Radiology Partners allegedly conspired with kidney care giant DaVita to stifle competition in labor market
Radiology Partners allegedly conspired with kidney care giant DaVita Inc. to stifle competition in the labor market, according to a report published Saturday.
In July 2021, a federal jury returned a two-count indictment charging Denver-based DaVita and its former CEO with violating the antitrust act. They allegedly did so by colluding with execs at three other companies, agreeing not to solicit one another’s employees.
The Department of Justice did not name Rad Partners in its original indictment. However, with the criminal trial kicking off on April 4, the El Segundo, California-based imaging company was revealed as a participant in the alleged conspiracy, The Gazette reported April 9.
In November 2013, Rad Partners CEO Rich Whitney reportedly emailed the former DaVita chief executive Kent Thiry, laying out “ground rules” for hiring away his workers.
“Apparently Kent had heard from others within his organization that people at Rad Partners may have been targeting DaVita employees, and we had at that point already hired a handful of DaVita executives," Whitney testified, according to the Colorado Springs newspaper. “I agreed to not recruit people I believed were not otherwise looking to leave DaVita.”
Whitney — who formerly served as DaVita’s chief financial officer before founding Radiology Partners in 2012 — said he would not pursue his former employers’ workers unless certain conditions were met. Those included if they were actively seeking to leave DaVita or if they told their boss they were interested in a career change. Whitney testified that the two execs never nailed down a firm agreement on the ground rules, which applied to all DaVita employees. However, they decided to honor the “spirit” of them, The Gazette noted.
Rad Partners and its leader have reportedly applied for leniency with the antitrust division, cooperating with the investigation in exchange for avoiding prosecution in the case. Other alleged conspirators included Surgical Care Affiliates (facing its own separate case from the DOJ) and Hazel Health, both also piloted by former DaVita execs at the time.
“These charges show a disturbing pattern of behavior among healthcare company executives to conspire to limit the opportunities of workers,” Assistant Director in Charge Steven M. D’Antuono, of the FBI’s Washington Field Office, said last year.
The case marks the first time a CEO and company have been criminally charged for non-poaching agreements under the 132-year-old Sherman Antitrust Act, The Denver Post reported. The results are expected to reverberate across the country, with Senior Judge R. Brooke labeling the case “a big deal.”
If convicted, Thiry faces a maximum penalty of 10 years in prison and a $1 million fine per count, while his former company faces fines of up to $100 million per count. DaVita attorneys have charged that the agreements were legitimate business transactions and never meant to stifle competition, the Post noted. All told, the company operates 2,815 outpatient dialysis centers across the U.S., serving 203,000 patients.
Read more on the case below.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.