Disclosure: Just initiated a small short position DVA.
Here is my rationale: recently published 2013 physician fee schedule on the federal register demonstrates significant reductions to medicare payments for CPT codes 35475 and 35476 (angioplasty codes for AV access with stenosis). Assuming they perform approximately 100,000 interventions per year, I estimate that this will reduce revenue by approximately 30M in 2013, with same operational overhead.
other potential headwinds:
sequestration - possible 2% reduction in total revenue on the dialysis side
potential SGR reductions to physicians: approximately 26% reduction in revenue for contracted MD's both within Lifeline and with its new partner HCP
Fees associated with integrating Health Care Partners will be significant in q4
I wonder how the shares being issued to purchase HCP will impact the future price?