On March 28, 2019, Saxena White secured a major victory with an important decision issued by the District of Colorado Court in Peace Officers’ Annuity and Benefit Fund of Georgia et al., v. DaVita Inc. et al., Case No. 1:17-cv-00304-WJM-CBS (D. Colo.). In his order, Judge William J. Martinez denied Defendants’ motion to dismiss in its entirety.
The Amended Complaint alleged that Defendants DaVita Inc., one of the largest dialysis providers in the country, and certain of its executives engaged in a fraudulent scheme to illegally steer dialysis patients away from Medicare and Medicaid and into more lucrative commercial insurance plans for DaVita’s own financial gain, artificially inflating the Company’s stock price in violation of the federal securities laws. In addition to damaging shareholders, DaVita’s disreputable patient steering negatively impacted end-stage renal disease (ESRD) patients in a myriad of ways, including by making it difficult for them to obtain a life-saving kidney transplant. Dialysis does not restore kidney function, but rather manually filters toxins to keep ESRD patients alive longer. The only way to restore kidney function is through a life-saving kidney transplant. The five-year survival rate for ESRD patients on dialysis is 35.8%, with 25% of patients dying within the first year of dialysis treatments. In contrast, the five-year survival rate for ESRD patients who receive a kidney transplant is 85.5%.
The Court determined that “DaVita expressly disclaimed steering and publicly attributed success to other factors, while fully cognizant that it had a policy of directing ESRD patients to private insurance and internal metrics to demonstrate its success in directing patients.” The Court found that the facts alleged in the complaint “give rise to a strong inference that Defendants made statements about steering and the source of Defendants’ financial success with the intent to manipulate, deceive, or defraud, or were reckless because their statements presented a danger of misleading buyers.”
The case is now in the discovery phase.
