DaVita Inc. Accused of Ripping Off Government Programs
The firm’s investigation concerns actions taken by DaVita Inc. fiduciaries between August 5, 2015 and October 21, 2016, which may have harmed the value of DaVita stock. DaVita has been accused of purposefully steering patients into unnecessary private insurance plans in order to maximize profits by using the American Kidney Fund (“AKF”) as a vehicle to facilitate its scheme. As a result, DaVita’s revenues and profits may have been illegally obtained, indicating a lack of effective internal controls over financial reporting. On August 18, 2016, the Centers for Medicare and Medicaid Services requested information from DaVita regarding alleged steering of Medicare and Medicaid beneficiaries into other plans in order for the company to earn higher reimbursement rates. Then, on October 23, 2016, the St. Louis Post published an article that accused DaVita of steering clients to private insurance providers. On this news, DaVita’s stock price fell $2.86 per share, or 4.69%, to close at $58.10 per share on October 24, 2016. On January 6, 2017, DaVita Inc. announced that it had received a subpoena from the U.S. Attorney’s Office for the District of Massachusetts seeking information relating to charitable premium assistance.