This is the third article in a series dedicated to explaining the confrontation between Dr Obua and Dr Gera in Richland Manor on January 8th. The first article was a report on the initial details of the altercation, and the second focused on the dialysis treatment company DaVita and the nearly $1 billion dollars they’ve paid in fraud settlements since 2012.

A legal case brought against Fresenius Medical Care North America (Fresenius) raised serious questions about its business practices. Martin Flanagan, a former employee, filed an amended complaint on February 5, 2021, alleging that the company engaged in unethical arrangements to secure patient referrals for its outpatient dialysis centers.

These actions, he claims, violated federal laws, including the False Claims Act (FCA) and the Anti-Kickback Statute (AKS). Internal Medicine Nephrology, a local medical joint venture of Dr Manish Gera, Dr Raj Jeevan, and Dr Gaurav Verma, was specifically named in the complaint.

Flanagan’s complaint accuses Fresenius of entering into problematic agreements with nephrologists and their practices, aiming to secure a steady stream of patient referrals. These alleged practices include: Contracts with excessive payments to dialysis center medical directors, and restrictive non-compete clauses, ensuring loyalty to Fresenius facilities.

Equity stakes offered to doctors in joint ventures at below-market rates and exceeding safe harbor thresholds, along with long-term non-competition requirements. Agreements with physicians who also served as landlords for dialysis centers. Support services for nephrology practices, including patient education, financial assistance coordination, and recruiting assistance.

The complaint also describes Fresenius’ acute care dialysis management as a key part of its operations. It alleges the company used management contracts with hospitals as financial loss leaders to gain patient referrals for its outpatient facilities.

Additionally, Fresenius allegedly provided hospitals with free services like discharge planning and in-service training, raising concerns about the fair market value of these relationships. The company’s leadership reportedly ignored required rate increases in contracts to maintain these agreements.

These allegations echo a similar lawsuit against another dialysis provider, DaVita, filed in 2009. That case resulted in a $400 million settlement in 2014, with DaVita agreeing to significant compliance measures to address concerns raised by whistleblowers.

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