DaVita Inc., headquartered in Denver, Colorado, has agreed to pay $34,487,390 to resolve allegations that it violated the False Claims Act by paying kickbacks to induce referrals to DaVita Rx, a former subsidiary providing pharmacy services for dialysis patients. The company is also accused of paying kickbacks to nephrologists and vascular access physicians to induce patient referrals to its dialysis centers.
The Anti-Kickback Statute prohibits offering or paying any remuneration, directly or indirectly, to induce referrals of patients or services covered by Medicare, Medicaid, and other federally funded programs.
The United States alleges that DaVita paid kickbacks to a competitor to induce referrals to DaVita Rx as a “central fill pharmacy” for the competitor’s Medicare patients’ prescriptions. In exchange, DaVita acquired certain European dialysis clinics and extended a prior commitment to purchase dialysis products from the competitor. The United States contends that DaVita would not have paid the price it did without the competitor’s referral commitment.
Further allegations include DaVita providing management services to vascular access centers owned by physicians who could refer patients to DaVita’s clinics. Allegedly, DaVita paid improper remuneration in uncollected management fees to these physician-owners for referrals.
Additionally, the United States claims that DaVita paid improper remuneration to a large nephrology practice for patient referrals. The company allegedly gave the practice a right of refusal for staffing medical director positions at new dialysis centers near the practice and paid $50,000 despite the practice not staffing those positions.
“Improper financial arrangements between Medicare providers can distort the healthcare marketplace,” stated Principal Deputy Assistant Attorney General Brian M. Boynton. “We will hold accountable healthcare providers that seek to generate business by paying unlawful remuneration.”
Acting U.S. Attorney Matthew Kirsch for the District of Colorado remarked, “Medicare patients should be able to trust their healthcare providers not to pay illegal kickbacks.” He added that this resolution reflects the government’s determination to restore integrity in the healthcare marketplace.
Special Agent in Charge Linda Hanley of HHS-OIG emphasized that “illegal kickback payments corrupt the market for health care services and cause harm and financial loss” and highlighted ongoing enforcement efforts aimed at safeguarding taxpayer-funded health care programs like Medicare and Medicaid.
The civil settlement includes claims brought under the qui tam provisions of the False Claims Act by Dennis Kogod, former Chief Operating Officer of DaVita Kidney Care. Under these provisions, private parties can file actions on behalf of the United States and receive part of any recovery. Kogod will receive $6,370,000 from this settlement.
This resolution was achieved through coordinated efforts between various governmental branches including HHS-OIG.
Tips about potential fraud can be reported at 800-HHS-TIPS (800-447-8477).
Trial Attorney Gary Newkirk of the Civil Division and Assistant U.S. Attorney Lila Bateman handled this matter.
The claims resolved by this settlement are allegations only; there has been no determination of liability.