California Lawmakers Wage New Battle With Dialysis Industry

Feb 4, 2019

An effort to limit dialysis company profits in California is back.

A new bill from Democratic Assemblymember Jim Wood could limit how much profit dialysis companies make in reimbursement rates after treating patients. Gov. Jerry Brown vetoed a similar bill last year.

Wood says Maryland-based nonprofit American Kidney Fund is taking donations from dialysis providers, then steering patients to private plans. Many dialysis patients are eligible for Medicare, but Wood says large companies such as DaVita and Fresenius want patients in the commercial market so they can reap a higher return on reimbursement rates.

The fund says they don’t push patients toward any plan, and that more than half of premium assistance grants they gave out last year were for patients on some form of Medicare. They are reviewing the bill.

“We are disappointed to see another bill in California that singles out low-income, mostly minority dialysis patients to be targeted for discriminatory health insurance practices,” said LaVarne Burton, the company’s president, in a statement.

Under the bill, companies could still donate to the fund, which could still help people with their premiums. But it would set Medicare reimbursement rates as the benchmark for how much companies could gain back for services, even if the patient is on a private insurance plan.

Wood says he plans to work with Gov. Gavin Newsom to adjust parts of the bill that caused Brown to veto it.

“We know we’re not wrong fundamentally, but we need to figure out a way to thread the needle to make it out,” he said.

The bill would also establish additional rules around relationships between providers and third-parties offering premium assistance.

This isn’t the first time these donations have been questioned. A 2016 New York Times investigation found the fund was resisting giving aid to patients if the clinics where they sought treatment hadn’t donated. The federal government subpoenaed Davita and Fresenius in 2017 about their relationship with the fund.

The bill follows a contentious item on the 2018 ballot that aimed to cap dialysis company profits. The kidney lobby paid more than $110 million to fight the proposition.