DaVita Pays $34 Million to Settle Kickback Violations
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DaVita is a regular target of government enforcement actions involving fraud and illegal kickbacks. It has an extensive history of violations and settlements. here is a list of some of the highlights::
- In 2012, DaVita paid $55 million to settle a whistleblower lawsuit alleging the company double-billed for the anemia drug Epogen.
- In 2014, a company whistleblower alleged DaVita paid kickbacks to doctors in return for patient referrals. DaVita paid more than $400 million to settle that case, with $350 million paid to the federal government.
- In 2015, DaVita paid $495 million to settle a whistleblower lawsuit alleging the company had defrauded taxpayers through the Medicare program. The company was accused of throwing away medication that was still usable and billing Medicare and Medicaid for the drugs. The settlement included $450 million paid to the federal government, plus $45 million in fees.
- Divisions of DaVita also settled for $64 million in 2017 over “unlawful financial inducements to health program beneficiaries,” according to the DOJ.
- Last year, DaVita was also among nine dialysis providers that agreed to pay the federal government and the state of New York upward of $9.5 million to for double-billing treatments to Medicaid for more than a decade.
The Anti-Kickback Statute prohibits anyone from offering or paying, directly or indirectly, any remuneration — which includes money or any other thing of value — to induce referrals of patients or of items or services covered by Medicare, Medicaid and other federally funded programs.
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The United States alleges that DaVita paid kickbacks to a competitor to induce referrals to DaVita Rx to serve as a “central fill pharmacy,” or prescription fulfillment provider, for that competitor’s Medicare patients’ prescriptions. In exchange, DaVita paid to acquire certain European dialysis clinics and agreed to extend a prior commitment to purchase dialysis products from the competitor. DaVita would not have paid the price that it did for these deals without the competitor’s commitment to refer its Medicare patients’ prescriptions to DaVita Rx in return.
DaVita provided management services to vascular access centers owned by physicians in a position to refer patients to DaVita’s dialysis clinics. DaVita paid improper remuneration to these physician-owners in the form of uncollected management fees to induce referrals to DaVita’s dialysis centers.
Finally, the United States alleges that DaVita paid improper remuneration to a large nephrology practice to induce referrals to DaVita’s dialysis clinics. DaVita gave the practice a right of refusal to staff the medical director position at any new dialysis center that opened near the nephrology practice and paid the practice $50,000 despite the practice’s decision not to staff the medical director position for those clinics.
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DaVita agreed to pay $34.5 million, of which the whistleblower will receive $6.37 million — roughly an 18.5% relator share. The government intervened in the case for settlement purposes, and the settlement does not include a corporate integrity agreement.
The whistleblower, Dennis Kogod, former chief operating officer of DaVita Kidney Care, worked for DaVita for 11 years. He also served as COO and later president of subsidiary HealthCare Partners and CEO of its international business.