Federal court temporarily halts California dialysis profits law
A federal court in California has granted a preliminary injunction to prevent Assembly Bill 290, which is aimed at limiting dialysis provider profits and premium assistance, from taking effect.
“Considering both the likelihood that A.B. 290 will abridge plaintiffs’ constitutional rights and the extreme medical risks it poses to thousands of [end-stage renal disease] patients, the court finds it obvious that the public interest favors a preliminary injunction, and that the balance of the hardships tilts strongly in plaintiffs’ favor,” the court said in its ruling released Dec. 30.
“I am extremely disappointed to read the court’s order granting the plaintiff’s motions for a preliminary injunction of A.B. 290,” California Assemblyman Jim Wood, D-Santa Rosa, said in an email statement to Healio/Nephrology. Wood is the author of the legislation that was signed by California Governor Gavin Newsom on Oct. 13. 2019.
“It has been my goal to ensure that every Californian has health care, and to do so requires our efforts to contain increasing health care costs that are making coverage unaffordable for many. This injunction is consequential because it emboldens the corporate duopoly of Fresenius and DaVita to continue to gouge the health care system in order to increase their profits,” Wood said.
The court order also provides a reprieve for the American Kidney Fund. The organization had sent letters to patients on dialysis in California who receive premium assistance through its Health Insurance Premium Program, which is funded by dialysis providers, that it would no longer cover those premiums starting Jan. 1, 2020. A.B. 290 required the AKF reveal the names of patients and the providers who were covering the premiums.
The legislation would have restricted payment to dialysis providers by commercial health plans for patient care to no more that the current Medicare rate. Dialysis providers Fresenius Medical Care and DaVita Inc. had spent more than $100 million during the last 2 years trying to defeat the bill, along with a ballot measure in November 2018. That measure was defeated by California voters.
“We are pleased that the court has issued an injunction enjoining A.B. 290, which will enable our patients, who need charitable assistance to afford their health insurance premium, to continue to access such resources,” Brad Puffer, spokesperson for Fresenius Medical Care North America, said in a statement emailed to Healio/Nephrology. “Our focus remains on providing the highest quality of care for our patients and we will continue to advance those efforts despite work by the California legislature to restrict financial assistance.”
“Today, the American Kidney Fund (AKF) joins 3,700 low-income Californians living with kidney failure in applauding the decision by Judge David Carter in the U.S. District Court for the Central District of California to grant an emergency injunction preventing A.B. 290 from becoming law,” LaVarne A. Burton, president and CEO of the American Kidney Fund, said in a statement. “This is important news for patients with kidney failure who depend upon AKF to ensure access to the health care that they must have to survive.
“Because this injunction prevents A.B. 290 from becoming law, pending the outcome of a trial, AKF can continue to serve California’s low-income dialysis and transplant patients who depend on AKF for charitable premium assistance. We will also immediately re-open the program to new grant applicants who qualify for assistance.”
In November, the AKF, Dialysis Patient Citizens (DPC) and two patient plaintiffs filed a suit in federal court in California asserting numerous constitutional challenges against A.B. 290. Fresenius, DaVita and U.S. Renal Care have separately filed suit in the same court, also challenging the constitutionality of A.B. 290.
“On behalf of our patients, we are pleased that the court took the important step of putting a hold on the implementation of Assembly Bill 290, a law that threatens to harm nearly 4,000 low-income, primarily minority Californians on dialysis,” DaVita Kidney Care said in a statement. “While this is a temporary victory for California dialysis patients, we will continue to advocate on their behalf and remain focused on providing high-quality care.” The California Medical Association and the California State Conference of the NAACP filed amicus briefs in support of enjoining A.B. 290 as unconstitutional.
“We are truly grateful to the court for grating so many vulnerable dialysis patients this temporary reprieve,” the CEO of DPC, Hrant Jamgochian, JD, LLM, said in the release. “We know that A.B. 290 still threatens more than 3,700 of the poorest and sickest dialysis patients in California. Health insurance coverage is absolutely critical for patients to continue their dialysis treatments, and if they can’t maintain it, their lives are literally on the line. That is why DPC joined as a plaintiff in this critical litigation, and why we hope this repugnant law never takes effect.” – by Mark E. Neumann
Disclosures: Puffer and Wood report no relevant financial disclosures.