Attorney General's News Release

September 20, 2005

Nixon recovers $974,182 in settlement with company that improperly billed Medicaid for dialysis services

Jefferson City, Mo. — Attorney General Jay Nixon today announced that his office will recover $974,182 as part of a 40-state $37.5 million settlement with a health care company that improperly billed Medicaid for home dialysis services. Missouri was one of four states leading the settlement negotiations with Gambro Healthcare Inc., which has offices in Denver, Nashville and Irvine, Calif.

Nixon says the agreement with Gambro resolves allegations the company used a "shell" company, Gambro Supply Corp., to bill Medicaid for providing supplies and equipment to patients undergoing dialysis at home. Dialysis assists in removing toxins from the blood when a patient's kidneys are unable to do so on their own. One form of dialysis, peritoneal dialysis, can be done by the patient at home after the patient has had sufficient training.

By using this shell, Gambro billed Medicaid at a higher reimbursement rate than what was allowed under federal regulations. As a result, the Medicaid programs of Missouri and the other states paid too much to Gambro for the dialysis services, Nixon says.

"Gambro manipulated the system to receive improper Medicaid payments, and this scheme cost taxpayers across the country millions of dollars," Nixon says. "In the end, Gambro paid a substantial price for its fraud and abuse of the Medicaid system."

Nixon said the $37.5 million represents a double damages recovery. Of the $974,182 recovered through Nixon's settlement with the company, Missouri's share totaled $385,669 and will be used to reimburse the state Medicaid program. The remainder will go to reimburse the federal government for its share of the state's Medicaid funding. The settlement period covers from Jan. 1, 1991, to Sept. 30, 2004.

Last year, the federal government and Gambro entered into a settlement agreement in which Gambro paid more than $308 million to the federal government to settle civil liabilities from the improper payments made to Gambro Supply Corp.

The settlement also covered allegations that Gambro caused federal health care programs to pay for unnecessary tests and services and that Gambro paid kickbacks to physicians based on patient referrals made to a Gambro clinic.

Gambro Supply Corp. also was fined $25 million in federal court in St. Louis in 2004 when the corporation pleaded guilty to a charge of health care fraud related to the improper billing.

As part of the federal settlement, Gambro has entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services' Inspector General. The agreement will require strict scrutiny of Gambro's billing practices for the next five years.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to the Press Secretary.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818