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Medicare Reimbursement Changes Coming for Kidney Care, Dialysis

HHS is looking to modify Medicare reimbursement structure to encourage the use of home-based dialysis and kidney transplants.

Medicare reimbursement and kidney care

Source: Getty Images

By Jacqueline LaPointe

- HHS is reexamining Medicare reimbursement structures in kidney care that encourage more dialysis center treatment, rather than home-based care or even transplants.

HHS Secretary Alex Azar made the announcement at the sixth annual Kidney Patient Summit, led by the National Kidney Foundation, on March 4 in Washington DC.

“Today, I want to lay out what it would look like to pay for kidney health, rather than kidney disease—and pay for Americans with kidney disease to actually get good outcomes, rather than the endless, life-consuming procedures that you all know so well,” he told attendees.

Kidney disease puts a significant strain on patients and the healthcare industry. Over 30 million Americans have some stage of kidney disease, Azar explained. Of those individuals, about 100,000 Americans start dialysis each year. But one in four are likely to die that same year.

The economic burden of kidney disease is also significant. In 2016 alone, Medicare spent $79 billion on beneficiaries with kidney disease and another $34 billion on beneficiaries with end-stage renal disease (ESRD).

READ MORE: Team-Based Care for Kidney Disease Saves Park Nicollet $1.2M

Patient outcomes and Medicare spending is suffering because Medicare reimbursement policy is failing, Azar stated.

“One of the key reasons for our failing policies is that kidney care in particular has some of the worst incentives in American healthcare,” he said. “In fact, kidney care represents a huge opportunity to deliver on the promise of one of the priorities I’ve laid down as HHS Secretary, getting better value out of American healthcare.”

Medicare reimbursement policies should incentivize providers to try more treatment options with patients, especially in light of innovative and developing technologies, he continued.

However, the predominant fee-for-service payment mechanism does not encourage providers to treat patients outside of the dialysis center.

Azar pointed out that 88 percent of Americans with ESRD start treatment with center-based dialysis, while just 12 percent of patients start treatment at home with hemodialysis or peritoneal dialysis.

READ MORE: Targeting Skilled Nursing Facility, ESRD Care Saves ACO $15M

Similar nations are doing the opposite. In fact, more than 80 percent of kidney disease patients in Hong Kong use some form of in-home dialysis. Even patients in Guatemala leverage the use of peritoneal dialysis more than patients in America, Azar highlighted.

Home-based treatment may not be appropriate for all kidney disease patients, but these individuals deserve more convenient options that promote independence and self-sufficiency, the head of HHS explained.

“But in many ways, today’s policies bias providers toward center-based dialysis,” he elaborated. “For one, we believe we may simply underpay for these alternatives, even though we know how much they can benefit patients’ lives. It’s also more appealing for a dialysis company to add patients to a center where one machine can accommodate multiple patients than it is to provide new services to each patient at home.”

“But that isn’t providing the care patients deserve, and we have the power within HHS to test out significant payment changes to boost home dialysis.”

HHS has already embarked on improving the incentives in kidney care with the Comprehensive ESRD Care Model. Through the model, providers and suppliers across the care continuum form accountable care organizations (ACOs) to deliver patient-centered, high-quality care. The ACO model has both one- and two-sided financial risk tracks based on the size of the participating dialysis organizations.

READ MORE: The Difference Between Medicare and Medicaid Reimbursement

Azar reported that the Comprehensive ESRD Care Model saved about $2,000 per patient per year in Medicare costs in the first year. Providers also reduced hospitalizations while maintaining care quality.

HHS plans to build on the ACO model to help more patients with kidney disease. The department is now looking at ways to include patients with stage 4 and 5 kidney disease, Azar stated.

Aligning the Medicare reimbursement structure for kidney care with accountable care would also support the adoption of new, innovative technologies, as well as the use of kidney transplants, the HHS leader added.

“Even though a transplant improves health and dramatically lowers the cost of care, from the perspective of a dialysis company, every transplant is one less customer,” he said. “A system that pays for health, as we envision for all of healthcare, will pay for the healthiest possible outcomes.”

“Ideally, we’d want to offer dialysis providers incentives to get patients off dialysis through transplants. We want to make the outcome that’s good for the patient and good for the system good for their business, too.”

More flexible payments will incentivize providers not only to encourage kidney transplants using live organs, but also using artificial kidneys when the option is available. Investing in technologies can help to reduce the number of transplant patients requiring dialysis within five years, which is now at about 20 percent.

“We have some of that technology today—and yet too many Americans still suffer without it,” he concluded. “Now, we could take the gap between that promise, and the reality of so many Americans still relying on the same technology we wanted to leave behind half a century ago, as a reason to be shocked and frustrated.”

“We’ve waited long enough. We just need renewed ambition and the right policies.”


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