ESCOs: The Way of the Future?

To meet the ever-growing need for cost savings in the Medicare part D system, the Centers for Medicare & Medicaid Services (CMS) developed the first-ever disease-specific Accountable Care Organization (ACO) for dialysis providers. Designed to reduce duplicative services and expenditures, the ACO—which CMS titled the ESRD Seamless Care Organization (ESCO) program—would consolidate all aspects of care for patients with end stage renal disease (ESRD).

According to CMS, the initiative will identify, test, and evaluate new ways to optimize the quality of care for Medicare beneficiaries with ESRD. To do so, CMS will partner with health care providers and suppliers to test the effectiveness of a new payment- and service-delivery model with the goal of providing beneficiaries patient-centered, high-quality care resulting in improved outcomes and overall Medicare savings.

CMS originally expected between 10 to 15 unique ESCOs to participate, with representation from all dialysis provider organizations/facility types and geographic areas. However, after the first and second deadlines came and went it appeared CMS received fewer applications than the agency and the community had anticipated.

On October 25, 2013, CMS announced it would reopen the request for applications program to solicit additional participation but has not yet announced the number of applications received to date. Whether ESCOs will be the wave of the future remains to be seen.

CMS proposed rebasing reimbursements in years 4 and 5, which would effectively penalize the highest performing ESCO and could deter potential ESCO applicants. Another concern is that CMS has not identified the quality metrics the ESCO program will use—nor have they clarified how or under what criteria—to determine if the program is deemed “successful” or “unsuccessful.” These uncertainties are complicated by the recent 12-percent cut to the ESRD Prospective Payment System base rate scheduled to be implemented over the next 4 years.

These outstanding questions about certain aspects of the model—such as which quality measures will be used to evaluate the program, or the state of uncertainly regarding how financially viable the shared savings model would actually be (especially in light of the proposed rebasing in years 4 and 5) remain a major concern for the success of the ESCO program, slated to be introduced on January 14, 2014.

ASN is working to ensure that if the ESCO program is implemented its focus remains on patient safety and quality of care. As of now, no further information about these updates has yet been made available, but ASN will continue to monitor developments and keep our members up-to-date on any new developments in the ESCO program as it moves forward.

January 2014 (Vol. 6, Number 1)