DaVita pays $389M in anti-kick­back case

Modern Healthcare - - NEWS - By Lisa Schencker

A $389 mil­lion civil set­tle­ment an­nounced last week be­tween DaVita Health­Care Part­ners and the fed­eral gov­ern­ment over al­le­ga­tions of Medi­care fraud is the lat­est ex­am­ple of the feds go­ing after health­care com­pa­nies al­legedly violating the anti-kick­back statute.

The DaVita case be­gan when David Bar­betta, a for­mer se­nior fi­nan­cial an­a­lyst in the company’s merg­ers and ac­qui­si­tions depart­ment, filed a False Claims Act law­suit against the company. The gov­ern­ment later joined the case. DaVita ul­ti­mately agreed to pay $389 mil­lion to re­solve al­le­ga­tions that it paid kick­backs to doc­tors for pa­tient re­fer­rals to its dial­y­sis clin­ics.

The gov­ern­ment al­leged DaVita iden­ti­fied physi­cians and prac­tices that served large pop­u­la­tions of pa­tients with kid­ney dis­ease in a spe­cific ge­o­graphic area, tar­get­ing doc­tors who were “young and in debt.” It then al­legedly of­fered the doc­tors joint-ven­ture deals in­volv­ing the clin­ics where they re­ferred pa­tients. The gov­ern­ment said the doc­tors agreed not to com­pete with DaVita or send pa­tients to com­peti­tors.

In a writ­ten state­ment, DaVita said: “We have worked in­cred­i­bly hard to get things right and it is our belief there was no in­ten­tional wrong­do­ing.” The company said “pa­tient care was never at is­sue, nor were billing or pay­ment prac­tices.” At­tempts to ob­tain fur­ther com­ment from a DaVita spokesman on Thurs­day were un­suc­cess­ful.

Be­tween 2007 and 2013, the num­ber of False Claims Act cases in health­care brought by whis­tle-blow­ers more than dou­bled, said Pa­trick Burns, co-ex­ec­u­tive di­rec­tor of Taypay­ers Against Fraud Ed­u­ca­tion Fund, a Wash­ing­ton-based ad­vo­cacy group for whis­tle-blower suits. Burns said a 2005 law re­quir­ing health­care com­pa­nies to ed­u­cate their em­ploy­ees about the False Claims Act might be partly re­spon­si­ble for the surge. That ed­u­ca­tion can lead more em­ploy­ees to be­come whis­tle-blow­ers, he said.

Gor­don Sch­nell, a lawyer with Con­stan­tine Can­non in New York who rep­re­sents whis­tle-blow­ers, said anti-kick­back cases might be grow­ing more common be­cause they are rel­a­tively straight­for­ward for pros­e­cu­tors com­pared with other types of false claims is­sues.

Kick­backs, he ex­plained, are au­to­matic vi­o­la­tions of the False Claims Act. “So if you can prove there have been kick­backs, you don’t have as dif­fi­cult a time show­ing a vi­o­la­tion un­der the act as you might have with other types of fraud in health­care,” Sch­nell said.

Bar­betta’s at­tor­ney, Eric Havian of Phillips & Co­hen in San Francisco, at­trib­uted the in­crease in cases to greater aware­ness among po­ten­tial whis­tle-blow­ers.

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