DaVita Healthcare Partners is one of the nation’s leading providers of dialysis services, with clinics in 46 states. DaVita agreed to one of the largest healthcare fraud settlements in fiscal year 2014 with regard to its alleged submission of false claims to programs like Medicare and Medicaid for reimbursement.
As we reported in 2014, DaVita agreed to pay $389 million in order to settle claims of a widespread and expansive kickback scheme involving nephrologists across the United States. Allegedly, the company was offering both lucrative cash incentives and ownership stakes in DaVita dialysis centers in exchange for the doctors’ promises to refer all nephrology patients exclusively to DaVita facilities. This practice, which is expressly prohibited by the anti-kickback provisions of the False Claims Act, resulted in a major, multi-jurisdictional whistleblower case and one of the largest settlements in False Claims Act history.
As you may be aware, the need-based Medicaid program is administered through a concerted effort by the federal and state governments. As such, states are entitled to a portion of any settlement offered by a False Claims Act defendant having defrauded the Medicaid system.
States Defrauded By DaVita Collect
Five states were awarded their portion of the settlement between DaVita and the federal government, including Kentucky, California, Florida, Colorado, and Ohio. The breakdown of payments received by each state is as follows:
- Colorado: $3 million
- Florida: $5.6 million
- Ohio: $600,000
- Kentucky: $172,000
- California: $12 million
The settlements will allow each state to replenish their Medicaid programs in a manner congruent with the amount taken unlawfully by DaVita pursuant to its healthcare fraud scams. The attorneys general of each state also issued several statements in support of the settlement.
The Kentucky Attorney General’s Office announced:
“[I] am pleased that this settlement allows us to recover funds for our vital state Medicaid program…My Medicaid Fraud and Abuse Control Unit works hard each day to hold accountable health care companies that participate in this type of deceptive behavior.”
Likewise, Colorado’s Attorney General stated:
“This represents a significant recovery for Colorado’s Medicaid program…Colorado will not tolerate any arrangement that appears to compromise the objectivity of physicians and the efficiency of the Medicaid program.”
The Florida Attorney General’s Office similarly commented, stating:
“Health care providers base medical decisions on the individual needs of their patients, not on their own financial interests….My office will continue to protect Floridians from health care providers who use kickbacks to induce patient referrals and put profits ahead of sound medical decision-making.”
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