Medicare to Award Contract for Demonstration Project to Improve Care for Beneficiaries With High Medical Costs to RMS Disease Management, LLC

DaVita Inc. announced that The Centers for Medicare & Medicaid Services (CMS) has selected RMS Disease Management, LLC, a wholly-owned subsidiary of DaVita, to operate a three-year demonstration project to help Medicare beneficiaries with Chronic Kidney Disease (CKD) improve their quality of life while reducing their medical expenses and Medicare program costs.

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"This demonstration project will focus on Medicare beneficiaries who have the most to gain from our health care system but who too often don't get the best possible prevention-oriented care," said CMS Administrator Mark B. McClellan, M.D., Ph.D. "They often see numerous doctors without the continuity of care and support needed to enable the health professionals to work together effectively, and they often are unable to take advantage of evidence-based steps to prevent the complications of their diseases."

"Fragmented care leads to avoidable complications and unnecessary costs despite the best efforts of health care providers in caring for Medicare beneficiaries with complex illnesses," Dr. McClellan said. "This is another effort to support promising approaches to help our beneficiaries get the most innovative, effective care possible as well as reward organizations who provide better quality care at lower costs."

RMS Disease Management, LLC is one of six organizations selected by CMS for the Care Management for High Cost Beneficiaries (CMHCB) demonstration. The Demonstration will test the ability of direct-care provider models to coordinate care for high-cost/high-risk beneficiaries by providing such beneficiaries with support to manage their conditions and enjoy a better quality of life.

RMS DM, LLC a renal disease management organization, will provide care to selected beneficiaries in Nassau and Suffolk counties on Long Island, New York, who have chronic kidney disease and seek to prevent further development of their illnesses which may lead to further complications and End Stage Renal Disease (ESRD).

While CMS has a number of planned and ongoing care coordination and disease management demonstrations and programs, the CMHCB demonstration will be the first effort to focus specifically on provider-directed models of care for high-cost fee-for-service Medicare beneficiaries.

"The RMS program will focus on coordinating care for Medicare beneficiaries who are at high risk for kidney failure and typically have multiple chronic conditions. Our selection by CMS demonstrates the value and strength of our program in providing an integrated care management approach for CKD patients," said DaVita CEO, Kent Thiry.

RMS Disease Management, LLC will receive a monthly fee for each beneficiary participating in the program to cover their administrative and care management costs. However, RMS will be required to assume financial risk if they do not meet established savings to Medicare. As CMS has done in other disease management demonstrations, contracting with external organizations allows federal investment in care management and care coordination, while assuring that the new programs will not add to Medicare net costs.

"RMS's program will include collaboration with participants' primary and specialist providers to enhance communication of relevant clinical information. RMS will provide DaVita's Kidney Education and You (KEY) educational services and RMS Chronic Kidney Disease Management Services in combination with Nephrology-based Nurse Practitioner Clinic Services. Our intent is to help increase adherence to evidence-based care, reduce unnecessary hospital stays and emergency room visits, and help participants avoid costly and debilitating complications," said RMS Director of Strategy and Government Programs, Dr. Gary L. Cellini.

Beneficiaries eligible for participation in the demonstration will be identified by CMS and will have to meet eligibility criteria outlined by the RMS program. The RMS project will begin operations starting in the fall.

DaVita is a leading provider of dialysis services for patients suffering from chronic kidney failure. DaVita operates and provides administrative services to kidney dialysis centers and home peritoneal dialysis programs domestically in 37 states, as well as Washington, D.C. As of March 31, 2005, DaVita operates or provides administrative services to 665 outpatient facilities serving approximately 55,000 patients.

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SOURCE: DaVita Inc.

CONTACT: LeAnne Zumwalt, Investor Relations of DaVita Inc.,