Davita Inc (NYSE:DVA) Will Benefit From The Lift Of A Charity Ban

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Davita Inc (NYSE:DVA) Will Benefit From The Lift Of A Charity Ban

Congress has put in a request to the Trump administration to revise a 2014 policy, which bars dialysis patients from seeking help from industry-backed charities. Dialysis providers the likes of Fresenius Medical Care AG & Co. (ADR) and Davita Inc (NYSE:DVA) offer much lower rates compared to private insurance. Under the Obama-era rule, dialysis was covered under Medicare or Medicaid.

In its letter to Health and Human Services Secretary Tom Price, Congress cites that a revision of the rule would come in handy even for dialysis companies. However, it also urges patients to ensure they are not influenced by other people’s financial interests.

Industry-funded charities hurt by the ban

According to the lawmakers, the Obama-era policy was discriminative against Americans with rare diseases. They were rejected on the basis of cost-sharing assistance they received from nonprofit organizations, which were banned. Why the government would ban sick people from accepting charity is an open question. Apparently, these charities often also help with drug prescription co-pays, a practice that health insurers did not appreciate.

The charities receive reimbursement from the US government but according to DaVita the amounts are very low and this ends up hurting them financially. Javier Rodriguez, the company’s chief executive officer of kidney care also cites the likelihood of a having a lower number of dialysis patients in the Obamacare market.

He says, “The current practice of many insurers across the country refusing to accept charitable premium assistance is discriminatory and it’s limiting health-care coverage for some the poorest and most vulnerable patients.”

DaVita accused of abusing its kidney dialysis business

The charity operates about 70% of the nation’s 7,000 outpatient centers. However, there are a lot of unanswered questions about the welfare of the half million Americans seeking care from it. It is alleged that due to staffing shortages, Davita workers have to quickly shift between patients, which more often than not results in loads of errors.

Similar concerns have been raised by former employees who points out at unsanitary clinic conditions and inappropriate procedures of disinfecting tools and machinery. The company’s leadership steered by CEO, Ken Thiry has also been questioned. Meanwhile, DaVita’s stock traded at $66.26 witnessing an increase of $1.05 or 1.61%.