On October 22, 2014, the Department of Justice (DOJ) announced that DaVita Healthcare Partners, Inc. (DaVita), a provider of dialysis services, has agreed to pay the U.S. Government $350 million for allegedly violating several provisions of the False Claims Act (FCA) — including persuading physicians or physician groups to refer their dialysis patients to DaVita by offering kickbacks for each patient referred. The lawsuit also claims that the alleged illegal practices administered by DaVita were part of a calculated scheme involving thorough research by DaVita which identified and targeted physicians, mostly young and in debt, and who were more likely to be open to kickback incentives.  This lawsuit was initially filed under the qui tam whistleblowers provision of the FCA by David Barbetta, who was previously employed by DaVita as a Senior Financial Analyst.  Mr. Barbetta will receive a reward that has yet to be determined, although whistleblower rewards under the FCA generally fall within the range of 15% to 30% of the amount recovered by the Government.

According to the lawsuit filed by Mr. Barbetta, for a period of nine years, between March 1, 2005 and February 1, 2014, DaVita sought out physicians and physician groups that specialized in treating patients that suffered from renal disease. DaVita then presented the physician or physician group with a lucrative opportunity to grow their practices by partnering with DaVita.  Part of the alleged agreement required that the physician or physician group refer their patients to DaVita and in exchange for monetary kickbacks and other forms of profit boosting.  However, the agreement prevented the physician or physician group from referring any of their patients to other dialysis providers, even when doing so would have benefitted the patient.  In addition, the alleged contract prevented the physician or physician group from competing with DaVita clinics. This type of practice, if proven, is illegal and is a violation of both the Anti-Kickback Statute and the FCA. Indeed, kickback cases such as this have become a major part of FCA litigation, as evidence by another recent $6.05 million settlement by Bostwick Laboratories, involving similar allegations.

Provisions of the FCA make it unlawful for a person or company to defraud governmental programs, such as Medicare or Medicaid. The Stark Law and the Anti-Kickback Statue were enacted to prevent unlawful practices and to ensure that patients receive quality medical care based on a physician’s best judgment and not based on kickback incentives. The qui tam lawsuit filed by Mr. Barbetta alleged by DaVita violated the Physician Self-Referral Statue (a.k.a. Stark Laws) and the Anti-Kickback Statue, which generally prohibit healthcare providers for receiving payments or gifts, or entering into certain types of financial arrangements, in exchange for referrals of patients who are covered by Medicare or Medicaid.

If you have information concerning a potential case involving Medicare or Medicaid fraud, do not hesitate to take action. It is possible that you might be able to bring your own qui tam lawsuit under the False Claims Act, acting as a whistleblower on behalf of the US government. Before filing your lawsuit, be sure to consult with an attorney familiar with the intricacies of the False Claims Act and qui tam lawsuits, as these attorneys are best equipped to help protect your rights and help you gain your share of any monetary reward from a potential settlement.