Kidney Fund Seen Insisting on Donations, Contrary to Government Deal
A DaVita dialysis center in Paterson, N.J., before its opening in 2014. DaVita is one of two large dialysis companies that provide most of the funding for the American Kidney Fund, a charity.
The American Kidney Fund is one of the largest charities in the country, with an annual budget of over $250 million. Its marquee program helps pay insurance premiums for thousands of people who need dialysis, a lifesaving and expensive treatment for kidney failure.
The organization has earned accolades for its efficient use of the money.
Under an agreement with the federal government, the Kidney Fund must distribute the aid based on a patient’s financial need. But the charity has resisted giving aid to patients at clinics that do not donate money to the fund, an investigation by The New York Times has found. The actions have limited crucial help for needy patients at these clinics. The agreement governing the relationship between the group and the companies forbids choosing patients based on their clinic.
In multiple cases, the charity pushed back on workers at clinics that had not donated money, discouraging them from signing up their patients for assistance. Until recently, the Kidney Fund’s guidelines even said clinics should not apply for patient aid if the company had not donated to the charity.
“I watched many patients who were not able to get that assistance,” said Elaine Brecher, a former social worker at a small clinic in rural Arkansas. After an application for one patient was declined, she said, she did not apply for others, because a colleague believed that only clinics that donated could refer patients.
Ms. Brecher now works at a clinic owned by Fresenius, one of the two largest dialysis companies along with DaVita. Together, the two companies provide nearly 80 percent of the charity’s funding. She said her current patients benefited from the Kidney Fund, whose assistance can amount to thousands of dollars in financial aid a year.
“If our patients didn’t get that assistance, they would be owing great big huge bills to hospitals and doctors,” she said.
The financial help is available to patients with kidney failure, known as end-stage renal disease, many of whom are unable to work. The money covers the insurance premiums for many types of coverage, including Medicare and employer and individual private plans.
The Kidney Fund’s payments are part of an unusual deal it made with the government and the dialysis industry 20 years ago. The arrangement allows the dialysis companies to avoid violating anti-kickback laws. It allows dialysis clinics to donate to the Kidney Fund, treat patients whose insurance premiums are paid by the charity and then collect money from the insurers for those patients’ treatments — essentially guaranteeing a steady stream of paying customers for the companies.
But the agreement also has a caveat: It requires that all patient applications be treated equally, regardless of whether their clinic donates.
In an interview this month, LaVarne A. Burton, the Kidney Fund’s chief executive, said that the charity treated all patients equally, and that the fund had never denied anyone assistance if they qualified financially.
“It is simply not true that we require any provider to contribute to the program,” she said. “Never have, and never will.”
She acknowledged, though, that the charity pushed clinics hard to donate, particularly if they applied on behalf of patients.
“We believe there is a moral obligation for providers to contribute to the organization,” she said.
Ms. Burton said the concerns raised by social workers like Ms. Brecher and others arose because many in the industry misunderstood how the charity worked. The charity recently updated its guidelines, she said, to provide more clarity.
An examination of public documents, as well as interviews with more than a dozen social workers, employees of dialysis clinics, insurance officials and regulators, and a former executive at the charity, put the actions in a different light. Many of the clinic workers, from about a half-dozen states around the country, were called randomly, to limit any chance of coordinated talking points.
For years, The Times found, the Kidney Fund’s preference for patients at the biggest clinics has been an open secret among many social workers, who said that as a result they had stopped applying for assistance entirely.
A 2011 event for the American Kidney Fund in New York to raise awareness of kidney disease. The charity has resisted helping patients at clinics that do not donate to it, The New York Times found.
The findings also add to a list of concerns about the group’s relationship with the dialysis industry.
This year, for example, the fund faced questions about whether it was helping dialysis companies game the Affordable Care Act. In some cases, insurers and government officials have argued, the dialysis clinics used the charity’s assistance program to push people who were eligible for Medicaid, government health insurance for the poor, into private health coverage available under the new law.
The private plans pay the clinics much more than Medicaid — up to four times as much, adding up to an additional $200,000 per patient per year — for the same dialysis treatment.
In recent months, the federal government has raised concerns about how patients are steered into private plans. UnitedHealthcare sued one company, American Renal Associates, over the practice, claiming it was harming patients by converting them to less generous coverage. American Renal, which declined to comment for this article, has denied the claims and is fighting the suit.
The suit against American Renal also says the Kidney Fund directed some donations directly back to patients at American Renal. As part of an investigation by Medicare, social workers and insurers have made similar accusations against the Kidney Fund.
Ms. Burton denied those accusations and attributed the recent scrutiny of the insurance assistance program to insurers that want to avoid covering the often costly medical bills of people who need dialysis.
“The insurance industry has let us have it full force,” she said.
A Costly Treatment
Dialysis filters toxins from the blood when a patient’s kidneys no longer work. The process is lifesaving, but also onerous, often requiring that patients be tethered to a machine for hours at a time, three times a week. Patients on dialysis often cannot hold full-time jobs, studies have shown, and those receiving the treatment are disproportionately poor.
The poorest people with kidney disease qualify for Medicaid, which covers all of their costs. But Medicare covers most of the 500,000 or so Americans who need the treatment, regardless of their age, under a government program that has existed since the 1970s and that costs the federal government more than $30 billion a year.
Even with help, people covered by Medicare are left with significant out-of-pocket costs. Most must pay a monthly premium of about $120, as well as a portion of their medical expenses, which can add up to several thousand dollars a year.
Until the late 1990s, the dialysis companies routinely paid these expenses. But a federal law outlawed that practice, out of concern that covering a patient’s bills might dissuade that patient from switching to another clinic that might provide better care.
That was when the American Kidney Fund stepped in. In 1995, the charity was relatively small, with a $5 million annual budget and contributions from the dialysis industry that accounted for less than 10 percent of its donations.
The Kidney Fund and the biggest dialysis clinics presented the government with a proposal that would allow the companies to indirectly pay insurance premiums for patients.
The deal, reached with the Office of Inspector General at the Department of Health and Human Services in 1997, has had a profound effect on the charity. In 2015, the Kidney Fund reported revenue of $264 million, making it one of the country’s 100 largest nonprofits.
The dialysis industry has also flourished. DaVita and Fresenius in particular have grown quickly, buying smaller chains, consolidating their market share and locking in profits. The Kidney Fund says it got 78 percent of its revenue in 2015 from two companies, which insurers, state regulators and others identified as DaVita and Fresenius.
“There’s a long history of recognition of the unique needs of that patient population,” said Philipp Stephanus, a senior vice president at DaVita who handles patient support and insurance issues.
The Kidney Fund, DaVita and Fresenius said the federal agreement prohibited them from disclosing what percentage of applications the fund approved from those companies’ clinics, or how much the charity paid in insurance aid for patients at those clinics.
But the 1997 deal tried to prevent any preferential treatment, no matter how big the companies became.
LaVarne A. Burton, the Kidney Fund’s chief executive, said the charity treated all patients equally. “It is simply not true that we require any provider to contribute to the program,” she said.
Kevin McAnaney, a former government lawyer who helped draft the original agreement, said fairness to patients was at the heart of the deal.
Everyone understood that “they were covering free riders who weren’t contributing anything,” said Mr. McAnaney, a lawyer in private practice who previously worked at the Office of Inspector General.
But if the rules are not followed, the Office of Inspector General has the right to end the agreement, which would profoundly change the relationship of the industry and the charity.
“If all the conditions are not met, the opinion is without force and effect,” said Donald White, a spokesman for the agency. In keeping with the agency’s policy, he would not confirm or deny whether the agency was investigating the group.
Patients Turned Away
Tracey Dickey works as a social worker for a nonprofit dialysis clinic in rural Missouri with no connection to a big dialysis company, and many of her patients struggle to pay their medical bills, she said. They are exactly the kind of people the Kidney Fund says it is there to help.
In November 2014, Ms. Dickey emailed an executive at the fund. She said she had heard that only clinics that donated to it could apply for financial aid for patients. Her clinic had not donated, she said — but she still had a patient in need.
“I need to know the facts before I tell her there isn’t premium assistance,” Ms. Dickey wrote in an email to the fund. She provided a copy of the email to The Times.
An executive at the fund wrote back the same day. He was noncommittal, but attached a set of guidelines that he asked her to review. “If your company cannot make fair and equitable contributions,” the guidelines read, “we respectfully request that your organization not refer patients.”
And so she didn’t. The patient, Ms. Dickey said, continues to struggle financially.
This summer, after Ms. Dickey and other social workers shared their experiences in an industry discussion group, the Kidney Fund invited them to contact the charity about their concerns. When she followed up, the charity told Ms. Dickey that she would need some computer training to enroll in the program. She has not pursued it, she said.
Ms. Burton said that Ms. Dickey had apparently misunderstood the exchange with the Kidney Fund employee and that had she applied, her patient would have been approved, assuming the person qualified financially.
But Ms. Brecher and several workers at other nonprofit or independent clinics told similar stories.
An administrator at an independent clinic in a Midwestern city said he had helped a handful of patients maintain their coverage through the fund after they transferred to his clinic from a large chain. He declined to be identified because, he said, he did not want to anger DaVita and Fresenius, who sometimes send him patients.
Each time, he said, the charity’s workers later demanded that the clinic make a donation that at a minimum covered the amount it had paid for the patient’s premium. If he did not pay, he said he had been told, the patient risked losing the financial help from the charity for his insurance.
The administrator said he had refused to donate to the charity. The Kidney Fund continued to help pay for the patients’ insurance, he said, but the aggressive approach angered him.
Ms. Burton said the charity never declined a patient because a clinic did not donate. But she said the Kidney Fund did not hesitate to ask clinics for donations.
“We are a charitable organization,” she said. “We fund-raise for everything that we do.”
She said nearly 40 percent of the 213 dialysis companies whose clinics had successfully helped patients apply to the fund had never donated. She would not say, though, what percentage of the 80,000 patients the fund helps annually comes from clinics that do not donate, or how many of those patients come from the biggest companies, which donate most of their revenue.
Still, some social workers say the assumption at many clinics where they work is that the aid decisions are not always based on financial need.
Jennifer Bruns, now a social worker at the St. John Transplant Specialty Center in Detroit, worked for years in dialysis clinics and said she had many clients who received assistance from the American Kidney Fund. She said sometimes patients would tell her that their insurance premiums — which the Kidney Fund had agreed to pay — had not been paid that month.
Ms. Bruns called the fund to find out why, she said in an interview, “and they would say, ‘Well you haven’t made your contribution this month.’”
Correction: December 27, 2016
An earlier version of a picture caption with this article referred incorrectly to an event being held by the American Kidney Fund. The event was to raise awareness about kidney disease; it was not a fund-raiser.