Top Kidney Charity Directed Aid to Patients at DaVita and Fresenius Clinics, Lawsuit Claims

Top Kidney Charity Directed Aid to Patients at DaVita and Fresenius Clinics, Lawsuit Claims

One of the nation’s largest public charities steered financial aid to patients of its two biggest corporate donors — the dialysis chains DaVita and Fresenius — while denying help to people who used smaller, unrelated clinics, in violation of anti-kickback laws, according to a federal whistle-blower lawsuit unsealed this week in Boston.

The charity, the American Kidney Fund, helps patients who need dialysis by paying their health insurance premiums and other costs for treatment. But under a longstanding federal agreement intended to prevent illegal kickbacks, the charity is supposed to provide help based solely on a patient’s financial need, and not favor companies that donate to it.

The lawsuit, filed by David Gonzalez, who worked for 12 years at the kidney fund in its patient assistance program until he left in 2015, accused the charity of creating a so-called blocked list of dialysis clinics whose patients would not get financial assistance while making sure patients at clinics operated by DaVita and Fresenius would.

The Justice Department, which had earlier issued subpoenas regarding the accusations, said it would not join the case. But it requested that the court seek the department’s consent if a decision were reached to dismiss or settle the lawsuit. Some cases that did not involve federal prosecutors have still led to large settlements, including one in which Celgene agreed to pay $280 million to settle claims it had inappropriately marketed the cancer drugs Thalomid and Revlimid.

In a statement, LaVarne A. Burton, president of the American Kidney Fund, said the group was pleased that the Justice Department had declined to intervene and said it had cooperated fully in the case. “We now know that this suit was brought by a former employee who, prior to making this complaint, was terminated for cause,” she said. The fund adheres to the federal agreement that governs its charitable program, she added.

“The Department of Justice has looked at this matter and decided not to pursue any action against DaVita,” the company said in a statement.

Fresenius declined to comment. A lawyer for Mr. Gonzalez did not return a request for comment.

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Fresenius and DaVita control about 70 percent of the market. The accusations against the big dialysis chains have become public just a few weeks after the Trump administration called for a shift away from the care provided in dialysis clinics to kidney transplants or in-home dialysis.

The allegations in the lawsuit mirror the findings of a 2016 report in The New York Times about the fund. Representative Katie Porter, a California Democrat, recently requested that the Office of Inspector General for the Department of Health and Human Services, the federal agency that created the original guidelines for the charity, investigate the charity’s activities. A spokeswoman for the agency said it would not comment.

The lawsuit, filed in 2016, says the charity went to great lengths to ensure no aid was given to patients at clinics that were not donors. Mr. Gonzalez said in his lawsuit that the charity began formally tracking donors in 2009, labeling those clinics that did not contribute as “free riders.”

When the charity was criticized for its use of a “blocked list” of clinics, it changed the name to “training list,” according to the lawsuit. The charity would contact these clinics to request donations in specific amounts, calculated by looking at the payments made to patients at these clinics.

When one patient moved from a Fresenius clinic in Florida to a clinic in Indianapolis, the fund initially stopped paying the patient’s premiums, according to the lawsuit, because the new clinic had not donated. “She will definitely lose the policy without AKF assistance, so I just wanted to see what we are able to do,” the patient’s social worker wrote in an email quoted in the suit.

Similarly, Mr. Gonzalez described the “rough treatment” given to Kaiser Permanente, the California group, which he says was blocked in 2015.

With revenues of $299 million in 2018, the American Kidney Fund is one of the country’s largest charities and helped pay the insurance premiums of about 74,000 people in 2017, or about one in every five patients who underwent dialysis.

It continues to receive the vast majority of its support from DaVita and Fresenius. In 2018, the group’s external auditors said it had received $247 million from two corporations, which represented 82 percent of its total revenues.

Though the two companies were not named, the whistle-blower complaint identified the group’s primary contributors as DaVita and Fresenius, as have insurers and state regulators. The American Kidney Fund said it could not reveal the identities of the contributors.

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