Kidney pharmacy company, DaVita Rx, pays $63.7 million to settle fraud claims

by Ben Vernia | December 26th, 2017

On December 14, the Department of Justice announced that Texas-based DaVita Rx had agreed to pay $63.7 million to resolve a whistleblower’s allegations that the company defrauded federal healthcare programs. According to DOJ’s press release:

DaVita Rx LLC, a nationwide pharmacy that specializes in serving patients with severe kidney disease, agreed to pay a total of $63.7 million to resolve False Claims Act allegations relating to improper billing practices and unlawful financial inducements to federal healthcare program beneficiaries, the Justice Department announced today.  DaVita Rx is based in Coppell, Texas.

The settlement resolves allegations that DaVita Rx billed federal healthcare programs 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.  In addition, the settlement also resolves allegations that DaVita paid financial inducements to Federal healthcare program beneficiaries in 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.  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.

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DaVita Rx has agreed to pay a total of $63.7 million to resolve the allegations in its self-disclosures and the whistleblower lawsuit.  DaVita Rx repaid approximately $22.2 million to federal healthcare programs following its self-disclosure and will pay an additional $38.3 million to the United States as part of the settlement agreement.  In addition, $3.2 million has been allocated to cover Medicaid program claims by states that elect to participate in the settlement.  The Medicaid program is jointly funded by the federal and state governments.

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DaVita, Inc. (including its subsidiaries) previously settled False Claims Act allegations in 2014 and 2015. The Government announced that the relators will receive approximately $2.1 million of the federal share of the recovery (approximately 3.5%).



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