review - Peritoneal Dialysis International

Peritoneal Dialysis International, Vol. 31, pp. 12-16 doi:10.3747/pdi.2010.00143

0896-8608/11 $3.00 + .00 Copyright © 2011 International Society for Peritoneal Dialysis

review

Home Dialysis in the New USA Bundled Payment Plan: Implications and Impact

Thomas A. Golper,1* Steven Guest,2 Joel D. Glickman,3 Joe Turk,4 and Joseph P. Pulliam5 Vanderbilt University Medical Center,1 Nashville, Tennessee; Baxter Healthcare,2 McGaw Park, Illinois; University of Pennsylvania,3 Philadelphia, Pennsylvania; NxStage Medical,4 Lawrence, Massachusetts; Fresenius North America,5 Portland, Oregon, USA On 1 January 2011, a new payment system for Medicare patients will be implemented in the United States. This new system bundles services previously charged separately and under a “fee for service” environment. The authors discuss the implications of this approach. Over the next several pages is a response by American physicians and dialysis in novators to a federal initiative to change the way dialysis is paid for in the United States. Peter Blake, the Editor-in-Chief of Peritoneal Dialysis International, invited Thomas Golper to articulate physicians’ concerns with this new payment scheme. After the government of the USA closed its com ment period over the new payment methodology, called “bundling,” Golper sought out colleagues from diverse back grounds and compiled this collective view of the situation. Perit Dial Int 2011; 31:12-16

www.PDIConnect.com doi:10.3747/pdi.2010.00143

KEY WORDS: Dialysis payment; dialysis reimbursement; home dialysis; bundling.

S

ince 1983, payment for dialysis services has been provided by the Centers for Medicare & Medicaid Services (CMS) on a per treatment basis (known as the composite rate). There have been two components of each per treatment hemodialysis (HD) invoice submitted by dialysis providers: (1) a partially bundled composite

rate adjusted for both geographic location of the dialysis unit and patient characteristics, and (2) an “add on” portion for separately billable medications administered intravenously during the dialysis session. Dialysis facilities caring for peritoneal dialysis (PD) patients receive a daily per treatment payment, which over a week is equivalent to three times the applicable HD composite rate. Facilities are also entitled to submit for reimbursement of separately billable intravenous, subcutaneous, and intraperitoneal drugs administered at the facility, as well as patients’ self-administered erythropoiesisstimulating agents (ESAs). As part of the Medicare Improvements for Patients and Providers Act (MIPPA; passed into law in 2008 and to be implemented 1 January 2011), CMS was directed to develop a bundled payment for routine dialysis services that incorporates drugs and laboratory services into what used to be the composite rate payment for the dialysis procedure. By this technique, the payer (the USA government) could predict expenses (fixed rate per patient treatment) rather than have an unpredictable fee-for-service arrangement. CMS developed a complex bundle, proposed it to the renal community for comments, and, in late 2009, ended the comment period and started revisions based on the comments. A revised, final version has now emerged. Major controversies had included the question of which laboratory tests would be covered in the bundled payment and whether oral dialysis-related medications would be included. It is not possible to delineate all the debated points on each specific controversy. Instead, we want to describe overarching concepts that should either be implemented

Correspondence to: T.A. Golper, Division of Nephrology, Room S-3303 Medical Center North, Vanderbilt University Medical Center, 1161 21st Ave. South Nashville, Tennessee 37232-2372 USA. [email protected] Received 9 June 2010; accepted 4 August 2010. 12 This single copy is for your personal, non-commercial use only.

For permission to reprint multiple copies or to order presentation-ready copies for distribution, contact Multimed Inc. at [email protected]

PDI

January 2011 – Vol. 31, No. 1

initially or evolve as the bundling strategy/methodology matures over the next decade. Policies implemented in the USA find their way into other countries over time, so the international community would be prudent to observe the USA experience as events unfold. That is why, in part, Blake requested this response. A Single-Payment Approach and Its Effects on Home PD

As of this writing, CMS has decided that there will be one payment per treatment regardless of whether the treatment is PD or HD, and regardless if performed at home or in a dialysis center. PD is the least expensive form of dialysis for many reasons (1,2): First, the supplies are cheaper and the patient or family provides the labor. Second, far fewer parenteral medications are given to PD patients than to HD patients, given the more convenient oral route of administration for this home-based population. Third, significantly fewer ESAs are given to PD patients based upon more efficient ESA effect (presumably related to better marrow response in PD and subcutaneous dosing), preserved residual renal function, and less blood loss (no obligate HD loss or ongoing phlebotomy). However, under the existing payment structure, the larger “separately billables” portion of billing for injectable drugs given at HD can serve as the only profit for dialysis providers, who can take advantage of the spread between acquisition costs and payment rate. Some believe that provider dependence upon separately billable services has impeded the use of less costly PD, accounting for its erosion as a renal replacement therapy in the USA. Thus, this newly developed, simple singlepayment strategy is a strong incentive for the dialysis provider to encourage home PD. Greater utilization of PD would be expected to result in greater profitability under the new bundle payment structure. The rationale is that expensive intravenous medications will be contained within the single bundle payment and, as PD patients require fewer intravenous medications, this savings would make delivery of PD care less costly to the provider. Combined with the lesser staf f ing requirements, e quipment needs, space requirements, and facility overhead, providers could administer more PD care with less utilization of resources and take advantage of the inherent profitability of PD under the new bundle (Figure 1). A Single-Payment Approach and Its Effects on Home HD

Peritoneal dialysis is not always suitable or able to achieve clinical objectives for certain patients. Home HD, and particularly more frequent home HD, is a desired but

Home Dialysis and Bundled Payments

underutilized treatment modality in the United States. So, for the maximal number of patients appropriate for home therapies to be so treated [as was Congress’ original intent for the End Stage Renal Disease program as well as the implied intent of Congress in MIPPA’s bundling legislation (3)], home HD must become a viable option. Furthermore, clinicians and healthcare professionals believe that home HD should be utilized in a larger percentage of the patient population than today. Noticeably more clinicians identify more frequent home HD as the best long-term modality versus any other single modality (4), and other research shows that physicians are significantly more likely to recommend home HD for themselves, family members, or friends, again versus the other dialysis modalities (5). Clinical reports show that frequent (4 – 6 times/week) and/or longer (6 – 8 hours/session) home HD (a) is more effective in improving patients’ health, well-being, and energy than is in-center HD; (b) helps to significantly reduce costly cardiovascular complications and hospitalizations; and (c) allows maintained employment and rehabilitation (6,7). Early publications from the FREEDOM Study (the largest prospective study to date in home daily HD) (8) show significant and dramatic reductions in patient recovery time and depressive symptoms versus conventional HD, as well as significant improvements in patient quality of life (9). More recently, the results of the National Institutes of Health–funded randomized controlled trial comparing 6-times-weekly with conventional 3-times-weekly HD showed significant benefits for the former schedule (10). Even though this study involved in-center HD, it will inevitably focus interest on more-frequent HD regimens that could be more conveniently delivered in a home setting. At present, only 1% of dialysis patients utilize home HD despite its appropriateness for an estimated 12% – 16% of dialysis patients according to nephrologists surveyed (11). Prior to this new bundling strategy, CMS payment policies favored delivery of in-center dialysis and discouraged home HD. Known disincentives include inadequate payment for self-care training, which has not been updated since the early 1980s and does not reflect the significant investment to prepare a patient and his or her partner to perform self-care HD at home. This home training cost is a one time, up-front expense and, very much like the first-year costs of transplantation, makes up for itself in subsequent years with successful home dialysis. Other disincentives to home dialysis include non-reimbursement of certain separately billable intravenous drugs in the home versus the center and, particularly for daily home HD, the administrative burden and uncertainty when seeking payment for medically

This single copy is for your personal, non-commercial use only. For permission to reprint multiple copies or to order presentation-ready copies for distribution, contact Multimed Inc. at [email protected]

13

Golper et al.


PDI

Figure 1 — January 2011 reimbursement changes for dialysis providers in the United States. HD = hemodialysis.

justified treatments in excess of three times per week. Furthermore, smaller dialysis providers and independent providers will not have the resources to develop home HD programs and may not be willing to risk developing them knowing that reimbursement does not favor this modality. The bundle under development is focused at the dialysis clinic level, not on global costs for care of patients with end-stage renal disease. As a result, all other things being equal, dialysis clinics will be driven to offer the therapy that is most efficient to them (e.g., lowest cost or most profitable) but not necessarily that which is most efficient to the entire healthcare system (e.g., through reductions in hospitalization, transportation, and pharmaceutical expenses not in the bundle, and through improved patient rehabilitation). A single bundled payment may encourage PD due to the maturity 14

of the therapy and its lower drug requirements, but this should not be done at the expense of home HD or frequent home HD. Home HD is experiencing a rebirth and technology has not yet been allowed to mature in the way that PD and in-center HD technologies have over the past 30 years. Currently, there is only one system cleared for home use available in the United States market; however, there are many advanced development programs from established and start-up companies aimed at this application. Performance enhancements and improved efficiencies can only come from a healthy competitive market. If access to home HD is stifled by disincentives or uncertainty created by the bundle, it will only be prudent for manufacturers to delay investment and market entry, further restricting ultimate patient access and healthcare system efficiency gains. Another


PDI


way to put it is, without CMS formally endorsing the value of more frequent HD, the impact of the bundle might curtail the growth of more frequent dialysis. This will need to be closely monitored since it might result in providers not offering modalities that do not cover costs. In fact, the Government Accounting Office (GAO) essentially stated this in GAO publication 09-537. During the comment period, this point was driven into CMS by many quarters. Important Desirable Components in a Bundled Payment

An outcome in which fewer beneficiaries have access to home dialysis would have deep human and economic consequences. Therefore, CMS is encouraged to incorporate features into the bundled payment system that recognize the unique economic considerations of home dialysis of all types. First, CMS should maintain the home training payment separate from the routine dialysis bundle and the payment level should be updated appropriately, based on true resource requirements. It is not a routine dialysis cost; it is a one-time cost applicable to a very limited subset of patients. Second, CMS should retain the “treatment” as the unit of payment under the expanded bundle and maintain existing provisions for Medicare payment of all prescribed, medically justified HD treatments (12). If a unit of payment other than the treatment is chosen, CMS should use the best available information to establish within its authority under MIPPA an adjustment to account for the costs of more frequent HD. Third, CMS claims coding and cost report instructions should be modified so that home dialysis utilization and costs may be better tracked. With this information, CMS can then consider payment modifications to achieve the original intent of Congress with respect to beneficiaries’ access to home therapy as well as capture efficiencies that will undoubtedly emerge. Areas of Concern in a Bundled Environment

A bundling system must not complicate the relationship among patient, physician, and dialysis provider. The patient–physician relationship is based on trust that the physician will provide the highest level of care and will refer the patient to dialysis facilities that also provide that level of care. Inherent in this relationship, and as mandated by CMS, the physician should be confident that all options for renal replacement therapy are available to all patients. The physician–provider relationship should be based solely on the premise that both parties work together to improve patient outcomes

Home Dialysis and Bundled Payments

as well as utilize resources efficiently. The physician can discuss options with patients but the availability of those options is dependent on the dialysis provider’s ability to make sure dialysis therapy options are obtainable. The physician often feels an undercurrent of tension because the dialysis provider still needs and is entitled to make a profit. Therefore, expensive resources and modalities may not be as accessible as physicians prefer. The dialysis provider clearly wants to do the right thing for the patient and needs to keep the physician happy but now has to straddle the position of patient choice versus modality of best financial reward. That conflict, while often subliminal, may be a factor in deciding whether or not home dialysis programs are started, promoted, or developed. Finally, the patient–dialysis provider relationship recognizes that the dialysis patient is the focal point and that reported quality outcomes must be outstanding. But does the patient really know if all dialysis modalities are being offered without bias or prejudice? If options for home dialysis are discussed but not readily available, that does not constitute “offering all modalities.” Bundling may increase these pressures and conflicts by shifting the cost of dialysis and medication therapy to the dialysis provider without allowing the provider to benefit from the total cost savings of different modalities. It is also possible that other components of the proposed bundle might have adverse consequences. There is a case-mix adjustment to the per treatment payment. Despite such adjustments, the healthiest patients will generate the greatest profit for the provider. Will that lead to selecting only the healthiest patients for acceptance into a dialysis program that may have limited capacity? Will efficiency of scale lead to regional home dialysis programs with the advantage of size, expertise, and superior outcomes? Will this occur at the expense of local more conveniently located programs? Will the bundled reimbursement structure lead to further consolidation of dialysis providers, resulting in less competition and patient choice? The answers to these questions will take years to evolve. Thus, the new bundled system must be reassessed often and there must be the political will to recognize and correct its inevitable shortcomings. Final Comments

In some countries, the provision of chronic outpatient dialysis services is in some manner dependent on generating a profit as part of a business model. This could manifest as a top-to-bottom profit model like that of for-profit large dialysis organizations in the United States. More limited is a government-provided


15

Golper et al.


service purchasing products from the for-profit sector, as would be exemplified by the National Health System of the United Kingdom. It does not matter what overall shape the delivery system takes, there are still two competing forces driving all systems: the payer wants the products and services at the least costs and the provider wants to maximize profits. To address this inevitable conflict of interests, the USA government has tried to control whatever aspects of the system it can legally manipulate. For the USA, the 2011 bundling of dialysis payments will be the greatest change in dialysis reimbursement in decades. For providers, in-center HD has been the predominant dialysis modality and the providers’ greater expansion of home therapies will be the likely result of these federal changes. If this is indeed the case, the resources and infrastructure to develop and expand home capabilities will be necessary. Furthermore, expanded education of practicing physicians and nurses and revisions of fellowship training priorities will be required. This will be a challenging period for providers and practitioners in the USA. These changes are occurring in the absence of a pilot model and thus must be closely monitored. That monitoring must be timely so as to not lose the technical advances that have occurred recently, particularly in the home HD and more frequent HD arenas. The future climate outside is unclear, so bundle up! Disclosures Thomas Golper has received honoraria and/or consultancy fees from Fresenius Medical Care North America, Baxter Healthcare, Davita, and Genzyme. Steven Guest is employed by Baxter Healthcare, Renal Division, McGaw Park, IL, USA. Joe Turk is Senior Vice President, Commercial Operations, NxStage Medical, Inc. Joe Pulliam is Vice President of Medical Affairs for Home Therapy for Fresenius Medical Care North America.

16

PDI

References 1. US Renal Data System. USRDS 2008 Annual Data Report. Bethesda, MD: National Institutes of Health; 2008: Chapter 11: pages 175–86. 2. Neil N, Guest S, Wong L, Inglese G, Bhattacharyya SK, Gehr T, et al. The financial implications for Medicare of greater peritoneal dialysis use. Clin Ther 2009; 31:880–8. 3. Social Security Act. S 1881 (c)(6): Chairman Stark comments in Congressional Record House, June 24, 2008, p. H5908. 4. Ledebo I, Ronco C. The best dialysis therapy? Results from an international survey among nephrology professionals. NDT Plus 2008; 6:403–8. 5. Independent physician market research survey conducted by Healthcare Research Consulting Group. New York; 2010. 6. Blagg CR, Ing T, Kerr P, Ronco C [eds]. The renaissance of home hemodialysis: lessons from the world over. Hemodial Int 2008; 12(Suppl 1):S1–S65. 7. Chan C, Lok C [eds]. Contemporary trends in home dialysis. Adv Chronic Kidney Dis 2009; 16:156–220. 8. Jaber BL, Finkelstein FO, Glickman JD, Hull AR, Kraus MA, Leypoldt JK, et al. Scope and design of the Following Rehabilitation, Economics and Everyday-Dialysis Outcome Measurements (FREEDOM) Study. Am J Kidney Dis 2009; 53:310–20. 9. Jaber BL, Lee Y, Collins AJ, Hull AR, Kraus MA, McCarthy J, et al. Effect of daily hemodialysis on depressive symptoms and postdialysis recovery time: interim report from the FREEDOM (Following Rehabilitation, Economics and Everyday-Dialysis Outcome Measurements) Study. Am J Kidney Dis 2010; 56:531–9. 10. FHN Trial Group, Chertow GM, Levin NW, Beck GJ, Depner TA, Eggers PW, Gassman JJ, et al. In-center hemodialysis six times per week versus three times per week. N Engl J Med 2010; 363:2287–300. 11. Mendelssohn DC, Mullaney SR, Jung B, Blake PG, Mehta RL. What do American nephrologists think about dialysis modality selection? Am J Kidney Dis 2001; 37:22–9. 12. Medicare Benefit Policy Manual, Ch. 11, § 30.1(A); Medicare Provider Reimbursement Manual, Part 1, Chapter 27 § 2709.
