Author Topic: DVA – DaVita HealthCare Partners  (Read 76333 times)

MrB

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Re: DVA – DaVita HealthCare Partners
« Reply #310 on: October 11, 2017, 10:17:06 AM »
Just out of interest. Can someone look on Interactive Brokers what the cost to borrow on DVA is please?


frankhkii

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Re: DVA – DaVita HealthCare Partners
« Reply #311 on: October 11, 2017, 10:59:19 AM »
Just out of interest. Can someone look on Interactive Brokers what the cost to borrow on DVA is please?

I see a current "fee rate" of 0.25% and a "Rebate rate" of 0.91%. It was interesting that Chanos decided to not mention DVA at Grants yesterday and only briefly mentioned dialysis in passing (he pitched short UHS, ESRX, LPNT, and THC). It seems he's short a large basket of healthcare companies...

Is there any timeline you can point to for the injunction? I see FMC was quoted as saying it is "indefinite in duration" as long as the court does not change it. Additionally, when and how does the rule actually get overturned? Thanks.

 
« Last Edit: October 11, 2017, 11:11:03 AM by frankhkii »

rb

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Re: DVA – DaVita HealthCare Partners
« Reply #312 on: October 11, 2017, 11:50:00 AM »

I see a current "fee rate" of 0.25% and a "Rebate rate" of 0.91%. It was interesting that Chanos decided to not mention DVA at Grants yesterday and only briefly mentioned dialysis in passing (he pitched short UHS, ESRX, LPNT, and THC). It seems he's short a large basket of healthcare companies...
Do you have a link for yesterday's Grants or Chanos's thing?

sleepydragon

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Re: DVA – DaVita HealthCare Partners
« Reply #313 on: October 11, 2017, 03:29:26 PM »
GS UK team:

Fresenius Medical Care/dialysis: Yesterday’s conversations were dominated by the ongoing “charitable premium assistance” issue at FMC and other dialysis
providers. For a fuller description of steering and CPA – see here). I don’t think we learned anything new yesterday – but the debate around charitable assistance continues. Broadly there are three groups of patients who have received charitable premium assistance (CPA)
1. those who are eligible for Medicaid (or Medicare) but purchase commercial healthcare insurance which is funded by charitable assistance (ie steered
patients) – we have previously quantified this impact as a $132mn headwind for FME. This group is highly likely to decline over time
2. Patients who are insured on an employer sponsored plan, or COBRA (unemployment insurance) but cannot afford co-pays and seek financial help (eg
from the American Kidney Fund – AKF).
3. People insured by Medicare but cannot afford co-pays

Yesterday’s conversations related mostly to the second group, and despite yesterday’s concerns, we see limited risk to the charitable assistance for this group.
For FME, Charitable Assitance is likely to remain an overhang, with limited visibility on full resolution. CMS are expected to issue a rule relating to the first group (Medicaid eligible, steering patients) by year end, and an ongoing DoJ investigation into the wider charitable premium issue may provide clarity on groups 2 and 3 – but this CPA issue may dominate the narrative on dialysis/FMC for some time – we are Buy on FME. Our 12-month price target of €97 assumes FMC trades at 11.5x 2018E EV/EBITDA. Key risks to our view and price target include reimbursement headwinds, wage inflation, commercial mix changes, corporate activity, and US$ moves. Last close: €81.01.

MrB

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Re: DVA – DaVita HealthCare Partners
« Reply #314 on: October 11, 2017, 10:43:24 PM »
GS UK team:

Fresenius Medical Care/dialysis: Yesterday’s conversations were dominated by the ongoing “charitable premium assistance” issue at FMC and other dialysis
providers. For a fuller description of steering and CPA – see here). I don’t think we learned anything new yesterday – but the debate around charitable assistance continues. Broadly there are three groups of patients who have received charitable premium assistance (CPA)
1. those who are eligible for Medicaid (or Medicare) but purchase commercial healthcare insurance which is funded by charitable assistance (ie steered
patients) – we have previously quantified this impact as a $132mn headwind for FME. This group is highly likely to decline over time
2. Patients who are insured on an employer sponsored plan, or COBRA (unemployment insurance) but cannot afford co-pays and seek financial help (eg
from the American Kidney Fund – AKF).
3. People insured by Medicare but cannot afford co-pays

Yesterday’s conversations related mostly to the second group, and despite yesterday’s concerns, we see limited risk to the charitable assistance for this group.
For FME, Charitable Assitance is likely to remain an overhang, with limited visibility on full resolution. CMS are expected to issue a rule relating to the first group (Medicaid eligible, steering patients) by year end, and an ongoing DoJ investigation into the wider charitable premium issue may provide clarity on groups 2 and 3 – but this CPA issue may dominate the narrative on dialysis/FMC for some time – we are Buy on FME. Our 12-month price target of €97 assumes FMC trades at 11.5x 2018E EV/EBITDA. Key risks to our view and price target include reimbursement headwinds, wage inflation, commercial mix changes, corporate activity, and US$ moves. Last close: €81.01.
I don't think this is a bad summary. However I think one should always view this in the broader industry and historical context. This has been going on for a long time and is industry wide, not limited to ESRD. So if you want to hit ESRD you have to hit the entire premium assistance market, which will be more challenging. Go after ESRD alone and you need to show you're not discriminating, which will be more challenging. ESRD also has the advantage that it is operating under legal cover from the 1997 OIG opinion.
I suspect the end of year/early 2018 ruling will be challenged (lawyers weigh in please).

DOJ going after specific companies is possibly biggest threat here or another whistleblower/DOJ. Considering the last guy walked away with an estimated $30m; it must present a big carrot.

MrB

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Re: DVA – DaVita HealthCare Partners
« Reply #315 on: October 11, 2017, 10:45:32 PM »
Just out of interest. Can someone look on Interactive Brokers what the cost to borrow on DVA is please?

I see a current "fee rate" of 0.25% and a "Rebate rate" of 0.91%. It was interesting that Chanos decided to not mention DVA at Grants yesterday and only briefly mentioned dialysis in passing (he pitched short UHS, ESRX, LPNT, and THC). It seems he's short a large basket of healthcare companies...

Is there any timeline you can point to for the injunction? I see FMC was quoted as saying it is "indefinite in duration" as long as the court does not change it. Additionally, when and how does the rule actually get overturned? Thanks.

 

Are you referring to the CMS rule that was struck down in TX? If so then the next development seem to be the CMS ruling that most are expecting towards yearend, which will clarify the above. Don't recall being a limit on it. Think it has to be a new rule.

Also do you have the main points about Chanos' ESRX short thesis please?

MrB

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Re: DVA – DaVita HealthCare Partners
« Reply #316 on: October 12, 2017, 10:14:10 AM »
https://www.nephrologynews.com/house-bill-would-require-health-plans-to-accept-3rd-party-payment-assistance/

On Oct. 5, Representative Kevin Cramer, R-N.D., introduced legislation that would amend the Affordable Care Act to allow third-party payments and charitable assistance. H.R. 3976, called the Access to Marketplace Insurance Act, would open the door to charitable contributions like the American Kidney Fund’s Health Insurance Premium Program (HIPP), which is funded largely by dialysis companies to help patients pay their health coverage premiums........

cubsfan

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Re: DVA – DaVita HealthCare Partners
« Reply #317 on: October 13, 2017, 10:27:52 AM »
Sadly, if this report is to be believed - obesity trends worldwide are alarming:

http://www.who.int/mediacentre/news/releases/2017/increase-childhood-obesity/en/


rogermunibond

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Re: DVA – DaVita HealthCare Partners
« Reply #318 on: October 13, 2017, 10:34:41 AM »
Huge problem in Mexico (sugar/soda tax), huge problem in the Middle East.

ESRD is kind of the pessimists bet that human genetics are wired to seek out sugar, alcohol, fat, dopamine.
« Last Edit: October 13, 2017, 10:36:35 AM by rogermunibond »

MrB

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Re: DVA – DaVita HealthCare Partners
« Reply #319 on: October 13, 2017, 02:23:51 PM »
Macabre, but in business terms, despite the small international presence DVA has it is already number 2 globally.