Fresenius Medical Care Announces Successful Completion of Legal Matters

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BAD HOMBURG, Germany—Fresenius Medical Care AG & Co. KGaA announced that the United States government’s litigation against its United States subsidiary (the “company”) in connection with “Method II” Medicare reimbursement has successfully concluded with the Department of Justice’s filing yesterday of a stipulation of dismissal. The end of this litigation also concludes the broader investigation begun by the government in St. Louis, Missouri in 2005.

The Department of Justice investigated many areas of the company’s operations under subpoenas issued in St. Louis beginning in April 2005. In July 2007, after two years of investigation, the Department initiated litigation on a single topic of the investigation: that Renal Care Group, which the company had acquired by merger, violated the False Claims Act by maintaining a "Method II" subsidiary.

In 2011, a federal trial court in Tennessee entered judgment against the company for $83 million. In October 2012, however, the United States Court of Appeals reversed and vacated the judgment. The Court of Appeals further ruled against the Department of Justice on several significant issues of law raised by the case, agreeing with the company that it was not unlawful for Renal Care Group to maintain a subsidiary that billed under Method II. The Court of Appeals then remanded the case to the trial court to allow the Department to proceed to trial on remaining, unresolved issues. By its filing yesterday, the Department confirmed that it would not pursue the remand and would litigate no further.

Ben Lipps, chief executive officer of Fresenius Medical Care, commented: “We are pleased to have this lengthy litigation successfully concluded.”

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