Corporate News Blog - DaVita Divulges Information Regarding Charitable Premium Assistance
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LONDON, UK / ACCESSWIRE / October 12, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for DaVita Inc. (NYSE: DVA), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=DVA. The Company's division DaVita Kidney Care announced on October 10, 2017, information regarding the charitable premium assistance provided to dialysis patients in US. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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DaVita's Stand on the Charitable Premium Assistance
DaVita believes that the Charitable Premium Assistance provided to dialysis patients across the US has helped many patients and has been in place for many decades. The assistance allows patients who are unable to work full time due to the medical condition, encourages them to continue to pay for their health insurance premiums at a time when they need it most. The assistance is offered to patients irrespective of the healthcare plan or the dialysis service provider. The Company feels that charitable assistance has been available to patients with other high-cost, chronic diseases as well.
The Details of the charitable premium assistance
According to DaVita, less than 13%, or approximately 25,000 of its patients, receive assistance from the American Kidney Fund. Out of these nearly 1,800 patients receive assistance for the individual coverage (i.e. both on-exchange – Obamacare - and off-exchange plans). The loss of individual coverage for some or all the remaining patients would have a direct impact on the Company's annual operating income to the tune of $45 million to $90 million.
There are nearly 4,000 patients with commercial group coverage that includes employer group plans and COBRA plans etc. and are receiving charitable premium assistance. These patients account for approximately $450 million of the Company's expected annual operating income.
The remaining 80%, or approximately 19,000 of its patients, have government coverage, under plans like Medicare Part B and Medicare Supplemental Plans and receive the charitable premium assistance. DaVita claims that the average reimbursement per treatment for these patients is at or below DaVita's average cost per treatment. The Company believes that if the charitable premium assistance is not provided to these patients, many of them would be forced to move to state Medicaid programs or remain uninsured.
DaVita believes that the charitable assistance program would continue as it benefits patients. If the program is stopped it would put a strain on the private insurers, who would have to cover more patients thereby pushing the cost of health insurance. The ending of the charitable assistance would also impact the existence of many dialysis centers. The Company feels that government should change its policies and consider the extension of the 30-month Medicare coordination period, limiting or delaying eligibility for Medicare coverage, subsidizing COBRA coverage, and raising the Medicare reimbursement rate. Meanwhile, the Company has assured that it would work with the patient advocacy groups and other providers and continue to provide its services and support patient choice, non-discrimination, continuity of coverage, and access to care to its patients.
Backdrop
In January 2017 DaVita Inc. and Fresenius Medical Care were subpoenaed by the US Attorney's Office in Boston questioning the arrangement wherein the charitable donations by the Companies funded the dialysis treatment for patients. The Companies countersued the government for changing a rule that impacted the patient insurance coverage. The inquiry was a result of an article published on December 25, 2016, in the New York Times about the charitable institution - American Kidney Fund which helped pay the costly insurance premiums for dialysis patients through a special program. The report alleged that the Kidney Fund discouraged clinics which have not donated money to the charitable institution from signing up patients for financial assistance. The practice was followed irrespective of its commitment to the US Department of Health and Human Services to not offer preferential treatment to any patient. The interesting part is that both DaVita and Fresenius are major contributors to the Kidney Fund. The Kidney Fund had denied the allegations.
In the US, government-run programs, Medicare or Medicaid, cover medical costs for patients with limited income and resources. They also cover costs for medical care for patients with end-stage kidney disease who need dialysis. Under these programs the government typically reimbursed the cost of dialysis to companies which provide these services. The government inquiry comes after claims by patients that the private companies providing dialysis services would push patients away from government health insurance schemes and encourage them into buying private health insurance. The costs of the patients would be subsidized by charities like American Kidney Fund under the Charitable Premium Assistance program. The American Kidney Fund would reimburse these companies at a higher rate than the government which helped them in inflating their financial performance.
The current information provided by DaVita is the Company's point of view on the matter.
About DaVita Inc.
Denver, Colorado-based DaVita was founded in 1994 and was previously known as DaVita HealthCare Partners Inc. It is the parent Company of DaVita Kidney Care and DaVita Medical Group. DaVita Kidney Care is a leading provider of kidney care in the US, delivering dialysis services to patients with chronic kidney failure and end-stage renal disease. DaVita Medical Group is a leading independent medical group that operates and manages medical groups and affiliated physician networks in California, Colorado, Florida, Nevada, New Mexico, Pennsylvania, and Washington.
DaVita Kidney Care strives to improve patients' quality of life by innovating clinical care, and by offering integrated treatment plans, personalized care teams, and convenient health-management services. The unit has 2,445 outpatient dialysis centers in the US that caters to approximately 194,600 patients as on June 30, 2017. DaVita Kidney Care supports numerous programs dedicated to creating positive, sustainable change in communities around the world.
Last Close Stock Review
At the close of trading session on Wednesday, October 11, 2017, DaVita's stock price rose slightly by 0.44% to end the day at $54.56. A total volume of 4.32 million shares were exchanged during the session, which was above the 3-month average volume of 1.72 million shares. The Company's shares are trading at a PE ratio of 8.38. At Wednesday's closing price, the stock's net capitalization stands at $10.35 billion.
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