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DaVita gains in 4th quarter, agrees to settle with federal investigators
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DaVita HealthCare Partners Inc. reported adjusted income for the fourth quarter of 2014 was $212.3 million, or 99 cents per share. Adjusted income for the year totaled $817.6 million, or $3.81 per share. The kidney care segment of the company had a 2013 adjusted operating income of $1.513 billion, CEO Kent Thiry said in an investor conference call.
(DaVita HealthCare Partners expands health plan into Los Angeles, Orange Counties)
DaVita HealthCare Partners'adjusted income for 2013 excluded a loss contingency reserve and a contingent earn-out obligation adjustment. Income including these items was $620.2 million, or $2.89 per share.
Total U.S. dialysis treatments for the fourth quarter of 2013 were 6,106,166, or 76,711 treatments per day, representing a per day increase of 6.3% over the fourth quarter of 2012. Non-acquired treatment growth in the quarter was 4.7% over the fourth quarter of 2012. Normalized non-acquired treatment growth in the quarter was 5.2% over the fourth quarter of 2012.
DaVita settles with federal investigators
The company also reported that it has reached a framework for a settlement with federal investigators in which it will pay $389 million and unwind 11 of its joint ventures with nephrologists. The settlement, still subject to negotiation of specific terms, will resolve the 2010 and 2011 U.S. attorney physician relationship investigations, the company said in an earnings release. A Denver federal grand jury has been investigating the relationship between DaVita and Denver Nephrology, and whether the dialysis company paid kickbacks to the nephrologists in exchange for customers.
(DaVita partners with nephrology practice in Germany)
Chief Financial Officer Garry E. Menzel explained that DaVita would have to buy out or sell to its joint venture partners at fair market value. "In most cases, we would anticipate being the purchaser." Most likely, he said, this will involve 11 transactions containing 28 dialysis centers.
Dialysis clinic closures
Thiry also said that the kidney care segment would be closing some dialysis clinics. "As most of you know, we carry quite a few money-losing centers but there does have to be some limit; and with the breadth and depth of the Medicare cuts, both incurred and contemplated, we simply have no choice in markets where there aren't enough private patients to subsidize the federal government with respect to the Medicare patients."