DaVita Continues to Operate in the Shadow of Litigation

Denver, COAgainst a backdrop of perceived benefit from time spent at DaVita healthcare clinics, various lawsuits and other accusations targeting the company appear to have painted DaVita Healthcare Partners Inc. (DaVita) with a tainted brush. The enterprise continues to be dogged by allegations of inappropriate professional conduct with doctors, and various dialysis plaintiffs have brought lawsuits alleging wrongful death.

In the spring, DaVita announced during a conference call to analysts that it had set aside $300 million as a fund to settle allegations of kickbacks to doctors and other criminal allegations surrounding the alleged practice of paying a stipend to doctors who brought patients to DaVita dialysis centers. An investigation by a Denver grand jury probed the relationship between DaVita and one of the largest offices of kidney doctors in the City of Denver. It was alleged that DaVita paid to guarantee a steady stream of patients.

The dialysis sector is competitive. DaVita is one of the largest operators in the country. According to the Denver Post (5/10/13), the CEO of DaVita Ken Thiry termed the disclosure of settlement funds as a “sober” update during a report of DaVita financial activity to analysts in the spring.

Elsewhere, DaVita healthcare clinics were the subject of a lawsuit by employees with regard to an alleged failure to provide meal and rest periods or overtime pay. The DaVita lawsuit was brought in April 2008 and was put forward for certification as a class action. While the original motion for class-action status was denied, plaintiffs have appealed.

As for wrongful death, various plaintiffs have brought lawsuits against the company relative to GranuFlo side effects. GranuFlo and NaturaLyte are two products used in the dialysis process that have come under fire for dosing errors posing risk to the heart while patients are on dialysis. The manufacturer of GranuFlo and NaturaLyte, Fresenius Medical Care, has been the target of various lawsuits with regard to dosing errors inherent with the products.

However, DaVita plaintiffs allege that DaVita healthcare clinics should have been aware of the dosing errors and the issues surrounding the problematic products. A debate is ongoing (not to mention a collection of lawsuits) over the alleged failure of Fresenius to inform clinics outside of its own collection of Fresenius dialysis facilities about potential problems with GranuFlo and NaturaLyte side effects and the resulting impact to patients. Be that as it may, various plaintiffs have launched wrongful death lawsuits against DaVita. In March, a plaintiff filed a GranuFlo class-action lawsuit in Colorado District Court (case no. 1:2013cv00573) alleging GranuFlo sudden death after the plaintiff’s wife succumbed to cardiac arrest and died following use of GranuFlo at a DaVita facility.

In April, the offspring of a woman who suffered GranuFlo cardiac arrest and subsequently died following dialysis using GranuFlo and NaturaLyte at a DaVita facility filed a lawsuit alleging GranuFlo sudden death (Louisiana Western District Court case no. 5:2013cv00829).