DaVita encouraged some low-income patients to enroll in commercial plans

Oct. 23--Internal emails from DaVita HealthCare Partners Inc. show the Denver-based company targeted some patients in a campaign to get them to buy insurance they didn't necessarily need, saying their monthly premiums would be paid by a nonprofit foundation.

DaVita, one of the nation's largest dialysis providers, with a major presence in St. Louis, had a financial incentive to get certain Medicaid-eligible dialysis patients to enroll in private insurance. Medicaid, the government-run health insurance program for low-income Americans, pays significantly less than traditional commercial insurance for dialysis treatment.

Emily Bremer, a Clayton-based health insurance broker, said she first heard about kidney failure patients being targeted after one of her clients said he was encouraged by a dialysis center employee to enroll in a private insurance plan. Bremer said she was concerned because the plan described as best didn't include her client's current BJC HealthCare doctors and also had other limitations.

Prior to the Affordable Care Act, patients with end-stage renal disease were typically denied commercial insurance because of the high cost of care. Because those patients couldn't get coverage, the federal government decided to allow individuals with failing kidneys to qualify for Medicare -- the health insurance plan for the elderly -- at any age. Some of those patients also may qualify for Medicaid, the taxpayer-funded health care program for some low-income Americans.

In some cases, however, some patients with failing kidneys have not worked long enough to qualify for Medicare even with the grave diagnosis, leaving them eligible only for Medicaid. This was the population DaVita was targeting for commercial coverage, according to the company's emails, which were provided to the Post-Dispatch by an employee who asked not to be identified.

Private insurers can pay as much as $4,000 per treatment, while government plans such as Medicaid or Medicare pay $300, according to a lawsuit filed in federal court in Florida by the nation's largest health insurer UnitedHealthcare against a separate dialysis chain, American Renal Associates. In Missouri, the Medicaid program pays dialysis centers $122.94 for each treatment, which does not include other monthly payments.

Dialysis filters out toxins from the blood, a normal function of healthy kidneys. Typically, patients receive dialysis treatments up to three times per week and each session can last hours.

There were about 662,000 cases of end-stage renal disease in the country at the end of 2013, according to the U.S. Renal Data System, and treatment costs averaged about $89,000 per patient each year, according to data from the Kidney Project at the University of California San Francisco.

Red flags

Sudden spikes in payments to dialysis centers raised red flags for major health insurers, and they complained to the federal government. It was a significant financial hit they were not expecting.

"This is what's causing instability, and it's what's raising prices for everyone," a spokeswoman for America's Health Insurance Plans, an industry group, told the Post-Dispatch.

The effect on the private insurance market, including the exchanges, was obvious to public-policy experts.

"If you suddenly shift these folks into private plans, you're moving cost increases to marketplace plans," said Jack Hoadley, a research professor at Georgetown University's Health Policy Institute.

Bremer, the Clayton insurance agent, agrees.

"I understand the reasoning why different companies would want to manipulate the system," she said. "But now you've basically dumped these catastrophic claims into the pool, and it's very difficult to offset that with young healthy people.

"It's a perfect example of one of the unintended consequences of the (Affordable Care Act)," Bremer said.

DaVita adamantly denies that they pushed any patients toward commercial coverage; rather, they characterize their efforts as providing important patient education.

"DaVita does not steer patients toward any particular insurance option or plan. DaVita educates its patients so that they are able to make informed decisions that are in their best interest," Philipp H. Stephanus, a company senior vice president, said in a statement provided to government officials in September.

A coordinated effort

Based on the company's internal emails, the difference between "steering" and "educating" is a subtle one. Those communications, sent during last year's open enrollment period, outline a systematic approach to "educate" hundreds of area patients -- and thousands across the country -- about individual health plans.

Those emails show that patients were told by DaVita dialysis center employees -- either social workers or insurance counselors -- that the American Kidney Fund would pay their monthly health insurance premiums so they could gain coverage that is usually out of reach financially. The DaVita employees were instrumental in helping patients enroll by helping complete applications for the plans and for the American Kidney Fund's health insurance premium assistance program. The initiative was referred to as the "Medicaid Opportunity" in internal emails.

In regulatory filings, DaVita says it contributes to the American Kidney Fund, but doesn't specify how much. In 2015, the fund provided about $255 million worth of patient assistance to 93,000 kidney failure patients, according to its most recent filing with the Internal Revenue Service.

DaVita's dialysis center employees were given information on which patients to target for the program. From there, they were supposed to engage Medicaid patients in a conversation about new coverage options and the employees' progress was closely tracked.

Some advertising and brochure materials listed talking points for dialysis center employees. In bold large print, a brochure asked Medicaid patients: "What could additional coverage do for you?" The brochure went on to explain that the new coverage would improve access to transplants, to doctors that patients were "unable to see today" and to treatment when traveling out of state.

The brochure advertised the coverage as low to no cost and encouraged patients to reach out to social workers and insurance counselors to learn more.

The brochure boasted that patients may have access to an array of specialists if they opted for commercial coverage. The brochure included short testimonials from unnamed patients and workers, and included the statement: "This insurance is excellent. I haven't been denied anything, and it probably has saved my life."

The internal emails from last fall's open enrollment tally each region's performance. The emails show regions were tracked by how many patients were interested in commercial coverage and the percentage of those that had been talked to by employees about their options.

"Hooray! The Village has completed over 75% of interest conversations, and over 7,200 patients will receive enrollment education on the specific plans available in their market," an email said. (Village is the company's term for itself.)

The goal outlined in the emails was to hit 100 percent of "interest conversations" by late October.

However, "disinterested" patients were also tracked and their cases were reviewed by division vice presidents and regional operational directors, according to the emails.

The emails instructed that division leadership teams should conduct weekly or biweekly calls to discuss "validation" for patients who are not interested in this opportunity.

Anne Bailey, group vice president at DaVita, told the Post-Dispatch, "We had to be super organized and systematic." She explained that employees were instructed to talk to all patients during open enrollment so they could be informed of all their insurance options.

Bailey said of their more than 3,000 patients in Missouri, less than 1 percent -- or fewer than 30 -- enrolled in commercial plans.

Of those that were interested, the company also tracked who had completed the health insurance premium program (HIPP) application with the American Kidney Fund.

Continued communications encouraged employees to "close the gap" between the number of patients with a plan selected and those with an AKF check "that has cleared" to "ensure coverage is not delayed because of payment issues."

U.S. expresses concern

The federal government is concerned about this type of practice. Earlier this year, the government sent out a request for information to gather more information about the practice and its prevalence.

"Enrollment decisions should be made, without influence, by the consumer and based on their individual circumstances and health and financial needs," the letter posted by the Centers for Medicare and Medicaid Services said.

In the letter, CMS warns that patients who are "steered" away from government-run coverage like Medicare and Medicaid could experience a disruption in care, changes in drug benefits, loss of dental care and changes in provider networks.

CMS said it is considering a slew of changes to address these "harms," including imposing financial penalties on individuals and facilities for failing to provide correct coverage information to patients.

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