U.S. accuses Fresenius Medical Care unit of fraud in dialysis treatment

Fresenius headquarters in in Bad Homburg

By Jonathan Stempel

NEW YORK (Reuters) -The United States has joined a whistleblower lawsuit accusing a unit of Germany's Fresenius Medical Care AG of defrauding Medicare and other healthcare programs by billing for medically unnecessary procedures on dialysis patients.

According to a civil complaint filed late Tuesday night, Fresenius Vascular Care violated the federal False Claims Act by routinely performing the procedures on patients with end-stage renal disease at nine facilities in New York City and its suburbs from January 2012 to June 2018.

The U.S. Department of Justice said Fresenius knowingly conducted angioplasties and fistulagrams, which both involve insertions or injections into veins and arteries, to drive up revenue and help the facilities meet performance metrics.

Many patients who received the procedures were elderly, low-income or disadvantaged minorities, the department said.

In a statement, Fresenius said it disputed the accusations and intended to vigorously defend itself. "Our policies are intended to result in a high standard of care and compliance with government regulations," the company added.

End-stage renal disease occurs when a person's kidneys stop functioning normally, requiring dialysis or kidney transplants.

The Justice Department said Fresenius knew its procedures "exposed patients to grave risks" including over-sedation, infection, blood vessel ruptures or conditions that could require more invasive or frequent treatment.

In a statement, U.S. Attorney Breon Peace in Brooklyn called Fresenius' conduct "egregious."

The lawsuit was originally filed in June 2014 by two doctors, John Pepe of the New York City borough of Staten Island and Richard Sherman of Westfield, New Jersey, court papers show.

Pepe, in a statement, said Fresenius "put patients in harm's way to support their bottom line."

The False Claims Act lets whistleblowers sue on behalf of the federal government, and share in recoveries.

The case is U.S. ex rel. Pepe et al v Fresenius Vascular Care Inc, U.S. District Court, Eastern District of New York, No. 14-03505.

(Reporting by Jonathan Stempel in New York; Additional reporting by Brendan Pierson; Editing by Richard Chang and Jonathan Oatis)