Denver-based DaVita Healthcare Partners, Inc., has agreed to pay $350 million and forfeit an additional $39 million to resolve allegations it paid kickbacks for patient referrals in violation of the False Claims Act, according to the Department of Justice.
The lawsuit against DaVita alleged the dialysis services provider paid physicians and physician groups that had a large patient population suffering from renal disease to partner with DaVita from March 2005 to February 2014.
DaVita allegedly targeted practices that were "young and in debt," and offered them lucrative opportunities that involved DaVita acquiring an interest in dialysis clinics owned by the physicians or DaVita selling an interest in its dialysis clinics to the physicians, according to the DOJ.
To make the transactions financially favorable for the physician partners, DaVita allegedly used the "HIPPER compression," which was based on arbitrary and speculative data that resulted in physicians paying less for the joint ventures and receiving an extremely high return on investment.
The physicians also allegedly agreed not to compete with DaVita and not to refer their patients to other dialysis providers, according to the DOJ.
The $39 million civil forfeiture was based on DaVita's conduct related to two joint ventures it entered into in Denver. DaVita has also agreed to enter into a corporate integrity agreement, which requires the company to unwind some business arrangements and restructure others.
The lawsuit against DaVita was originally filed under the qui tam, or whistle-blower, provision of the False Claims Act by David Barbetta, who previously served as one of DaVita's senior financial analysts in the company's mergers and acquisitions department, according to the DOJ.
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