Medical companies schemed to take advantage of patients' chronic illnesses to pump up profits, according to two unrelated lawsuits filed on behalf of Georgians.
One suit, filed by a retirement fund for Georgia law enforcement officers, accuses DaVita of targeting low-income and elderly kidney dialysis patients in a strategy to boost stock prices.
It worked like this, the suit says: DaVita steered Medicare and Medicaid patients to private insurance by telling them a private foundation, the American Kidney Fund, would pay their insurance premiums. The company then illegally funneled money to the foundation, the suit alleges.
The payoff: Instead of getting paid $300 or less by the government plans for each dialysis session, DaVita would get $4,000 or more from the private insurance.
The Peace Officers' Annuity and Benefit Fund of Georgia filed the suit because it invested in DaVita stock, and the value of the stock saw a "precipitous decline" after the federal government last year said it was probing such arrangements. The Georgia organization in its lawsuit accuses DaVita of misleading investors with false statements about its relationship with the nonprofit foundation.
That case was filed in federal court in Colorado, where DaVita is based. The company told the Denver Post that it disputed the allegations.
The second, unrelated lawsuit accuses three drug companies of conspiring to inflate insulin prices.
As a result of the price fixes, the suit says, some diabetic patients suffered complications."Unable to afford their insulin drugs, patients report under-dosing their insulin, injecting expired insulin, and starving themselves to control their blood sugars with as little insulin as possible..." the suit says. "Stories of patients taking out loans and accruing debt to afford insulin are common... Many patients describe rearranging their lives around their insulin costs -- keeping lights off and the heat low to avoid high electricity bills, moving back in with parents, and even leaving school."
The suit was filed in the names of patients from Georgia, Florida, California and Massachusetts. Among them is Karyn Wofford, who lives about 50 miles southeast of Atlanta in Jackson, and has to pay for much of her insulin out of pocket because she has a high deductible health plan, the lawsuit says.
Uninsured consumers and patients like Wofford who have high deductible insurance plans have to pay the drug companies' inflated prices, according to the suit, which was filed in Massachusetts. Some Medicare patients also had to pay more out of pocket. Meanwhile, the lawsuit says, the scheme gave more money to pharmacy benefit managers, which negotiate drug prices with manufacturers on behalf of health insurers.
The drug companies - Sanofi U.S., Novo Nordisk and Eli Lilly and Company -- are accused violating the Racketeer Influenced and Corrupt Organizations Act and various state laws, including Georgia's Uniform Deceptive Trade Practices Act.