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DaVita shares rise after California bill capping dialysis payments is vetoed

Key Points
  • The bill, which was vetoed by Gov. Jerry Brown on Sunday, would have limited reimbursements for financial assistance to dialysis patients.
  • That assistance is used by companies to maximize their reimbursements and can drive up premium costs.
A patient gets dialysis at DaVita Dialysis Center in Inglewood.
Irfan Khan | Los Angeles Times | Getty Images

Shares of dialysis clinic operator DaVita rose more than 3 percent on Monday after California's governor vetoed a bill that would have cut into its sales.

The bill, which was vetoed by Gov. Jerry Brown on Sunday, would have limited reimbursements for financial assistance to dialysis patients. That assistance is used by companies to maximize their reimbursements and can drive up premium costs.

CEO Javier Rodriguez said in a statement the bill "would have harmed thousands of dialysis patients in California by allowing health plans to discriminate against low-income dialysis patients who rely on charitable assistance to pay their insurance premiums." He also noted the company was "deeply relieved" the bill was vetoed.

Though this is seemingly a win for DaVita, one of the largest kidney care provider in the U.S., but it all depends on what happens next month. California voters will have a chance to vote on a ballot that would limit how much revenue dialysis providers can earn from commercially insured individuals.

Prior to Monday, the stock was flat for the year. However, the stock has surged more than 12 percent in the past six months, outpacing the S&P 500 in that time.

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Key Points
  • Medicare's fall enrollment period ends Dec. 7.
  • With Part B premiums jumping 23 percent for many Medicare recipients, looking for savings is worth your time.