DaVita paying $34 million over kickback allegations
DaVita allegedly paid kickbacks to induce referrals to DaVita Rx, a former subsidiary that provided pharmacy services for dialysis patients.
Photo: Svenja Foto/Getty Images
Colorado-based kidney-care company DaVita has agreed to pay about $34.5 million to resolve allegations that it violated the False Claims Act by paying kickbacks to induce referrals to DaVita Rx, a former subsidiary that provided pharmacy services for dialysis patients, according to the U.S. Department of Justice.
It was also alleged that DaVita paid kickbacks to nephrologists and vascular access physicians to induce the referral of patients to DaVita's dialysis centers.
The Anti-Kickback Statute prohibits anyone from offering or paying, directly or indirectly, any remuneration – which includes money or anything else of value – to induce referrals of patients or of items or services covered by Medicare, Medicaid and other federally funded programs.
WHAT'S THE IMPACT?
The United States alleged 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, the DOJ said.
DaVita also allegedly 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, the DOJ said.
The United States also alleged 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.
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Dennis Kogod, a former chief operating officer of DaVita Kidney Care.
THE LARGER TREND
Settlements and judgments under the False Claims Act exceeded $2.68 billion in the fiscal year ending Sept. 30, 2023, and, of that total, more than $1.8 billion related to matters that involved the healthcare industry – including managed care providers, hospitals, pharmacies, laboratories, long-term acute care facilities and physicians.
According to the DOJ, the government and whistleblowers were party to 543 settlements and judgments, the highest number of settlements and judgments in a single year. Recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $75 billion.
Overall, healthcare fraud was responsible for two-thirds of the recovered amount in 2023.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.
