Kidney Settlement Derided

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DaVita Healthcare Partners Inc. this week agreed to one of the largest ever anti-kickback settlements in the U.S.

But even a $350 million penalty isn’t enough to satisfy Jamie Court’s sense of justice.

The president of Consumer Watchdog wants to hold accountable the kidney doctors who bought ownership stakes in DaVita dialysis clinics and then referred patients there for treatment.

Dialysis referrals are made when people are most vulnerable, he said.

It was unclear Friday whether physicians who did business with DaVita will face any consequences.

The American Medical Association didn’t respond to a request for comment. And Jeff Dorschner, spokesman for the U.S. attorney in Colorado, said the federal investigation is now closed.

Kidney dialysis is big business for the companies serving more than 2.1 million patients worldwide. The global market’s value was estimated at almost $62 billion last year by MarketsandMarkets, a market research firm in Dallas.

Fresenius Medical Care and DaVita are two of the largest providers, the research firm said. They also are the two primary providers in Fort Wayne.

Court would prefer that doctors just say no to ownership in clinics and other medical facilities.

“I think it’s very troubling for patients because we put our trust in doctors, and they aren’t thinking of all the money doctors are making from their treatment,” he said Friday. “There’s a huge problem with doctors self-dealing.”

It was unclear Friday whether any local nephrologists – or doctors who treat kidney disease – have financial ties with DaVita or other dialysis providers.

Until June, Nephrology Associates leased office space at 3124 E. State Blvd., the same address as a DaVita operation that allows patients to receive dialysis treatments at home.

Norvel Frock, practice administrator for Nephrology Associates, called the proximity a coincidence. The physicians’ practice and DaVita both happened to lease space from the same landlord, he said.

Nephrology Associates has since moved into offices at 1104 Parkview Circle Drive. The group includes 15 nephrologists and 43 support staff.

Frock said doctors in the practice allow patients to choose where they will receive dialysis, and most patients choose the clinic closest to their home. Doctors in the practice don’t require specific clinics, he said.

Allegations against DaVita said the Denver company required physician partners to sign documents that forbade them from saying anything critical of DaVita and from recommending any other dialysis provider.

Frock was unable to say definitively whether any doctor in his practice has a personal financial relationship with DaVita. And he declined to say whether the practice has entered any agreements with the company.

A nephrologist in another local practice didn’t return a message seeking comment.

Dr. Robert Dettmer, a retired nephrologist, left Indiana Medical Associates in 1997 after 23 years in practice. For the next nine years, he was associate medical officer for Renal Care Group, a company that was then sold to Fresenius.

While Renal Care Group operated a dialysis clinic, it was mostly owned by doctors, who wanted to ensure that it offered high-quality care, Dettmer said. Those doctor/owners never required patients to seek treatment there, he said.

Dettmer doesn’t know ownership details since Fresenius took over.

According to its website, publicly traded Fresenius operates more than 2,150 dialysis facilities in North America. DaVita, which also is listed on the New York Stock Exchange, claimed 2,074 outpatient dialysis centers in its most recent annual report.

DaVita’s settlement with the Justice Department is the culmination of a whistle-blower lawsuit filed in September 2009 by David Barbetta, a former senior financial analyst in DaVita’s mergers and acquisitions department.

The U.S. government and 14 individual states, including Indiana, joined the lawsuit because DaVita was accused of illegal business practices that led to inflated medical bills being filed with the federal Medicare and state-controlled Medicaid programs.

The company will pay $350 million to the U.S. government related to alleged kickbacks; $11.5 million to certain states in relation to disputed Medicaid claims; and $39 million in penalties related to ownership of some specific clinics.

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