Physician Kickback Scheme Costs Firm $350,000,000 Penalty

kickback“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 statement.

– Business Insurance

A national dialysis services provider has agreed to pay $350 million to settle a whistleblower lawsuit involving Justice Department charges that it violated the False Claims Act by paying kickbacks to induce physicians to refer patients to its clinics, the DOJ said Wednesday.

The department said that between March 2005 and February 2014, Denver-based DaVita Healthcare Partners Inc., which has dialysis centers in 46 states and the District of Columbia, identified physicians or physicians groups that had significant patient populations suffering renal disease and offered them lucrative opportunities to partner with the firm by acquiring, and/or selling, an interest in dialysis clinics to which their patients would be referred for dialysis treatment.

In addition, DaVita entered into secondary agreements with the physicians, including ones in which the physician agreed not to compete with the DaVita clinic, and non-disparagement agreements that would have prevented the physicians from referring their patents to other dialysis providers, the department said in its statement.

The settlement resolves charges brought in a lawsuit filed under the False Claims Act by a former senior financial analyst in DaVita’s mergers and acquisitions department, David Barbetta. His share of the recovery has not yet been determined, the department said.

“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 statement.

The company said in a statement, “ We have worked incredibly hard to get things right, and it is our belief there was no intentional wrongdoing.

“We believe this settlement is the right thing for our teammates, partners and shareholders. It allows us to move forward with heightened clarity and transparency, both with regulators and our physician partners. As part of the settlement, we will undo 11 joint venture transactions covering 26 of our 2,119 clinics.”

In July, the department announced the $24.5 million settlement of a whistleblower lawsuit with an Alabama health system and physician group, in which they were charged with violating the False Claims Act by paying or receiving kickbacks in connection with claims to the Medicare program.