Behind the scenes of DaVita's $450 million fraud settlement

The $450 million fraud settlement announced last week by DaVita Healthcare Partners Inc., which defense attorneys claim is the largest False Claims Act settlement without government involvement, left a lot of people wondering why the feds didn't intervene. The answer, according to a Reuters article, can be traced back to claims that the defense attorneys tampered with witness testimony.

Two whistleblowers originally filed the case in 2007, claiming the company falsely billed Medicare and Medicaid for large vials of medication that went unused. By March 2011, the Department of Justice (DOJ) opted not to intervene in the case, at which point well-known attorney Lin Wood left his law firm to help the whistleblowers independently pursue charges against DaVita.

The case began to unravel in November 2013, according to Reuters, when Wood and the other prosecutors alleged that a DaVita witness had provided false testimony regarding a computerized dosage system and that DaVita lawyers had improperly coached the witness. Months later, another DaVita witness admitted to lying under oath.

Eventually, the U.S. District Judge indicated that the altered testimonies were "highly suspect." When DaVita agreed to settle, the judge seriously considered a motion to lift the attorney-client privilege in order to find out if the defense attorneys had tampered with witness testimony, according to Reuters. The attorneys denied any misconduct but admitted to "regrettable mistakes."

The case marked the third settlement in as many years for the largest dialysis provider in the country, including a $389 million settlement to resolve kickback allegations in October 2014.

For more:
- read the Reuters article