Healio Special Report: Health Care and Politics
Healio Special Report: Health Care and Politics
September 10, 2019
3 min read

California Senate passes bill that would restrict dialysis profits

You've successfully added to your alerts. You will receive an email when new content is published.

Click Here to Manage Email Alerts

We were unable to process your request. Please try again later. If you continue to have this issue please contact customerservice@slackinc.com.

Despite 52 amendments added to the legislation just last week, the California Senate voted 21-19 on Sept. 9 to accept the changes and approve A.B. 290, a bill aimed at restricting dialysis provider profits in the state and limiting the use of third-party payers, like the American Kidney Fund.

The bill has been reconciled with the House version and is on its way to state Governor Gavin Newsom for approval. A similar bill was vetoed by then-governor Edmond G. “Jerry” Brown Jr. in 2018.

The aim of A.B. 290, introduced by California Assemblyman Jim Wood, D-Santa Rosa, back in January, is to force dialysis providers to charge only Medicare rates to commercial health plans for dialysis treatments. The legislation would also require providers to disclose to health care plans which patients are receiving premium assistance from third-party payers, like the AKF. The AKF operates its Health Insurance Premium Program (HIPP) with funding from dialysis providers to cover health insurance premiums for dialysis patients who qualify. If A.B. 290 becomes law, the AKF said it would have to violate a federal Office of Inspector General requirement that the identities of patients who participate in HIPP and the providers who help fund it remain confidential.

Members of the Senate Appropriations Committee added 52 amendments to the bill on Aug. 30 as part of their approval; the amendments include extending the implementation date to 2022, setting up an arbitration panel to dispute charges for dialysis care and putting in some regulatory safeguards.

However, dialysis providers and the AKF said in statements that the revised legislation is more confusing with the additional amendments and will force the AKF to leave the state.

“A year ago, Governor Brown vetoed a previous version of A.B. 290 and asked stakeholders to develop a solution that would protect patients while addressing the cost of care issue,” LaVarne A. Burton, AKF president and CEO, said in a statement. “The legislature failed to do that and now they are attempting to shift the responsibility to AKF to solve a problem that they have created. With their latest round of revisions — 52 amendments — lawmakers acknowledge what we have said from the beginning: A.B. 290 is a bad bill that hurts patients.”

Burton said the amendments were “hastily constructed and are full of contradictions, complications and risk for patients.” She added, “The bill still has the disclosure requirements that have been at the foundation of our objection to the bill since the beginning ... we are fundamentally opposed to the legislature requiring AKF to disclose the names of the people we help because it violates their right to receive charitable help from a nonprofit with dignity and privacy.”

Kathy Fairbanks, a spokesperson for the Dialysis is Life Support coalition, made up of doctors, hospitals, patients on dialysis and caregivers, along with business and community groups, said, “A.B. 290 is still a bad bill for dialysis patients, even with the amendments. Under A.B. 290, AKF will still have to leave California, putting 3,700 vulnerable, low-income and mostly minority dialysis patients in harm’s way.” The coalition is funded by the dialysis industry.

The coalition said the amendments fail to clarify whether patients would continue to receive their charitable premium assistance from AKF if they needed to switch insurers.

The legislation also does not lower the cost of health care, the group argues. “[There is no] language in the bill mandating insurers to pass any savings to dialysis patients or consumers,” the group said in a statement. “Insurers make more in profits as patients lose their commercial coverage and are forced to enroll in Medicare or MediCal, which may not be the best for the patient. Patients will end up in hospital ERs at a much higher cost than outpatient settings.”

The bill has been supported by Health Access California, the California Labor Federation, Service Employees International Union California, California Association of Health Plans and the Association of California Life and Health Insurance Companies.