DaVita Reaches $270 Million Settlement For Medicare Fraud Claims

DENVER, CO – A branch of Denver-based DaVita, Inc., has reached a $270 million settlement with the U.S. Department of Justice for allegedly providing false information to Medicare that inflated payments.

During an investigation, DaVita voluntarily disclosed to the government an upcoding scheme devised by HealthCare Partners, a large California-based company that DaVita acquired in 2012. The company submitted incorrect diagnosis billing codes to Medicare which inflated reimbursement payments shared by DaVita and HealthCare Partners, the Department of Justice said Monday.

For example, HealthCare Partners gave doctors improper medical codes, telling them to use an improper diagnosis code for a particular spinal condition that yielded increased reimbursement from Medicaid, the U.S. Attorney's Office said.

A whistleblower at a company doing business with HealthCare Partners alleged that the company "scoured its patients’ medical records for diagnoses its providers may have failed to record," submitting the "missed" diagnosis codes to Medicare, while ignoring inaccurate codes that would result in refunds to Medicare.

“This settlement demonstrates our tireless commitment to rooting out fraud that drains too many taxpayer dollars from public health programs like Medicare,” said United States Attorney Nick Hanna. “This case involved illegal conduct in which patients’ medical conditions were improperly reported and were not corrected after further review – all for the purpose of boosting the bottom line. We will continue to pursue and hold accountable any entity that seeks to illegally increase revenue at the expense of the Medicare Advantage so that the program may continue to remain viable for all who need it.”

DaVita has been hit recently with a number of judicial rulings, including a $383.5 million wrongful death ruling in June on behalf of patients who died from a dialysis drug and a $63.7 million settlement with the U.S. DOJ in December, 2017 for claims of illegal billing kickbacks.

DaVita admitted no wrongdoing in the HealthCare Partners case and said the company would pay the settlement with funds from an escrow account it required the California-based company to set up. DaVita is in the process of spinning off HealthCare Partners, renamed "DaVita Medical Holdings LLC" for $4.9 million, the Denver Post reported in December.

“We will pursue those who undermine the integrity of the Medicare program and the data it relies upon," said Joseph Hunt of the Department of Justice’s Civil Division in a statement Monday."This also illustrates that the Department encourages and incentivizes health care organizations to make voluntary disclosures to the government when they identify false claims."

Whistleblower James Swoben, a former employee of a company that did business with DaVita, will receive $10,199,100 from the settlement under the qui tam provisions of the Federal False Claims Act.

Image via Shutterstock

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