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New York Files False Claims Act Case Against Fresenius in Whistleblower Suit

Healthcare Dive

July 13, 2022

  • New York state formally filed a False Claims Act case against dialysis company Fresenius on Tuesday, joining a major whistleblower lawsuit against the provider.
  • The suit brought by the Eastern District of New York alleges Fresenius and a subsidiary illegally nabbed hundreds of millions of dollars from the government by performing potentially thousands of medically unnecessary and invasive vascular procedures on late-stage kidney disease patients.
  • In June, the Department of Justice joined the lawsuit, which was originally filed in 2014 in New York against Fresenius and its business unit, Azura Vascular Care. Eighteen other states besides New York are included in the lawsuit and could potentially join the case, though a majority have declined to intervene so far.

Dive Insight:

End-stage renal disease patients typically need surgically-created access to their vascular systems to allow adequate hemodialysis to take place. Dialysis units monitor that access and can potentially refer a patient to a vascular access facility for surgery in the event there’s a narrowing in one or more of the vessels used during hemodialysis.

The complaint alleges that for years, Azura — after being referred and treating patients with evidence of narrowing vessels — continued scheduling followup visits every two to four months indefinitely for those patients. During those followups, Azura providers allegedly performed improper angiograms, or X-rays using chemical dye, on patients, along with invasive surgical procedures called angioplasties, without evidence such procedures were necessary and without a referral from a nephrologist.

Fresenius and Azura then submitted claims to programs including Medicare and Medicaid. Medicare covers ESRD treatment for patients regardless of age, spending more than $50 billion annually on the disease.

“I saw firsthand how Fresenius put patients in harm’s way to support their bottom line. The practice of conducting medically unnecessary procedures, especially on such chronically ill patients as those with end stage renal disease, is unethical, unlawful and should be stopped,” said John Pepe, a physician at Richmond University Medical Center and Staten Island University Hospital, in a statement provided to Healthcare Dive.

Pepe is one of the two practicing nephrologists who served as whistleblowers in the case. The other is Richard Sherman, a Rutgers University medical professor and medical director of dialysis at the Robert Wood Johnson University Hospital.

New Jersey, Florida and Georgia are still deciding whether to join the case. Cohen Milstein Sellers & Toll, the legal firm representing the whistleblowers, told Healthcare Dive it’s hopeful that states which have yet to decide to join the case may do so as the litigation proceeds.

Read New York Files False Claims Act Case Against Fresenius in Whistleblower Suit.