Erica Maltby, Senior Director of Physician Solutions
Tying volume to revenue — fee-for-service reimbursement — has long been the standard for nephrologists. But this payment model has created behavior patterns like high utilization, lack of accountability, and siloed care management, all of which ultimately led to increased costs.
In 2017, Medicare spending for chronic kidney disease (CKD) patients totaled $84 billion. That same year, spending for end-stage renal disease (ESRD) patients totaled $35.9 billion. Less than 1% of Medicare beneficiaries have ESRD, yet the condition accounts for more than 7% of overall Medicare spending.
The per-person, per-year spending on an ESRD patient averages nearly $80,000 — an unsustainable cost that is driving a wave of innovation in kidney care. The need for high-value care has resulted in several new value-based care models.
Three years after the Affordable Care Act’s 2012 introduction of primary care Accountable Care Organizations (ACOs), value-based kidney care began.
In 2015, CMS launched the Comprehensive End-Stage Renal Disease Care (CEC) Model. The program’s goal was to create kidney care “ACOs,” referred to as ESRD Seamless Care Organizations (ESCOs), to better coordinate ESRD care and spending.
The CEC program brought together dialysis facilities with nephrologists and other healthcare providers and suppliers to test a new payment and service delivery model. The program was the first step in encouraging more holistic kidney care by offering incentives that could be earned through investments in care coordination and new workflows. The program provided new accountability for those responsible for managing ESRD.
Results of the CEC program were mixed. While quality indicators showed an improvement, savings were too small to generate overall savings for Medicare. In fact, Medicare experienced aggregate net losses of $46 million after taking into account shared savings payments made to ESCOs.
A leading theory for why the model did not meet its potential is that it focused on ESRD patients only and centered around dialysis providers, not nephrologists. Without engaging, educating, and preparing patients upstream before they transition to ESRD, it is difficult to make meaningful changes after kidney failure occurs. Similarly, the core competencies and financial incentives of dialysis facilities are oriented around fee-for-service treatment reimbursements, which makes it challenging to justify investments in upstream care or holistic care management.
CMS took key learnings from CEC and other specialties’ value-based models to develop the next value-based care iteration, Kidney Care Choices (KCC). Launching in 2021, KCC is CMS’ newest value-based kidney care model.
KCC offers two voluntary sub-models:
CKCC expands beyond ESRD to also include CKD patients. KCC is centered around the nephrologist, who drives attribution into the model and acts as the quarterback of their patient’s kidney care. The program addresses some of the historic misalignment in kidney care reimbursement by including a greater emphasis on CKD management, encouraging transplant, rewarding investment in interdisciplinary care teams, and leveling payments across dialysis modalities.
In February, Strive Health offered our insights on KCC and what it means for the future of kidney care, including:
In 2021, CMS will launch the mandatory ESRD Treatment Choices (ETC) model. ETC is complementary to KCC, meaning participants can be involved in both at the same time.
The ETC model aims to bring the U.S. up to world benchmarks for both in-home dialysis and transplant rates. ETC will do this by impacting reimbursement rates for physicians who increase home dialysis and transplant adoption, first by a positive adjustment to home dialysis claims, then gradually introducing potential penalties throughout the 7-year program.
Commercial payors will likely adopt value-based kidney care.
KCC has caught the attention of commercial payors, who now have a framework for impacting the high cost of kidney care. Commercial payors have large CKD patient populations, so the shift in incentives upstream could be adopted in their markets. Additionally, there are specific actions that exacerbate cost. For example, “crash” dialysis starts — by some estimates — increase costs per patient by more than $50,000 a year. Creating quality incentive bonuses that correlate with these kinds of high-cost encounters incentivizes physicians to focus their attention there and help payors save overall.
The emphasis will continue to move upstream.
KCC was the start of shifting incentives towards CKD management, and this will likely continue. Actions taken during CKD progression, including early intervention, diet, medication reconciliation, modality education, transplant evaluation, and access planning, all have significant cost and quality implications. Shifting focus — and incentives — toward CKD will be critical in evolving kidney care.
New incentives will lead to new investments.
The changing reimbursement landscape encourages practices to make investments in holistic care management. Practices will increasingly develop or partner on interdisciplinary care teams, analytic assets, and risk capitalization.
At Strive Health, we’ve long thought that kidney care should be focused on intervening early to impact the primary drivers of high costs and poor outcomes. When it comes to value-based care program restructuring, we advise nephrologists to follow these key principles:
While nephrologists and their services are not the drivers of high spending in kidney care, they can be a significant part of the solution to lower costs while also improving outcomes.
The many new models introduced by CMS are indicative of an industry shift toward value-based care. Strive Health partners with nephrologists, health systems, payors, and medical groups to create integrated solutions that make effective value-based kidney care a reality.
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