(Reuters) – A medical care unit of DaVita Inc (DVA.N) will pay $270 million to resolve claims it provided inaccurate information about patients that caused Medicare Advantage plans operated by private insurers to obtain inflated payments from the government.
The settlement, which the U.S. Justice Department announced on Monday, will help DaVita tie up a loose end as it moves toward completing its sale of its primary care unit to UnitedHealth Group Inc (UNH.N) as part of a $4.9 billion deal. [nL3N1O63UK]
The settlement related largely to practices that originated with HealthCare Partners, a large California-based independent physician association that Denver-based DaVita acquired in 2012, according to the Justice Department.
The government alleged that HealthCare Partners had instituted practices that resulted in insurers operating Medicare Advantage plans to submit incorrect diagnosis codes for patients to the government.
HealthCare Partners, which is being sold as part of the UnitedHealth deal, did not admit wrongdoing as part of the civil settlement.
DaVita in a statement said the $270 million will be paid out of escrow funds that it required HealthCare Partners’ former owners set aside when DaVita acquired it in 2012.
Reporting by Nate Raymond in Boston; Editing by Rosalba O’Brien and Lisa Shumaker