In January, Congress ordered the Federal Government to reduce spending: $500 million a year in excessive drug payments are being sent to dialysis clinics throughout the nation. Eight months later, the same members of Congress who implemented these cuts are fighting to reverse them. The dialysis industry, dominated by two companies—DaVita Healthcare Partners of Denver and Fresenius, based in Germany—have both seen their bottom lines improve since 2011, when the federal government first started making excessive payments. Until 2011, the government paid clinics for each dosage of an anti-anemia drug, Epogen which led to government concerns about excessive usage. These concerns ultimately lead Congress to convert to a flat fee for dialysis. The single bundled payment for each patient visit was created in an effort to eliminate the incentive of prescribing too many doses of Epogen, which research showed to be harmful to patients. Congress noticed the use of the drug plunged, while DaVita and Fresenius earnings margins rose immensely, prompting it to order a cut in the drug fee.
The proposed cut of $29.52 per patient visit from the previously planned $246 reimbursement for next year would affect many of the more than 5,000 dialysis clinics in the United States.
For years, end-stage kidney disease has been covered by the federal government, costing more than $32.9 billion a year — mainly for dialysis services. Approximately 90 percent of dialysis patients rely on some amount of federal assistance. Officials at Health and Human Services will issue a final rule by November 1st.
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