Kidney dialysis firm DaVita's pharmacy services unit DaVita Rx will pay $63.7 million to settle allegations that it presented false payment claims to the government for prescription medications.
The settlement also resolves allegations that the pharmacy business provided Medicare beneficiaries with unlawful financial incentives, in violation of the anti-kickback statute, the U.S. Justice Department said Thursday.
According to the Justice Department, DaVita Rx, based in Coppell, Texas, allegedly billed federal healthcare programs for prescription medications that were never shipped, were shipped but returned, and that did not comply with requirements for documentation of proof of delivery, refill requests, or patient consent.
DaVita Rx also allegedly accepted drugmaker copayment discount cards in lieu of collecting copays from Medicare beneficiaries. It regularly wrote off unpaid beneficiary debt, and gave discounts to beneficiaries who paid for their medications by credit card.
"We take full ownership and continue to embrace transparency and rigorous compliance," DaVita said in a statement. "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."
The settlement grew out of an investigation into DaVita Rx's billing practices launched in Feb. 2016 by the U.S. Attorney's Office for the Northern District of Texas. The investigation, which also looked into the company's relationship with drugmakers, explored allegations that DaVita Rx has been presenting false payment claims to the government since 2006.
DaVita Rx previously launched an internal review and self-disclosed some of the issues identified by the Justice Department. It then repaid $22.2 million to federal healthcare programs. It will pay an additional $38.3 million to the U.S. as part of the settlement agreement, as well as $3.2 million to cover Medicaid program claims by states that elect to participate in the settlement, the Justice Department said.
DaVita is no stranger to legal problems. In 2015, DaVita paid a $450 million settlement from a whistle-blower lawsuit. Dr. Alon Vainer, the whistle-blower, alleged that DaVita overbilled Medicare and Medicaid by charging the full amount for drugs that were only partly used.
In Oct. 2014, the company paid $389 million to settle a whistle-blower's allegations that DaVita bribed physicians to steer patients to its dialysis centers with opportunities to profit by buying and selling stakes in clinics.
DaVita's 2016 revenue totaled $14.7 billion and its net income was a little more than $1 billion. The company recently agreed to sell its medical group to UnitedHealth Group's Optum subsidiary for $4.9 billion.
