Trends in Reimbursement in Nephrology

Katie KwonKatie Kwon, MD, FASN, is a partner with Lake Michigan Nephrology in St. Joseph, MI.

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Compensation for physicians in nephrology has long lagged behind that for other more procedure-based medical specialties. The past few years have shown signs of hope in addressing the compensation gap. The Advancing American Kidney Health initiative introduced more value-based payment models, both voluntary and mandatory. Up to half of the 10,000 nephrologists in the country will be participating in these programs, which seek to rein in costs while improving patient outcomes. A third have been enrolled in the mandatory model, whereas the optional Kidney Care Choices/Comprehensive Kidney Care Contracting (KCC/CKCC) models have attracted applicants representing roughly another 20% of the workforce (1). The primary focus is on delaying progression to end-stage kidney disease (ESKD) and increasing the rates of home dialysis and transplantation. Practices that are successful in achieving these laudable goals will be financially rewarded, and those that fall below performance benchmarks will be penalized.

The continued focus is on payment for specific outcomes, rather than reimbursing episodes of care. Population health management tools are critically important in this endeavor. Electronic health records (EHRs) are currently optimized for billing rather than for patient care, and integration among different systems remains fragmented and incomplete. It remains to be seen whether the offered financial incentives will be enough to tempt practices to invest the significant sums required to upgrade their EHR capabilities. EHR costs will continue to be a barrier to improved delivery of care for the foreseeable future. Dialysis corporations are included in the risks and benefits of several of the payment models, and as they provide the EHRs for their units we may see better alignment of interests toward EHR improvement.

The payment models are restricted to patients with traditional Medicare. Starting in 2021, patients with ESKD will be eligible to enroll in Medicare Advantage plans. One unintended consequence of these intersecting policies is that practices in the mandatory model can reduce their exposure by steering patients toward Medicare Advantage programs. Although patients may benefit with lower out-of-pocket expenses, they may be restricted in their choice of nephrologists, given the plans’ restricted physician networks.

The nephrology community should rejoice with the new relative value unit (RVU) update, which increased the value of most of the commonly billed codes for inpatient and outpatient dialysis. It remains to be seen how much the RVU increases will translate into improved nephrology reimbursements, however. The conversion factor for RVUs (the multiplier that translates RVUs into dollar amounts) may be decreased to maintain budget neutrality (2). The net effect may be a rebalancing of the value of cognitive work compared with procedures but limited growth in compensation.

As the new administration takes charge in 2021, we hope they also continue the new focus on improving payment models for nephrologists and improved care models for our patients.