Kristoffer Tripplaar/Sipa USA via AP Images
Fresenius and DaVita have established a functional duopoly over dialysis treatment in the U.S., and the VA has given them billions of taxpayer dollars over the last decade.
The Revolving Door Project, a Prospect partner, scrutinizes the executive branch and presidential power. Follow them at therevolvingdoorproject.org.
Former Rep. Doug Collins is Donald Trump’s pick to head the Department of Veterans Affairs (VA), a federal agency that oversees the administration of health care to over 9.1 million veterans. Collins, notably, is a veteran himself, but has seemingly little background on veterans issues. His early pronouncements are superficially bland, promising to “root out corruption, and ensure every veteran receives the benefits they’ve earned,” among other things.
Unfortunately, here Collins seems to be suggesting the mass firing of VA employees, an act purportedly to be accompanied by the expansive downscaling and robust privatization of VA services, perhaps as outlined by Project 2025’s VA section. Privatization and other divestment schemes have a long history at the VA, a history that has continuously proven to hurt veterans while padding the profits of corporate profiteers.
Instead, Collins and others claiming to want to finally address the VA’s notoriously broken system should target the private contractors whose utter lack of accountability at the department has—across administrations—only created an environment of callous indifference toward veterans and their health. The conservative goal of privatizing every part of government will only serve to worsen the plight of veterans across the country.
Proof of this can be found in the VA’s administration of its dialysis services.
FOIAs from the department reviewed by the Revolving Door Project showcase how shockingly paltry the VA’s oversight is of their dialysis contractors. Sick veterans are paying the price.
The Dialysis Duopoly
Dialysis, of course, is the treatment for people with failing kidneys. These organs clean toxins out of the blood and into the bladder for excretion, along with many other important tasks. Without kidneys, you will quickly die. So a dialysis machine serves essentially as an external replacement kidney that patients visit regularly to clean their blood.
Many veterans need this care. In 2014, the VA first awarded a lucrative contract for the department’s dialysis administration needs. Since then, just two companies, Fresenius and DaVita, have carried out the vast majority of dialysis for veterans. Though the VA attempted to transition its dialysis services to a Medicare-capped program known as the Community Care Network (CCN) beginning in 2018, the vast majority of the VA’s dialysis patients continue to be serviced through the (non-Medicare-capped) Nationwide Dialysis Services Contract (NDSC). In 2019, the VA renewed that contract for another five-year term.
Read more from the Revolving Door Project
A 2023 VA Office of Inspector General (OIG) report found that 95 percent of veterans receiving dialysis treatments from October 2020 to September 2022 were being treated by NDSCs. That’s no less than 20,800 people over just that two-year span. Of those 20,800 patients, some 87 percent were administered their dialysis treatments by just two contractors. Though not named specifically by the OIG, the largest dialysis contractors by far are Fresenius and DaVita, which have now received $1.4 billion and $808.7 million, respectively, through the NDSC since 2019. Over the total life of the ten-year contract, these awards have seen Fresenius gain a revenue of more than $2 billion from the department, and DaVita $1.5 billion.
These two companies have established a functional duopoly of all dialysis treatment in the U.S., and the VA has given them billions of taxpayer dollars over the last decade. Despite these huge sums, the VA has seemingly failed to implement any real system for overseeing the companies to which it is entrusting the lives and basic health of tens of thousands of veterans. Multiple Freedom of Information Act requests (FOIAs) obtained by RDP have illustrated an apparent lack of regard for safeguarding the veterans under its care, as well as its own budget.
Where Are the Complaints?
FOIAs reviewed by the Revolving Door Project included requests for all documented veteran/patient complaints to Fresenius under the NDSC as well as all documented “Veteran Clinical Safety Events” under Fresenius’s NDSC contract. In its initial response, the Contracting Officer Representative (COR) for the VA returned just a single relevant patient complaint from Fresenius, as well as a single documented facility closure over the total life of the five-year, billion-dollar contract.
This is extremely hard to believe. Fresenius is a company that has been frequently protested by its own employees for severe clinic understaffing, has had multiple retaliation and whistleblower concerns raised related to its quality of patient care, has been sued for civil rights violations for allegations of discriminatory dialysis, and more. Yet, miraculously, it has somehow managed to insulate all veterans (but one) under its care from problems afflicting its facilities.
Except we don’t actually know that. Instead, the VA essentially said it does not require comprehensive tracking of patient complaints via its NDSC contract.
Specifically, in response to the aforementioned request, the VA revealed that the VHA Office of Integrated Veteran Care (IVC) Dialysis Team “does not track or monitor patient complaints or safety events related to this contract,” and that the VHA National Kidney Office does not maintain any relevant documents pertaining to patient complaints, either. This is an alarming statement given how dangerous dialysis can be, and how large this contract is. Yet it is even more concerning because the VA’s own NDSC Quality Assurance Surveillance Plan (QASP) includes provisions specifically detailing that—at minimum—the agency’s Contracting Officer Representative is required to maintain a record of patient/customer concerns and complaints in order to protect patients and ensure contract compliance.
The lack of record apparently kept by these offices is even more concerning given that subsequent FOIAs submitted to VA Patient Advocates (who serve as navigatory resources for patients and their families on-site at VA medical centers) returned 61 complaints relating to Fresenius or DaVita since 2019. These complaints varied in terms of location and severity of concern, but included allegations of over-dialysis, over-frequency of treatment, retribution from staff, and more.
Dialysis is a complicated procedure that can easily cause illness or death if done incorrectly. At times, according to the VA Patient Advocates complaints, some veterans even had to go to emergency rooms following improper treatment by Fresenius and DaVita. Several requested to be transferred to VA medical centers to access better care. Other complaints noted that veterans have had extreme difficulty contacting the VA to report improper and dangerous conduct from their service providers. These stories sound very similar to how other reports have described these companies’ routine treatment of private patients.
What’s the Plan?
It’s bad enough that the VA has seemingly so little regard for the health of their dialysis patients. But they also seem to have few existing oversight processes for ensuring they are not being overcharged for their NDSC contract.
When asked for any files relating to adverse administrative actions for DaVita and Fresenius, multiple VA departments insisted it was someone else’s responsibility to conduct NDSC contract oversight. When FOIAs were filed with the National Acquisition Center (NAC), NAC responded that the Strategic Acquisition Center (SAC) was the correct office for the request. When the request was then sent to SAC, FOIA officials determined that SAC does not actually maintain the relevant documents, and subsequently closed the request. That FOIA officer then suggested that the VA’s Office of Integrated Veteran Care (IVC) was most likely to maintain these records. When re-requested under the IVC, the department offered that it did not have any records relevant to this request as IVC simply “does not receive, track, investigate, or otherwise work adverse actions.”
To be clear, the IVC is ostensibly tasked with the contract delivery for both the NDSC and CCN, and according to a VA Inspector General report, should be responsible for delegation of oversight responsibilities. This lack of record is particularly concerning, given that other governmental entities have taken action in the past five years against DaVita and Fresenius for defrauding Medicaid and deceptive medical practices.
It’s possible another VA department among this bureaucratic tangle is engaging in this oversight. But when asked, the agency did not clarify the situation.
When asked for comment on “what the VA’s enforcement … of its oversight and accountability mandate in its administration of [NDSC] is, and what the VA has done (if anything) to insulate the veterans entrusted to its care from the harms reported in these clinic facilities,” the VA responded simply that “We take complaints from Veterans very seriously, investigate them, and take appropriate action to ensure that they are getting full access to health care services in a safe, welcoming, and respectful environment.”
The New Requirements
To be fair, Biden’s VA has taken some late steps toward the formation of an oversight system. Yet it’s much too little, and years too late.
In May, the VA posted an updated Performance Work Statement (PWS) related to the NDSC. A PWS is part of the contract portfolio that lists out requirements for the contract, rather than specifying requirements for its implementation. PWS documents tend to include procedural mandates such as defining the scope of the contract, performance requirements and reports, quality assurance requirements and reports, and more.
The latest PWS on the NDSC contracts notably requires contractors to implement a process for handling veteran complaints (including requiring monthly reports to the VA), to develop a fraud prevention and detection strategy, and to develop a Clinical Quality Monitoring Plan that outlines quality monitoring activities for patient safety, among other things.
These changes are fine, and include a litany of tightened reporting timelines for patient complaints, new tracking and reporting requirements for interventions in safety and quality issues, and new standards that facilities must receive a Centers for Medicare & Medicaid Services (CMS) star rating of at least three.
Still, it is absurd that this is happening only now, years after problems with DaVita and Fresenius became public knowledge. Worse, these new oversight requirements are primarily reliant on the good-faith disclosure of contractors. Indeed, the new PWS does not seem to include clear processes for the VA’s enforcement of these new standards, and there is no clear infrastructure outlined within it regarding the VA’s oversight implementation responsibilities, including requirements allowing for VA inspections of dialysis facilities themselves.
An agency seriously concerned with the welfare of the veterans it cares for would be much more aggressive than this.
Five More Years?
The latest NDSC contract expired this fall on September 30.
Though the VA has ostensibly been preparing to issue a new contract solicitation, as it is required to do, as of September 1, no new NDSC solicitation had been issued on the SAM.gov website. Notably, both previous solicitations for the program took months to process between issue date and award date. For fiscal year 2013, the solicitation was originally posted in November 2012, and was ultimately awarded in June of 2013, seven months later. For FY2019, the solicitation was originally posted in October of 2018, and awarded in March of 2019, five months later.
On September 5th, the VA finally posted a temporary plan to ensure the continuance of care come October 1st. Yet it has no obvious standards for quality care or fair pricing. The department instead used a noncompetitive extension mechanism to continue business as usual, and justified it in order to “prevent a lapse in critical dialysis services.” While it is imperative that veterans continue to have access to crucial health care, this reasoning rings hollow, given that this untenable timeline was the entirely foreseeable result of the VA’s own lethargy and inaction.
A 2023 report from the VA OIG raising concerns over the department’s NDSC oversight stated that “planning for contracts to replace the expiring NDSCs should have started by January 2023,” yet the VA’s integrated project team responsible for NDSC award strategy was not even assembled until mid-August 2023.
The VA itself has noted that its contract award process can vary between 180 and 240 days, with longer times associated with more complex contracts (such as service contracts) and those necessitating OIG review. Yet instead of allotting the appropriate time and attention to the solicitation and award of these contracts, the VA waited until there were just 25 days remaining to start the process.
Thus it seems likely that come March, the VA will simply reapprove DaVita and Fresenius to another five years of the same contract.
A Bipartisan Crisis
These problems are not new, and have seen both Democratic and Republican administrations refuse to address them, if not make them worse.
President Biden didn’t fully break with tradition. Doug Collins and the rest of the Trump administration have an opportunity now to actually live up to Republican rhetoric about veterans.
They could fully fund veterans health services to ensure timely and attentive care is available to all veterans. They could implement real oversight mechanisms and enforce robust reporting requirements for contract service and safety violations. They could “root out” corruption by ending uncompetitive, insufficiently supervised contracts. If necessary, they could even bar bad contractors, like Fresenius and DaVita, from eligibility for contract bids.
Alas, this is highly unlikely, given the administration’s ready advocacy for privatization in the VA and elsewhere. In that case, it is long past time for Congress to intervene, and to use their investigatory and oversight powers to ensure that veterans are getting good care at a fair price.
