Caremark International continued to comb out ongoing legal tangles last week, saying it will pay $42.3 million to resolve litigation with several private payers.
In total, the company will pay more than $200 million related to the federal agreement it reached last June.
"At issue were good-faith business disputes," said Sally Benjamin Young, a company spokeswoman. "They do not relate to current businesses or current contracts." Caremark said the settlement, which resolves disputes dating back to 1986, is not an admission of wrongdoing.
Unrelated to the settlement, Caremark also completed the previously announced sale of its nephrology business. Total Renal Care Holdings, a Torrance, Calif.-based provider of dialysis services, acquired Caremark's 32 dialysis centers for $49 million. The unit had 1995 revenues of $46.8 million.
The recent payer agreements stemmed from last year's $161 million federal settlement, the result of a four-year physician kickback and fraud investigation (June 19, 1995, p. 6). At that time, Caremark settled charges that it had defrauded Medicare and Medicaid by making improper payments to physicians in exchange for referrals.
The company sold its home infusion unit, the target of that probe, to Denver-based Coram Healthcare Corp. last April.
Northbrook, Ill.-based Caremark will record an after-tax charge of $65.6 million in the first quarter to cover the March 19 settlement and related expenses.
Caremark wouldn't disclose the specific payers, which had arrangements with the businesses involved in the June 1995 settlement. Young said Caremark will keep contracts with those payers relating to the company's continuing operations.