Medicare's proposed dialysis cut takes a toll on device makers

July 2, 2013 by Arezu Sarvestani

Medical device makers DaVita and Fresenius suffer Wall Street losses amid Medicare's proposal to cut about 9% from dialysis reimbursements.

Updated July 2, 2013, at 3:45 p.m. with comment from NxStage Medical.

Updated July 2, 2013, at 5 p.m. with comment from Fresenius.

healthcare and spending

Dialysis technology makers slid hard today after the Center for Medicare & Medicaid Services proposed a reimbursement decrease of more than 9% for 2014.

As of about 2:45 p.m. DaVita Inc. (NYSE:DVA) was down 5.8% to $114.16 and Fresenius (NYSE:FMS) was down 9.8% to $32.03.

The cuts, part of a new federal budget agreement designed in part to stem over-spending on certain drugs, also proposed a 9.4% cut to reimbursements for dialysis. The budget proposal will undergo a period of public comment and review before it's slated to take effect.

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"In this rule CMS has focused narrowly on 1 component of the bundle, drug utilization, while ignoring broader components of the payment system and advances in quality outcomes for patients," DaVita spokesman Skip Thurman told MassDevice in an emailed statement. "The proposed cuts may ultimately threaten access to one of America's sickest patient populations."