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

Our friend Jim Sloand to the Ways and Means Commitee.

Testimony By James Sloand, M.D., Statement

Statement of James Sloand, M.D., Medical Affairs U.S., Baxter Healthcare

My name is James Sloand, M.D. and I direct medical affairs for renal services at Baxter Healthcare for the U.S.  I have also been a practicing physician for over 30 years. Baxter’s renal business has long served the needs of people with end stage renal disease (ESRD). ESRD is the most serious form of kidney disease and occurs when the kidneys lose approximately 85-90 percent of their natural function.  Kidney disease is life threatening and requires treatment in order to remove toxins from the bloodstream.  In 1956, the company introduced the first commercially available and disposable dialyzer to act as an artificial kidney in hemodialysis.  Nearly 20 years later, Baxter pioneered peritoneal dialysis a primarily home-based treatment for ESRD patients that is used all over the world.
The development of kidney dialysis therapy and the many improvements made to it over the past several decades have vastly improved survival for patients with end-stage renal disease.  Improvements in the care of patients with kidney disease, for example, have meant that more individuals are undergoing dialysis therapy for longer periods.[1]  As such, total costs will continue to rise as the prevalence of patients on dialysis increases, (estimated to increase by 62% by 2020.[2] )
Finding a way to delay entry into dialysis and to lower the costs of car­ing by preventing hospitalizations for people with chronic kidney disease (CKD) is critical to reducing health care spending.  Patients can play an important role preventing deterioration in health once they have been diagnosed with a chronic condition. Building in patient self-management and empowerment through provider reimbursement policies may be key to reducing costs.[3]
A patient with end stage renal disease has  two different options for renal replacement therapy (dialysis) if a pre-emptive renal transplant is not available: treatment at home with either peritoneal or home hemodialysis  or by in-facility hemodialysis.  Home peritoneal dialysis is underutilized in the U.S. compared with (for example) Canada (7.6% in U.S. versus 37% in Canada in 2005).  A recent study of nephrologists indicated that if maximizing survival, wellness and quality of life were the most important factors in deciding mode for dialysis, 33% should be on PD.[4]  The underutilization of PD in the U.S. may thus have a negative impact on quality of life for patients that might otherwise use this modality and the data show that this deficiency increases costs to the Medicare program:

• MedPAC said in a recent report "Home dialysis offers several advantages related to quality of life and satisfaction to those patients who are able to dialyze at home.”[5]  
• The Centers for Medicare and Medicaid Services states that, "If 5 percent additional patients were to opt for home peritoneal dialysis, which provides added health and quality of life benefits….the potential savings for these 5 percent additional patients could be as much as $295 million."  (Page 20471 Final Regulation on the Medicare Conditions of Coverage for End-stage Renal Disease Patients).  [Note: these savings are through reduced hospitalizations and improved outcomes and over 10 years would result in at least $3 billion in savings.]

A lack of education about different modalities has been one of the significant reasons for underutilization in the U.S.  In fact, only 25% of patients on hemodialysis ever remember receiving information about peritoneal dialysis as an option.[6]  The provision of information to patients is also associated with greater willingness to adhere to therapies[7] and may include delayed progression to ESRD.[8]
 In 2008, the Congress added an education benefit to the Medicare program to educate patients in the final stages of kidney diseases to delay the onset of dialysis and to increase the information on dialysis options for care.  The benefit allows up to six educational sessions for Stage 4 kidney disease patients including instruction on the management of co-morbidities, with the goal of delaying the need for dialysis.  The educational sessions are also required to include a discussion of the treatment options available to patients.  The Centers for Medicare and Medicaid Services (CMS) now has responsibility for implementing this important benefit.  It is my hope that they recognize the need for a collaborative model between the physician and his staff where both contribute to the process to ensure that the therapy is as the law requires: individualized and aiding the patient in managing complications and co-morbidities of kidney failure.
I recommend that Congress further improve the management of kidney disease within the Medicare program by recognizing the direct link with the initial coverage under the Medicaid program for the low-income.  However, almost one-third of all new starts in dialysis begin in Medicaid and then transition after three months to Medicare.   Data show that Medicaid patients are less likely to have access to nephrologists and to critical information on diet.[9]  Increasing information to empower patients on how to manage their co-morbidities and significant metabolic issues-- prior to kidney failure-- is both equitable (increasing patient satisfaction) and, by reducing avoidable hospitalizations during the months immediately preceding and following the initiation of dialysis, it reduces costs for Medicaid program. 
Therefore Congress should specify that Stage 4 CKD patients should be part of targeted Medicaid case management services.[10]  In this instance, the case manager (a nurse or social worker) could ensure through community outreach that Medicaid eligibles with Stage 4 CKD have access to information on kidney disease, to kidney care providers, and they evaluate whether patients are receiving the appropriate information.  Further, similar to the recently enacted Medicare physician and practitioner model for renal education, the case manager would refer the Medicaid eligible to a physician for training on managing their co-morbidities, diet and metabolic issues, as well as the modalities of care and preparing for the appropriate access for dialysis.  It could also be a required case management activity for Medicaid managed care plans, through a case manager and through separate payments to physicians. 
In addition, prevention should be a cornerstone of all aspects of the health care system rather than an afterthought. This shift requires a fundamental change in the way providers are reimbursed in the system to reward those that are increasing the value of the health care services and reducing preventable admissions.  The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) requirement on pay for performance was an important step, as discussed further in my testimony as follows on vaccines for patients with end-stage kidney disease. Dialysis patients have long been recognized as a vulnerable and an underserved population that would benefit from immunizations.  Since 1995, hospitalization rates for dialysis patients for infection have risen 19 percent overall, and 28% for African Americans. The rates of death due to infection are also highest among African Americans.  Studies show that vaccination will result in reduced risk of hospitalization and death from infections.  As a result, the CDC has recommended that all dialysis patients and staff be immunized to improve anti-microbial resistance. 
Patients with ESRD are under immunized (60% in 2002 and no significant improvement in the reported data since then [11]), with an even lower rate for the dual eligible population.  A CMS objective is to increase the annual ESRD patient influenza vaccination rate to 90% by 2010.  Vaccines are cost effective overall for the population over 65, reducing costs by $117 per person.[12]  Specifically, vaccinations reduce the risk of any hospitalization for hemodialysis patients by 7% (see chart below.)

Influenza vaccine delivery and effectiveness[13]
Hospitalization	Reduction in Risk
-Any cause -Influenza -Bacteremia -Respiratory infection	-7%
	-16%
	-24%
	-12%

Mr. Chairman, I request that your Committee urge CMS to include a measure concerning the percentage of vaccines, which is a national Quality Forum, for use in the pay for performance system that is required under the new dialysis payment system, effective January 2011.  The statute provides for flexibility in the measures to be used for dialysis pay for performance, but does not specifically require vaccination for influenza as a measure.  Given that spending on hospital services for patients undergoing dialysis was $7.05 billion a year in 2006, the estimated savings for an increase up to the CMS influenza vaccine target would be $150 million a year, or roughly $800 million over 5 years.  This could be a key part of aligning incentives for excellence of care for providers in the Medicare program and also for reducing disparities for vulnerable kidney patients.
Thank you for this opportunity to submit testimony for the record on health care reform and reforming the delivery system.

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[1] “Technological Change and the Growth of the Health Care System”, Congressional Budget Office, January 2008.
[2] Gilbertson and Collins, USRDS (the NIH US Renal Data System).
[3] “The Healthcare Delivery System: A Blueprint for Reform, from Chapter 5, Second Generation Consumerism: Increasing Consumer Activation to Improve Health Outcomes and Lower Costs for Patients with Chronic Disease by Judith Hibbard, and Katherine Hayes, J.D., Center for American Progress
[4] Mendelssohn et al, 2001
[5] MedPAC
[6] Golper, 2001 
[7] Swatz, Robinson, Davy and Poltoski, 1999
[8] Golper, 2001
[9] Solid, Collins, USRDS, Minneapolis, Medical Research Foundation, 2007
[10] Case management is not the direct provision of medical and related services, but rather is assistance to help beneficiaries receive care by identifying needed services, finding providers, and monitoring and evaluating the services delivered.1 Targeted case management (TCM) refers to case management that is restricted to specific beneficiary groups. Targeted beneficiary groups can be defined by disease or medical
condition, or by geographic regions, such as a county or a city within a state. Targeted populations, for example, may include individuals with chronic physical or mental illness, developmental disabilities, or other groups identified by a state and approved by the Centers for Medicare and Medicaid (CMS). TCM and case management are optional services that states may elect to cover, but which must be approved by CMS through state plan amendment (SPAs).  CRS Report to Congress: Medicaid Targeted Case Management Benefits, March 27, 2008
[11] One large chain recently reported an 85% vaccination rate.
[12] The Efficacy and Cost Effectiveness of Vaccination against Influenza among Elderly Persons Living in the Community, Nichol et al, NEJM September 1994).
[13] Odds ratios for the impact of vaccinations on mortality and morbidity in hemodialysis patients during the period 1998-1999 from  “Influenza vaccine delivery and effectiveness in end stage renal disease”, Gilbertson et al, Kidney International, 2003

New Study Suggests Peritoneal Dialysis May Offer Significant Savings to Medicare

New Study Suggests Peritoneal Dialysis May Offer Significant Savings to Medicare

May 13, 2009

by Astrid Fiano, DOTmed News Writer

The Clinical Therapeutics Journal is publishing a new paper, "The Financial Implications for Medicare of Greater Peritoneal Dialysis Use" by Nancy Neil, PhD, Steve Guest, MD, and several associates. The paper details the use of in-home versus in-center dialysis, including the patterns of dialysis utilization and the results of a budget-impact analysis that indicate if the peritoneal dialysis (PD) share of total dialysis were to increase to 15%, Medicare could yield over one billion dollars in savings over five years.

Dr. Steve Guest, Medical Affairs, Baxter Healthcare, Renal Division, McGaw Park, IL, spoke to DOTmed about the issues and findings in the paper. Dr. Guest first explained that providing care to patients with end stage renal disease (ESRD) is very costly due to the therapy itself but also for the care required to manage the oftentimes concurrent advanced co-morbidities. The overall impact to Medicare is significant as the ESRD Medicare patients represent less than 1% of Medicare enrollees but consume approximately 7% of Medicare resources as measured by payments for medical care billed to Medicare in a given calendar year.

"However, in reality," Dr. Guest said, "the differences in Medicare expenditures between peritoneal dialysis and in-center hemodialysis are very complex with resources being applied to a variety of cost centers."

For example, Dr. Guest described peritoneal dialysis as being most dependent upon disposable resources such as the dialysis solutions and supplies, used to perform the therapy at home. By comparison, in-center hemodialysis is most dependent upon fixed resources, in which investments have been made in bricks and mortar facilities, water treatment capabilities, hemodialysis machines and in-center staffing requirements. "The cost of an unused investment is high and so as not to waste those investments, they must be used to repay the capital outlay." The article is an analysis of these more comprehensive fixed resources used for in-center hemodialysis that include:

-- the facilities in which the hemodialysis is performed;
--the capital investment in the machines themselves;
--the supporting equipment necessary to treat municipal water to become medical grade water and the equipment needed to prepare the dialysate from this treated water;
--ongoing maintenance of the facilities and machines;
-- health personnel, including nurses, technicians, medical assistants, receptionists, etc.

PD does not have the same requirements for a special facility as the home is the site of care. However, Dr. Guest points out that while there is less of a capital investment for peritoneal dialysis, there are significant costs for PD therapy nonetheless: "These costs impact the dialysis providers if they are supplying the patient's dialysis supplies for peritoneal dialysis. But other economies can be realized with home therapy, such as a ratio of 20 patients to 25 patients per nurse for peritoneal dialysis compared to four to six patients per staff member for in-center hemodialysis."

Dr. Guest further detailed the findings regarding the differences in spending. "The differences in spending for hospitalization, outpatient use of erythropoiesis stimulating agents, vitamin D injectables, iron and vascular access reveal that the medical care provided to patients receiving in-center hemodialysis is more costly than that provided to patients on the home-based peritoneal dialysis therapy". Additionally, transportation costs were analyzed as in-center therapy such as hemodialysis requires the typical patient to present to the center at least three times per week for their hemodialysis treatments while peritoneal dialysis, as a home-based therapy, generally requires a patient to visit their nurse and physician only once per month. "This alone represents at least a 12-fold higher monthly cost of transportation for many in-center hemodialysis patients."

"Medicare expenditure differences in favor of peritoneal dialysis compared to in-center hemodialysis are significant" and Dr. Guest states may have been attenuated due to the fact that, in the United States, it appears that peritoneal dialysis patients are generally healthier overall than patients receiving in-center hemodialysis.
In the paper, it is mentioned that factors influencing the lesser use of PD include physician bias and lack of patient awareness due to insufficient exposure to full dialysis options education. Dr. Guest spoke of addressing the factors. "In testimony we recently submitted to the record for the House Ways and Means Committee, we provided recommendations to strengthen the education received by patients living with kidney disease who are Medicaid eligible. Medicaid accounts for one third of the starts on end stage kidney disease. As peritoneal dialysis patients rate greater satisfaction with this therapy compared to in-center hemodialysis, we point out the benefit of both increasing patient satisfaction and reducing overall Medicare costs as the Medicaid eligibles transition onto Medicare after 90 days".

In House testimony by colleague James Sloand, M.D., Medical Affairs U.S., Baxter Healthcare Dr. Sloand referenced that the lack of education about different modalities has been one of the significant reasons for underutilization in the U.S and surveys have shown that only 25% of patients on hemodialysis recall receiving information about the more cost-effective and cost-efficient peritoneal dialysis option. Dr. Sloand also commented that dialysis patients are a vulnerable and an underserved population that would benefit from improved influenza and bacterial pneumonia immunizations and greater vaccination rates could result in reduced risk of hospitalization and death from infections, which could further reduce Medicare expenditures

What Health Care Reform Means for You Today

What Health Care Reform Means for You Today:

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No Denials for Pre-Existing Conditions Insurers may no longer exclude individuals under 19 years old with pre-existing medical conditions. The age limit increases over time. By 2014, people with pre-existing conditions could no longer be denied insurance.
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More Young Adults Insured Parents will be allowed to keep their children on their health insurance plan until age 26.
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Broader Coverage Within 90 days, people who have been locked out of the insurance market because of a pre-existing condition would be eligible for coverage.
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Insurance Stability All insurance plans will be barred from imposing lifetime caps on coverage. Insurers can no longer cancel insurance retroactively except for outright fraud.
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Prescription Drugs The 4 million Medicare beneficiaries with prescription drug bills so high they are not fully covered will get a $250 rebate this year. Next year, charges will be cut in half for seniors who fall into the Medicare coverage gap known as the doughnut hole.
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Tax Credits for Small Businesses Small business owners will no longer be forced to choose between offering health care and hiring new employees. Tax credits of up to 35 percent of premiums will help them insure their employees.
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Holding Down Premiums Insurers must report how much they spend on medical care versus administrative costs, a step that later will be followed by tighter government review of premium increases.
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Health Centers Funding for community health centers will begin to go up this year. About 40 million patients, twice as many as today, will be treated in community health centers within five years.
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Professional Training Investments in training more primary care doctors, nurses, nurse practitioners and physician assistants will begin later this year.
Let's push the 110th Congress to tackle the health care crisis.(Heath Policy and Politics): An article from: Nursing Economics

The Big Hole!!

How would health care reform help The Dialysis Patient?

The Medicare Part D doughnut hole will begin to be eliminated now under the Senate-passed reconciliation bill, saving patients thousands of dollars. Their brand-name drugs will be discounted 50 percent in 2011, and that savings will increase to 75 percent by 2020. Generic drugs would be equally discounted (although in some Medicare plans, there is no copay for generics.) In addition, they will receive a $250 federal rebate if they pay any money into the doughnut hole this year.
Comment/Opinion---- Not enough soon enough! This leaves Money and control in the hands of the Pharms for another decade!!! Hopefully one thing that is speculated is that this Bill is a framework that can be tweeked and changed with great strides in the short days, months ahead, Hopefully not to take many years to transpire!