DaVita Pays $34 Million to Settle Third Kickback Case in Decade, Revealing Systematic Fraud Business Model

DaVita Inc. agrees to pay $34,487,390 to resolve False Claims Act allegations involving three distinct kickback schemes: paying a competitor to induce referrals to DaVita Rx pharmacy subsidiary in exchange for acquiring European dialysis clinics and extending dialysis product purchases; providing management services to vascular access centers owned by referring physicians while paying improper remuneration through uncollected management fees; and paying a large nephrology practice $50,000 for right of first refusal to staff medical director positions despite the practice declining to provide services. Whistleblower Dennis Kogod, former chief operating officer at DaVita, filed the qui tam lawsuit in 2017 and will receive approximately $6.4 million from the settlement. This marks DaVita’s third kickback settlement in a decade, establishing a pattern of systematic Medicare fraud as core business model. The settlement history reveals extraordinary fraud: $350 million in 2014 for physician kickback joint ventures (with $39M additional civil forfeiture and $11.5M state Medicaid), $450-495 million in 2015 for drug wastage fraud, $55 million in 2012 for Epogen overbilling, and now $34 million in 2024, totaling nearly $1 billion in civil penalties since 2012. This pattern demonstrates that fraud settlements are merely a cost of doing business in the dialysis industry, where profit margins are so extraordinary (exploiting the 4x difference between Medicare and commercial insurance reimbursement rates) that even billion-dollar penalties don’t deter ongoing fraud. Former CEO Kent Thiry, who led DaVita 1999-2019 and earned up to $20 million annually, built company growth on systematic Medicare fraud. The repeated kickback schemes show how dialysis giants structure entire business operations around inducing referrals through financial relationships with physicians, knowing that controlling patient flow means controlling access to life-sustaining treatment for 550,000 Americans with kidney failure, enabling profit extraction regardless of penalties.