A federal judge levied more than $19.4 million in damages against Renal Care Group, a Fresenius Medical Care subsidiary, for falsely billing the Medicare system from 1999 to 2005.

Fresenius, which has its North American headquarters in Waltham, Mass., acquired Nashville-based Renal Care Group for $3.5 billion in 2005. RCG provided dialysis services from more than 425 clinics.

Judge William Haynes of the U.S. District Court for Middle Tennessee awarded the damages, plus interest, to the U.S. government in a whistleblower lawsuit filed in 2005. The suit accused RCG of of operating a subsidiary, Renal Care Group Supply Co., that submitted false Medicare claims for home dialysis equipment and support services. Under Medicare regulations, only independent supply firms can bill the agency for dialysis supplies and services; supply houses that are affiliated with dialysis clinics can’t bill Medicare. The lawsuit accused RCG of setting up a sham billing company to skirt that rule and of forcing patients to use RCG supplies.

"Even after RCG employees raised concerns and industry competitors closed their supply companies, RCG kept RCGSC open because of the illicit revenue it created," according to a U.S. Dept. of Justice press release. "Renal Care Group failed to heed the advice of the company’s lawyers when operating the supply company, and discussed an internal audit of the supply company that found that one hundred percent of the company’s files were missing information that Medicare required for billing."

Bad Homburg, Germany-based Fresenius posted net income of $891 million on sales of $11.25 billion last year.