Changes in ESRD Medicare Reimbursement: What The Patient Needs to Know

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. Driving Factors for Revision of Medicare Reimbursement for ESRD. Randomized controlled trials failed to show improved outcomes when ESAs dosed to higher hemoglogin/hematocrit levels in patients with kidney diseaseCHOIR and CREATE in non-dialysis CKD patientsNormal Hematocrit Study in hemodialysis patientsCosts of ESAs in ESRD patients escalating to >$2 billion/yearHigh percentage of dialysis patients (50% in 2006) with hemoglobin >12 g/dL (upper limit per KDOQI guidelines) Previous paymen30066

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Changes in ESRD Medicare Reimbursement: What The Patient Needs to Know

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1. Changes in ESRD Medicare Reimbursement: What The Patient Needs to Know Jay Wish, MD Medical Director, Dialysis Program University Hospitals Case Medical Center Cleveland, Ohio

2. Driving Factors for Revision of Medicare Reimbursement for ESRD Randomized controlled trials failed to show improved outcomes when ESAs dosed to higher hemoglogin/hematocrit levels in patients with kidney disease CHOIR and CREATE in non-dialysis CKD patients Normal Hematocrit Study in hemodialysis patients Costs of ESAs in ESRD patients escalating to >$2 billion/year High percentage of dialysis patients (50% in 2006) with hemoglobin >12 g/dL (upper limit per KDOQI guidelines) Previous payment policies did not provide financial incentive to constrain ESA use

3. Previous Medicare Payment Policies 60% of what CMS paid was for the dialysis treatment itself and included labs ($4,8 billion) 40% of what CMS paid was for separately billed items Parenteral drugs and biologicals ($2.8 billion) Additional lab services ($333 million) Certain supplies ($40 million) Congress called upon CMS to develop a plan to bundle ESAs and other separately billable drugs into a single case-mix adjusted payment to dialysis facilities Changes ESAs from a profit center to a cost center for dialysis providers Encourages facilities to curtail ESA use

4. Major Provisions of Final Rule Base payment rate of $230 (compared to old rate of around $130) per treatment Excludes adjustments Average adjustment 6% higher Per treatment unit of payment Up to 3 treatments per week (unless medically justified) May discourage more frequent home HD modalities Beneficiary/coinsurance amount is 20% of the total ESRD PPS payment after all adjustments

5. Major Provisions of Final Rule (cont’d) Patient level payment adjusters Facility level adjusters Low volume (<4000 treatments/year) Geographic wage index Inclusion of all ESRD related drugs Previously separately billable IV drugs given on dialysis and their oral equivalents Includes all antibiotics administered on dialysis for an ESRD-related indication Excludes all vaccines

6. Major Provisions of Final Rule (cont’d) 2% withhold for payment for performance Can earn all or part back based on “total performance score” Performance measures for 2012 include hemoglobin and URR; new ones likely to be added All ESRD-related lab tests are included in the bundled payment whether or not they are drawn in the dialysis facility

7. Case Mix Adjusters

8. Self-Dialysis Training $33.38 can be added on to the ESRD PPS payment for each self-dialysis training session This amount is adjusted by the geographical area wage index and can range from $20.03 to $45.84 ESRD facilities cannot receive the self-training adjustment and the 4-month onset of dialysis payment on the same patient for the same session Self-training add-on is capped at 15 treatments for PD and 25 treatments for hemodialysis

9. Future Adjustments Annual increase to the bundled payment based on the increase in the ESRD market basket Annual adjustments to the geographic wage index Updated case-mix adjustments Inclusion of oral ESRD drugs with no IV equivalent (such as phosphate binders and cinacalcet) in 2014 Need for data gathering on costs of these agents Need to develop monitoring, tracking and outcomes quality measures for these agents

10. Quality Incentive Program (Nonpayment for nonperformance) 2% withhold, incremental pay-back for achieving “total performance score” based on % of patients with Hb <10 (more is lower score) % of patients with Hb >12 (more is lower score) % of patients with URR >65% (more is higher score) Hb and URR data averaged for each patient over entire year (initially using 2010 data) QIP begins in 2012

11. Total Performance Score Each of three measures is worth 10 points If the provider meets the performance standard, it would receive all 10 points for each measure If the provider fails to meet the performance standard, it is docked 2 points for each 1% below the standard The standard can be EITHER national data from 2008 or the facility’s own data from 2007 Hb <10 is weighted at 50%; Hb >12 and URR >65% are each weighted at 25% of the total performance score

12. Payment Reduction Scale

13. New Performance Measures Being Developed By Expert Panels Anemia Management (Target value for Serum Ferritin, Target value for Transferrin Saturation) Mineral Metabolism (Target value for Calcium, Target value for Phosphorus) Vascular Access Infection Rate (Catheter Infection Rate) Pediatric Adequacy (HD, PD) Pediatric Anemia (Anemia Management) Fluid Weight Management

14. Changes in Anemia Management Use of less expensive ESAs (when available) More aggressive IV iron use Maintenance rather than “load and hold” Higher targets for iron levels in blood Use of lower cost iron products Lower Hb targets (10-12 rather than 11-12 g/dL) More conservative ESA use in ESA-resistant patients Get rid of dialysis catheters ? Subcutaneous administration

15. Changes in Bone and Mineral Metabolism Management (in 2014) Use of lower cost phosphate binders Use of lower cost oral/IV vitamin D agents (now) Use of lower calcium dialysate Abandonment of cinacalcet Increased prevalence of parathyroidecomies Decreased testing and replacement of 25-OH vitamin D

16. Changes in Vascular Access Management Vascular access likely to become the next P4P indicator once CROWNWeb is able to capture those data Increased use of vascular access coordinators to help navigate patients through fistula placement and troubleshooting Catheters cost money because of high ESA requirements, antibiotics and absenteeism Increased emphasis on getting rid of catheters even if that means an A-V graft

17. Summary and Conclusions The ESRD bundled payment system began in January 2011 Since one of the goals of bundling was to decrease ESA use by making it a cost center, ESA use is likely to decrease by 15-25% (which is exactly what Congress intended) Facilities are already testing algorithms for anemia management to decrease costs and maximize the number of patients within the hemoglobin target range of 10-12 g/dL Additional dialysis industry consolidation is likely occur as some smaller providers may not be able to adapt [ADD SPEAKER NOTES][ADD SPEAKER NOTES]

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