Editor’s Note: The italicized quotes in this column were taken from the Centers for Medicare & Medicaid Services’ proposed payment system for the End-Stage Renal Disease Program, better known as the bundled payment.
For the first time in the history of renal reimbursement, the Centers for Medicare & Medicaid Services has proposed that reimbursement for dialysis be based on the patient’s sex.
"In developing the proposed ESRD PPS, we again analyzed the extent to which the regression model explains composite rate and separately billable payments based on a patient’s sex and, as a result of that analysis, are proposing an adjustment based on a patient’s sex.”
The groundbreaking proposed rule for ESRD payment, issued by CMS on Sept. 15, 2009, even addressed the use of the term “sex” as opposed to “gender.”
“We believe using the term sex is a more accurate term than gender. Sex is defined as a classification according to an individual’s reproductive function while gender is defined in terms of masculine/feminine characteristics.”
CMS references a “regression model” which is a mathematical approach to developing a numerical representation of how changes in patient characteristics impact the cost of providing care.
“Consequently, we analyzed patient sex as part of the regression analysis and found that patient sex is a strong predictor of variation in payments for ESRD patients.”
The whole idea, in simple terms, is to analyze a sizable amount of data and back into a workable mathematical formula that more or less predicts reality.
“For the composite rate equation, we defined case-mix measures using data for all Medicare dialysis patients treated in each facility. Specifically, we determined the percentage of a facility’s patients having each patient characteristic. For example, patient’s sex was measured as the percentage of patients that were female.”
The formula has “independent variables,” which are input to the equation.
“To define the independent variables for each equation, however, it was necessary to link patient and facility-level data. For example, measures for patient characteristics (for example, female gender) were included as potential payment variables in the facility level composite rate equation...”
Choosing the most appropriate independent variables is essential to creating a predicative model that actually produces accurate results for most uses of the formula. CMS has concluded that sex is an appropriate variable because it is objective, and claims data now provides a source of reliable data regarding patient sex and resource consumption for ESRD patients.
“In addition, patient sex is an objective measure and data on patient sex are readily available.”
The interesting fact is that gender had been visited and abandoned as a predictor in the 2004 development of the present case-mix approach. In essence, males were found to consume more composite rate resources, as per the present, unbundled composite rate, but not enough data was available to make sex a case-mix factor back in 2005.
But now a new day has come and CMS not only feels it has sufficient data, but also holds that the data objectively indicates that when in comes to distinguishing the cost of separately billables, females are notably more costly to treat.
