Deutsche Banks Comments On DaVita News That OMB Receives Receipt Of ESRD Transition Adjuster

In a report published by Deutsche Bank, DaVita DVA saw positive news when the Office of Management and Budget (OMB) posted today that it has received a document titled "Changes to the ESRD Prospective Payment System Transition Budget‐Neutrality Adjustment; to the Signature Requirement on Clinical Laboratory Services Requisition". Deutsche Bank said that, “As background, a rule such as this is first submitted to the OMB for clearance before it is published in the Federal Register (www.reginfo.gov). While we do not know the contents of the final rule, we do believe that this document sets forth instructions to fix the transition payment adjustment error of 3.1%. We are not sure whether the changes will be made retroactively to January 1, 2011, but we do think that the adjustment will be fixed in 2011. This is positive news for DaVita (DVA) as it now appears certain that the fix will come ahead of the 2012 rule making cycle. We continue to think that a transition payment fix could add between $0.60 to $0.70 per share annually to earnings.” DaVita closed yesterday at $79.72.