Rural dialysis does not pay as well as dialysis in urban facilities, according to a recent report from the Medicare Payment Advisory Commission (MedPAC).
The March 2019 report noted that facilities with high volumes of dialysis earned higher margins because cost per treatment falls with efficiencies, and that urban facilities had higher financial margins (-0.4%) than do rural facilities (–5.5%).
Treatment volume accounted for most of the differential in margins between urban and rural facilities. In 2017, urban facilities averaged about 12,000 treatments, while rural facilities each performed about 7800 treatments. A “low-volume facility” is defined as one that provides fewer than 4000 treatments total in each of three years before the payment year and with certain unchanged ownership criteria. A volume of 4000 treatments is the cutoff at which facilities receive more funds—a low-volume Medicare program adjustment of 23.9%. MedPAC staff member Nancy Ray noted a “so-called ‘cliff effect’ might be encouraging some facilities to limit services,” so they can keep their increased funding, according to Modern Healthcare.
Distance is a focus of the report, which highlighted that about 47% of facilities that receive the low-volume program adjustment of 23.9% under the prospective payment system are still within five miles of the next closest facility, while MedPAC wants the low-volume and rural payment adjustments to “focus on protecting only facilities that are critical to beneficiary access.”
In a statement, Chief Medical Officer Jeffrey Hymes, MD, of Fresenius Kidney Care, said that his company is pursuing more use of home dialysis and telehealth services to help “reduce these disparities and improve outcomes” for those who need treatment for kidney failure in rural areas. He also noted that the average distance to dialysis facilities in rural areas is at a minimum 2.5 times farther than average travel distances to urban facilities.
DaVita has been working to improve outcomes in rural dialysis cen- ters. The company touted its outcomes for rural and low-income facilities under the Medicare ESRD Quality Incentive Program, which reduces payments if facilities do not meet or exceed certain performance standards. In 2018, DaVita said it achieved a 21% reduction in rural and low income centers that missed the top clinical tier since the program’s inception in 2012. The company stated that rural and low-income areas present the greatest challenges to delivering top-tier clinical results.