Updated Feb. 24 at 11:00 a.m. with additional information about the scope of the investigation
Kidney care giants DaVita and Fresenius are under investigation from the District of Columbia’s attorney general over relationship with and donations to the nonprofit American Kidney Fund (AKF), according to a disclosures in the companies' annual regulatory filings.
The investigation, first spotted by Stat, echoes a whistleblower’s accusations from 2016 that the AKF was improperly steering charity care patients toward kidney care providers like DaVita and Fresenius in exchange for donations.
Such contributions are permitted by the government so long as the charity provides its assistance based on patients’ financial need.
The whistleblower’s lawsuit was eventually dismissed after the Department of Justice declined to join the suit.
The new disclosure is connected to “an antitrust investigation concerning the AKF,” according to the filings.
In DaVita's 10-K regulatory filing, the company states that it received a Civil Investigative Demand from the Office of the Attorney General for D.C. in January that “requests information on a number of topics, including but not limited to the company’s communications with AKF, documents relating to donations to the AKF and communications with patients, providers and insurers regarding the AKF.”
In a statement provided to Fierce Healthcare, DaVita reiterated its cooperation with the investigation and said that the subpoena "focuses on a handful of clinics within D.C."
"We aim to obtain a swift resolution of this inquiry into a relationship that was previously investigated by the Department of Justice and found to be compliant with the law,” the company said.
A separate legal disclosure listed in the filing outlines subpoenas sent by the California Department of Insurance in 2020 and 2021 seeking information including DaVita’s communications with patients about insurance plans and financial assistance from AKF as well as related information on donations and patients’ insurance provider selections. DaVita said in the filing that it is continuing to cooperate on that investigation as well.
Fresenius, meanwhile, disclosed in its annual 20-F filing that it had also received a subpoena from the D.C. attorney general in January "related to the activities of the [AKF] and grounded in antitrust concerns, including market allocation within the District of Columbia."
The company's filing was also more explicit in linking the current investigation to prior government scrutiny.
"[Fresenius Medical Care Holdings]’s relationship with AKF was the subject of previously reported, but resolved, investigation by agencies of the United States and litigation against United Healthcare," the company wrote. "FMCH is cooperating in the District of Columbia investigation."
Fierce Healthcare has reached out to Fresenius for any additional comment on the referenced investigation.
In an email statement, AKF President and CEO LaVarne Burton said that the charity's Health Insurance Premium program "is 100% needs-based, and the only factors AKF considers when issuing grants are whether the patient demonstrates financial need and meets program criteria. We do not have any role in which insurance a patient selects, or where they go for dialysis treatment or any other medical care."
AKF is cooperating with the ongoing investigation and is "confident this will be resolved swiftly," Burton said.