DaVita stands to lose $400 million a year in California midterms

Pushed by the Service Employees International Union, the measure applies to rates charged to patients who don’t have federal insurance provided by Medicare or Medicaid. The programs cover treatment for the majority of people on dialysis in the state, often paying a predetermined set fee for treatment. But individual health insurers usually have to negotiate rates with dialysis providers, sometimes paying several times that charged to Medicare.

The ballot proposition would limit the revenue earned, or roughly the rates privately insured patients are charged, for dialysis treatment to 115 percent of the costs to provide the care. Anything above would be put to dialysis providers, which would be forced to give insurers or patients rebates to make up the difference.

Supporters of the proposal say one way the reimbursements could help patients is in the form of lower premiums, Erin Trish, a research professor at the USC Price School of Public Policy, told CNBC.

“Ultimately, the heart of this proposition is kind of rooted in a belief that the private payments are too high,” said Trish, whose research focuses on U.S. health insurance markets. “It’s not fair that the rates are so much higher than Medicare.”

DaVita spokeswoman Alicia Patterson said “Prop 8 will limit patients’ access to life-saving dialysis.” She also pointed to a coalition of 160 medical professionals, clinics and business groups that say it could have far-reaching implications across the state, including clinic closures.

The “No Prop 8” group calls it a dangerous measure that could jeopardize access to dialysis care that patients need to survive.

“California Proposition 8 sets severely low limits on what insurance companies are required to pay for dialysis care,” the coalition says on its website. “These limits do not cover the cost of providing care, forcing many dialysis clinics to cut back services or even close.”

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