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Dialysis companies would rebate payers excess revenue under proposed California bill
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Legislators in California, where a universal, one-payer health care system is now under consideration, are pushing a bill that would require major dialysis chains in the state to rebate excessive revenue each year to payers.
State Assembly bill 251, introduced earlier this year by Assemblyman Rob Bonta and due for a hearing on July 12 before the Senate Health Committee, would require that a chronic dialysis clinic submit a report to the state Department of Health detailing the total treatment revenue of the clinic, and the percentages of that total treatment revenue the clinic spent on direct patient care services costs, health care quality improvements costs, federal and state taxes, facility license fees, and all other costs.
If those costs total less than 85% of the treatment revenue, the legislation requires that the dialysis companies would issue a rebate and reduction in billed amount to payers.
The bill, if approved, would take effect January 2019.
“Dialysis clinics in California frequently charge private health insurance plans four or more times as much, and sometimes 15 to 20 times as much, as they charge Medicare for the very same dialysis treatment, but do not spend sufficient funds on ensuring quality patient care,” the bill reads. “The disparity in amounts that dialysis clinics charge to Medicare and private health insurance plans does not enhance health outcomes, but it produces substantial profits for dialysis clinics while raising the cost of private health insurance for patients and all Californians.”
The bill says that consolidation of the private dialysis clinic industry has prevented the marketplace from effectively ensuring that the clinics spend sufficient funds on quality patient care. “Two multinational, for-profit companies operate or manage nearly three quarters of the dialysis clinics in California and treat more than 70 percent of dialysis patients nationwide. These companies can largely dictate the quality of patient care provided to the dialysis patients, as well as the pricing of such treatments."
There are currently more than 66,000 dialysis patients and more than 570 licensed chronic dialysis clinics in California.