DaVita settles $450 million Medicare fraud lawsuit
- DaVita has agreed to a $450-million Medicare fraud settlement to resolve allegations that it deliberately wasted medicines in order to receive higher Medicare reimbursements.
- The lawsuit was filed by two DaVita employees who stand to profit by up to $135 million.
- The agreement, which was reached in a U.S. federal court in Atlanta on April 16, is the company's third whistleblower settlement since 2012; all together, the dialysis provider has paid out more then $1 billion.
According to the allegations, DaVita attempted to defraud Medicare by using larger-than-necessary medicine vials and also by unnecessarily spreading medicine dosages across multiple treatments. The case was originally filed with the federal government in 2007, but the government declined to join the lawsuit after two years of investigation. The plaintiffs in this case, Alon Vainer, a nephrologist, and Daniel Barbir, a registered nurse, filed in civil court under the False Claims Act in 2011.
The financial fall-out for DaVita has been difficult. The company had a profit of $183.3 million for Q1 2014, but posted a $110.6 million loss for Q1 2015, which took into account a $298-million after-tax charge for the settlement.
The largest DaVita Healthcare shareholder is Berkshire Hathaway, which owns 17.9% of the company. Shares were only down slightly on the news, and are currently trading at $81.51.