Federal Grand Jury Probes Major Dialysis Provider
DaVita, the country’s second-largest dialysis provider, announced in a financial filing that a U.S. Attorney’s Office investigation into the company’s business practices is “preliminary.”
The U.S. Attorney’s Office in Colorado has opened a grand jury investigation into the practices of DaVita Inc., the country’s second-largest dialysis chain.
As we’ve reported previously, Colorado-based DaVita operates more than 1,600 dialysis clinics nationwide and controls roughly one-third of the market for care relied on by about 400,000 Americans with kidney failure.
The company disclosed the investigation Wednesday in a filing with the Securities and Exchange Commission, describing it as “preliminary.”
It’s not yet clear exactly where the government’s attention is focused. The company said the probe appears to overlap with another Justice Department investigation into possible overuse of Epogen, a drug used to treat anemia, as well as the chain’s relationships with doctors.
Jeff Dorschner, the spokesman for the Colorado U.S. Attorney’s Office, declined to comment on the case.
In an earnings call with financial analysts on Wednesday, DaVita Chief Executive Kent Thiry said the company would cooperate with government investigators.
“We are eager to educate them,” he said. (The company also provided ProPublica with a longer statement.) “We are comfortable and confident with our business practices.”
The company appears to be facing scrutiny on multiple fronts.
A whistleblower lawsuit filed in 2007 and recently unsealed by a federal court in Atlanta alleges that DaVita systematically wasted certain medications to collect hundreds of millions of dollars in additional Medicare payments. The company has denied the allegations.
Last year, ProPublica published an investigation on U.S. dialysis care, finding that patients often received treatment in environments that were unsafe or unsanitary, though these problems were not specific to any particular provider.
Our analysis of government inspections turned up hundreds of instances in which facilities were cited for breaches in infection control, as well as egregious cases in which lapses in care may have led to patient injuries or deaths.
DaVita learned from the US Attorney's Office for the District of Colorado that it opened a grand jury investigation that covers certain activities of the company. The investigation is at a very preliminary stage. While its precise scope is unclear, it appears to overlap, at least in part, with the OIG Dallas and the Eastern District of Missouri matters regarding physician relationships, which we have previously disclosed. We do thousands of transactions and work very hard to get every one right and are comfortable and confident with our business practices, which go through extensive internal and external review. Our strong record of compliance over the last eleven years is well-established in the healthcare industry. At this time, there is nothing more that we can say about this matter other than that the company intends to cooperate with the investigation.
Nearly 40 years after Congress created a unique entitlement for patients with kidney failure, U.S. death rates and per-patient costs are among the world's highest while the biggest for-profit providers flourish.
The Story So Far
Dialysis holds a special place in U.S. medicine. In the 1960’s, it was the nation’s signature example of rationing, an expensive miracle therapy available only to a lucky few. A decade later, when Congress created a special entitlement to pay for it, dialysis became the country’s most ambitious experiment in universal care.
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