DOJ files False Claims Act case against dialysis giant Fresenius alleging unnecessary vascular procedures

Editor's Note: This story has been updated with the DOJ's statement regarding its civil fraud complaint. This story was originally filed June 3.

Updated: July 13, 3:30 p.m.

The federal government filed a civil complaint Tuesday in federal court in Brooklyn against the country's largest dialysis provider alleging that the company performed unnecessary procedures on dialysis patients.

The Department of Justice has formally intervened and joined the False Claims Act whistleblower lawsuit filed against dialysis giant Fresenius Medical Care, according to court documents filed in U.S. District Court in Brooklyn.

The DOJ's False Claims Act complaint alleges Fresenius Vascular Care, a business unit of Fresenius Medical Care performed these unnecessary procedures at nine centers across New York City, Long Island and Westchester, and billed the procedures to Medicare, Medicaid, the Federal Health Benefits Program and TRICARE. The complaint seeks damages and penalties under the False Claims Act.

The whistleblower complaint alleges that from about January 1, 2012 through June 30, 2018, Fresenius routinely performed certain procedures on patients with end stage renal disease (ESRD) who were receiving dialysis, without sufficient clinical indication that the patients needed the procedures. Fresenius knowingly subjected ESRD patients—who included elderly, disadvantaged minority, and low-income individuals—to these procedures to increase its revenues, the DOJ complaint states.

A Fresenius spokesperson said the company disputes the allegations contained in both the relators’ complaint and the U.S. government’s complaint and "intends to vigorously defend the litigation."

"Our network of vascular centers is leading efforts to reduce total healthcare costs and improve patient outcomes by expanding access to innovative and less-invasive procedures. Our policies are intended to result in a high standard of care and compliance with government regulations," the Fresenius spokesperson said in a statement.

Breon Peace, United States Attorney for the Eastern District of New York, called the company's alleged conduct "egregious," claiming that Fresenius "not only defrauded federal healthcare programs but also subjected particularly vulnerable people to medically unnecessary procedures."

"This Office will hold medical providers accountable for practices that needlessly expose patients to harm for financial gain at taxpayer expense," Peace said in a statement.

Two doctors allege in a lawsuit that the country's largest dialysis provider performed potentially thousands of unnecessary, invasive vascular procedures on late-stage kidney disease patients and fraudulently charged Medicare and Medicaid for these procedures.  

The lawsuit, originally filed in 2014 in New York, claims Fresenius Medical Care and its business unit, Azura Vascular Care, violated the federal False Claims Act. The case remained under seal until the court lifted the seal May 9. The federal government has 60 days to file its complaint.

Nineteen states also are included in the lawsuit and potentially could join the case.

The U.S. attorney in the Eastern District of New York will be taking over with respect to federal False Claims Act fraud claims against Fresenius, according to law firm Cohen Milstein Sellers & Toll, which is representing the plaintiffs in the case.

The U.S. attorney's office declined to comment at the time.

The plaintiffs, two practicing nephrologists, charge in the complaint that Fresenius performed thousands of end-stage renal disease-related treatments that were "not medically reasonable and necessary" and that "exposed patients to undue and unnecessary risks."

In a statement provided by a spokesperson, Fresenius declined to comment on the lawsuit.

Fresenius Medical Care North America is the largest dialysis provider in the U.S., operating over 2,600 dialysis units nationwide and treating over 205,000 patients annually. Its business unit, Azura Vascular Care, operates more than 90 vascular care facilities across the country.


The case was brought on behalf of the federal government and 19 states to recover "hundreds of millions of dollars" in government payments to Fresenius and its business units, according to the complaint.

Fifteen states have declined to intervene in the case while decisions by New York, New Jersey, Florida and Georgia are still pending.

Medicare spends more than $50 billion annually on treatments for patients with end-stage renal disease.

According to Fresenius Medical Care's 2021 annual report, about 27% of the company's total revenue was attributable to reimbursements by U.S. federal healthcare benefit programs, including Medicare and Medicaid. That's down from 32% in 2020.

ESRD patients often receive hemodialysis treatments several times weekly to remove toxins from their blood when their kidneys can no longer do so. Patients with late-stage kidney disease typically require surgically-created access to their vascular system so that adequate hemodialysis can take place.

In the lawsuit, John Pepe, M.D., a nephrologist and attending physician at Richmond University Medical Center and Staten Island University Hospital in New York, and Richard Sherman, M.D., a professor of medicine at Rutgers University and medical director of dialysis at the Robert Wood Johnson University Hospital, allege that many of their end-stage renal disease patients referred to Fresenius Vascular Care facilities underwent unnecessary fistulagrams, which is an X-ray procedure to look at the blood flow and check for blood clots, as well as other related procedures. These procedures were performed without their treating physicians’ consent, the doctors claim in the complaint.

They also claim that Fresenius and Azura providers falsified patient records in connection with the procedures and submitted false claims for reimbursement.

"Dialysis patients are highly vulnerable and must trust their doctors to look out for their best interests. We believe that Fresenius has acted for financial gain at the expense of the patient and the U.S. taxpayer," Pepe in a statement provided by his attorneys.

In the whistleblower complaint, the two doctors allege that for many years, once a nephrologist has initially referred a patient with evidence of clinically significant stenosis, or a narrowing of the blood vessels, to an Azura facility, and the patient’s vascular access has been treated there, Azura then continues scheduling periodic follow-up visits every two to four months indefinitely. The doctors claim that almost every time these follow-up visits occur, Azura performs an angiogram on the patient, which is an X-ray using a chemical dye injected into the patient’s vessels, followed by an invasive surgical procedure called an angioplasty, according to the lawsuit.

The doctors claim these procedures are performed without evidence of problems in administering dialysis and without a referral by the patient’s nephrologist.

Based on the doctors' professional judgment, they claim the fraudulent scheme accounted for around 70% of all fistulagrams performed by Azura. With a nationwide network of vascular access facilities, this percentage means the companies have "unlawfully obtained hundreds of millions of dollars" from the U.S. government and states over the past several years, the doctors allege in the complaint.

In 2011, Fresenius bought American Access Care Holdings, an operator of outpatient vascular access centers, for $385 million, then folded that business into its vascular care business and eventually renamed it Azura Vascular Care.

The DOJ had investigated American Access Care 10 years ago for possible False Claims Act violations before Fresenius acquired the company.  The company settled the case in 2015 and agreed to pay $1.2 million. The DOJ had alleged that the vascular access facility fraudulently billed Medicare for medically unnecessary percutaneous transluminal angioplasties (PTAs) and thrombectomies and by billing for more PTAs per patient encounter than permitted. 

In Fresenius' 2021 annual report, the company said it received subpoenas in 2015 from the U.S. Attorney for the Eastern District of New York as part of an investigation into Azura Vascular Care's operations and invoicing.

"The Brooklyn USAO has indicated that its investigation is nationwide in scope and is focused on whether certain access procedures performed at Azura facilities were medically unnecessary and whether certain physician assistants employed by Azura exceeded their permissible scope of practice," the company stated in its annual report.

In the complaint, the doctors also allege Fresenius engaged in illegal kickbacks by offering patients free limousine rides to medical facilities for the procedures. The DOJ declined to intervene in the kickback claim.