Spokane

Two new dialysis centers planned
Nation's largest dialysis company OK'd by state Department of Health

Wendy Harris
Staff writer

After years of trying to break into Spokane's kidney dialysis market, a major company plans to open two dialysis centers in the region with the state's blessing.

Fresenius Medical Care North America, the nation's largest dialysis company, announced Wednesday it plans to open a dialysis center in north Spokane and one in the Spokane Valley by year's end. Each center would have eight dialysis stations.

Sacred Heart Medical Center and its dialysis partner, Inland Northwest Renal Care Group, are trying to block the competition. Both are appealing the recent decision by the state Department of Health to approve Fresenius' plans.

Regardless, Fresenius is proceeding.

"The state has ruled in our favor . . . and for us to continue to delay would be fairly meaningless," said Fali Sidhva, Fresenius' regional manager for the Northwest.

Sidhva said he believes the competition Fresenius will bring to the area will be good for patient choice and quality of care.

Meanwhile, Gerard Fischer, vice president of Sacred Heart, said the hospital's longstanding tradition as the leader in kidney dialysis is worth protecting.

"It's been our position to stay very active in protecting a service that we have been the leader in and the provider of since it came to the area," Fischer said.

Sacred Heart had been the sole provider of kidney dialysis in Eastern Washington and North Idaho since it began offering the service in 1962. Then last year, Sacred Heart sold a portion of its dialysis business to the for-profit Renal Care Group. The medical center wasn't eager to sell but figured a for-profit company eventually would enter the market and lure away business. The joint venture has allowed Sacred Heart to keep its hand in dialysis.

Dialysis removes waste and extra fluid from the blood when a person's kidneys can't. As the number of dialysis patients in the region has grown over the years, so has the demand for more dialysis stations.

Fresenius has been trying to enter the Spokane market since 1997 but was twice refused permission by the state to open dialysis operations. Fresenius is the parent company of QualiCenters Inc., which originally applied with the state to open the two centers.

When considering new dialysis stations, the Department of Health looks at whether there is demand for services, the financial feasibility of the proposed operation, whether it is cost effective, and the quality of care the applicant would provide.

In both previous denials, Fresenius was only able to show demand for services, not the other three criteria, said Karen Nidermayer of the Health Department.

Fresenius appealed the rejections and the Health Department finally gave it the green light in April.

Fresenius had been under federal investigation for billing fraud. The pending investigation contributed to the Health Department's denials, Nidermayer said.

Fresenius reached a settlement with the federal government recently that helped its appeal, Nidermayer said.

"They were able to provide information that demonstrated that the fraudulent billing practices would not be happening again," Nidermayer said.

The Health Department also was initially concerned by a pending lawsuit involving Dr. Leo Obermiller, whom Fresenius has selected as medical director for the two Spokane clinics.

Obermiller, a Spokane nephrologist, worked for Northwest Nephrology Associates. The clinic was accused in the late 1990s of defrauding Medicare, Medicaid and private insurers of more than $1million. While Dr. Mark Frazier was indicted on criminal charges, the clinic's other three doctors -- including Obermiller -- were not criminally charged. However, Obermiller was ordered to pay $415,000 in restitution in a related civil suit.

That issue also has been settled to the Health Department's satisfaction.

"They were able to provide information that showed there had been a settlement agreement between (Obermiller) and the United States and that there was a corporate integrity agreement," Nidermayer said.

Fresenius plans to spend at least $1 million in construction and other costs to open its two new Spokane clinics, Sidhva said.

The North Side clinic will be at 7407 N. Division in the building formerly occupied by Group Health Northwest, Sidhva said. He declined to disclose the proposed location of the Valley center but said it would be close to Valley Hospital and Medical Center.

The two new centers will be able to treat up to 100 patients per week. Typically, patients need dialysis about every other day, which takes about three to four hours each session.

Fresenius is talking with Empire Health Services, which owns Deaconess Medical Center and the Valley Hospital, about a possible collaboration, Sidhva said.

Sacred Heart and Renal Care Group have filed both an administrative appeal with the Health Department and a judicial appeal in Spokane County Superior Court to overturn the Health Department's decision to approve Fresenius' two "certificates of need," which allows them to open the two centers.

In the event they are successful and Fresenius loses its certificates, the company could not operate the centers, Nidermayer said. However, the appeals themselves do not preclude Fresenius from proceeding, she said.

Sacred Heart and Renal Care Group operate six dialysis centers that have a total of a 79 stations. The centers are at Sacred Heart in downtown Spokane, in north Spokane, the Valley, Moses Lake, Omak and Coeur d'Alene. The Valley Dialysis Center is being moved from Valley Hospital and Medical Center to a new facility on Pines Road this summer. It is being expanded from seven to 14 stations.

Back to Top