Questioning the validity of case mix adjusters in ESRD bundle

John Doe begins dialysis at a clinic. He is 63 years old. He sits next to Simon Doe, his brother, who is 75 and started dialysis a week earlier.

According to the Centers for Medicare & Medicaid Services, younger John costs more money to treat than the older Simon, based on age alone. And, if John was 36 years old, according to CMS, he costs even more to treat. In fact, the 18-44 year age group for patients on dialysis pays the highest among all others—even elderly patients in their 80s.

Is that the reality on the dialysis floor? The overwhelming response from the renal community in comments on changes to the adjusters, part of the proposed rule for the 2016 version of the Prospective Payment System (the “ ESRD bundle”), was a solid “no.”

Controversial from the start

Age is one of 12 case-mix adjusters that have been part of the Prospective Payment System since it was initiated by CMS in January 2011. They offer dialysis providers additional payments for patients that fit the specific conditions, but selection of the adjusters has been controversial from the start. In February 2010—10 months before the ESRD payment bundle took effect—NN&I published an article by Mayne et al. entitled, “Finding the case mix adjusters in the bundle,” stating that these comorbid conditions were rare. In its comments on the 2014 proposed rule for the bundle, the Medicare Payment Advisory Commission called for an analysis of the PPS’s case-mix adjusters.

CMS, by law, was obligated to do the review. The American Taxpayer Relief Act of 2012 required the Department of Health and Human Services to conduct an analysis of the case-mix payment adjustments and make appropriate revisions by no later than Jan. 1. CMS completed that review just in time for revisions for the 2016 final rule.

Dialysis providers and renal care groups said in their comments that they don’t believe most of the age adjustments make sense —or the rest of the adjusters, for that matter. “We are not aware of any complaints from patients that they are experiencing access problems due to their age, nor complaints from providers that they are under-compensated for patients in certain age groups,” wrote Dialysis Patient Citizens Executive Director Hrant Jamgochian, JD, LLM. “Indeed, it strikes us as counter-intuitive that patients in the 60-69 age group would be $16 more costly to treat than those in the 70-79 age group.”

CMS is updating the adjuster payments to help balance a proposing $9-per-treatment cut in the base composite rate. But the agency’s use of cost reports to determine proper payments––and the scarcity of the comorbid conditions among ESRD patients that would allow a provider to qualify for an add-on payment—means providers will get short-changed.

“ANNA is unclear as to the significant increase in value of the age adjuster, as there is no data to justify such a large increase … In our experience, the patient population ages 70-79 often has greater needs and suffers more complications than younger adults,” wrote American Nephrology Nurses’ Association president Cindy Richards, BSN, RN, CNN, in comments on the proposed rule. “To ensure the nephrology community can continue to provide high quality and cost-effective care, we must be furnished with the necessary resources to adequately treat populations with complex needs,” she said.

The other adjusters include body surface area, body mass index, six comorbid conditions, time on dialysis, and rural and low-volume facility status (see adjusters and CMS’ proposed changes to payment in Table 1).

Table 1. Proposed changes in values for the 12 case-mix adjusters for 2016

While respondents to the proposed rule are applauding CMS’ decision to remove two of the comorbidity adjusters—bacterial pneumonia and monoclonal gammopathy—from the list (“Given the difficulty in obtaining the results of an x-ray, sputum culture, positive serum test, or a bone marrow biopsy test, we support the agency’s elimination of the (two) case-mix payment adjustments…” said ANNA’s Richards)––many are questioning the validity of the adjusters altogether—and whether the adjustments will make up for the drop in the base rate.

“…It is our belief that the often futile efforts to obtain the documentation to meet the requirements associated with the comorbid case-mix adjusters outweigh the benefit of any payment adjustment,” Richards said.

And the renal community may have already been “short changed” over the last four years as dialysis providers struggled or gave up on trying to document the special conditions in order to get the add-on payment. “Data suggests that, historically, the case mix adjusters have not been paid out as CMS had expected they would, which has resulted in an unintentional reduction in payments to facilities,” said National Renal Administrator Association president Debbie Cote in their comments to CMS.

NRAA retained Prima Health Analytics to examine the provisions of the proposed PPS refinement and their impact on dialysis facilities. According to Prima’s report, from 2012–2015, providers were underpaid by an estimated $33 million, or $0.19 per treatment, because the actual prevalence of the case mix adjusters did not align with CMS’ assumptions. Even with the proposed refinements to the case mix adjusters, the risk for the prevalence of case mix adjusters to be misaligned with the multipliers remains present due to shifts in patient populations over time.

Because of this risk, expected payments for providers may not be realized, the NRAA response said.

ANNA, along with Kidney Care Partners, an advocacy group for the renal community and product and drug manufacturers, urged CMS to remove the four remaining comorbid case-mix adjusters—pericarditis; gastrointestinal (GI) tract bleeding with hemorrhage; hereditary hemolytic or sickle cell anemia; and myelodysplastic syndrome. “In determining which adjusters are appropriate, CMS should ask: ‘Does the adjuster center on a patient or facility characteristic that without additional dollars would limit access to patients?' Additionally for patient-level adjusters, evaluating both the clinical relevance and the cost of documenting a patient’s condition to claim the adjuster are critical aspects of determining whether access to services could be limited without an adjuster,” said KCP chairman Edward Jones.

Like the oddness about the age adjuster, renal community members said CMS is validating use of the adjusters by cost reports, not by actual case studies. “The theory that should be guiding this research is that there exist characteristics of patients that make them more costly to care for and therefore likely to be avoided by providers absent additional reimbursement,” said Jamgochian.

“AKF strongly recommends that the determining factor in choosing adjusters should be which adjusters will impact the policy goal of improving patient access," said American Kidney Fund president LaVarne A. Burton. "Furthermore, CMS should recognize that in some cases, costs seen in claims data may not actually be attributed to the specific adjuster. Where such is the case, AKF urges CMS to establish an interim set of adjusters to ensure that the changes in payments reflect the cost of care.”

Just prior to the CMS analysis of the adjusters, NN&I published a study tracking changes in the existence of these comorbid conditions since 2000. In their review, Hollenbeak et al. found large declines in the medical conditions identified by the case mix adjusters, particularly those involving the prevalence of patients with low BMI, pericarditis, new to dialysis, and among ages 18-44, while large increases were observed in patients with chronic co-morbidities, pneumonia, and age cohort 80+.

The message? Substantial changes were seen in case-mix adjuster prevalence, suggesting that CMS needs to regularly update the PPS payment formula.

Or, throw most of them out altogether. -by Mark Neumann