DaVita changes policy on helping patients secure financial assistance

Nov. 01--DaVita Healthcare Partners Inc. will no longer help certain patients obtain financial aid to pay for health insurance they don't necessarily need.

The Denver-based company, one of the nation's largest dialysis providers, announced Monday that it will "suspend support" for applications to the American Kidney Fund that allowed some dialysis patients, also enrolled in Medicaid, to gain access to private health insurance plans. The American Kidney Fund, a charitable organization, provided the funds that allowed some Medicaid patients to obtain the additional insurance coverage.

The private plans allowed DaVita to be reimbursed at higher rates for the same services. Medicaid and Medicare, government-run insurance programs, pay significantly less for dialysis services than private insurance.

The change is effective immediately, the company said, and comes just before enrollment begins on HealthCare.gov, the health insurance exchanges created by the Affordable Care Act.

The switch will affect about 2,000 patients, or 1 percent of DaVita's total patient population, the company said. The policy change will result in a reduction of the company's annualized operating income of up to $140 million, according to the company's statement. The company's shares jumped by more than 6 percent after the announcement, closing Monday at $58.62.

"We stand ready to work with all stakeholders to preserve the intent of the ACA within a sustainable rate and regulatory structure," Kent Thiry, chairman and CEO of DaVita, said in a statement.

The policy change comes after the American Kidney Fund announced measures of its own to ensured patients would not be "steered" into commercial plans unnecessarily.

Last week, the Rockville, Md.-based nonprofit outlined a new series of steps that they say will protect patients' "autonomy and informed choice" when they seek help from the fund to pay their health insurance premiums.

In a statement provided to the Post-Dispatch on Monday, the nonprofit's CEO said the organization will continue to urge federal regulators from potentially barring patients with end-stage renal disease, or ESRD, from receiving financial aid to pay for insurance.

"Though the vast majority of ESRD patients are well-served by public health insurance options, a small percentage of patients find that they are not, and the ACA has given them an important alternative that should not be taken away," LaVarne Burton said in a statement.

Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities, said DaVita's latest action is a positive step. She said she's troubled by the practice that exposes low-income individuals to "unaffordable out-of-pocket costs."

She said the Centers for Medicare and Medicaid Services should "issue clear requirements" regarding these third-party payments. For example, in this instance, the American Kidney Fund's payment program should have to register with and report to the agency on its activities. And, she said, donors to a payment program like the American Kidney Fund's should not be involved in the assistance program.

In regulatory filings, DaVita has said it contributes to the American Kidney Fund but doesn't specify how much. The fund, in its filings with the Internal Revenue Service, does not list its contributors.

A St. Louis Post-Dispatch investigation examined how DaVita targeted some patients in a campaign to get them to buy insurance they didn't necessarily need. As part of that effort, DaVita employees told patients that the American Kidney Fund would pay their monthly insurance premiums.

Internal company emails, obtained by the Post-Dispatch, described how DaVita encouraged low-income patients with end-stage renal disease to enroll in commercial plans when they were already covered by Medicaid. The internal emails span several months during last year's open enrollment period.

Allegations of so-called "steering" by providers already had become a matter of concern with federal regulators. The Centers for Medicare and Medicaid Services issued a request for comment last summer to obtain more information on how patients were targeted.

Insurance companies have also complained to federal regulators after seeing large spikes in payments to dialysis centers.

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