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MILBERG LLP > Regulators Probe DaVita, Inc. (NYSE: DVA) Over Payments on Infusion Drugs Covered by Medicaid

Regulators Probe DaVita, Inc. (NYSE: DVA) Over Payments on Infusion Drugs Covered by Medicaid

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DaVita, Inc. (“DaVita” or the “Company”), the largest provider of dialysis services, announced in an October 25, 2011, press release that it expects to receive a request for documents, which may include an administrative subpoena from the Office of Inspector General for the U.S. Department of Health and Human Services.   The government probe, which was initiated by the United States Attorney’s office for the Eastern District of New York, is focusing on payments for infusion drugs covered by the Medicaid health program for the poor in New York, according to Reuters.

DaVita’s competitors in New York, which also provide services to Medicaid patients, may also be receiving or have received similar requests for documents, the press release stated.  DaVita said that it plans to cooperate with the government.

On August 3, 2011, DaVita filed a Form 8-K disclosing a grand jury investigation by the U.S. Attorney’s Office for the District of Colorado.   The company stated that the probe was in its preliminary stages and may be related to the investigations being conducted by the Eastern District of Missouri and the Dallas Office of the Inspector General (OIG) relating to possible overuse of Epogen, a drug used to treat anemia. The investigations also include the chain’s relationships with doctors.

Shares of DaVita fell 8.77% on September 29, after Citigroup analyst Gary Taylor lowered his rating on DaVita shares to “Hold” from “Buy” and reduced his price target for the stock to $77 from $89.  Bloomberg reported that Taylor attributed his downgrade to a variety of reasons including a weaker overall stock market, potential payment cuts from Medicare, and the Colorado probe.   Taylor’s report noted that Medicare could cut its payments to dialysis companies by 2% for fiscal 2013 which, as a result, will reduce DaVita’s per-share profit by about 7%.

If you would like more information about this, please fill out the form on the right or contact the following attorney:

Andrei Rado, Esq.
Milberg LLP
One Pennsylvania Plaza, 48th Fl.
New York, NY 10119-0165
Phone number: (800) 320-5081
Email: arado@milberg.com

Milberg LLP has been representing defrauded consumers for more than four decades and serves as lead counsel in federal and state courts throughout the United States.  Please visit the Milberg website for more information about the Firm.

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