DaVita HealthCare Partners Inc., which swung to a fourth-quarter net loss, said Thursday it is setting aside $22.5 million to cover expected damages related to false-claims allegations in its pharmacy business.
DaVita disclosed Thursday that its DaVita Rx subsidiary is under investigation for allegations that the division presented false claims for payment to the government for prescription medications.
DaVita executives said the Denver-based company previously self-reported some discrepancies in DaVita Rx billing dating back to 2010, and there likely is overlap between those disclosures and the civil investigation.
The Civil Investigative Demand from the U.S. Attorney’s Office for the Northern District of Texas covers the time period from Jan. 1, 2006, to the present, DaVita officials said in a filing with the U.S. Securities and Exchange Commission.
The Texas CID is the latest in false-claims allegations handed down against DaVita, which last year paid $495 million to settle a whistle-blower suit that alleged dialysis clinics billed the government for usable medications that were discarded.
DaVita subsequently bolstered its compliance efforts by $25 million to $30 million annually.
During DaVita’s fourth-quarter and full-year earnings release, the provider of kidney dialysis and medical centers reported a fourth-quarter loss of $6 million on revenue of $3.5 billion. In the fourth quarter of 2014, the company made $208 million on sales of $3.3 billion.
For the full year, DaVita reported net income of $269.7 million and revenue of $13.8 billion as compared to $723.1 million and $12.8 billion the year before.
DaVita CEO Kent Thiry in a call with investors expressed optimism for the business, notably the increased investment and leadership changes in the HealthCare Partners business it acquired in 2012. Of the 22 executives heading the HealthCare Partners division, 17 are new, Thiry said.
In the U.S., DaVita is targeting California, Colorado, Florida, Nevada, New Mexico and Washington as key areas for near- and long-term growth, Thiry said.
Internationally, “we underperformed in 2015,” he added, noting that by 2018, the international dialysis business is expected to break even.
Alicia Wallace: 303-954-1939, awallace@denverpost.com or @aliciawallace
