Patients and Advocacy Groups File Federal Lawsuit Against the State of California to Overturn AB 290

ORANGE COUNTY, Calif. (November 2, 2019) – Two kidney failure patients, together with two patient advocacy groups — the American Kidney Fund (AKF) and Dialysis Patient Citizens (DPC) — filed a federal lawsuit today in the U.S. District Court for the Central District of California against the State of California. The lawsuit, Doe vs. Becerra, asks the court to strike down AB 290, the newly enacted law that will do irreversible harm to dialysis and transplant patients who need charitable assistance to help them pay for health care. Filed against California Attorney General Xavier Becerra, California Insurance Commissioner Ricardo Lara, Shelley Rouillard, Director of the California Department of Managed Health Care, and Susan Fanelli, Acting Director of the California Department of Public Health, the suit calls for AB 290 to be ruled unconstitutional.

AB 290 is set to go into effect Jan. 1, 2020, placing AKF in the impossible position of having to choose between obeying federal law or state law in the operation of its longtime health insurance premium assistance program. The program helps more than 3,700 low-income, mostly minority, kidney failure patients in the state, and more than 75,000 nationally. The lawsuit aims to sustain health care coverage and access to care for needy Californians, including two patient plaintiffs — Stephen Albright and a second plaintiff who has filed anonymously — who depend on AKF now and those who will need AKF's assistance in the future.

"With the enactment of AB 290, the California legislature has created an unnecessary crisis for Mr. Albright and the other plaintiff, along with thousands of other seriously ill patients across the state," said LaVarne Burton, president and chief executive officer of the American Kidney Fund. "Without AKF financial support, these patients cannot afford their insurance; without coverage, they lose access to health care and the treatments that keep them alive. California policymakers have removed their safety net and let special interests win out over the needs of this underserved population. AKF remains committed to our promise to do everything we can to protect patients; with the lawsuit, we continue to fight this unconscionable effort by policymakers."

Doe vs. Becerra claims that AB 290 is both unconstitutional and interferes with federal health care laws. As the complaint explains, AB 290 will force AKF to end its charitable premium assistance program in California because of the legal risk that the California law poses to AKF's financial assistance efforts throughout the country. It also tramples on the First Amendment freedoms of the patients, AKF, and DPC.

The patient plaintiffs, both in their 50s, live in Orange County and have had their lives upended by kidney failure, suffering extreme financial hardship as a result. Both enrolled in Medicare when they were diagnosed with end-stage renal disease (ESRD, or kidney failure). But because California does not require insurers to offer supplemental Medigap policies to ESRD patients under 65, they both need to maintain their employer-based health insurance in addition to Medicare because Medicare only pays 80% of health care costs. AKF grants pay for both their Medicare Part B premiums and their employer-based policy premiums. Without AKF's assistance, neither patient could afford to stay insured.

"Instead of protecting some of their most vulnerable constituents, California state lawmakers decided to jeopardize patient access to lifesaving care in violation of longstanding federal law," said Hrant Jamgochian, CEO of Dialysis Patient Citizens, a national nonprofit organization led by dialysis patients. "Unfortunately, not only is AKF assistance at risk for thousands of Californians, but AB 290 threatens to undermine patient access and quality of care for all dialysis patients in the state. With so much at stake, we are counting on the courts to strike down this unconstitutional law before it threatens patients' lives."

The parties are seeking a preliminary ruling before AB 290 becomes effective on January 1, 2020.

About the AKF charitable assistance program: For more than 20 years, the American Kidney Fund's 100% needs-based Health Insurance Premium Program (HIPP) has provided grants to low-income dialysis and kidney transplant patients, helping them pay for their health coverage when they cannot afford to do so on their own. AKF's program is governed by Advisory Opinion 97-1, which was issued by the Inspector General of the U.S. Department of Health and Human Services in 1997. AO 97-1 requires strict firewalls and safeguards to protect and ensure patient choice of provider and insurance coverage, providing a safe harbor from federal beneficiary inducement laws. This protocol has set the standard for dozens of similar national charity care programs for more than two decades.
For more information on the lawsuit and media inquiries, please contact: akfpress@mercuryllc.com.

About the American Kidney Fund

The American Kidney Fund (AKF) fights kidney disease on all fronts as the nation's leading kidney nonprofit. AKF works on behalf of the 37 million Americans living with kidney disease, and the millions more at risk, with an unmatched scope of programs that support people wherever they are in their fight against kidney disease — from prevention through transplant. With programs that address early detection, disease management, financial assistance, clinical research, innovation and advocacy, no kidney organization impacts more lives than AKF. AKF is one of the nation's top-rated nonprofits, investing 97 cents of every donated dollar in programs, and holds the highest 4-Star rating from Charity Navigator and the Platinum Seal of Transparency from Guidestar.

For more information, please visit KidneyFund.org, or connect with us on Facebook, Twitter and Instagram.

About Dialysis Patient Citizens

Dialysis Patient Citizens (DPC) is America's largest patient-led organization representing dialysis patients. With a membership of more than 28,000 dialysis and pre-dialysis patients and their families, DPC's mission is to improve the quality of life of dialysis patients by engaging policy makers, providers and the public. Through patient education, empowerment and advocacy, DPC works to increase awareness about kidney disease and promote favorable public policy.