DaVita, the Denver-based dialysis giant, will pay $34.49 million to settle a lawsuit alleging the company violated anti-kickback laws, the latest in a string of whistleblower settlements for the company.
The lawsuit, brought by Dennis Kogod, former chief operating officer of DaVita Kidney Care, claims DaVita illegally compensated kidney doctors for patient referrals by providing free management services to their clinics, among other things. The lawsuit also alleges the company effectively paid off a competitor in exchange for an agreement to provide pharmacy services for that company’s patients.
“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,” a DaVita spokesperson said in an emailed statement Thursday. “While we deny any liability, we agreed to this resolution to close this chapter and move forward.”
Since 2012, DaVita has paid roughly $1 billion in civil charges to settle whistleblower complaints. The largest was a $450 million settlement in 2015 to resolve allegations the company defrauded Medicare by throwing away dialysis drugs and billing the government for the waste. In 2014, it agreed to pay $350 million over claims it paid kickbacks to doctors using arrangements similar to some of the practices outlined in the new complaint.
DaVita hasn’t admitted wrongdoing in any of the cases.
For a company worth $12 billion, a $34 million payment isn’t going to make much of a dent in its bottom line. Still, it adds to a pattern of allegedly illegal behavior that has followed the company for more than a decade.
DaVita moved its headquarters from El Segundo, California, to Denver in 2009. The company has a major presence in the Union Station area of Lower Downtown. Its former CEO Kent Thiry, known for his unconventional management style, has become a prominent player in local and state politics. He stepped down from his post at DaVita in 2019.
The complexity of the schemes laid out in the lawsuits makes it difficult to draw a direct line between DaVita’s actions and the company’s financial gain. The fact plaintiffs are able to secure settlements in such cases is indicative of the government’s determination to hold businesses accountable, according to Hamsa Mahendranathan, a partner at Whistleblower Partners, the law firm representing Kogod.
“The government is showing time and again that they are fine taking action against even these more non-traditional kickback schemes,” she said.
