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Home » Medicare’s proposed dialysis cut takes a toll on device makers

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

July 2, 2013 By Arezu Sarvestani

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.

"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."

Kidney care device makers have already faced several rounds of cuts, Thurman noted, calling the new proposal "devastating to patients."

Fresenius reiterated some of the same points, telling MassDevice that the proposal "put patient care at risk."

"We are deeply disappointed in CMS’ proposal," Fresenius spokesperson Jon Stone told us. "We urge Congress and the Administration to act immediately to protect access to the highest quality care for Americans with kidney failure."

Dialysis device makers have butted heads with CMS before. Last year NxStage publicly chastised the federal healthcare program for failing to provide sufficient support for at-home dialysis programs. In July 2012 CMS issued an updated rule for reimbursement of home hemodialysis treatment that wasn’t much of an update at all. CMS maintained the reimbursement status quo, dashing NxStage Medical’s hopes of a more favorable physician payment environment.

The new proposal made no moves on home hemodialysis either, an outcome that Leerink Swann analysts Danielle Antalffy and Robert Marcus called "in line with low expectations." The 9% cuts to in-clinic treatments aren’t likely to affect NxStage positively or negatively, they added in a note to investors. Nevertheless, NXTM shares were down 3.5% to $13.96 this afternoon.

"It’s time for CMS to act on behalf of patients," NxStage North America president Joe Turk said in a statement emailed to MassDevice.com today. "Patients deserve better access to home hemodialysis (HHD) and its life-changing benefits.  Better access can only come when CMS appropriately reimburses for the HHD training services that are provided by nurses to dialysis patients."

Filed Under: Dialysis, Medicare, News Well Tagged With: Centers for Medicare and Medicaid Services (CMS), DaVita Inc., Dialysis, Fresenius, NxStage Medical Inc.

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