Patients with kidney failure need dialysis several times a week. The blood cleansing treatments keep them alive.
For a typical patient covered under Medicare or Medicaid, dialysis clinics are paid about $80,000 a year.
But if a patient has an individual or family plan, the payments could be nearly four times that amount.
Some health insurers say the dialysis companies are scamming them, and driving up insurance premiums in the process.
For-profit dialysis companies are steering patients from government health plans to commercial insurance, the insurers allege, just because it helps their bottom lines.
But dialysis firms say patients are just deciding what's best for them.
The federal government is looking into the issue, but one Minnesota insurance company, UnitedHealth Group, isn't waiting for regulators. It has sued one dialysis provider, American Renal Associates, which says the lawsuit is full of errors and baseless.
Minnesota Commerce Department spokesperson Ross Corson said dialysis centers appear to be prodding patients to switch from government health plans to better paying commercial insurance.
Patients don't necessarily pay more as a result, but other people who buy their own health plans do — the added cost of dialysis boosts premiums $300 to $600 higher per year, Corson said.
The state says dialysis patients moving into commercial health plans have boosted health costs in Minnesota's individual insurance market by an estimated $75 million or more.
The federal government could be picking up that $75 million tab, Corson said, instead of health plans and their members.
"Patients generally have a right to coverage under Medicare, potentially Medicaid as well, and do not need private health insurance coverage," he said.
So why would a kidney failure patient who can get affordable government coverage switch to private insurance, with large monthly premiums?
That's because they don't actually pay the premiums — someone else does.
Insurers say it works like this: First, the clinic encourages a dialysis patient to apply for private insurance. Then the dialysis company helps line up a charity like the American Kidney Foundation — which gets its money from dialysis providers — to pay the premiums.
The insurers' allegation is that dialysis centers are gaming the system by paying for patients' health insurance so they'll receive much fatter payments.
Patients are apparently just pawns, Corson said. "These third-party payment arrangements seem to be serving provider profits rather than patient health and well being."
Insurers hope regulators will intervene.
"When people offer to help pay premiums, it must be to help the individual not to ensure a provider gets more money," said Jim Schowalter, president the Minnesota Council of Health Plans.
The American Kidney Foundation says that if there is a problem, it's small. Only about 100 Minnesota dialysis patients fit the profile insurers complain about.
Foundation president LaVarne Burton said switching from government to private insurance can be justified for medical, financial and other reasons. She said the insurers' complaints are part of a concerted effort to dump people with an expensive condition.
Starting next year, Burton said anyone asking the foundation for help must show why private insurance is a better option for them than Medicare or Medicaid. Others in the industry are making changes as well.
DaVita, the second-biggest dialysis provider in the country, has 2,300 Minnesota patients. Only a small portion of them buy their own insurance.
CEO Kent Thiry recently said DaVita's policy has been merely to educate patients about insurance options.
"We were very sensitive to the fact that some of these patients choosing an ACA plan meant that we would be paid higher rates," he said. "And, therefore, we created a very intense oversight process, absolutely letting the patient choose."
Still, after the feds announced they're looking into the issue, Davita changed course. Last month, the company said it's suspending its advocacy for certain patients' requests for kidney foundation funds.