The fiscal cliff for dialysis patients did not occur when President Obama signed into law the American Taxpayer Relief Act of 2012 on Jan 2. It occurred years ago, when there was a vertical integration and then rapid consolidation of the dialysis industry to create behemoths focused on profit not outcomes.
Kidney Care Partners (KCP) should blush when they say that there could be a "devastating impact on vulnerable patients" because the government calibrates down it's payments to industry because of lower utilization of expensive intravenous drugs such as Epo. The world won't fall apart for patients; but it might just mean a smaller dividend for shareholders, or fewer millions each year for top executives.
Congress recommended a re-evaluation of the composite rate because it was clear to everyone that the dialysis industry was profiting from more conservative use of
ESAs under the bundle. And, you have to only look at the financial statements
of these large dialysis providers to realize that the resulting profits were
not being used for improving patient care.
Here is a quote from an excellent commentary in Nephrology news for some background:
'The law [American Taxpayer Relief Act of 2012, signed into law by President Obama Jan 2] calls for the Department of Health and Human Services to reevaluate the cost of dialysis drugs in the composite rate by comparing per patient use in 2007––the time period used by the Centers for Medicare and Medicaid Services to determine the drug payment component in the current composite rate––to 2012, where data has shown that dialysis providers have cut back on the use of expensive erythropoiesis-stimulating agents. ...
Congress' interest in the reevaluation is clearly taken from a recently released Government Accountability Report suggesting that Medicare is spending $650 - $880 million more per year in the composite rate than it should because it hasn’t adjusted the rate to account for the decrease in the use of ESAs. Dialysis providers have been cutting both the number of doses and the dosing prescription since the bundled payment took effect in January 2010."
Congress and the Obama administration did what
it needed to. The dialysis industry should be relieved it didn't do more - it
could have clawed back the 2.3% increase in the composite rate for this year. It
could have been more prescriptive in how much the reduction should have been.
Besides, the dialysis industry will have an opportunity to lobby
Medicare - and they will as this press release from KCP demonstrates...."We also believe it is important to allow the experts, armed with the most up-to-date and accurate data, to work with the kidney community to accomplish this."
The chickens have come back to roost for the dialysis industry. For the past decade or so, dialysis providers have viewed dialysis as a commodity: "3 to 4 hours three times a week, URR greater than 65%." Now the government and congress treats them as commodity providers - when costs go down, payments go down.
My advice to dialysis providers: make dialysis a boutique industry again, that is focused on patient outcomes that matter - not clinically meaningless "process measures", self-aggrandizing press releases, and rising profits.
My advice to dialysis providers: make dialysis a boutique industry again, that is focused on patient outcomes that matter - not clinically meaningless "process measures", self-aggrandizing press releases, and rising profits.
