DaVita’s new planned world headquarters in Denver
One of the nation’s largest providers of kidney dialysis deliberately wasted medicine in order to reap hundreds of millions of dollars in extra payments from Medicare, a former clinic nurse and a doctor are charging in a whistle-blower lawsuit.
The lawsuit says that the company, DaVita, used larger than necessary vials of medicine knowing that Medicare would pay for the unused portion of each vial if it were deemed unavoidable waste. DaVita, which treats nearly a third of the nation’s dialysis patients, denies the accusations.
The accusations are the latest related to how financial incentives may have driven overuse of pharmaceuticals in the dialysis business. In January, Medicare began a payment system that pays for the overall treatment and does not pay separately for the drugs accompanying it. Many practices, including the size of some vials used, suddenly changed, providing an instant case study of how financial incentives can influence treatment choices.
The lawsuit says that until January, for example, DaVita required nurses to use one 10-microgram vial of Zemplar, a vitamin D drug, instead of a six-microgram dose in three two-microgram vials,. It then billed Medicare for all 10 micrograms even though four went unused.
Instead of giving an entire 100-milligram vial of Venofer, an iron drug, once or twice a month, the clinics gave 25-milligram doses more frequently, the suit says. 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, the lawsuit says…
This so-called bundled payment system has instantly turned drugs from a source of profit to a cost to be avoided. And dialysis clinics have responded.
Not especially different from the ever-popular cost-plus billing often used in the military-industrial complex. My least favorite form of welfare for capitalists producing non-consumable goods. If you have a guaranteed profit of any size – and can inflate the legitimate costs 100% – you double your profit.