Fresenius Medical Care dips after US proposes lower dialysis reimbursement rate

Investing.com -- Shares in Fresenius Medical Care (ETR: FMEG) fell about 5% Thursday after U.S. health regulator CMS proposed a smaller-than-expected increase to dialysis reimbursement rates and moved to bundle a key drug category into its payment system.

CMS proposed a 1.1% increase to the base rate for its end-stage renal disease bundle payment, roughly half what investors had anticipated and well below increases seen in prior years.

The regulator also proposed including phosphate binders in the bundle from 2027, removing a payment mechanism that had driven strong uptake of Fresenius’s Velphoro drug.

UBS analysts said the proposal was "worse than usual" and below the roughly 2% rate investors had been expecting.

On the phosphate binder inclusion, the analysts warned they would expect "lower utilisation of Velphoro" under the bundled payment — similar to what happened with calcimimetics when they were moved from transitional add-on payments to the bundle — "meaning we would expect this profit pool to fall significantly for FME in 2027."

Hopes had been building in recent weeks that the phosphate binder transition would be delayed by another year, making the proposal "likely to disappoint," the analysts led by Graham Doyle wrote.

While the final rate could still be revised upward — last year’s final rate came in 30 basis points above the draft — UBS noted that even with such an adjustment, the outcome would likely still imply a margin drag for Medicare patients.

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