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DaVita to Pay $63.7M to Settle False Claims Act Suit

By John Commins  
   December 15, 2017

The company allegedly paid kickbacks to Medicare and Medicaid beneficiaries, and billed the federal government for prescription drugs that were never shipped.  

DaVita Rx LLC will pay the federal government $63.7 million to resolve whistleblower and self-disclosed allegations that it paid kickbacks to Medicaid and Medicare beneficiaries and improperly billed the federal programs, the Justice Department said.

Coppell, TX-based DaVita Rx, a nationwide pharmacy that specializes in serving patients with kidney disease, said in a statement provided to HealthLeaders Media that it self-disclosed the illegal activity, takes "full ownership" of its misdeeds, "and (will) continue to embrace transparency and rigorous compliance."

According to federal prosecutors, DaVita Rx billed Medicaid and Medicare for prescription medications that were never shipped, that were shipped but subsequently returned, and that did not comply with requirements for documentation of proof of delivery, refill requests, or patient consent.

DOJ said the settlement also resolves allegations that DaVita paid kickbacks to Medicare and Medicaid beneficiaries, a violation of the Anti-Kickback Statute.

"Specifically, DaVita Rx allegedly accepted manufacturer copayment discount cards in lieu of collecting copayments from Medicare beneficiaries, routinely wrote off unpaid beneficiary debt, and extended discounts to beneficiaries who paid for their medications by credit card," DOJ said. "These allegations relating to improper billing and unlawful financial inducements were the subject of self-disclosures by DaVita Rx and a subsequently filed whistleblower lawsuit."

DOJ's Civil Division Acting Assistant Attorney General Chad Readler said the settlement "reflects not only our commitment to protect the integrity of the healthcare system, but also our willingness to work with providers who review their own practices and make appropriate self-disclosures."

DaVita said it is "proud that its team discovered and self-disclosed these issues to the federal government in 2015 and 2016 and cooperated with the government in resolving them."

DaVita Rx repaid $22.2 million to Medicaid and Medicare following its self-disclosure and will pay an additional $38.3 million to the federal government. In addition, $3.2 million has been allocated to cover Medicaid claims by states participating in the settlement.

"The conduct being resolved in this matter presents serious program integrity concerns," said C.J. Porter, special agent in charge for the Office of Inspector General of the Department of Health and Human Services. "DaVita Rx's cooperation in the investigation of this matter was necessary and appropriate to reach this resolution."

John Commins is a senior editor at HealthLeaders.

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