DaVita Inc. (DaVita) is a healthcare provider focused on transforming care delivery to improve quality of life for patients globally.
As a comprehensive kidney care provider, the company has been a leader in clinical quality and innovation for 25 years. The company cares for patients at every stage and setting along their kidney health journey–from earlier diagnosis and prevention through supporting the transplant process. This includes ensuring they are supported at home, in the company’s dial...
DaVita Inc. (DaVita) is a healthcare provider focused on transforming care delivery to improve quality of life for patients globally.
As a comprehensive kidney care provider, the company has been a leader in clinical quality and innovation for 25 years. The company cares for patients at every stage and setting along their kidney health journey–from earlier diagnosis and prevention through supporting the transplant process. This includes ensuring they are supported at home, in the company’s dialysis centers, in the hospital and/or skilled nursing facilities. In the company’s unwavering pursuit of a healthier tomorrow, the company strives to reimagine what high quality care looks like: more preventative, better integrated, improved outcomes at the lowest total cost, and personalized at scale to deliver a better tomorrow regardless of location, insurance status or other factors. The company’s caring culture fuels its continuous drive toward achieving the company’s mission to be the provider, partner and employer of choice.
Businesses
The company is a leading dialysis provider in the United States. The company’s U.S. dialysis and related lab services (U.S. dialysis) business treats patients with chronic kidney failure, ESKD, in the United States, and is the company’s largest line of business. The company’s robust platform to deliver kidney care services also includes established nephrology and payor relationships.
In addition, as of December 31, 2024, the company’s international operations provided dialysis and administrative services to a total of 509 outpatient dialysis centers located in 13 countries outside of the U.S., serving approximately 80,300 patients.
Finally, the company’s U.S. integrated kidney care (IKC) business provided integrated care and disease management services to 70,400 patients in risk-based integrated care arrangements and to an additional 11,600 patients in other integrated care arrangements across the United States as of December 31, 2024.
The company also maintains a few other ancillary services and investments outside of the company’s U.S. dialysis, the U.S. IKC, or international operations, which the company refers to as its U.S. other ancillary services. The company refers to its U.S. integrated kidney care business, the U.S. other ancillary services and international operations as, collectively, the company’s ‘ancillary services.’ The company also has a separate corporate administrative support function that supports the company’s U.S. dialysis business and these ancillary services. Each of the company’s businesses are described in greater detail in the sections that follow.
Care Model
The company’s patient-centric care model leverages the company’s platform of kidney care services to maximize patient choice in both models and modalities of care. The flexibility the company offers coupled with a focus on comprehensive kidney care supports the company’s commitments to help improve equitable clinical outcomes and quality of life for the company’s patients. According to the most recently published data, for the ten most recently reported years, the company has continued as an industry leader in the Centers for Medicare & Medicaid Services’ (CMS) Quality Incentive Program (QIP), which promotes high quality services in outpatient dialysis facilities treating patients with ESKD.
The company’s clinical outcomes are driven by the company’s experienced and knowledgeable caregivers. The company employs registered nurses, licensed practical or vocational nurses, patient care technicians, social workers, registered dietitians, biomedical technicians and other administrative and support teammates who strive to achieve superior clinical outcomes at the company’s dialysis facilities. In addition to the company’s teammates at the company’s dialysis facilities, as of December 31, 2024, the company’s domestic Chief Medical Officer leads a team of 23 nephrologists in the company’s physician leadership team as part of the company’s domestic Office of the Chief Medical Officer (OCMO). The company’s international Chief Medical Officer leads a team of 11 nephrologists in the company’s physician leadership team as part of the company’s international OCMO as of December 31, 2024. The company’s OCMO teammates represent a variety of academic, clinical practice, and clinical research backgrounds. The company also has a Physician Council that serves as an advisory body to senior management, which was composed of 10 physicians with extensive experience in clinical practice and five Group Medical Directors as of December 31, 2024.
The company’s IKC business provides comprehensive care management for complex CKD patients nationwide, with payment models that include a variety of structures to advance and encourage integrated and value-based care. Among other arrangements, the company’s IKC business has percent-of-premium arrangements in several Medicare Advantage ESRD Chronic Special Needs Plans and is an active participant in CMMI’s Comprehensive Kidney Care Contracting (CKCC) model that seeks to manage the care of late stage CKD and ESKD patients to delay the progression of kidney disease, promote home dialysis when appropriate, and incentivize transplants. The company’s IKC business also utilizes other value-based payment methodologies in its care coordination and disease management contracts, which include two-sided shared savings/shared losses and outcomes-based pay-for-performance compensation arrangements.
U.S. dialysis business
The company’s U.S. dialysis business is a leading provider of kidney dialysis services for patients suffering from ESKD. As of December 31, 2024, the company provided dialysis, administrative and related laboratory services in the U.S. through a network of 2,657 outpatient dialysis centers in 46 states and the District of Columbia, serving a total of approximately 200,800 patients. The company also has contracts to provide hospital inpatient dialysis services in approximately 760 hospitals throughout the U.S.
Treatment options for ESKD
Treatment options for ESKD are dialysis and kidney transplantation.
Dialysis Options
Hemodialysis
The company’s freestanding outpatient dialysis centers are staffed with members of the company’s care team and store the supplies necessary for treatment. Treatments are usually performed three times per week.
Patients receive training, support and monitoring from registered nurses, usually in the company’s outpatient dialysis centers, in connection with their HHD treatment. HHD is typically performed with greater frequency than dialysis treatments performed in outpatient dialysis centers and on varying schedules.
Peritoneal Dialysis
Peritoneal dialysis uses the patient’s peritoneal or abdominal cavity to eliminate fluid and toxins and is typically performed at home. The most common methods of peritoneal dialysis are continuous ambulatory peritoneal dialysis (CAPD) and continuous cycling peritoneal dialysis (CCPD). Because it does not involve going to an outpatient dialysis center three times a week for treatment, peritoneal dialysis is generally an alternative to hemodialysis for patients who are healthier, more independent and desire more flexibility in their lifestyle.
Kidney Transplantation
Kidney transplantation, when successful, is considered the most desirable form of therapeutic intervention. However, in light of the shortage of suitable donors, side effects of immunosuppressive pharmaceuticals given to transplant recipients and dangers associated with transplant surgery, some patient populations have generally limited the use of this treatment option. In accordance with an executive order signed in July 2019 (the 2019 Executive Order), the U.S. Department of Health and Human Services (HHS) developed policies addressing, among other things, the goal of making more kidneys available for transplant. CMS, through CMMI, also subsequently released the framework for certain proposed and existing voluntary and mandatory payment models, including ESRD Treatment Choices Model (ETC) model, which would adjust payment incentives to encourage kidney transplants.
Hemodiafiltration
Hemodiafiltration (HDF) is a form of augmented hemodialysis that includes a component of convection to remove additional molecules from the blood. Like hemodialysis, HDF can be performed at certain freestanding outpatient dialysis centers and may also be performed in hospital in-patient centers. HDF usage varies by country, and the efficacy of this modality is still being assessed in the U.S.
U.S. Dialysis Services the company provides
Outpatient Hemodialysis Services
The majority of services the company provides to patients are outpatient hemodialysis treatments. As a condition of the company’s enrollment in Medicare for the provision of dialysis services, the company contracts with a nephrologist or a group of associated nephrologists to provide medical director services at each of the company’s dialysis centers. In addition, other nephrologists may apply for practice privileges to treat their patients at the company’s centers. Each center has an administrator, often a registered nurse, who supervises the day-to-day operations of the center and its staff. The staff of each center typically consists of registered nurses, licensed practical or vocational nurses, patient care technicians, a social worker, a registered dietician, biomedical technician support and other administrative and support personnel.
The overall number of patients to whom the company provided services in the U.S. in 2024 was relatively flat compared to 2023, primarily due to growth in new admits partially offset by elevated mortality rates, which continue to be elevated relative to the company’s pre-COVID-19 mortality rates.
Hospital Inpatient Hemodialysis Services
As of December 31, 2024, the company had contracts to provide hospital inpatient dialysis services to patients in approximately 760 hospitals throughout the U.S. The company renders these services based on a contracted per-treatment fee that is individually negotiated with each hospital. When a hospital requests the company’s services, the company typically administers the dialysis treatment at the patient’s bedside or in a dedicated treatment room in the hospital, as needed.
Home-Based Dialysis Services
Home-based dialysis services include HHD and peritoneal dialysis. Many of the company’s outpatient dialysis centers offer certain support services for dialysis patients who prefer and are able to perform either HHD or peritoneal dialysis in their homes. Home-based hemodialysis support services consist of providing equipment and supplies, training, patient monitoring, on-call support services and follow-up assistance. Registered nurses train patients and their families or other caregivers to perform either HHD or peritoneal dialysis.
Other
ESKD Laboratory Services
The company operates a separately licensed and highly automated clinical laboratory that specializes in ESKD patient testing. This specialized laboratory provides routine laboratory tests for dialysis and other physician-prescribed laboratory tests for ESKD patients. The vast majority of these tests are performed for the company’s ESKD patients throughout the U.S. These tests are performed for a variety of reasons, including to monitor a patient’s ESKD condition, including the adequacy of dialysis, as well as other medical conditions of the patient. The company’s laboratory utilizes information systems that provide information to certain members of the dialysis centers’ staff and medical directors regarding critical outcome indicators.
Management Services
The company operates or provide management and administrative services pursuant to management and administrative services agreements to 52 outpatient dialysis centers located in the U.S. in which the company either owns a noncontrolling interest or which are wholly-owned by third parties.
Sources of Revenue—Concentrations and Risks
The company’s U.S. dialysis revenues represent approximately 88% of the company’s consolidated revenues for the year ended December 31, 2024. The company’s U.S. dialysis revenues are derived primarily from the company’s core business of providing dialysis services and related laboratory services; and to a lesser extent, the administration of pharmaceuticals and management fees generated from providing management and administrative services to certain outpatient dialysis centers, as discussed above.
The sources of the company’s U.S. dialysis revenues are principally from government-based programs, including Medicare and Medicare Advantage plans, Medicaid and managed Medicaid plans, other government-based programs, including the company’s agreement with the Veterans Administration, and commercial insurance plans.
Medicare Revenue
Medicare Fee for Service
For the year ended December 31, 2024, approximately 89% of the company’s total U.S. dialysis patients were covered under some form of government-based program, with approximately 74% of the company’s total U.S. dialysis patients covered under Medicare and Medicare Advantage plans.
If a patient does not have secondary insurance coverage, the company is generally unsuccessful in its efforts to collect from the patient the remaining 20% portion of the ESRD composite rate that Medicare does not pay. In those instances, however, the company is able to recover some portion of this unpaid patient balance from Medicare through an established cost reporting process by identifying these Medicare bad debts on each center’s Medicare cost report.
Medicare Advantage Revenue
The company continues to monitor MA notices, regulatory updates and guidance, as well as enforcement for impact on the company’s business.
Medicaid Revenue
Medicaid programs are state-administered programs partially funded by the federal government. These programs are intended to provide health coverage for patients whose income and assets fall below state-defined levels and who are otherwise uninsured. These programs also serve as supplemental insurance programs for co-insurance payments due from Medicaid-eligible patients with primary coverage under the Medicare program. Some Medicaid programs also pay for additional services, including some oral medications that are not covered by Medicare. The company is enrolled in the Medicaid programs in the states in which the company conducts its business.
Commercial Revenue
The payments the company receives from commercial payors generate nearly all of the company’s profits and all of the company’s non-hospital dialysis profits come from commercial payors. Payment methods from commercial payors can include a single per treatment rate, referred to as bundled rates, or in other cases separate payments for dialysis treatments and pharmaceuticals, if used as part of the treatment, referred to as FFS rates. Commercial payment rates are the result of negotiations between the company and commercial payors or third party administrators. The company’s commercial contracts sometimes contain annual price escalator provisions. The company is comprehensively contracted, and the vast majority of patients insured through commercial health plans are covered by one of the company’s commercial contracts, though the company also receive payments for a limited set of commercial patients that are covered by a health plan that considers the company out-of-network. While the company’s out-of-network payment rates are on average higher than in-network commercial contract payment rates, the company has made efforts to be contracted with the majority of commercial payors offering health plans.
Approximately 27% of the company’s U.S. dialysis patient service revenues and approximately 11% of the company’s U.S. dialysis patients are associated with non-hospital commercial payors for the year ended December 31, 2024.
Physician Relationships
Joint Venture Partners
The company owns and operates certain of its dialysis centers through entities that are structured as joint ventures. The company generally holds controlling interests in these joint ventures, with nephrologists, hospitals, management services organizations, and/or other healthcare providers holding minority equity interests. These joint ventures are typically formed as limited liability companies. For the year ended December 31, 2024, revenues from joint ventures in which the company has a controlling interest represented approximately 30% of the company’s U.S. dialysis revenues. The company expects to continue to enter into new U.S. dialysis-related joint ventures in the ordinary course of business.
Community Physicians
The company’s relationships with local nephrologists and the company’s ability to provide quality dialysis services and to meet the needs of their patients are key factors in the success of the company’s dialysis operations. Nearly 5,300 nephrologists refer patients to the company’s outpatient dialysis centers.
Medical Directors
Participation in the Medicare ESRD program requires that dialysis services at an outpatient dialysis center be under the general supervision of a medical director. Per these requirements, this individual is usually a board certified nephrologist. The company engages physicians or groups of physicians to serve as medical directors for each of the company’s outpatient dialysis centers. At some outpatient dialysis centers, the company also separately contract with one or more other physicians or groups to serve as assistant or associate medical directors over other modalities such as home dialysis. The company has over 900 individual physicians and physician groups under contract to provide medical director services.
Medical directors for the company’s dialysis centers enter into written contracts with the company that specify their duties and fix their compensation. These agreements range in duration, but generally are for periods of ten years. The compensation of the company’s medical directors is the result of arm’s length negotiations, consistent with fair market value, and generally depends upon an analysis of various factors such as the physician’s duties, responsibilities, professional qualifications and experience, as well as the time and effort required to provide such services.
The company’s medical director contracts and joint venture operating agreements generally include covenants not to compete or own interests in dialysis centers operated by other providers within a defined geographic area for various time periods, as applicable. These non-compete agreements do not restrict or limit the physicians from practicing medicine or prohibit the physicians from referring patients to any outpatient dialysis center, including dialysis centers operated by other providers.
Location of the company’s U.S. Dialysis Centers
The company operated 2,657 outpatient dialysis centers in the U.S. as of December 31, 2024 and 2,605 of these centers are consolidated in the company’s financial statements. Of the remaining 52 nonconsolidated U.S. outpatient dialysis centers, the company owns noncontrolling interests in 49 centers and provides management and administrative services to three centers that are wholly-owned by third parties.
Ancillary Services, including the company’s International Operations
The company’s ancillary services relate primarily to its core business of providing kidney care services. As of December 31, 2024, these consisted primarily of the company’s U.S. integrated kidney care (IKC) business, certain U.S. other ancillary businesses (including the company’s clinical research programs, transplant software business, and venture investment group), and the company’s international operations.
The company has made and continues to make investments in building the company’s integrated care capabilities, including the operation of certain strategic business initiatives that are intended to integrate and coordinate care among healthcare participants across the renal care continuum from CKD to ESKD to kidney transplant. Through improved technology and data sharing, as well as an increasing focus on value-based contracting and care, these initiatives seek to bring together physicians, nurses, dieticians, pharmacists, hospitals, dialysis clinics, transplant centers, payors and other specialists with a view towards improving clinical outcomes for the company’s patients and reducing the overall cost of comprehensive kidney care. Certain of the company’s ancillary services are described below.
The U.S. Integrated Kidney Care
Integrated Kidney Care. DaVita Integrated Kidney Care (DaVita IKC) provides advanced integrated care management services to health plans and government programs for members/beneficiaries diagnosed with ESKD and CKD. Through a combination of health monitoring, clinical coordination, innovative interventions, predictive analytics, medical claims analysis and information technology, the company endeavors to assist its health plan and government program customers and patients in obtaining superior renal healthcare and improved clinical outcomes, as well as helping to reduce overall medical costs. Integrated kidney care management revenues from commercial and Medicare Advantage insurers can be based upon either an established contract fee recognized as earned for services provided over the contract period, or related to the operation of risk-based and value-based care programs, including shared savings, pay-for-performance, and capitation contracts. DaVita IKC also contracts with payors to support MA ESKD chronic condition special needs plans (C-SNPs) to provide ESKD patients full service healthcare and integrated care management services. DaVita IKC participates in both the involuntary and certain voluntary payment models administered by CMMI.
The company is also developing, and has entered into, various forms of technology-based, administrative, financial and other collaboration and incentive arrangements with physician partners and other providers in the support of the company’s innovative care model, developing and expanding IKC programs and arrangements.
The U.S. Other Ancillary Services
Clinical research programs. DaVita Clinical Research (DCR) is a provider-based specialty clinical research organization with a wide spectrum of services for clinical drug research and device development. DCR uses its extensive real-world healthcare expertise to assist in the design, recruitment and completion of retrospective and prospective studies. Revenues are based upon study generated fees, as determined by contract with drug companies and other sponsors, and are recognized as earned according to the contract terms.
Transplant software business. DaVita's transplant software business, MedSleuth, works with transplant centers across the U.S. to provide greater connectivity among transplant candidates, transplant centers, physicians and care teams to help improve the experience and outcomes for kidney and liver transplant patients.
Venture group. DaVita Venture Group (DVG) focuses on innovative products, solutions and businesses that improve care for patients with kidney disease and related conditions. DVG identifies companies and products for acquisitions, strategic partnerships, and venture investment opportunities. DVG’s focus includes innovation in digital health, pharmaceuticals, medical devices, and care delivery models.
International Dialysis Operations
The company operated, managed or administered 509 outpatient dialysis centers located in 13 countries outside of the U.S. serving approximately 80,300 patients as of December 31, 2024. The company’s international dialysis operations have continued to grow steadily and expand as a result of acquiring and developing outpatient dialysis centers in various strategic markets. The company’s international operations are included in the company’s ancillary services.
Government Regulation
The company’s dialysis centers are certified by CMS, as required for the receipt of Medicare payments.
In the ordinary course of the company’s business operations, DaVita and its ancillary businesses and subsidiaries enter into numerous arrangements with physicians and other potential referral sources, that potentially implicate the Anti-Kickback Statute.
In the ordinary course of business operations, DaVita and its ancillary businesses and subsidiaries have many different types of financial arrangements with referring physicians that potentially implicate the Stark Law, including, but not limited to, medical director agreements, joint ventures, leases and subleases with entities in which physicians, hospitals or medical groups hold ownership interest, consulting agreements, hospital services agreements, discharge planning services agreements, acute dialysis services agreements, value-based care arrangements, employment agreements and incentive performance arrangements.
The company is subject to the provisions of the Foreign Corrupt Practices Act (FCPA) in the United States and similar laws in other countries, which generally prohibit companies and those acting on their behalf from making improper payments to foreign government officials and others for the purpose of obtaining or retaining business.
The Health Insurance Portability and Accountability Act of 1996 and its implementing privacy and security regulations, as amended by the federal Health Information Technology for Economic and Clinical Health Act (HITECH Act) (collectively referred to as HIPAA), require the company to provide certain protections to patients and their health information.
History
The company was incorporated as a Delaware corporation in 1994. The company was formerly known as DaVita HealthCare Partners Inc. and changed its name to DaVita Inc. in 2016.
