January 7, 2017 / 10:48 AM / 3 years ago

Fresenius Medical, DaVita subpoenaed over premium assistance

BERLIN/NEW YORK (Reuters) - German’s Fresenius Medical Care and U.S. rival DaVita Inc said they had both received subpoenas from federal prosecutors investigating their ties with a charity that helps patients pay for kidney dialysis.

The charity, the American Kidney Fund, said it had also been subpoenaed by the U.S. Attorney for the District of Massachusetts.

Both companies and the charity said they were cooperating with the probe, whose existence U.S. Attorney’s office spokeswoman Christina Sterling declined to confirm.

The subpoenas were issued amid growing controversy over a U.S. Department of Health and Human Services rule aimed at preventing dialysis providers from using premium assistance from outside charities to steer patients into Obamacare individual insurance plans instead of Medicare or Medicaid to receive higher payments for medical services.

FMC and DaVita said in separate statements that they had sued on Friday to challenge the rulemaking process and seeking an injunction delaying the rule from taking effect, as scheduled, on Jan. 13. The Kidney Fund said it supported the suit, which was filed in U.S. federal court for the Eastern District of Texas.

Under Obamacare, individual plans offered by the insurers generally pay doctors and other medical groups more than Medicare and Medicaid for their medical services and may cover different drugs and procedures.

In a related case, insurer UnitedHealth Group Inc filed a lawsuit against American Renal Associates Holdings Inc last year that has to do with payments for dialysis through its exchange plans.

FMC described the new HHS rule as a move to end assistance to patients with end-stage renal disease (ESRD) that could have a “material adverse affect” on its business.

DaVita alleged the rule violates federal law and could cause “irreparable harm” to dialysis patients, noting that it was due to take effect days before the inauguration of a new administration.

FMC said the new regulation could put an end to assistance programs that help fund health insurance premiums, with between 700 and 2,000 of its patients potentially affected.

The Kidney Fund said in a statement the rule would relegate “an entire class of disabled individuals who are poor and disproportionately minority to dependence on taxpayer-funded health care — even if they have determined it is not the best choice for them.”

HHS officials could not immediately be reached for comment.

Reporting by Emma Thomasson and Christian Plumb; editing by John Stonestreet and Chizu Nomiyama

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