Proposed Cuts to ESRD Program Could Limit Access to Care

A recent proposal from the Centers for Medicare and Medicaid Services (CMS) to reduce the End Stage Renal Disease (ESRD) program bundle by 12 percent has generated concern throughout the kidney community. The July 1 proposed rule recommends several other changes to the ESRD Prospective Payment System (PPS) and Quality Incentive Program (QIP) but the focus and concern from ASN—as well as other health professional organizations, patient groups, dialysis providers, and industry—remains the significant proposed payment reduction.

If implemented, cuts to the ESRD program of the magnitude CMS proposed could have negative consequences for patients and dialysis units in certain parts of the country—with certain populations disproportionality affected.

“More than 20 million Americans have kidney disease, and the Medicare ESRD program provides life-saving care to nearly 400,000 beneficiaries with kidney failure,” said ASN President Bruce A. Molitoris, MD, FASN. “People with kidney disease, among the most vulnerable patients, are disproportionately underrepresented minorities, and such a large cut may reduce access to care and quality of treatment.”

Should the proposed cut take effect, it would likely endanger the existence of some dialysis units—especially rural, inner-city, and smaller clinics—making it much more difficult for people who rely on those clinics for life-saving dialysis at least 3 times a week to access that therapy.

Each year during midsummer, CMS releases a proposed rule typically adjusting the base PPS rate to reflect changes in price (known as the market basket), modify the QIP, and make other adjustments to the ESRD program. Earlier this year, however, Congress directed CMS to re-examine the ESRD PPS base rate from the perspective of utilization (rather than price, as it does on an annual basis). Specifically, the American Taxpayer Relief Act of 2013 mandated that CMS compare use of drugs and biologics in 2007 to use of drugs and biologics in 2012, and adjust the payment rate accordingly.

That comparison yields a 12 percent cut to the ESRD program, according to CMS. Together with the annual market basket update, which this year would provide a 2.6 percent increase based on recent price changes, the total cut would amount to 9.4 percent.

To put this proposed cut in perspective, the Medicare Payment Advisory Commission’s (MedPAC) March 2013 Report to the Congress projects a Medicare margin of just 3 percent to 4 percent for dialysis providers. While the exact methodology CMS used to calculate the base rate—and whether the agency is acting according to the statute—remains unknown or contested, the fact remains that a cut of the scale proposed could have a deleterious effect on patient access to high-quality care.

“It’s troubling that Congress mandated a payment reduction at the same time that CMS is using the ESRD program as a model for bundled payment, a quality incentive program, and a specialty-specific integrated care delivery model,” said Thomas H. Hostetter, MD, ASN Public Policy Board chair. “The kidney community is working diligently on achieving the goals of the Quality Incentive Program, which was also mandated by Congress and implemented by CMS, in order to avoid further cuts in reimbursement.”

ASN, together with the broader kidney community, is taking action to ensure that CMS follows Congress’ directive to re-examine the base rate payment in a manner that protects the vulnerable kidney patient population. In addition to highlighting the potential unintended consequences of CMS’ proposed payment reduction in press releases and on social media, ASN is joining other organizations in asking Congress to weigh in to support patients with kidney disease. As of press time, at least 13 members of the U.S. House of Representatives had signed on to a letter to CMS Administrator Marilyn Tavenner urging CMS to carefully consider the impact of proposed cuts, pointing out that every congressional district has patients dependent on the ESRD Program. ASN will continue to help call congressional attention to the situation, and will submit comments to CMS regarding its proposals and recommending alternatives—as well as urging CMS to closely track the care patients on dialysis receive to guarantee that any payment reductions do not have unintended consequences.

“ASN, the rest of the kidney community, and CMS must work together to provide the highest quality care possible to the millions of Americans with kidney disease, including those on dialysis whose lives are saved daily by the Medicare ESRD Program,” Molitoris said.

Visit ASN’s website for more information and responses from the society on this important issue.