WALTHAM, Mass., November 21, 2023 /PRNewswire/ — Fresenius Medical Care, the world’s leading provider of products and services for people with kidney disease, has settled a legal dispute with the US government over accounts receivable and today entered into a final and legally binding settlement agreement. , by which the company will receive payment from the US government.
Fresenius Medical Care filed a complaint against United States in 2019. The complaint sought to recover money owed to the company by the U.S. Department of Defense for services it provided under the Tricare program or before. January 11, 2023.
Tricare pays for dialysis treatment and other medical care provided to military service members, their dependents and retirees. The lawsuit challenged undisclosed administrative actions by Tricare administrators to reduce the reimbursement rate paid for dialysis treatment provided to Tricare beneficiaries in light of the recoding of billing codes. Tricare administrators had accepted the unpublished administrative action and refused to change or withdraw it.
The settlement agreement now in place resolves the dispute underlying the complaint and brings the litigation to an end.
Both revenue and operating income will be positively impacted by the settlement agreement. In previous reporting periods, the negative impact related to this issue was not treated as a separate item due to its operational nature. Therefore, Fresenius Medical Care expects a net positive impact on operating income (basis of guidance)1: approx. 175 million euros at 4th Quarter of 2023.
The company previously expected operating income in fiscal 2023 (basis of guidance)1: to grow at a low single-digit rate compared to the previous year (2022 EUR 1540 million)
As a result of the settlement agreement, Fresenius Medical Care is raising its earnings outlook today. The company now expects operating income (guidance basis)1: In fiscal year 2023, compared to the previous year, it will grow by 12 to 14 percent. All other elements of the 2023 outlook, as published, remain unchanged.
Consistent with its disciplined financial policy, Fresenius Medical Care intends to use the agreed settlement payment to reduce its net financial debt and thereby replenish its balance sheet.
Fresenius Medical Care is the world’s leading provider of products and services for people with kidney disease, of whom approximately 3.9 million patients worldwide regularly undergo dialysis treatment. Through its network of 4,014 dialysis clinics, Fresenius Medical Care provides dialysis treatment to approximately 342,000 patients worldwide. Fresenius Medical Care is also a leading supplier of dialysis products such as dialysis machines or dialyzers. Fresenius Medical Care is listed on the Frankfurt Stock Exchange (FME) and the New York Stock Exchange (FMS).
For more information, visit the Company’s website at www.freseniusmedicalcare.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results may differ materially from those described in these forward-looking statements due to various factors, including, but not limited to, business, economic and competitive conditions, legislative changes, regulatory approvals, effects related to the results of the COVID-19 pandemic. clinical trials, currency exchange rate fluctuations, uncertainties in legal or investigative proceedings and the availability of funding. These and other risks and uncertainties are detailed in Fresenius Medical Care AG & Co. In KGaA’s reports filed with the US Securities and Exchange Commission. Fresenius Medical Care AG & Co. KGaA undertakes no obligation to update any forward-looking statements in this release.
Operating income as presented in the forecast is on a constant currency basis and without special items. Special items will be provided as a separate KPI (“Operating Income Excluding Special Items”) to reflect effects that are unusual in nature and were not foreseeable or unforeseeable in size or impact at the time of guidance. These items are excluded to ensure comparability of the figures presented with the Company’s financial targets, which have been set, except for specific items.
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SOURCE Fresenius Medical Care Holdings, Inc.
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