Skip to main content
Sister Publication Links
  • ESG: THE NEW IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Digital Health
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Supply Chain
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE +
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Providers
October 01, 2018 01:00 AM

Calif. governor vetoes dialysis reimbursement cap

Susannah Luthi
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    In a massive win for dialysis giants DaVita and Fresenius Medical Care, California Gov. Jerry Brown on Sunday vetoed a measure that would have slashed and capped their commercial insurance reimbursements.

    DaVita's and Fresenius' stocks tumbled in late August after the California Legislature approved SB 1156, which would have capped insurer payments at Medicare if dialysis industry-tied charities and third-party organizations subsidized the premiums on behalf of patients. Financial analysts had predicted the measure might have driven DaVita out of California entirely, a $300 million loss to the company. The state represents a massive and fast-growing market for commercial dialysis.

    In his veto message, Brown acknowledged the complexity of the issue, noting the "questionable practice of financially interested entities providing premium assistance payments for the purposes of obtaining higher fees for medical services."

    However, the governor found SB 1156 broad enough to allow insurers to cherry-pick patients, and he urged stakeholders to cohere around narrower language.

    Brown's veto followed intense lobbying from the industry. DaVita and the not-for-profit American Kidney Fund issued statements praising Brown's move.

    "We are deeply relieved and want to thank Governor Brown for protecting dialysis patients and vetoing SB 1156, a bill that would have significantly hurt dialysis patients throughout the state," said Javier Rodriguez, CEO of DaVita Kidney Care.

    Like Rodriguez, LaVarne A. Burton—president and CEO of the American Kidney Fund—blasted insurers and a major labor group for pushing the bill. The fund helps pay for individual market premiums for dialysis patients who are otherwise covered by Medicare and Medicaid. DaVita and Fresenius are major contributors to the charity and insurers argue that the two companies game the system for their own financial benefit by leveraging the Affordable Care Act's guaranteed-issue provision and steering patients into plans that will yield high profits.

    Burton said that the California measure "was introduced and passed through the Legislature at the behest of health insurers and" the labor union Service Employees International Union.

    "For 21 years, low-income California kidney patients have turned to AKF and our federally approved health insurance premium program for help with the devastating financial impacts that accompany this disease," Burton said.

    The California legislation was the health insurance industry's biggest push yet against the dialysis industry, driven by Blue Cross and Blue Shield of California, but Brown's veto isn't likely to end fighting on the increasingly contentious issue.

    In November, state voters will weigh in on a ballot initiative backed by the SEIU that also aims to cap dialysis reimbursements at 115% of Medicare. The Sacramento Bee has reported that the two warring sides have spent more than $40 million in the advertising fight.

    California is a hot spot because it represents such a large market share for commercial dialysis, but the third-party payment issue has roiled other states as well.

    In 2017, Washington's insurance commissioner filed a cease-and-desist order against DaVita after Premera Blue Cross complained that despite frequent attempts to negotiate with DaVita and Fresenius the companies billed at 1,800% and 2,200% of Medicare in regions where they owned the only dialysis facilities. Sometimes, Premera said, the charges exceeded 3,100% of Medicare.

    In the order, Insurance Commissioner Mike Kreidler wrote that his staff had obtained a PowerPoint presentation that directed DaVita financial and insurance counselors and social workers to steer Medicaid-eligible patients to commercial insurance, telling them that commercial insurance would give them access to "better services."

    For this year's elections, the SEIU failed to secure Arizona and Ohio ballot initiatives similar to the California effort.

    Correction: An earlier version of this story incorrectly stated that SB 1156 would have capped reimbursement at 115% of Medicare if premiums were subsidized by industry-tied third party payments. The bill would have capped reimbursement at Medicare or less. The story has been updated.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Screen Shot 2023-02-01 at 4.02.50 PM.png
    Cancer Treatment Centers of America completes City of Hope rebrand
    rural-health1.png
    Transgender patients in rural states struggle to find doctors
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Digital Health
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Supply Chain
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE +
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing