Oregon officials grill dialysis companies and the American Kidney Fund about hig

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Oregon officials grill dialysis companies and the American Kidney Fund about high costs, transplants
Published: Wednesday, January 04, 2012, 9:20 PM     Updated: Wednesday, January 04, 2012, 9:21 PM
  By Nick Budnick, The Oregonian

With dialysis bills for Oregon Medical Insurance Pool patients surging from $7 million to more than $20 million in the last three years, the OMIP board Wednesday grilled executives from the two largest dialysis companies and the American Kidney Fund over high rates and a policy that discourages kidney transplants.

The public meeting in Wilsonville provided the first forum in which state officials could directly question the nation's leading dialysis companies as well as the nonprofit they largely fund.

The OMIP board members were concerned about the skyrocketing costs, but also about the kidney fund's transplant policy, which cuts off premiums for patients if get a transplant.

Sue Sumpter, a board member, called the policy "exceptionally troubling," saying the patients appear to be "used and exploited."

As a result of the policy, "They are prisoners to dialysis for their rest of their lives," she said. A transplant vastly improves quality of life, relieving patients from the grueling four-hour, three-times-a-week dialysis sessions, and enables them to start working again.

LaVarne Burton, president and CEO of the kidney fund, defended the practice, saying the kidney fund has limited resources and can pay for dialysis premiums, but not for premiums that would pay for a transplant and the drugs and aftercare. She said the nonprofit views dialysis patients as the most needy people it can help.

Board members cited figures showing dialysis companies charge OMIP dialysis patients as much as 15 times what they charge Medicare. Dialysis companies said that's because they lose money on Medicare rates, which are set by federal law. But the high rates also means the program's patients can hit their $2 million OMIP coverage limit in a few years, leaving them without health insurance.

"That rate structure needs to be reexamined as to what the community reasonably can be expected to bear," said Robert Gluckman, a Portland physician who sits on the OMIP board.

The Oregon Medical Insurance Pool covers roughly 12,000 people who can't get insurance anywhere else, largely due to pre-existing conditions. Established in 1990, its goal remains to contain spending by keeping people out of costly emergency rooms.

About 70 people in OMIP get dialysis, and about 50 of them have premiums paid by the Maryland-based kidney fund.

In November The Oregonian reviewed records indicating the kidney fund receives 80 percent of its $220 million budget from the two largest dialysis chains, DaVita, Inc and Fresenius Medical Care. The kidney fund then uses that money to pay dialysis premiums. Dialysis providers are barred by federal anti-kickback law from paying them directly.

The kidney fund pays OMIP's premiums, which are $7,600 per patient per year on average. The state program then pays a dialysis company $300,000 a year on average, according to state records.

Representatives of Fresenius and DaVita,who provide dialysis to more than 90 percent of the Oregon dialysis market, defended their contributions to the kidney fund as legal. They said they were willing to entertain negotiations with OMIP about lower rates or other cost control measures.

"We'd like to have those conversations," said Jean Stevens, a Fresenius regional vice president.

Another OMIP board member, Jared Short, who serves as president of Regence BlueCross BlueShield, told a DaVita representative that OMIP wants rates far closer to those paid by Medicare.

"That's our formal request to you here publicly today. And we'd appreciate a response," Short said.

"I will pass that up the chain, as it were," said John Westover of DaVita.

The OMIP board voted to appoint a subcommittee to discuss polices to rein in costs, including potentially barring the kidney fund from paying premiums for OMIP patients.
The committee will report back in 90 days. Burton, the president of the kidney fund, said the proposal would block the nonprofit from helping OMIP patients and have a devastating impact. She encouraged the board to work with the kidney fund to curb costs, saying, "This is the beginning of a conversation."

-Nick Budnick

http://www.oregonlive.com/health/index.ssf/2012/01/oregon_officials_grill_dialysi.html