DaVita Healthcare Partners Inc. agreed to pay $350 million and forfeit another $39 million to settle allegations of paying kickbacks for patient referrals in violation of the False Claims Act, the U.S. Department of Justice announced. DaVita is a Denver-based dialysis provider serving nearly 170,000 patients nationwide, according to The Denver Post.
The government alleged that the company paid doctors and group practices with large numbers of kidney disease patients to partner with DaVita, Becker's Hospital Review reported. The company reportedly approached practices owned by doctors who were "young and in debt," offering them profit-making opportunities where DaVita acquired an interest in dialysis clinics owned by the physicians or sold an interest in its dialysis clinics to the doctors, the DOJ noted.
To prime the pump, DaVita allegedly used speculative data that resulted in doctors paying less for the joint ventures and receiving a high investment return, Becker's noted. The doctors also reportedly agreed not to compete with DaVita and not to send patients to those who did. The government will not pursue physicians who benefited from the alleged DaVita kickbacks, The Denver Post reported.
The whistleblower in this case, former DaVita senior financial analyst David Barbetta, voiced concern about the company's practices internally only to be warned by a vice president not to "give any of that ethics crap," The Denver Post reported. Now Barbetta and his lawyers will receive up to 25 percent of the $350 million settlement.
"No one else was standing up and saying this wasn't right and it should stop," Barbetta told The Denver Post. But in a prepared statement, DaVita said "It is our belief there was no intentional wrongdoing," the newspaper reported.
"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, Inspector General for the U.S. Department of Health and Human Services, in the DOJ announcement. "Expect significant settlements and our continued investigation of such wasteful business arrangements."