Corporate Compliance

Dialysis chain, prospective buyer face increased federal scrutiny

Compliance Monitor, March 16, 2005

Three months after settling Medicare fraud charges with the government for $350 million, Gambro Healthcare U.S., the nation's third-largest renal-dialysis clinic operator, is facing even more federal scrutiny.

On March 8, the U.S. government filed a lawsuit in the U.S. District Court in Missouri alleging Gambro provider Dr. Saadoon Kadir conspired to submit more than $250,000 in fraudulent bills to Medicare, the Associated Press (AP) reported. Kadir allegedly submitted false claims for outpatient dialysis services, including some that were never performed.

"The best way to protect the Medicare system is to pursue every doctor and healthcare provider that attempts to defraud the Medicare system," James Martin, the U.S. attorney for eastern Missouri, told the AP. "We will continue to aggressively pursue these claims."

Martin said its previous fraudulent activities include kickbacks for referring physicians, creating a false company to boost revenue, and falsifying billing statements to justify unnecessary tests and services, the AP reported.

In addition to the lawsuit against Kadir, officials from Davita Inc.--which is planning to buy Gambro's U.S. holdings for more than $3 billion--confirmed that Missouri is also investigating Davita's business practices.

Martin's office issued a subpoena to DaVita last week seeking documents dating back to 1996 that relate to services, financial relationships with physicians, and joint ventures. DaVita officials said they will cooperate with the subpoena, which overlaps with an investigation under way by federal prosecutors in the eastern district of Pennsylvania, the AP reported.

Editor's note: HCPro, Inc., which publishes Compliance Monitor, is pleased to announce that beginning in April, dialysis providers will have two new resources to turn to for their compliance and quality needs: Dialysis Quality & Reimbursement Advisor and Dialysis Quality & Reimbursement Weekly. Advisor, an eight-page monthly print newsletter, will be loaded with tips and tools to help your organization navigate billing and quality regulations set forth by CMS and various other government agencies, including the all-new Conditions of Participation. Weekly will give you the latest news on dialysis and ESRD and provide a forum for your most pressing questions--to be answered by some of the top names in the dialysis field--free to your e-mail inbox every week. For more information about either of these publications, please send an e-mail to Managing Editor Matthew Paul.

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