The stock of Davita Inc (NYSE:DVA) has been downgraded by a major Wall Street firm on concerns over the relationship of the company with the nonprofit American Kidney Fund. The nonprofit offers subsidized insurance premiums to patients requiring kidney dialysis. According to analysts there is worry over the fact that DaVita has declined to publicly disclose the total number of patients who are offered subsidies by American Kidney Fund.
During a meeting with investors the chief executive officer of DaVita is said to have sidestepped a question posed by an analyst. The analyst wanted to know the amount of revenues that DaVita obtains from patients undergoing dialysis and whose insurance-premiums bills are footed by American Kidney Fund.
Kidney-dialysis providers
This is not the first time that such concerns are being raised against a kidney-dialysis provider. DaVita and other providers have previously been sued over the claims that patients requiring dialysis were discouraged from holding health coverage plans provided by government towards plans offered by private insurance companies which get subsidies from the American Kidney Fund. The latter tend to enjoy higher reimbursement rates and dialysis providers prefer them. In so doing DaVita and other providers have been accused of using this to artificially boost their financial results.
DaVita has consequently offered disclosures on charitable premium assistance in which the kidney care services provider has indicated that under 13% of its dialysis patients in the United States, which is around 25,000 patients, get the support of the American Kidney Fund.
Recertification award
The downgrade comes in the wake of DaVita announcing that its DaVita VillageHealth had received from the NCQA – National Committee for Quality Assurance, a recertification award of three years.
“The NCQA recognition reflects our continued performance in delivering high-quality, integrated care to help manage the unique and complex needs of our patients and achieve the triple aim working together with our partners,” DaVita VillageHealth’s general manager, Todd Ezrine, said.
Development of the NCQA Accreditation standards is done with input from federal and state regulators, researchers as well as other experts.
On Tuesday shares of Davita Inc rose by 0.83% to close the day at $54.32.
