Health company to pay $270M over improper billing practices

A health care company has agreed to pay $270 million to resolve allegations it provided inaccurate information to Medicare, federal prosecutors said Monday.

DaVita Medical Holdings admitted to practices that caused incorrect diagnosis codes to be submitted in order to obtain inflated payments, according to the U.S. Justice Department.

California-based HealthCare Partners, which DaVita acquired in 2012, shared the overpayments with its parent company, prosecutors said.

In one instance, HealthCare Partners sent out improper guidance advising its physicians to use an improper diagnosis code for a particular spinal condition that yielded increased reimbursement.

The settlement also resolves allegations made by a whistleblower that HealthCare Partners engaged in so-called "one-way" chart reviews in which it scoured its patients' medical records for diagnoses its providers may have failed to record. The company then submitted these "missed" diagnoses to be used in obtaining increased Medicare payments, prosecutors said.

At the same time, officials said, the firm ignored inaccurate diagnosis codes that should have been deleted and that would have decreased Medicare reimbursement.

Colorado-based DaVita, one of the largest dialysis and kidney care providers in the U.S., did not admit wrongdoing. "The settlement announced today reflects close cooperation with the government to address practices largely originating with HealthCare Partners," DaVita said in a statement.

The settlement will be paid with escrow funds that DaVita required be set aside by the former owners of HealthCare Partners in 2012 during its acquisition, the statement said.