According to his September 2009 False Claims Act qui tam complaint, David Barbetta worked for dialysis services provider DaVita from April 2007 until July 2009 as a Senior Financial Analyst in the Mergers and Acquisitions Department. This department, known as “Deal Depot,” was allegedly responsible for buying and selling shares in dialysis centers and dialysis related joint ventures.

According to Mr. Barbetta, his responsibilities in the “Deal Depot” included using the economic models developed by DaVita for determining values of dialysis centers and joint ventures. In this role, he concluded that DaVita engaged in nationwide Medicare fraud by illegally inducing physicians to refer, recommend and otherwise influence their patients to go to DaVita-owned dialysis centers to receive treatment for End Stage Renal Disease.

Mr. Barbetta’s lawsuit  alleged that DaVita induced physicians to refer business to its facilities by: (a) selling them shares in existing DaVita dialysis centers for below-market rates; (b) buying shares in dialysis centers owned by physicians for above-market rates; (c) giving physicians kickbacks masked as profits from joint ventures; and (d) paying physicians to refrain from building competing dialysis centers.

The complaint further alleged that DaVita engaged in an illogical business strategy of “buying high and selling low,” which was, in effect, giving physicians an immediate kickback—either the inflated sale price of the centers sold or ownership of a share of existing centers at a below market value price.

In October 2014, the federal government intervened in Mr. Barbetta’s qui tam lawsuit and settled his kickback allegations for $350 million. His share of the recovery has not yet been determined, but under the relators’ share provisions of the False Claims Act, his share could be more than $52 million.

More information for whistleblowers is located at the Nolan Auerbach & White website.