Healthcare Reform and Dialysis

Keith Chartier
05/05/2010

HEALTHCARE is a thorny issue, and platoons of pundits have happily weighed in on the left and the right to rile up their bases over the past year. However, on March 23, President Obama signed into law the biggest expansion of federal healthcare guarantees in more than four decades. That doesn’t mean the healthcare debate is over, but the reality is that the U.S. health system must work to adapt to the new rules. And just how will health reform affect the renal community? “The bigger issue for all of dialysis is what’s going to happen with the bundle and how is it going to be implemented,” said Robert Sepucha, senior vice president, government affairs, Fresenius Medicare Care. The bundled payment system was mandated by 2008’s Medicare Improvements for Patients and Providers Act, which will arguably affect dialysis care more than the bill Obama signed into law. “I’m not sure there is anything unique to dialysis or renal care that is going to be impacted by virtue of healthcare reform, save for one exception,” Sepucha said. “But there’s nothing I think people should be overly concerned about.” The one exception for dialysis in the reform bill is a provision that the General Accounting Office (GAO) must do a study on the impact of the inclusion of oral drugs in the dialysis bundle. The deadline for the report is a year from passage, or March 23, 2011. “That’s a good thing, so we can figure out whether or not these things are being adequately priced and if there are any safety concerns,” Sepucha said. Accountable Care Organizations One area of opportunity for the renal community in healthcare reform is accountable care organizations. Right now, Medicare reimburses hospitals through Part A and dialysis through Part B. However, quality advancements in dialysis can lower Part A costs, yet Part B does not share in the savings. “Currently, CKD (chronic kidney disease) is fragmented and not coordinated between PCPs (primary care physicians) and all specialists. Implementing CKD care, disease management, HIT (health information technology), etc. will improve the coordination of quality care,” said Edward R. Jones, MD, president of the Renal Physician Association. “Use of guidelines, setting quality outcomes and instituting P4P (pay-for-performance) models will enhance CKD care. In addition, improved quality of care has demonstrated decreased costs but predominately from Part A services.” ACOs have been officially endorsed by the healthcare reform bill, and the Department of Health and Human Services has been authorized to start reimbursing provider and doctor groups who band together for large cadres of patients. If they are able to improve outcomes and lower costs then those ACOs can potentially share in the savings. “Gainsharing within the ACO will allow sharing of cost savings provided by good quality care,” Jones said. “In addition, ACOs jointly formed by nephrologists, PCPs and other entities will allow for redistribution of cost savings to those providing the improved care.” However, the ACO structures have not been defined, but an example would be dialysis organizations partnering with nephrologists, PCPs and others within kidney care delivery to accept the risks and share in the benefits of the ACO, said Jones. “It would require breaking down on the Part A and B barrier.” In addition to structure, the way ACOs are compensated is still up in the air, but the Medicare Payment Advisory Commission’s June 2009 healthcare reform report to Congress could provide some insight. “In our model, the ACO would consist of primary care physicians, specialists, and at least one hospital,” MedPAC wrote in the report. “The defining characteristic of ACOs is that a set of physicians and hospitals accepts joint responsibility for the quality of care received by the ACO’s panel of patients.” In the MedPAC version of ACOs, which would have at least 5,000 patients to distinguish actual improvement from random variation, providers would still be paid standard fee-for-service Medicare payment rates (such as the dialysis bundle). However, bonuses would be paid if ACOs met certain spending and quality targets. Just how these bonuses are figured out will be up for much debate. In the report, MedPAC acknowledged that geographic consideration needs to be taken into account as some parts of the country use more services that other parts. “The financial incentives would need to be based on changes in spending rather than levels of spending,” MedPAC wrote in the report. “The dialysis community got together to make sure that Congress specifically included dialysis providers and groups as eligible under ACOs,” Sepucha said. “It’s contemplated that we could be part of this overall solution.” Medicare chief medical officer Barry Straube, MD, outlined some areas of interest for ACOs at the Renal Physicians Association’s annual meeting in March. They include physician offices, dialysis clinics and home training programs, fistula maintenance programs, transplant programs, CKD prevention and management programs and end-of-life and palliative care programs. “I think dialysis and renal care are uniquely positioned because of the close relationship we have with CMS,” Sepucha said. “The bundle is a great example. The bundle is the tip of the spear in terms of how CMS and the federal government are going to reimburse providers going forward. People have figured out the fee-for-service doesn’t work in every context and may be sort of a bad way of reimbursing providers,” he added. “That’s what the bundle is, and people realize with global payments you need some sort of shared savings program. That’s what an ACO is. We feel like we’re moving to where people want to end up.” Reform Basics for Patients Although the new healthcare law has little to say specifically about kidney care, its other provisions will have a broader affect on patients and those providing care. Some of the benefits under the new health law take effect in 2010, and many others will be phased in over the next few years in order to allow the healthcare system to adapt to the changes. Starting in 2010, private insurers cannot drop people from their plans if they get sick. In addition, young adults can remain as a dependent on their parents’ private insurance coverage until they reach 26 years old. Another major change is that health insurers can no longer impose lifetime limits on benefits meaning patients’ benefits can no longer run out because of a long or expensive illness. According to the National Kidney Foundation’s Web site, “this could ensure continued access to care and to all treatment options for individuals who have been on dialysis for several years and received two or more kidney transplants.” Under the new law in 2010, children 18 years old and younger can no longer be denied private insurance coverage if they have a preexisting condition. However, adults will have to wait until 2014 until insurers can’t deny them for preexisting conditions. In the meantime, a temporary “high-risk” pool will be established to provide coverage. Also in 2014, all U.S. citizens will be required to obtain health insurance coverage or pay a minor tax penalty. “This is to ensure that everyone is in the insurance pool so no one can get a ‘free ride’ by not having affordable coverage and then going to the emergency room for care,” according to a news release from the American Medical Association. With the greater access to health insurance, one affect of healthcare reform is kidney disease patients receiving preventive care before going on dialysis. “Anyone who understands the renal business knows about the huge transition costs when someone crashes into dialysis,” Sepucha said. “If we can facilitate an orderly transition, we’re able to, not just reduce costs, but dramatically improve health outcomes and reduce mortality and reduce hospitalizations.” Supermarket-like state-based health insurance exchanges will start in 2014. In these, people who don’t have access to employer-based insurance can shop and compare the benefits and costs of private insurance plans. Insurance companies will be required to provide a minimum benefit package, as well as additional coverage options beyond a basic plan. Those who can’t afford the full cost of coverage can access federal subsidies in 2014 through tax credits or vouchers. Medicaid coverage will also be expanded in 2014 to cover those who have incomes at or below 133 percent of the federal poverty level. “From a dialysis perspective, people need to be concerned that large insurance groups aren’t able to dump chronic patients into healthcare exchanges,” Sepucha said. “If suddenly these exchanges are covering chronic patients and they’re woefully underfunded, then the system is destined for failure.” There are also a number of changes for patients enrolled in Medicare and Medicaid. Starting 2011, beneficiaries will no long pay any cost sharing for a number of preventive services. In addition, the new law will start closing the Medicare Part D “donut hole,” which requires patients to pay for their drugs when the costs fall between $2,700 and $6,150. In 2010, Medicare patients will receive a $250 rebate, and during the next 10 years the co-insurance rate will be narrowed in phases until the hole is closed in 2020. Reform Basics for Practices Primary care physicians whose Medicare charges for office, nursing facility and home visits comprise at least 60 percent of their total Medicare charges will be eligible for a 10 percent bonus payment between 2011 and 2016. Also, the new law re-establishes the geographic payment adjustment, also known as the GPCI. In 2010 and 2011, Medicare will reduce the GPCI adjustment for physician practice expenses in rural and low-cost areas. In addition, Medicare quality reporting incentive payments have been extended. Payments of 1 percent in 2011 and 0.5 percent between 2012 and 2014 will continue for voluntary participation in Medicare’s Physician Quality Reporting Initiative (PQRI). Practices or businesses with more than 50 employees will be required to offer health insurance in 2014. However, according to the AMA, the vast majority of physician practices have less than 50 employees and will be exempt from this provision. “People are worried that more coverage is going to change the dynamics of healthcare. That doesn’t play as much into the ESRD population because there is already universal coverage, but in CKD, it changes,” Sepucha said. “It’s one thing to be covered, and another to actually sit down and speak with your doctor. It can only help patients in the sense that if they’re covered they’re more likely to get treatment. That means a primary care doc might refer a patient to a nephrologist that much sooner, and they can get the care sooner.” RBT