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United States ex rel. Vainer v. Davita, Inc., Court Reopens Discovery and Awards Attorneys’ Fees for Defendants’ Discovery Abuses

Characterizing discovery in this case as a series of protracted fights, the court found that that defendants spoiled discovery relating to a critical computer program and ordered sanctions reopening discovery and awarding attorney fees and costs.

Suing the defendants on behalf of the United States, the whistleblowers in this case contend that their former employer engaged in Medicare fraud by illegally maximizing Medicare reimbursement for kidney dialysis drugs. The realtors alleged that the defendants purposely manipulated their dosing protocols and policies to maximize their Medicare payments through the use of a computer program called “Snappy.”.

Snappy allowed doctors and nurses to input, retrieve and code dosing amounts for the drugs Davita used at this kidney dialysis clinics. During discovery, the relators sought evidence to support their argument that the defendants used Snappy to manipulate dosing protocols to increase the reimbursement the defendants would receive for the wasted or discarded portion of the drugs after they were administered by intentionally creating unnecessary medical waste.

Davita’s Rule 30 (b) (6) witness, Richard Tetley, testified unequivocally that Snappy could not recommend dosages of Venofer prior to 2011. A year after Tetley’s deposition, the defendants filed a declaration that his testimony was false and that Snappy did recommend does of Venofer before 2011. Despite being presented as the person with the most knowledge of Snappy, both the witness and the defendants claimed Tetley had “misremembered” the details of the Snappy program during his deposition. After the defendants’ computer expert rebuilt a working version of the Snappy program that was in effect during the relevant time, Mr. Tetley had revised his understanding of how the program functioned.

Mr. Tetley’s original testimony stood for a year and during this time, relators deposed other witnesses regarding how Snappy functioned. During depositions, witnesses testified that Snappy did recommend Venofer doses during the relevant time period, however, after deposition breaks and via errata sheets, witnesses changed their testimony to align with the false testimony of Tetley (specifically that that Snappy did not recommend Venofer dosages before 2011). As an example of changed witness testimony, the court pointed to the testimony of Davita’s Vice President of Clinical Operations who first testified that Snappy did generate a calculated dosage for Venofer and then in an errata sheet changed his testimony to state that Snappy did not suggest dosages during the relevant time period. The court noted that although the defendants later admitted that the errata sheet was incorrect they did not remove it from the court’s docket.

After Tetley admitted to providing false testimony, the relators filed a motion for sanctions requesting that the court set aside the defendants’ answer and enter a default judgment. The relators argued that the defendants “pervasively and intentionally manipulated evidence and engaged in witness tampering in an attempt to hide the functions that Snappy performed during the relevant time period.”

The Court found that under the best case scenario, Tetley’s initial testimony led defendants and their counsel astray during subsequent discovery. The court noted further that even though some subsequent witnesses testified that Snappy did in fact suggest Venofer doses, the defendants failed to reexamine Tetley’s testimony and chose instead to alter the testimony of subsequent witnesses to match the original testimony of Tetley. The court suggested that in the “worst case,” the defendants purposely manipulated the evidence and witnesses to hide the truth from both the relators and the court. The court held that the realtors’ evidence did not “unequivocally” demonstrate that the defendants committed the more “nefarious” level of discovery practice and refused to grant their request to strike defendants’ answer. However, it found the “forgetfulness” and changed testimony from so many witnesses “highly suspect.”

In conclusion, the court held that defendants’ conduct during the Snappy related discovery showed “bad faith” and warranted sanctions based upon defendants’ extreme delay in correctly Tetley’s testimony, their attempts to ensure that subsequent witness testimony matched Tetley’s false statements, and their failure to retract other admittedly false statements after the Relators filed the motion for sanctions. The court reopened discovery and awarded attorneys’ fees and costs.

United States ex rel. Vainer v. Davita, Inc., No. 1:07-CV-2509-CAP (N.D. Ga. Aug. 12, 2014)

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