2016 in review: Regardless of who steered, the ACA drove in higher revenue

The past 12 months have been busy for the renal care industry ––dialysis patients in ACA health exchanges created some controversy, and a new rule, but also higher profits for providers.

Researchers also pushed further into research and development of an artificial kidney.

Dialysis providers have contended for years that Medicare does not reimburse enough for dialysis treatments, and they must subsidize the low pay by charging private payers more. This issue came to a head this year when United Healthcare filed a suit against American Renal Associates in July, and the Centers for Medicare & Medicaid Services issued a request for information on concerns that dialysis providers may be steering patients into Affordable Care Act individual market plans.

CMS has since issued an interim final rule with new requirements for dialysis providers who help patients seek premium assistance for ACA plans.

Dialysis providers unanimously deny those allegations (American Renal has asked the courts to dismiss the UHC case), but the Affordable Care Act has helped their bottom line. Fresenius Medical Care announced in November that third quarter profit grew 27%. North America revenue increased 10% to $3.3 billion, of which dialysis care revenue contributed $2.5 billion. The company said the growth was driven by increased revenue per treatment and higher volumes of dialysis treatments with commercial payers.

Of course, not all private pay patients are on Marketplace plans, but the ACA has helped. DaVita Kidney Care announced in October that it would suspend support for Medicaid patients seeking premium assistance tied to an Affordable Care Act plan. The change would affect approximately 2,000 patients, or about 1% of DaVita’s total patient population, and cause a reduction in its annualized operating income of up to $140 million.

American Renal Associates announced during its earnings call on Nov. 11 that it would also suspend payments.

The Marketplace plans may, in fact, be offering some dialysis patients better care, particularly Medicaid patients. But to be sure that patients are choosing plans of their own best interest, and not out of the interest of a provider, the American Kidney Fund created new safeguards to protect patients’ autonomy and informed choice when using AKF’s Health Insurance Premium Program to help pay for premiums.

Beginning in 2017, grant applicants will need to demonstrate to AKF why a Marketplace plan is a better option for them personally than Medicare or Medicaid. The AKF is also denying claims, published in a Dec. 25 article in the the New York Times, that it shows favor in approving applications for premium assistance to those dialysis providers who have paid into the AKF’s Health Insurance Premium Program––a violation of the federal agreement that set up the program over 20 years ago.

But with a Republican controlled Congress, and a new president determined to overturn the ACA, this might all eventually become a moot point.

The future is now(ish)

For Chicagoans, and baseball fans, 2016 will be remembered as the year the Cubs finally won the World Series. In addition to breaking a 108-year curse, 2016 also pushed technology further. Cars are driving themselves, scientists are working on neurally controlled prosthetic limbs, and those small computers we call phones are capable of more computing power than NASA had when we first put astronauts on the moon.

So why are we still hooking kidney disease patients up to devices the size of small washing machines? Researchers are working to change that.

Victor Gura, a nephrologist who has developed a wearable artificial kidney, gave a review of his first U.S. trial of the device to a captivated audience at the American Nephrology Nurses Association’s 47th National Symposium in May. The wearable kidney was safe, and walking and even dancing could be done with little side effects. The process of regenerating dialysate needs to be fine-tuned, and CO2 bubble traps related to kinked tubing developed throughout the therapy and need to be fixed.

Vanderbilt University Medical Center nephrologist William H. Fissell IV, MD, and University of California San Francisco bioengineer Shuvo Roy, PhD, announced progress on an implantable artificial kidney. The device uses microchip filters and living kidney cells that will be powered by a patient’s own heart. The duo have been working on the device for more than a decade, and say they have a long list of dialysis patients eager to join a future human trial.

The new ESA in town

Fresenius Medical Care reported in May that it had 120,000 dialysis patients on Roche’s anemia drug Mircera. The dialysis provider says about 155,000 of its 180,000 patients need drug therapy to treat their anemia.

DaVita Inc. CEO Kent Thiry said in February that DaVita Kidney Care is seeking a new partnership for providing erythropoiesis-stimulating agents before the expiration of its contract in 2018. DaVita signed a seven-year contract with Amgen in 2011 to supply DaVita with nearly all of its anemia drugs. The provider spends about $800 million a year on ESAs. -by Rebecca Zumoff