DaVita pharmacy unit settles U.S. billing probe for $63.7 million

(Reuters) — A pharmacy services unit of DaVita Inc. will pay $63.7 million to resolve allegations it improperly billed federal healthcare programs for medications and paid illegal financial inducements to patients, the U.S. Justice Department said.

The settlement announced on Thursday will resolve an investigation by the Justice Department into DaVita Rx L.L.C., a national pharmacy that specializes in serving kidney disease patients.

The deal resolved claims that DaVita Rx billed government healthcare programs like Medicare and Medicaid for medications that were never shipped, that were later returned or that did not comply with documentation requirements, the department said.

The settlement also resolved claims that Coppell, Texas-based DaVita Rx violated the federal Anti-Kickback Statute by paying unlawful financial inducements to patients covered by federal healthcare programs, the department said.

Those inducements included accepting manufacturer co-payment cards to lower patients' payment responsibilities and writing off debt of people covered by Medicare and Medicaid including for unpaid copays and coinsurance, according to the settlement agreement.

"Improper billing practices and unlawful financial inducements to health program beneficiaries can drive up our nation's health care costs," Acting Assistant Attorney General Chad Readler said in a statement.

DaVita cooperated with the investigation and self-reported some of the potential violations, according to the settlement agreement. Of the $63.7 million, about $22.2 million reflects money DaVita already has repaid the government.

"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 company said in a statement.

The settlement will also resolve claims that were contained in a whistleblower lawsuit filed by two former DaVita Rx employees, Patsy Gallian and Monique Jones.

The lawsuit was filed in 2016 under the False Claims Act, which allows whistleblowers to sue companies on the government's behalf to recover taxpayer money paid out based on fraudulent claims.

If successful, whistleblowers receive a percentage of the recovery. In this case, the Justice Department said Ms. Gallian and Ms. Jones will receive about $2.1 million.

The case is U.S. ex rel. Gallian v. DaVita Rx, L.L.C., U.S. District Court, Northern District of Texas, No. 16-cv-0943.