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.
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.
The United States further alleges that 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.
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. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States ex rel. Kogod v. DaVita, Inc., et al., No. 17-cv-02611-PAB (D. Colo.). Kogod will receive $6,370,000 of the proceeds from the settlement.
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of Colorado with assistance from HHS-OIG.
The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).
Trial Attorney Gary Newkirk of the Civil Division and Assistant U.S. Attorney Lila Bateman for the District of Colorado handled the matter.