Medicare ESRD Program has saved many lives, but government policy has slowed its potential
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Last year, the kidney community marked the 50th anniversary of the Medicare End-Stage Renal Disease Program.
The program is a federal entitlement by which the health care costs for patients with kidney disease, including coverage for dialysis and transplantation, are funded by Medicare and/or Medicaid.
When I started my nephrology fellowship in 1976, patients were dialyzed an average of 7 hours three times weekly using coil dialyzers immersed in a tank of dialysate that was changed midway through the treatment. The publication of the National Cooperative Dialysis Study and its secondary analyses revolutionized dialysis treatment in the early 1980s with the advent of shorter treatments, followed by the introduction of non-cellulosic hollow fiber dialysis membranes, dual dialysate proportioning systems that replaced acetate with bicarbonate, and ultrafiltration control.
Changes
The decision by Congress to expand the Medicare program in 1972 to include the ESRD program, the first such expansion since Medicare was established in 1965, has saved countless lives during the last 5 decades – mothers, fathers, brothers, sisters, husbands, wives, children – who would have died from kidney failure.
But the techniques we use today to treat kidney failure are still much the same as 50 years ago. Why? Because innovation in kidney care is financially challenging in a fixed payment system. The “composite” reimbursement rate for a dialysis treatment changed little between 1972 and 2005 despite inflation and changes in technology that were more costly to providers. In 2011, the costs of medications were completely incorporated into the new “bundled rate” as the Prospective Payment System (PPS) for dialysis, but the “composite rate” portion of the bundled rate, the portion attributable to the dialysis treatment itself, was changed little from 1972.
The care of patients in dialysis facilities has become standardized and algorithm-driven with little latitude for patients or physicians to deviate from the company-approved pathway. An example is the use of etalcalcetide, an effective treatment for secondary hyperparathyroidism for which there is an allowance in the PPS but is highly restricted in use by dialysis providers due to cost.
Another example is an informed patient decision to accept the cardiovascular risks of a hemoglobin target between 11.5 g/dL and 13 g/dL with erythropoiesis-stimulating agent therapy (supported by Kidney Disease Improving Global Outcomes anemia guidelines) to decrease fatigue and improve exercise tolerance. Such deviation from a one-size-fits-all approach to a patient-focused care model may be a losing battle with multiple bureaucratic barriers.
Industrialization of dialysis
How did this industrialization of dialysis care evolve from the design of the ESRD program in 1972 and what could have been done to soften it?
Certainly, the razor-thin margins of the composite rate and the bundled rate allowed only the largest dialysis providers to survive based on economies of scale. The other factor is the Medicare secondary payer provision that was progressively expanded to 30 months. The private insurers generally pay several times the Medicare rate, essentially subsidizing the thin margin on Medicare patients and the negative margin on Medicaid patients.
Providers with the largest geographic footprints would be in the best position to contract with the private insurers, and providers without these private insurer patients had financial challenges, which drove their acquisition by the larger providers. In 2023, there is little competition in the dialysis “industry” except that between the two largest providers. In essence, patients must choose between Home Depot and Lowes.
Iron lungs vs. vaccines
Funding for and treatment of patients with ESKD has been siloed from that of those with non-dialysis CKD since the introduction of the ESRD program. To use the polio analogy, dialysis is the iron lung, and upstream treatment of CKD is the vaccine. In 1972, patients with ESKD who died because they were unable to access or afford dialysis therapy generally had good access to health care and, if it were not for their ESKD, could have continued their lives as parents and financial providers for their families, and/or students. In fact, part of the Congressional budget analysis for the 1972 legislation which funded the ESRD program estimated that some of the costs of the program would be offset by income taxes generated as dialysis patients returned to the workforce.
Clearly that did not prove to be the case. But change in the epidemiology of CKD since 1972 was never recognized by the ESRD program.
Original estimates of the number of dialysis patients did not account for racial minority and socioeconomically disadvantaged patients who are now highly overrepresented in the CKD population. About 40% of incident patients with ESKD received no nephrology care prior to dialysis initiation and many received no regular health care at all. Now that we have many effective treatments for slowing the rate of CKD progression including angiotensin-converting enzyme inhibitors/angiotensin receptor blockers, mineralocorticoid receptor antagonists and SGLT2 inhibitors, the ESRD program can no longer ignore the imperative to screen and treat high-risk populations, many of which are not receiving regular health care services.
Financial incentives
The Advancing American Kidney Health (AAKH) initiative has as one of its goals to decrease CKD progression, but this is not something that can be achieved with financial incentives in the Medicare program alone. Screening and treatment for CKD must be funded and extended to those very populations that are not part of provider payment incentive programs because that is where the greatest opportunity to make an impact resides. We seem to have the “vaccine” for CKD to slow progression, but we are only offering it to a select few who have adequate health care coverage and who visit a provider regularly. Would that have worked for a polio vaccine?
Increase kidney transplants
Once a patient approaches ESKD, dialysis has become the path of least resistance, leaving the other two options, transplant and conservative management, underutilized.
Transplant is underutilized primarily because of a shortage of transplantable organs, although CMS also blames under-referral and has structured a payment system in the End-Stage Renal Disease Treatment Choices (ETC) model that penalizes under-referral. When the ESRD program was funded in 1972, it was estimated that the number of patients on dialysis would plateau at around 50,000 in 5 years, at which time the number of new patients initiating dialysis would equal the number of patients leaving the program due to death or transplant. Clearly that projection did not account for the unforeseen epidemic of CKD and the fact that transplant rates have not kept pace with the growth of the dialysis population which now numbers around 500,000.
The annual number of kidney transplants has grown to around 25,000, but this represents less than a twofold increase in the past 30 years. The shortage of transplantable organs has been partially attributed to organ wastage and organ procurement organizations (OPOs) not being held accountable.
But the major reason for the transplantable organ shortage in the U.S. is the opt-in (required consent) rather than an opt-out (presumed consent) system for deceased donor organ donation. Several European countries use a presumed consent system which yields far greater numbers of transplantable organs per capita than in the U.S., where the waitlist for kidney transplant is now over 90,000.
Although there may be political headwinds to a presumed consent organ donation system here, it makes the most sense from both a cost-containment and quality of life perspective. Patients with ESKD would have more transplantable organs available, and its adoption should be a legislative priority to help achieve the goal of the AAKH initiative to increase kidney transplantation.
End-of-life options
To return to the polio analogy, not every patient with respiratory muscle paralysis wanted to spend the rest of their life in an iron lung. There was considerable discussion with the patient and their family regarding the choice between an iron lung and end-of-life comfort care, and many patients reasonably chose the latter. Similar discussions do not regularly occur among patients with CKD approaching dialysis for whom transplant is not an option. Part of the reason is ignorance by nephrology practitioners regarding what comfort/palliative/conservative management of ESKD entails, and part is due to lack of funding for all the disciplines who may need be engaged in this discussion with patient and family including nephrology, primary care, palliative care, nursing, social work and nutrition.
Quality assurance, improvement
In 2012, a year following the implementation of the PPS, the Clinical Performance Measures Project evolved into the current Quality Incentive Program (QIP) which affects facility payment and public reporting.
The number of metrics for the QIP expanded to 14 in the domains of patient and family engagement, care coordination, clinical care and safety. Many of these metrics are of dubious value in assessing quality of care. For instance, the standardized readmission ratio was rejected by the technical expert panel convened by CMS to evaluate it and rejected by the National Quality Forum whose approval is legislatively required for any metric affecting payment of public reporting. Yet, it has survived as a measure in the QIP. The hypercalcemia measure has no evidence basis but was adopted because the legislation establishing the PPS required a metric for bone and mineral metabolism.
As these quality metrics expanded, the influence of stakeholders and ultimately the impact of the ESRD Networks on quality decreased.
A successful dual-oversight model of collaborative bottom-up ESRD Networks has been replaced with ESRD Network statements of work that have lost any latitude to identify and implement region-specific quality improvement programs, and the valuable medical review boards of these networks have become mere conduits for the deliverables in the ESKD Network contracts.
Although I might be biased due to my involvement with the ESRD Network program in the 1990s and 2000s, I see this transformation as an unfortunate waste of local stakeholder talent as ESRD Networks have become marginalized as messengers for CMS. It would be nice to recapture some of the bottom-up excitement that the ESRD Networks generated among stakeholders 20 years ago when CMS better recognized the value of that talent and incorporated this feedback into constructive programmatic change.
Insanity vs. innovation
As has been erroneously attributed to Albert Einstein, “Insanity is doing the same thing over and over again and expecting different results.”
The enemy of this insanity is innovation. Innovation can be based on doing things differently or having different things that can be accomplished with it. It also means walking the walk rather than talking the talk. Some examples include the following:
- The AAKH initiative has worthy goals to slow the rate of CKD progression and increase home dialysis and transplant. OPOs are being held more accountable for wasted organs with the goal of doubling the number of transplantable organs by 2030, but this is an aspirational goal unlikely to be achieved without a change in the opt-in process.
- Both the ESRD ETC model for dialysis patients and the KCC models for non-dialysis CKD patients offer financial rewards to the provider for transplant and home dialysis, but this undervalues the role of informed decision-making by the patient to decline these modalities. The KCC payment model includes an activation measure to gauge patient engagement, which is a step in the right direction, but there remains the assumption based on financial incentive that an engaged patient will choose home dialysis, transplant and/or start dialysis with a fistula or graft, which may not necessarily be the case.
- Positive aspects of the KCC model include expanded coverage for kidney disease education, improved access to care through telehealth, expanded coverage for post-hospitalization home visits and allowing concurrent care for patients who choose hospice care.
If the epidemic of CKD in the United States is appropriately viewed as a continuum rather than siloed into non-dialysis CKD and ESKD, harmonization of policy and payment for these conditions may provide the innovation needed to advance American kidney health.
- References:
- KDIGO clinical practice guidelines for glomerulonephritis. https://kdigo.org/wp-content/uploads/2017/02/KDIGO-2012-GN-Guideline-English.pdf. Published June 2012. Accessed Dec. 10, 2022.
- Lowrie E, et al. N Engl J Med. 1981;doi:10.1056/NEJM198111123052003.
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Jay B. Wish, MD, is chair of the Editorial Advisory Board for Healio/Nephrology News & Issues. He is professor of clinical medicine at Indiana University School of Medicine and chief medical officer for outpatient dialysis at Indiana University Health. He is also the medical director of a DaVita outpatient dialysis facility.
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