DaVita Healthcare Partners has agreed to pay $350 million to resolve claims it violated the False Claims Act, according to a Department of Justice press release.
DaVita, which is based in Denver and has dialysis clinics in 46 states and the District of Columbia, was accused of paying kickbacks to induce the referral of patients to its dialysis clinics between March 1, 2005 and Feb. 1, 2014.
According to DOJ, DaVita is accused of identifying physicians or physician groups with patient populations suffering renal disease and offering them lucrative opportunities to partner with DaVita by acquiring and/or selling an interest in dialysis clinics to which their patients would be referred for dialysis treatment.
DaVita was accused of further ensuring referrals of these patients to the clinics through a series of secondary agreements with the physicians. These include entering into agreements in which the physician agreed not to compete with the DaVita clinic and non-disparagement agreements that would have prevented the physicians from referring patients to other dialysis providers.
PE investors have remained consistently interested in dialysis company investments and they should be aware of this recent settlement which impacts the structuring of dialysis JVs with physicians.