HealthCare Partners Holdings, which does business as DaVita Medical Holdings, will pay $270 million to settle False Claims Act violations and a whistle-blower lawsuit, according to the Department of Justice.
HealthCare Partners is the large California-based independent physician group that El Segundo, Calif.-based DaVita bought in 2012. In a voluntary disclosure to the federal government, DaVita said HealthCare Partners' practices caused private Medicare Advantage plans it contracted with to submit incorrect diagnosis codes to CMS. This led to inflated Medicare payments shared between DaVita and HealthCare Partners, according to the Justice Department.
The $270 million settlement resolves these violations. It also settles allegations made by whistle-blower James Swoben, a former employee of a private Medicare Advantage plan doing business with DaVita. Mr. Swoben alleged HealthCare Partners engaged in "one-way" chart reviews leading to increased Medicare payments. Under the qui tam provision of the False Claims Act, Mr. Swoben will receive $10.2 million of the settlement.