Federal judge probes unorthodox civil discovery methods used by Davita Healthcare Partners
This is the first of a two-part post on an epic discovery battle currently being waged in the U.S. District Court for the Northern District of Georgia — specifically, this post is about a federal judge’s probe of the unorthodox civil discovery methods of repeat fraudfeasor Davita Helathcare Partners Inc.
Discovery battles are commonplace in qui tam/false claims act litigation (not to mention other types of civil and criminal litigation). But when the lawyers involved in a discovery dispute start hiring their own lawyers and federal judges start questioning witnesses in camera in chambers without any lawyers present, you know something is going on…and it is likely to be especially interesting to readers of this blog.
Background on Davita
Davita Healthcare Partners provides services to patients suffering from end-stage renal disease; mostly this means kidney dialysis treatment at one of its several thousand clinics across the country. Davita is no stranger to the federal False Claims Act and is no stranger to paying large settlements. In October of 2014 the company agreed to pay $400 million to settle allegations that it provided kickbacks in various forms to physicians across the country. And in July of 2012 the company paid $55 million to settle allegations it fraudulently billed the federal government for free supplies of Amgen Inc.’s anemia drug Epogen. These two settlements, among other things, earned them a place in the Taxpayers Against Fraud Hall of Shame.
Background — U.S. ex rel. Vainer et al. v. Davita Healthcare Partners, Inc., et al.
In 2007 qui tam relators Alon J. Vainer and Daniel Barbir filed suit against Davita in the Northern District of Georgia. The specific allegations of relators’ complaint are complex, but a bit of background is important to the discovery dispute currently playing out in Atlanta.
In a nutshell, the primary allegation is that the defendants purposely manipulated their dosing protocols and policies for certain drugs to illegally maximize reimbursement for the wasted or discarded portion of the drugs left over in a vial after administration. A crucial part of this allegation is that Davita intentionally used a computer program called “Snappy” to implement its illegal reimbursement maximization schemes. “Snappy” is a company-wide computer program that allows doctors and nurses to input, retrieve, and code dosing amounts for the drugs Davita uses in its kidney dialysis clinics. Naturally, the Relators sought discovery on how Snappy worked, how doctors and nurses used the program, and whether it in fact suggested or provided nurses with doses that created medically unnecessary waste.
Relators in this case have world-class counsel in the form of Marlan Wilbanks and team at Wilbanks & Bridges in Atlanta.
The Depositions at issue in the Discovery Dispute
As one might expect, Marlan and his firm naturally did depositions during the discovery period in this case, and those depositions included several pursuant to Fed. R. Civ. P. 30(b)(6). Pursuant to the rule, defendants named a corporate witness — one Richard Tetley — to testify about the knowledge of the corporation with regard to the Snappy program, how the Snappy program worked, how it was used, and whether it was programmed to recommend a dose that would cause Davita to be illegally reimbursed. The deposition took place in 2012. During that deposition, Tetley — who again had been named by the defendants as the person most qualified and most knowledgable about the Snappy program — testifed that the Snappy program recommended certain doses for two of the three drugs at issue just as relators alleged.
Relators of course had specific, extensive knowledge of the Snappy computer program. As a result, relators knew that Tetley’s testimony was false. But, having been through many such discovery battles myself in various civil cases, I imagine that Marlan just wanted to get the testimony in the record and see what defendants had to say. Usually, lawyers don’t find themselves proving that a witnesses’ testimony is wrong or misguided in discovery — that is usually something reserved for trial.
So far so good. Depositions carried on for another year, and many witnesses during that time testified in their depositions to the exact opposite of what Tetley said in his deposition. In other words, these witnesses testified that Snappy did in fact recommend dosage levels for all three drugs, not just for the two Tetley testified to. Whenever the witnesses testified to this fact, one of two strange things happened. Very often, after the next break in the deposition, the witness would come back in and change their testimony to match what Tetley had said. Other times, an errata sheet would mysteriously appear weeks or in some cases months after the depositions — and without exception, the errata sheet would alter the witnesses’ testimony to match exactly what Tetley had said.
This happened again and again and again during 2012 and 2013. So imagine relator’s counsels’ surprise when, at the end of the year 2013, an errata sheet showed up from Tetley himself, changing his deposition testimony on behalf of the corporation to reflect that the Snappy program did in fact recommend dosage levels for all three drugs!
That resulted in some real discomfort for the defendants. First of all, it is highly unusual and highly suspect whenever a witness dramatically changes his or her testimony during a deposition break. Second, it is also highly suspect when a witness submits an errata sheet — which is to be used to correct technical errors and so forth, but not to substantively change deposition testimony — changing his or her testimony in substantive ways, even when the errata sheet is submitted very soon after his or her deposition.
But for a witness to make substantive changes to his or her deposition testimony one year later that bring that testimony into line with what other witnesses originally said before they changed their original testimony? That, friends, is unheard of, and it stinks to high heaven.
It turns out, relator’s counsel and the court also found this highly irregular and decided to look into it. The next thing that happened was a motion to compel and re-open discovery in the summer of 2014, which resulted in Judge Pannell’s August 2014 Order re-opening discovery.
And believe me folks, this is where things just start to get interesting…stay tuned for part two….
