Medicare spending on End Stage Renal Disease (ESRD) and dialysis totaled more than $49 billion in 2016, almost 80% of which was allocated to the population covered by traditional Fee-for-Service (FFS) Medicare, the same patients included in the MSSP (Medicare Shared Savings Plan) that St. Elizabeth participates in through St. Elizabeth Provider Network. The goal of the MSSP is to “promote accountability for a patient population and coordinate items and services under Medicare Parts A and B and encourage investment in infrastructure and redesigned care processes for high quality and efficient service delivery.” In the process of achieving these goals, it is believed that ACOs will be able to achieve better outcomes, decrease costs, and produce savings for Medicare that can then be shared with participating ACOs. In 2018 and 2019, SEPN providers received positive payment adjustments up to 1.68% for the quality abstraction and submission of 2017 and 2018 MIPS/ MSSP performance.
About 750,000 Americans have permanent kidney failure or ESRD, 530,000 of which have Medicare benefits. People with permanent kidney failure, including those under age 65, have long been eligible to enroll in the traditional FFS Medicare program, which covers dialysis treatments, kidney transplants and other services. Meanwhile, ESRD patients have been the only patient group barred from enrolling in Medicare Advantage (MA) Plans, except in limited circumstances when the patient developed ESRD after enrollment or were grandfathered into the plan through employee-sponsored coverage. The 21st Century Cures Act, signed into law December 2016, lifts that restriction beginning next year and, for the first time, the ESRD and dialysis patient population are eligible to sign up for alternative Medicare plans without the circumstantial limitations. CMS expects 83,000 ESRD patients to switch to Medicare Advantage, with 50% of those enrolling in 2021.
The limited eligibility for patients with permanent kidney failure or ESRD to enroll in private alternatives to traditional FFS Medicare, has historically assigned the majority of the high cost burden of ESRD and dialysis for the Medicare population to the traditional Fee-for-Service Medicare plan. Of the $49 billion in Medicare spending on ESRD and dialysis population in 2016, only 8.7 billion of ESRD spending in 2016 was for MA plan covered patients. This 8.7 billion was spent on a Medicare Advantage ESRD population of 130,000, just a fraction of the total MA population of 24.7 million enrollees. According to the U.S. Renal Data System, although ESRD patients comprised a mere 1% of FFS Medicare enrollment, they accounted for 7%, or $35 billion, of all FFS Medicare costs in 2016. Combined, Medicare spending on chronic kidney disease and ESRD totaled more than $114 billion, approximately 23% of fee-for-service spending. In 2016, $67,116 was spent per ESRD beneficiary versus $10,182 per non-ESRD senior beneficiary.
On average, many Medicare Advantage insurers currently cover a few hundred ESRD patients who developed the condition while already enrolled. However, the addition of hundreds or thousands more to their rosters will test existing care and cost-management skills. The looming changes with the admittance of ESRD and dialysis patients into this sector of the health insurance industry that has enjoyed years of rapid growth and lucrative returns threatens to upend that success. Financial success relies upon successful care management of these patients, including movement to modalities as introduced in CMS’s July 2019 release of the ESRD Treatment Choices (ETC) Model. Initiatives focus on value-based care models to improve the care management process and care continuum for these patients and drive better health outcomes. Key interventions identified include preventative measures, early detection and referral to nephrology, early access, planned transition to treatment, home dialysis modalities, and even expanded access to kidney transplants.
Insurers and dialysis providers lobby for higher payment rates from the federal government, so far to no avail. Concerns are heightened by the fact that beyond kidney failure, most ESRD patients often have multiple other comorbities including diabetes and heart disease, making them much costlier to care for. Many also encounter numerous socioeconomic barriers to medical care. MA plan insurers verbalize that costs to manage the ESRD population is significantly greater than the CMS revenue received for those patients. They may seek to mitigate ESRD costs with proposals to shift more costs to patients through increased maximum out-of-pocket levels by as much as 13% and inflated total beneficiary cost thresholds, raising out-of-pocket cost burden for the members. CMS has also proposed loosening Advantage insurers’ network adequacy requirements related to dialysis and has committed to continuing to assume the costs for organ acquisitions for kidney transplants instead of having Medicare Advantage plans do so. For smaller, regional plans with less than 50,000 members, a large influx of ESRD patients could be terminal to the plan’s existence.
St. Elizabeth Provider Network is partnering with our local dialysis partners to decrease the ESRD population barriers and costs within the St. Elizabeth Healthcare System. Look for future information about the ESRD/ Dialysis Initiatives proposed through the partnership.