On July 18, the U.S. Department of Justice (DOJ) announced that Denver-based dialysis giant DaVita Inc. had agreed to pay $34.5 million to resolve allegations it paid kickbacks to doctors for patient referrals to its dialysis centers. This was the third time in 10 years that DaVita had settled with DOJ over kickback allegations. The case was launched under the qui tam provisions of the False Claims Act (FCA) by a whistleblower who alleged three kickback schemes, which have been described as novel, non-traditional, and with a complexity that made it difficult to draw a direct line between DaVita’s actions and its financial gain.

Under the Anti-Kickback Statute (AKS), it is illegal for a healthcare services provider like DaVita to knowingly and willfully offer, pay, solicit, or receive remuneration, which includes money and anything of value, to induce or reward patient referrals for services reimbursed by federal healthcare programs. In settling this case, DaVita resolved allegations of kickback schemes relating to its pharmacy business, its vascular access center business, and medical directorships at its dialysis centers.

DaVita Rx is a former subsidiary of DaVita, Inc. that provided pharmacy services for dialysis patients. The DOJ alleged that DaVita engaged in a kickback scheme with its primary competitor in the dialysis market, Fresenius Medical Care, to induce referrals to DaVita Rx to serve as Fresenius’s central fill pharmacy, and to fill its Medicare patients’...

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