The quarterly earnings were released three weeks after the Trump administration announced its new kidney initiative.
Fresenius Medical Care reported year-over-year revenue growth of 3% Tuesday morning, but suffered from sharp declines in operating income, net income and earnings per share (EPS).
Fresenius posted revenues of $484 million, up from $469.8 million in Q2 2018, though its operating income fell 63%, and its net income and EPS both fell 74%.
The German-based dialysis company's healthcare services segment saw its revenues rise by 2% but attributed growth constraints to the divestiture of Sound Inpatient Physicians last year.
One major development for Fresenius during Q2 was its sale of 24 MedSpring urgent care centers in Texas to HCA Healthcare in early July.
"We have delivered a solid second quarter with continued strong organic revenue growth," Rice Powell, CEO of Fresenius Medical Care, said in a statement. "Net income in our underlying dialysis business developed in line with our expectations. We are confident to accelerate earnings growth over the second half of the year toward achieving our full-year targets. Due to ongoing delays in reconciliation of generated savings in the value-based ESCO pilot program and differing views with regard to the measurement mechanisms, it is prudent to adjust the rate of savings we applied to accrue revenues and earnings. While views differ on the magnitude of savings generated, it is clear that we have realized meaningful savings in the ESCO pilot as well as other value-based arrangements. We moved quickly and maintained tremendous focus since 2014. We are uniquely positioned with our vast experience to impact cost and quality of care in kidney disease. We remain committed to value-based care."
Another consideration for Fresenius going forward will be the Trump administration's recently announced kidney care initiative, which aims to save 28,000 lives and $4.2 billion per year.
The president's executive order will direct the Center for Medicare and Medicaid Innovation to produce a required payment model in addition to four other optional ones that will incentivize "preventative kidney care, home dialysis, and kidney transplants."
Upon hearing the news, dialysis care rival DaVita Inc.'s stock jumped more than 4%.
One week ago, Rep. Katie Porter, D-Calif., called on the Department of Health and Human Services' acting Inspector General to investigate the relationship between Fresenius, DaVita, and American Renal Associates to "implement practices that benefit their bottom line at the expense of patients with kidney disease."
Fresenius previously paid $231 million to resolve criminal and civil foreign bribery charges with the Department of Justice.
For complete financial information, review Fresenius Medical Care's filing with the Securities and Exchange Commission.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.
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