Volume of services
Between 2009 and 2010, the number of FFS dialysis patients and dialysis treatments grew at similar rates (4 percent and 5 percent, respectively). Per capita use of erythropoiesis-stimulating agents, the drug class accounting for three-quarters of dialysis drug spending, declined during this time. This decline is linked to clinical evidence showing that higher use of these drugs is associated with increased risk of cardiovascular events. It also may be linked to facilities’ and physicians’ modifying their prescribing patterns in anticipation of the new payment method that began in 2011 that no longer pays separately for these drugs.
Quality of care
Dialysis quality has improved over time for some measures, such as use of the recommended type of vascular access—the site on the patient’s body where blood is removed and returned during hemodialysis. Other measures, such as rates of rehospitalization within 30 days, suggest that improvements in quality are still needed.
Providers’ access to capital
Information from investment analysts suggests that dialysis providers continue to have adequate access to capital. The number of facilities, particularly for-profit facilities, continues to increase.
Medicare payments and providers’ costs
In 2010, the Medicare margin for dialysis services and drugs was 2.3 percent for freestanding dialysis facilities. We project the Medicare margin for outpatient dialysis services will be 2.7 percent in 2012. This projection reflects payment updates of 2.5 percent in 2011 and 2.1 percent in 2012; the 2 percent reduction in total spending that the Medicare Improvements for Patients and Providers Act of 2008 mandated in 2011; the 3.1 percent transitional budget-neutrality adjustment in effect between January and March 31, 2011; the estimated 0.2 percent payment reduction due to Medicare’s quality incentive program in 2012; and a conservative behavioral offset to account for efficiencies in the use of drugs that are anticipated under the new dialysis payment method.
In Memoriam: William Cymer, CMS
I would like to note the untimely passing of William “Bill” Cymer at CMS. Bill was a dedicated public servant and significantly contributed to the implementation of many of the payment initiatives that CMS was tasked with, as well as preparation of reports to Congress on ESRD payment. You need only search the words “William Cymer” on the CMS Website to see the amount of impact he had on how CMS moved forward with updating renal reimbursement.
I have had the chance to get to know Bill over the last decade or so as we both addressed renal payment issues. I was always impressed with his courteousness, attention to detail, and enthusiasm for upgrading ESRD payment in a methodical and accurate manner. We owe a debt of gratitude to Bill, who passed away at a comparatively young age and, as such, gave the best years of his life to the service others.
As always, I invite your comments at Jahern@ahernconsulting.com and let me know what you think! RBT
With offices located in Chicago and in Washington, DC, Jack Ahern provides cutting edge financial and management consulting services to the healthcare community. He has an MBA from the University of Chicago, and undergraduate degrees in both Chemistry and Engineering from Dalhousie University. He can be reached at (312) 997-2177.