Former DaVita CEO Faces Healthcare Labor Market Collusion Charges
A Denver federal grand jury indicted DaVita and its former CEO for allegedly committing labor market collusion and depriving workers of free-market job opportunities.
Source: Getty Images
By Jill McKeon
- DaVita and its former CEO Kent Thiry are facing a two-count indictment for healthcare labor market collusion. A federal grand jury in Denver charged the dialysis and kidney care company and its ex-CEO for conspiring with competitors to not solicit certain senior-level employees, consequently depriving them of free-market job opportunities.
The allegations were uncovered as a result of the Department of Justice (DOJ) Antitrust Division’s investigation into employee allocation agreements within the healthcare industry.
The first charges in the ongoing investigation came in January, when outpatient surgery provider Surgical Care Affiliates (SCA) was charged with two indictments for allegedly conspiring with other healthcare companies on labor market collusion.
“A freely competitive employment market is essential to the health of our economy and the mobility of American workers,” Makan Delrahim, assistant attorney general of the DOJ’s Antitrust Division asserted in a January news release.
“Along with our law enforcement partners, the division will ensure that companies who illegally deprive employees of competitive opportunities are not immune from our antitrust laws.”
The SCA case is still pending in the Northern District of Texas, but the company has since been identified as one of DaVita’s co-conspirators.
Thiry and DaVita are charged with two counts of violating the Sherman Antitrust Act, which was enacted in 1890 as the first antitrust law in the nation. The act outlaws monopolization or conspiracy to monopolize, and prohibits restraint of trade through contracts or conspiracies, according to the Federal Trade Commission’s (FTC) website.
The first indictment claims that both DaVita and Thiry allegedly made an agreement with SCA to not solicit each other’s senior-level employees between 2012 and 2017.
The second charge accuses DaVita and Thiry of conspiring with another healthcare company and agreeing that the unnamed company would not solicit DaVita’s employees.
The indictment alleges that DaVita and Thiry participated in meetings and conversations with their co-conspirators and instructed other executives and recruiters to not solicit potential employees from each other’s companies.
“These charges show a disturbing pattern of behavior among [healthcare] company executives to conspire to limit the opportunities of workers,” Steven M. D’Antuono, assistant director in charge of the FBI’s Washington field office, said in a DOJ release.
“The FBI is dedicated to working with our partners to hold those accountable who would engage in labor market collusion to the detriment of their employees.”
Both DaVita and Thiry will appear in court on July 20th in Colorado. Thiry faces a maximum of 10 years in prison and $1 million in fines per charge, if convicted. DaVita faces a maximum of $100 million in fines per count. However, the maximum fine could increase to twice the victim’s financial losses or twice the crime’s gain if that amount is greater than the statutory maximum, the release explained.
In 2018, DaVita agreed to pay $270 million to Medicare over alleged billing and coding fraud that resulted in higher Medicare Advantage payments for DaVita.
Optum finalized its acquisition of DaVita in 2019 with the intention of lowering costs and combining its resources to care for 16 million patients.
