Kidney care giant DaVita has agreed to pay nearly $34.5 million to settle allegations that it paid kickbacks to secure referrals, according to an announcement from the Justice Department.
The agency said in the press release that the company allegedly paid out kickbacks for referrals to its former DaVita Rx subsidiary, which offered pharmacy services to dialysis payments. It was also accused of paying kickbacks to nephrologists and other physicians to encourage them to refer patients to DaVita dialysis centers.
According to DOJ, kickbacks were paid to a competitor for referrals to DaVita Rx as a “central fill pharmacy” that would dispense that competitor’s Medicare prescriptions. DaVita in exchange agreed to buy some dialysis clinics in Europe and extended an existing agreement to purchase clinics from a competitor, DOJ said.
“Medicare patients should be able to trust their healthcare providers not to pay illegal kickbacks to induce referrals,” said Acting U.S. Attorney Matthew Kirsch for the District of Colorado in the announcement. “This resolution reflects the seriousness of the government’s determination to restore integrity to the healthcare marketplace.”
A DaVita spokesperson said in a statement to Fierce Healthcare that the company agreed to a settlement to “close this chapter and move forward.”
“We have worked closely with the government for the past seven years to investigate these allegations, which involve transactions that date back more than a decade and largely involve business units we no longer operate and people who haven’t been with the company for years,” the spokesperson said. “We remain committed to compliance and operating with the highest integrity as we focus on the future of kidney care and doing what we do best: serving our patients.”
The Justice Department also alleges that DaVita worked with vascular access physicians to offer management services and then paid “improper remuneration” in the form of uncollected management fees to secure referrals to its dialysis clinics.
In addition, the agency said that DaVita paid kickbacks to a large nephrology practice to encourage dialysis referrals. That practice was offered the right to refuse staffing for the medical director position at any new dialysis center that opened nearby and was paid $50,000 despite its choice not to staff those roles.
DOJ said that resolving this case highlights its focus on combating healthcare fraud.
“Improper financial arrangements between Medicare providers can distort the healthcare marketplace,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, in the press release. “We will hold accountable healthcare providers that seek to generate business by paying unlawful remuneration.”
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