care fraud, and often make a deal with the government.  

“It is like a used car sale, where you negotiate and negotiate and then agree to a number,” Oberheiden said. "That is what happened in this case.”

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