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DaVita Rx hit with $63.7 million DOJ settlement over improper billing and kickback allegations

Pharma giant allegedly billed government payers for medications that were never shipped, or were returned, and paid kickbacks to beneficiaries.

Beth Jones Sanborn, Managing Editor

DaVita Rx, the Coppell, Texas-based pharma giant that serves patients with severe kidney disease, has agreed to pay $63.7 million to resolve allegations relating of improper billing practices and kickbacks to federal healthcare program beneficiaries, the Justice Department announced today. 

Optum acquired DaVita Medical Group in early December of 2017 for nearly $5 billion in a week that also saw CVS announce its plans to buy Aetna for $69 billion.

The DOJ agreement settles allegations that DaVita Rx billed federal healthcare programs for prescription medications that were never shipped, were shipped but subsequently returned, and that did not comply with proof of delivery documentation requirements, refill requests, or patient consent, the DOJ said.

[Also: Running list of notable 2017 healthcare frauds]

The settlement also resolves allegations that DaVita paid kickbacks to Federal healthcare program beneficiaries. Allegations against the company said DaVita Rx accepted manufacturer copayment discount cards instead of collecting copayments from Medicare beneficiaries, regularly wrote off unpaid beneficiary debt, and gave discounts to beneficiaries who paid for their medications by credit card. 

The improper billing and alleged kickbacks specifically were the subject of self-disclosures by DaVita Rx and a subsequently filed whistleblower lawsuit, the DOJ said.

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The $63.7 million DaVita Rx has agreed to pay includes approximately $22.2 million repaid to federal healthcare programs, $38.3 million to the United States as part of the settlement agreement, and $3.2 million allocated to cover state Medicaid program claims.

The whistleblower lawsuit was filed by two former DaVita Rx employees, Patsy Gallian and Monique Jones. They will receive roughly $2.1 million from the federal recovery, as is allowed by law in such lawsuits. The investigation was conducted by HHS-OIG, the Civil Division's Commercial Litigation Branch and the U.S. Attorney's Office for the Northern District of Texas.

A correction: In a previous version of this story, HFN incorrectly identified the company acquired by Optum as being DaVita Rx. Optum acquired DaVita Medical Group.

Twitter: @BethJSanborn

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