By Christopher N. Osher and Jennifer Brown
The Denver Post
The U.S. Attorney's Office in Colorado has opened a grand jury investigation into the practices of Denver-based kidney-dialysis firm DaVita Inc., the company's chief executive, Kent Thiry, revealed in an earnings call Wednesday.
"It is clear that this is very preliminary at this stage," Thiry said during the earnings call.
He added that the company "always takes these things seriously, and we look forward to cooperating with the government."
Thiry said it appears the Colorado investigation overlaps with an investigation initiated in 2005 by the U.S. Attorney's Office in Missouri. That investigation was exploring allegations that DaVita overused the anemia drug Epogen and then billed the government for it and that DaVita entered into improper relationships with pharmaceutical companies and physicians.
Thiry said prosecutors in Colorado seem to be especially interested in the firm's relationships with physicians.
The company has long maintained that it structures partnerships with physicians in such a way that those partnerships don't violate federal anti-kickback statutes.
"We do thousands of transactions, including hundreds with physicians, and we work hard to get every one right," Thiry said Wednesday. "We are comfortable and confident in our business practices."
Jeff Dorschner, a spokesman for the U.S. Attorney's Office in Colorado, declined to comment on the investigation.
DaVita, the nation's second-largest dialysis provider and which relocated to Denver last year from California, has been battling questions about its business practices for years. Company officials note, however, that DaVita has not been prosecuted or had to settle any federal claims.
In Colorado, court documents show federal investigators subpoenaed records in December from a health care consulting company that works with DaVita. The investigation was looking at whether DaVita submitted "false or otherwise improper claims" to Medicare and Medicaid.
Company executives told The Denver Post in May that subpoena is related to an investigation by the Dallas office of the Inspector General for the Department of Health and Human Services, which also is probing DaVita's financial relationships with doctors who refer patients to DaVita clinics.
Investigations into allegations of improper Medicare and Medicaid claims primarily focus on the company's use of Epogen, which is used to regulate hemoglobin levels in dialysis patients.
The Food and Drug Administration has warned since 2007 that the drug also can increase the risk of death when used at certain levels.
DaVita patients historically have had the highest hemoglobin levels of any company, according to congressional testimony and the U.S. Renal Data System.
Two whistle-blower lawsuits against DaVita allege the company overused the anemia drug to drive up revenues.
Federal officials recently overhauled how the government reimburses dialysis firms for the use of Epogen, taking away any financial incentive to use high levels of the drug. DaVita's protocols for use of the drug also have changed.
DaVita is the second-largest dialysis provider behind Fresenius Medical Care North America. The two for-profit companies account for 60 percent of the market.
Christopher N. Osher: 303-954-1747 or cosher@denverpost.com
