Kidney Dialysis Centers Could See Medicare Payment Reductions

Based on recent government reports, Medicare overpaid an estimated $529 million for anti-anemia drugs used in kidney dialysis treatement for years. As a result, kidney dialysis centers could see a 9.4% reduction in Medicare payments starting in 2014. The Wall Street Journal reports:

Kidney dialysis centers owned by DaVita Healthcare Partners Inc. (DVA) and Fresenius Medical Care AG (FMS, FME.XE) could receive 9.4% less in Medicare payments, starting in 2014, based on new rates proposed by the federal government.

News of the possible rate cuts, which came late Monday, sent shares of DaVita falling 8.4% to $111 in after-hours trading and shares of Fresenius down 3 cents to $35.47. While lower rates were expected from the Centers for Medicare and Medicaid Services, the proposed reductions were higher than some expected.

The proposed rates are open to public comment until Aug. 30, with a final ruling expected later this year.

Based on government reports, Medicare for years has overpaid for the anti-anemia drugs used in the treatment of kidney dialysis patients. One recent estimate said Medicare paid $529 million more than it should have in 2011 for the drugs made by Amgen Inc. (AMGN) and others.

Read the full story here: http://on.wsj.com/1ayEc5m