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Fresenius Medical Care North America Awarded ESRD Demonstration Project By CMS

Posted on: Tuesday, 8 November 2005, 09:01 CST

Fresenius Medical Care AG ("the Company") (Frankfurt Stock Exchange: FME, FME3) (NYSE: FMS, FMS-p), the world's largest provider of Dialysis Products and Services, today announced that the Centers for Medicare and Medicaid Services (CMS) has awarded Fresenius Medical Care North America (FMCNA) and its wholly owned subsidiary Fresenius Medical Care Health Plan (FMCHP) a four year capitated End Stage Renal Disease (ESRD) demonstration program.

The capitated ESRD demonstration is designed to test the effectiveness of disease management models to increase quality of care for ESRD patients while ensuring that this care is provided more effectively and efficiently. Fresenius Medical Care Health Plan is contracting with Sterling Life Insurance Company in Philadelphia and Pittsburgh, Pennsylvania and Dallas, Houston and San Antonio, Texas and with American Progressive Life & Health Insurance Company of New York in Boston and Springfield, Massachusetts to offer Medicare Advantage Private Fee-for-Service plans.

As part of the capitated Demonstration Program, FMCNA will conduct a "Disease Management Development Study of an Expanded Bundle" concurrent with the capitated demonstration. In Phase I of this study FMCNA will retrospectively apply a dialysis bundle payment reimbursement structure to the services/provider claims. FMCNA will compare the economic results of the bundle to the full capitation payment and the risk adjusted baseline cost. In Phase II of this study FMCNA will utilize a separate provider based disease management model and will compare clinical and utilization parameters against patients enrolled in the original full capitation demonstration program and a control group of non-enrolled beneficiaries.

Ben Lipps, Chief Executive Officer of Fresenius Medical Care, commented: "This integrated model allows us to cost effectively provide our products and services to our patients. We offer innovative treatment concepts and have differentiated our therapy offering UltraCare and single-use dialyzer therapy for all our patients. Combined with our years of experience in disease management within the commercial sector we believe that we can make this program successful. We feel this structure will be attractive to our ESRD patients and it is also a structure that we can readily expand into new markets during the subsequent years of the demonstration project and potentially beyond as a Special Needs Medicare Advantage Plan."

Beneficiaries will be able to enroll in these new plans beginning November 15, the Medicare health plan open enrollment period, with coverage beginning January 1, 2006. There will be continued open enrollment available to patients to join our program during the course of the demonstration project.

FMCHP has partnered with another FMCNA subsidiary, Renaissance Health Care (Renaissance) to provide specific disease management services. FMCHP and Renaissance will integrate the high quality dialysis services Fresenius Medical Services currently provides to patients in our affiliated dialysis clinics, with a broader disease management program focused on care coordination, and structured evidence based care maps driven from a patient risk assessment tool. Through our disease management program of coordinated care via Nurse Care Managers and our Nephrologist partners, patient education and empowerment, the use of our renal network for outpatient services, FMCHP projects it will increase the quality of care, decrease hospital admissions and lower the cost of caring for ESRD patients.

One of the factors that differentiate FMCNA in its participation in this demonstration is the fact that we have our own health plan designed to serve the specific needs of ESRD patients. FMCNA has gone this extra measure as further evidence in its commitment to better serving the needs of the ESRD community. Fresenius Medical Care Health Plan will have as its core mission to bring a more comprehensive approach to care coordination for its members to help reduce the burden and stress imposed upon them by their medical condition. The systems set up by FMCHP are designed to work closely with each member, their family and their care providers to create a seamless, more efficient and more effective process of care delivery.

Fresenius Medical Care AG is the world's largest, integrated provider of products and services for individuals undergoing dialysis because of chronic kidney failure, a condition that affects more than 1,300,000 individuals worldwide. Through its network of approximately 1,670 dialysis clinics in North America, Europe, Latin America, Asia-Pacific and Africa, Fresenius Medical Care provides dialysis treatment to approximately 130,400 patients around the globe. Fresenius Medical Care is also the world's leading provider of dialysis products such as hemodialysis machines, dialyzers and related disposable products. For more information about Fresenius Medical Care visit the Company's website at www.fmc-ag.com.

This release contains forward-looking statements that are subject to various risks and uncertainties. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including changes in business, economic and competitive conditions, regulatory reforms, foreign exchange rate fluctuations, uncertainties in litigation or investigative proceedings, and the availability of financing. These and other risks and uncertainties are detailed in Fresenius Medical Care AG's reports filed with the U.S. Securities and Exchange Commission. Fresenius Medical Care AG does not undertake any responsibility to update the forward-looking statements in this release.

Source: Business Wire

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