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Dialysis companies have found themselves settling lawsuits recently. Fresenius Medical Care North America (FMCNA) disclosed breaches of protected electronic health information and settled with a federal agency, while American Renal Associates (ARA), without admitting wrongdoing, settled with shareholders.

In early February 2018, FMCNA, a major dialysis provider, settled with the Department of Health and Human Services Office of Civil Rights (OCR).

The settlement involved patient privacy breaches that occurred in 2012, including computers stolen during a break-in, a hard drive on a desktop taken out of service and removed from a facility without a report to the corporate risk manager, a laptop and passwords stolen from a car at an employee’s home, a USB drive stolen from a facility parking lot, and computers stolen from a facility.

Besides paying $3.5 million to OCR, the company, whose parent company FMC is based in Bad Homburg, Germany, must implement more effective policies to protect patients through device and media controls, encryption, and secure facility access.

“The number of breaches, involving a variety of locations and vulnerabilities, highlights why there is no substitute for an enterprise-wide risk analysis for a covered entity,” OCR Director Roger Severino said.

In the shareholder lawsuit, ARA settled to pay shareholders who alleged they lost money because the company failed to disclose a “scheme before the company went public in April 2016,” the Salem (MA) News wrote. The stock price fell substantially when news of an investigation into ARA practices was reported.

ARA, based in Beverly, MA, which operates in 25 states through approximately 217 dialysis clinics, settled for $4 million to shareholders, but still faces a lawsuit from insurer United Healthcare.

ARA was alleged to have made commercial insurance plans attractive by agreeing to pay co-pays or deductible amounts, the Salem News noted. Premiums were to be paid out of funds for lower-income patients provided by the American Kidney Fund.

The insurer claims that ARA failed to tell patients that the coverage through the premium assistance program only covered dialysis and would not cover transplant care, for example. United Healthcare also said ARA’s earmarked donations to the kidney fund to pay premiums violated anti-kickback laws, the New York Times reported in 2016.

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