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13 August, 2018

Dialysis: DaVita's Exposure to California Third-Party Premium Assistance Bill

The Takeaway:

DaVita (DVA) will face operating income losses of up to $95.5 million per year, or 5.3% of 2017 operating income, if legislation before the California Assembly is signed into law. The legislation, SB 1156, would limit commercial reimbursement rates to the Medicare rate for services provided by operators that have a financial relationship with a third-party charitable contributor to the patient's insurance premiums. The bill is a high priority for its proponents and we expect it will reach a vote by the full Assembly. We assign 45% odds that the Assembly will pass it and 25% odds that Governor Jerry Brown will sign it into law.