DaVita® Medical Insights

Incident Dialysis Alternative Payment Model Aims for Triple Win

In the age of health care payment reform, the nephrology industry faces unique challenges due to the high cost of end stage renal disease (ESRD) patient care, the complexity of renal disease and its management, and traditionally low reimbursement rates for nephrologists. Disproportionately, the cost of care during the incident dialysis timeframe (the first 180 days of treatment) is significantly greater than subsequent timeframes. The transition to dialysis, whether planned or unplanned, holds significant opportunities for both cost savings and clinical improvement.

Pairing this finding with value-based payment model requirements established by the Department of Health and Human Services’ Physician-Focused Payment Model Technical Advisory Committee’s (PTAC), the Renal Physicians Association (RPA) has proposed a broadly beneficial incident dialysis advanced payment model (APM).

Incident dialysis cost and compensation

Simply put, incident dialysis is expensive. The total cost for Medicare ESRD patients was $33.9 billion in 2017. Hospitalization costs account for a significant portion of costs (approximately $11 billion (2015), with sub-optimal transition to dialysis accounting for a large portion of these costs. When chronic kidney disease (CKD) patients transition sub-optimally to dialysis, costs spike from less than $10,000 PPPM to more than $30,000 PPPM. Contributors to this spike include a lack of preparedness for the CKD to ESRD transition, patients choosing in-center rather than home modalities, and inappropriate adoption of dialysis by patients with overwhelming or terminal comorbidities. Furthermore, payments remain the same whether patients have an optimal or sub-optimal transition. The result is a less-than-ideal situation for patients, nephrologists, payers and society as a whole.

Payment model evolution

The Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 promotes the creation of novel payment models for Medicare to reimburse physicians and entities for the care they provide beneficiaries. MACRA (also known as the Quality Payment Program (QPP)) provides incentives to physicians for participation in Alternative Payment Models (APMs). The establishment of the alternative payment philosophy was spurred by the fee-for-service (FFS) reimbursement landscape that dominated the 1980s and 1990s, incentivizing volume of care over quality of care.

In the 2000s, the health care industry graduated from strict FFS to a model with a link to quality and value. Today, we reside in an era of APMs based on a fee-for-service foundation, with a vision for achieving population-based payment in the future.

One format for developing an APM is the physician-focused payment model (PFPM). The Centers for Medicare & Medicaid (CMS) has urged medical societies and other stakeholders to design new payment models that focus on value, defined as higher quality, better patient experience and lower overall costs. Proposed models are subsequently vetted through the PFPM Technical Advisory Committee (PTAC), who refer some models to the Secretary of HHS for partial or full implementation. The PTAC guidelines for APM proposals include:

  • Value over volume: practitioners are incented to deliver high-quality care
  • Flexibility: practitioners have flexibility in order to better achieve high-quality care
  • Quality and cost: care quality and/or cost are improved
  • Payment methodology: payment model is designed to achieve goals of stakeholders
  • Scope: provides for greater inclusivity
  • Evaluable: provides for evaluation of ability to meet cost, quality and other goals
  • Integration and care coordination: encourages greater care coordination
  • Patient choice: acknowledges unique needs and preferences of patients
  • Patient safety: aims to improve patient-safety standards
  • Health information technology: encourages use of health care IT to improve care

RPA’s incident dialysis proposal

Built on several key tenets, the RPA’s proposal was designed to positively impact patients, physicians and society. The model is intended to be simple and flexible to aid adoption by practices of all sizes and geographies. The RPA developed this APM to serve the needs of patients with and without prior CKD care and with a focus on enhanced patient choice. Additionally, the proposal accounts for early renal transplant referral, conservative care and medical management for patients unlikely to benefit from dialysis, and risks associated with variable patient populations. The proposal addresses the following:

  • Improvements for care coordination of CKD patients moving toward ESRD
  • Innovations for evaluating patients for home dialysis modalities (along with patient awareness education and promotion)
  • Better promotion of renal transplantation as a non-dialysis treatment option
  • Development of alternative approaches for improving cost and quality for ESRD
  • Innovations for smaller dialysis organizations
  • Reduction of disparities in CKD/ESRD rates and adverse outcomes among minorities
  • Changes in care delivery to improve the quality of life for CKD and ESRD patients

Having passed multiple PTAC review rounds and received recommendation to the Secretary for full implementation, the RPA’s proposal is currently undergoing evaluation by CMS. Once this evaluation process is complete, the new APM could be promoted to nephrologists for participation. Ideally, participation will create a triple win for patients, practitioners and society by improving the management of patient transition from CKD-to-ESRD treatment and reducing the high costs of end stage renal care.

Jeffrey Giullian, MD, MBA

Jeffrey Giullian, MD, MBA

Jeffrey Giullian, MD, serves as chief medical officer of hospital services, vice president of medical affairs and national group medical director at DaVita Kidney Care. He leads the clinical quality and safety efforts for hospital services, helps lead the group medical directors and plays an active role in improving physician experience. Dr. Giullian relies on his past experiences in private practice and hospital leadership to advocate for physicians and medical directors. Dr. Giullian is active with the Renal Physicians Association (RPA) as a member of the Board of Directors, chairman of the Healthcare Payment Committee and member of the RPA’s team of advisors to the American Medical Association Relative Value Units Utilization Committee. Dr. Giullian trained in nephrology and transplantation at Vanderbilt University and received his MBA from the University of Colorado at Denver. Twitter: @Dr_Giullian_MD