A pharmacy services unit of the Denver-based dialysis provider DaVita Inc. will pay $63.7 million to resolve allegations it improperly billed federal health care programs and paid illegal financial inducements to patients, the U.S. Department of Justice reported Thursday.
The settlement resolves an investigation by the U.S. Department of Justice into the practices by DaVita Rx LLC, a pharmacy services unit that specializes in serving patients with severe kidney disease.
The Coppel, Texas-based pharmacy provider was accused of billing federal health care programs such as Medicare and Medicaid for medications that were never delivered or had been returned unused, or for medications that did not comply with documentation requirements.
The provider also allegedly violated the federal anti-kickback statute by paying unlawful financial inducements to patients. The inducements included writing off unpaid beneficiary debt and extending discounts to beneficiaries who paid for their medications by credit card, according to the U.S. Department of Justice. The company also allegedly allowed patients to use manufacturer co-payment discount cards.
The justice department said DaVita Rx had self-disclosed the allegations related to improper billing and unlawful financial inducements, which were then later the subject of a whistle-blower lawsuit.
“DaVita 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,” said Skip Thurman, a spokesman for the company.
The justice department said the whistle-blower lawsuit had been filed by two former DaVita Rx employees, Patsy Gallian and Monique Jones. Such whistle-blower claims permit private parties to sue on behalf of the government when they discover evidence of false claims for government funds. Those suing are entitled to a percentage of the recovery made by the government due to the litigation. The department said the two former employees of the pharmacy would receive about $2.1 million from the federal recovery.
DaVita shares shed $2.27, or 3.2 percent, to close at $69.03 on Thursday.
The company and its subsidiaries have settled other legal claims. DaVita HealthCare Partners agreed to pay up to $495 million in 2015 to settle a whistle-blower lawsuit accusing it of defrauding the federal Medicare program. In 2014, it agreed to pay $389 million to the federal government to settle a criminal and civil anti-kickback investigation into transactions with doctors.
DaVita settled another whistle-blower lawsuit in 2012, agreeing to pay $55 million over allegations of drug overuse while denying any wrongdoing.