We have discussed in several prior posts the conversion to the Medicare bundled payment system for dialysis facilities which began January 1, 2011. Dialysis facilities had the option of either opting in fully to the new system starting this year or instead utilizing the four-year phase-in approach. CMS had estimated the number of facilities that would opt in fully at only 43%, when in reality more than 80% elected to opt in.
One significant update in the bundling methodology was announced by CMS earlier this month. Due to the higher-than-expected number of facilities opting in, CMS announced in an interim final rule on April 1st that it would eliminate the so-called “transition adjustment” imposed on dialysis facilities as part of the new payment methodology, which had required a 3.1% payment reduction during these transition years to achieve budget neutrality. Not surprisingly, members of the dialysis community are commending CMS for the move.
Separately, while in many ways it seems as if the dialysis industry has embraced bundling (as evidenced by the unexpectedly high percentage of facilities opting in fully), critics of certain aspects of the payment methodology remain. For example, BioTrends recently published a report detailing concerns of nephrologists with the impact on clinical care resulting from the conversion to bundling. According to the report, and as had been generally expected, bundling has had the greatest impact on the management of renal anemia. The BioTrend reports estimates that approximately one-half of nephrologists perceive the new payment system as negative and feel significant pressure to target lower hemoglobin levels and to limit the measurement of non-essential labs. The hemoglobin level at which nephrologists initiate and hold erythropoietin stimulating agents (ESAs) in dialysis patients has declined compared to both the prior year and prior quarter and nephrologists expect this to ultimately result in fewer hemodialysis patients being treated with ESAs in the next six months, and lower dosages when treated. Additionally, the report indicates changes in the treatment of chronic kidney care (CKD) patients who aren’t yet dialyzing, as well as other changes in their renal practices.
It is important that dialysis providers and investors considering the dialysis industry understand these shifts in various aspects of bundled reimbursement in order to most effectively structure a program from clinical and administrative standpoints that provides both high quality care and economic viability.