Healthcare Business News

DaVita nearing $389M settlement agreement with feds over doc kickbacks

By Beth Kutscher
Posted: February 13, 2014 - 3:00 pm ET

DaVita Healthcare Partners has reached an agreement with the U.S. government that would settle an investigation into whether its relationships with physicians violated the anti-kickback statute.

Specific terms of the agreement are still being negotiated, but the company said in an earnings release that it expects to finalize the settlement in the coming months.

HHS' inspector general's office in Dallas launched its investigation in 2010, and the U.S. attorney in Denver followed suit the following year. The inquiries focused on DaVita's joint ventures with nephrologists to operate dialysis clinics.

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The settlement will include a payment of $389 million, an amount DaVita already set aside in November. DaVita also agreed to enter into a corporate integrity agreement and install an independent compliance monitor.

The settlement also requires DaVita to unwind a limited number of joint ventures with physicians, either by buying out or selling its stake at fair market value. On an earnings call, executives emphasized that neither the size of the settlement nor the number of joint ventures affected would have a material impact on the company.

The terms of the deal will likely cover 11 joint ventures that include 28 clinics, said Garry Menzel, DaVita's chief financial officer, on the call, adding that more than 70% of the company's dialysis centers are already wholly owned.

Follow Beth Kutscher on Twitter: @MHbkutscher

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