Dialysis provider DaVita may lose $400M a year in California: 5 things to know

If a ballot measure in California passes in the Nov. 6 election, Dialysis provider DaVita may lose up to $400 million and be forced to close down clinics, according to CNBC.

Here are five things to know:

1. DaVita, based in Colorado, operates 292 dialysis clinics in California. This is more than  half of the chronic dialysis clinics in the state. DaVita reported revenue of more than $2.8 billion in the second quarter of 2018.

2. The measure up for vote, Proposition 8, would cap the amount of revenue dialysis providers in California could earn from commercially insured individuals.

3. Medicare and Medicaid often pay a predetermined fee for dialysis treatment. However, individual health insurers must negotiate rates with dialysis providers. As a result commercial insurers often pay several times the amount charged to federal insurers. The proposition aims to bring down the rates commercial insurers pay to the same or a closer rate to what Medicare and Medicaid pay.

4. Supporters of the proposition argue it is unfair that Medicare pays a lower rate. However, the dialysis giant has paid $66.6 million to lobby against the proposition.

"Prop 8 will limit patients' access to life-saving dialysis," a DaVita spokesperson told CNBC, pointing to a coalition of 160 medical professionals, clinics and business groups that say the measure could result in clinic closures.

5. If the measure passes, DaVita could lose about $400 million a year, according to a senior research analyst at Baird, cited by CNBC.

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