Two Key Points From DaVita’s Charges Against Illinois CON Board

October 4, 2012

1. DaVita Challenges Board

In a letter dated March 29, 2012, from DaVita Inc. (DaVita) to the Illinois Health Facilities and Services Review Board (the Board), DaVita alleges that the Board has allowed its competitor, Fresenius Medical Care A.G. (Fresenius), to open more clinics in the state of Illinois than DaVita has been allowed to open. The letter accompanied DaVita’s certificate of need application to establish a 16-station, $3,145,940 end-stage renal disease (ESRD) facility in the Lawndale community of Chicago. The application was ultimately denied by the Board in September 2012. In the letter, DaVita charged that over the past two years, the Board has approved 15 certificate of need permits for dialysis centers on behalf of Fresenius while approving only three such permits on behalf of DaVita. The letter further noted that Fresenius “dominates the [Chicago] market by operating 60% of the stations [within the city]. [Fresenius’s] grasp on the market continues to grow.”

2. Competition Helps Consumers

DaVita alleges that Fresenius’s growth has a tremendous effect on competition: “It is widely accepted that competition encourages efficiency and innovation, widens consumer choice, and delivers lower prices. In fact, vigorous competition promotes the delivery of high quality, cost-effective health care … [and] benefits consumers.” The lack of competition, argues DaVita, ultimately affects consumers: “Consumers are the only losers if DaVita is not permitted to establish and expand facilities to meet existing demand and to effectively compete with Fresenius. The addition of a facility in the Lawndale community will not only offer an alternate choice for consumers, but it will enhance access and assist in meeting the 92 station need in the [applicable health service area].”

McGuireWoods LLP will continue to track the Board’s reaction to this challenge.

Claire Bushey, “DaVita challenges health facilities board,” Crain’s Chicago Business (September 20, 2012).