A looming health crisis exists in the United States due to an increasing population of dialysis patients, and inadequate reimbursement for patient care.
With skyrocketing numbers of obese and diabetic Americans, and a lack of preventative education about these conditions as risk factors for kidney disease and kidney failure, Medicare’s program for covering dialysis treatments may soon not be able to stay afloat.
Medicare payments do not fully cover the cost of treating dialysis patients. To make matters worse, Medicare does not annually update payments to dialysis providers like it does for every other segment in health care.
Payment for dialysis services is the only prospective payment system in the entire Medicare program that is not adjusted annually for inflation, and as a result, the program is significantly under funded.
However, for those Americans who will one day ultimately require lifesaving dialysis treatments, it’s important to comprehensively address quality, access and safety issues.
Over the past 30 years, dialysis has progressed from a treatment limited to only a select few patients in hospital settings, to an advanced, convenient, readily available outpatient procedure which cleanses the blood of thousands of Americans with failed kidneys three or more times per week.
The Medicare program has made possible the availability of this medically complex and expensive routine, so that patients can continue living full and active lives, and enjoying work, recreation and time with friends and family.
The quality of dialysis equipment, medications, and staff continue to improve by necessity, despite the fact providers lose money on each treatment they administer. This progress can no longer be sustained.
The ESRD composite rate is the only Medicare PPS without an annual update mechanism to adjust for changes in input prices and inflation. MedPAC noted in its March 2003 Report to Congress that input prices related only to allowable costs would rise by 2.5 percent, but Medicare payments under the composite rate would remain the same unless Congress enacts an increase.
The lack of an annual update presents a special challenge to dialysis providers. Overall labor rates, for example, went up seven percent between 2000 and 2001, according to MedPAC’s 2003 report.
Nursing salaries rose, on average, from $23,140 to $31,720 between 1992 and 2002, an increase of 27 percent, according to the U.S. Bureau of Labor Statistics. Dialysis centers cannot afford to compete for nurses and other professionals with health care providers that have PPS mechanisms with annual update formulas.
To ensure that ESRD patients continue to have access to high quality care, the composite rate must be adjusted annually to cover dialysis providers’ real costs.
The key provisions of the Kidney Care Quality and Education Act include:
- Creating public and patient education initiatives to increase awareness about chronic kidney disease (CKD) and to help patients learn self-management skills;
- Establishing a three-year Quality Initiative that would reward quality improvement and attainment based on a composite score for measures developed in cooperation with the kidney care community;
- Providing Medicare coverage for CKD education services for Medicare-eligible patients;
- Establishing a uniform training for patient care dialysis technicians; and
- Seeking to understand the barriers to the adoption of different treatment modalities by patients.
The legislation would link the need for an annual update mechanism for the Medicare ESRD composite rate with an improved quality system.
The Medicare ESRD Program is the only one without an annual update mechanism.
The Quality Initiative would reward quality improvement and attainment through bonus payments funded through a portion of the annual inflationary increase calculated using the CMS-developed ESRD market basket.
Quality would be measured using metrics developed by the kidney care community and maintained by an ESRD Advisory Committee. In addition to being tied to payments, provider and physician performance would be available through public reporting.
MedPAC, the Institute of Medicine, and other agencies would evaluate various aspects of the program and make recommendations about its continuation.
CMS would also be required to use the data collected during the project to inform the establishment of a permanent update mechanism structure for the ESRD program.
The costs associated with the legislation would be offset by an expansion in the Medicare Secondary Payer (MSP) provision to 42 months (an additional 12 months from its current length).
It would also include a non-discrimination clause to prohibit private insurers from dumping these patients.
In addition, an extension of MSP would result in savings and could incentivize private payers to encourage wellness in managing the care of these patients.
We appreciate your commitment to improving the quality of dialysis services to kidney patients.
The kidney care community is the only major segment of Medicare that does not have an annual update mechanism; and therefore, Congress must vote an update each year.
The Kidney Care Quality and Improvement Act provisions that were included in the Deficit Reduction Act of 2005 took an important step in achieving one of the principal goals of the legislation, by providing an annual update of 1.6 percent to support quality in kidney care for 2006.
The Tax Relief and Health Care Act of 2006 built upon this progress by providing an annual update of 1.6 percent for 2007.