One of the nation’s largest dialysis services companies has agreed to a $350 million settlement of a lawsuit filed by an employee-turned-whistleblower under the federal False Claims Act.
Denver-base DaVita Healthcare Partners Inc. agreed to the settlement of litigation that also saw an investigation by the Department of Health and Human Services inspector general.
DaVita has offices in 46 states and the District of Columbia. The company was accused of conducting a complicated scheme that essentially paid kickbacks to physicians in return for patient referrals.
The Justice Department said that “between March 1, 2005 and Feb. 1, 2014, DaVita identified physicians or physician groups that had significant patient populations suffering renal disease and offered them lucrative opportunities to partner with DaVita by acquiring and/or selling an interest in dialysis clinics to which their patients would be referred for dialysis treatment.”
In addition, the Justice Department said, “DaVita further ensured referrals of these patients to the clinics through a series of secondary agreements with the physicians, including entering into agreements in which the physician agreed not to compete with the DaVita clinic and non-disparagement agreements that would have prevented the physicians from referring their patients to other dialysis providers.”
“Companies seeking to boost profits by paying physician kickbacks for patient referrals — as the government contended in this case — undermine impartial medical judgment at the expense of patients and taxpayers,” said Daniel R. Levinson, the HHS IG. “Expect significant settlements and our continued investigation of such wasteful business arrangements.”
The original allegations were brought under the False Claims Act by former DaViata senior financial analyst David Barbetta. The Qui Tam provision of the law allows whistleblowers like Barbetta to share in any amounts recovered by the government.
Barbetta worked in DaVita’s mergers and acquisitions department, which was a key cog in the kickback scheme, according to the Justice Department. Barbetta’s share of the $350 million has not yet been determined.
“This case involved a sophisticated scheme to compensate doctors illegally for referring patients to DaVita’s dialysis centers. Federal law protects patients by making buying and selling patient referrals illegal, so as to ensure that the interest of the patient is the exclusive factor in the referral decision,” said U.S. Attorney John Walsh.
“When a company pays doctors and/or their practice groups for patient referrals, the company’s focus is not on the patient, but on the profit to be extracted from providing services to the patient,” Walsh said.
Go here to read the complete report, which was made public Oct. 22, 2014.
Mark Tapscott is executive editor of the Washington Examiner.
