Nephrology practices face payment cuts, cost of value-based care
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More than a decade ago, three nephrologists and a policy analyst wrote a position paper for the RAND Corporation on the potential for physician practices to treat patients with late-stage chronic kidney disease.
The challenge, the authors wrote, was payers, namely Medicare, were not covering the cost for CKD care, and referrals to nephrologists were inconsistent
“Patient referral requires effective working relations between nephrologists and other specialists,” Richard A. Rettig, PhD, and colleagues wrote. “All CKD clinics and practices ... have confronted the need to reach out to PCPs, cardiologists and endocrinologists to ensure the referral of patients for CKD care before patients need immediate dialysis.”
Alexander Liang, MD, president of Dallas Nephrology Associates, said Medicare and commercial insurers are waking up to the costs of patients with CKD – and they want to do something about it.
Source: Dallas Nephrology Associates
“We have always been a proponent of moving everything upstream,” Liang told Healio/Nephrology News & Issues. “I’d rather see patients early rather than late – CKD stage 3 and even 2 when possible.
“We have developed a good working relationship with primary care physicians, trying to educate and partner with them on the value of slowing the progression of CKD.”
Developing an approach to treating patients with late-stage CKD is one of the challenges that Liang and other nephrology practices said they are facing this year. Recent cuts to the Medicare physician payment, workforce issues, the investment in new CMS demonstrations and a transition to value-based care are at the top of the list for Liang and his practice, which serves 35,000 patients in the Dallas/Ft. Worth area.
“What we are finding is to keep patients healthy and keep them out of the hospital, we need to see them more often,” Liang said.
Dallas Nephrology Associates has 106 nephrologists and 25 advanced practice providers and celebrated its 50th anniversary in 2021.
Focus on CKD
Dallas Nephrology Associates is participating in the CMS Kidney Care Choices (KCC) model, which provides a monthly capitated payment for care of patients with advanced CKD and for patients with ESKD. The objective of the demonstration, which continues until 2026, is to determine if improved monitoring and aggressively treating patients in late-stage CKD slows the progression of kidney failure and provides time for other options, such as preemptive transplants. For patients with ESKD, KCC participants offer additional medical services with an eye toward reducing hospitalizations.
The CDC estimates that kidney disease affects 37 million people or 15% of U.S. adults, including more than 38% of those older than 65 years.
Joseph Cashia, CEO of Renal Care 360, a nephrology practice group based in Franklin, Tennessee, said he expects to learn more about value-based care by participating as a Kidney Contracting Entity as part of the Kidney Care Choices model. His company focuses on treating Medicare patients in primarily rural markets “where renal disease disproportionately affects our patient populations,” Cashia told Healio/Nephrology News & Issues. “However, we believe in not starting at CKD stage 4 but rather focusing on the polychronic conditions that most of these patients we serve have.
“We recently launched an initiative in rural Georgia that has our nephrologists partnering with PCPs and endocrinologists to co-manage patients with type 1 diabetes,” Cashia said. “Patients with type 1 diabetes and CKD are two to three times more likely to suffer a heart attack or stroke than patients with type 1 diabetes alone. These patients deserve better,” Cashia said.
Opportunities
Liang sees the greater focus on CKD care leading to the need for more nephrologists – and advanced practice providers (APPs).
“We have been fortunate in finding the nephrologists we need to care for our patients,” Liang said. “We are also adding more advanced practice providers. When I started as president of [Dallas Nephrology Associates] in 2016, we had eight APPs. Today, we have 25.”
But the demand in other regions of the United States for nephrologists outstrips the supply, physician recruiter Martin Osinski, MBA, CVA, told Healio/Nephrology News & Issues.
“There are more jobs out there than I have candidates to fill them,” he said. “Nephrology loses a lot of candidates to critical care medicine and jobs as hospitalists because the pay and the schedule are better initially,” Osinski, president of Nephrology USA, said.
Osinski tells fellows the financial opportunities are better long-term in nephrology than working on staff at a hospital. “Many don’t realize that they can improve their income through medical directorships, joint ventures, and eventually, obtaining a partnership in the practice,” Osinski, an Editorial Advisory Board Member for Healio/Nephrology News & Issues, said. “Those opportunities are not available as a hospital employee.”
Pay cuts
Osinski said pay for nephrologists entering the specialty has “improved over the last few years as a result of lack of physician supply and greater demand,” but this year all physicians will face cuts in their Medicare paycheck. Federal budgetary changes last year led to plans for a 8.5% cut in payment under the Physician Fee Schedule (PFS) for 2023.
The AMA predicted there would be forced closure of physician practices and joined with more than 150 physician organizations, including the Renal Physicians Association and the American Society of Nephrology, in criticizing the cuts. That effort brought the planned reduction down to 2%, but the AMA said changes need to be made in how the fee schedule is managed in the future.
“The AMA is extremely disappointed and dismayed that Congress failed to prevent Medicare cuts next year, threatening the financial viability of physician practices and endangering access to care for Medicare beneficiaries,” Jack Resneck Jr., MD, AMA president, said in a press release. “This 2% cut, following 2 decades of flat payment rates, will have consequences on health care access for older Americans.”
In its March 2022 report, the Medicare Payment Advisory Commission (MedPAC) recommended that Congress increase payments to physicians for 2023 “by the amount determined under current law.”
More recently, the United Specialists for Patient Access (USPA) sent a letter to MedPAC urging it to consider recommending payment reforms to Congress.
“While Medicare reimbursement updates under the overall PFS have increased by only 11% over the last 2 decades, the cost of running a medical practice has increased 39% over that same period,” USPA wrote in the letter.
International graduates
Osinski said one of the biggest challenges facing expansion of nephrology practices is the high percentage of international medical school graduates entering the specialty.
“About 70% of the fellows I see are from other countries who studied medicine in the U.S.,” Osinski said. “In order to get board certified, they need practical medical experience here. That means they can’t enter nephrology practice right away.”
In a report released in November 2022 at ASN’s Kidney Week, the Task Force on the Future of Nephrology outlined 10 concepts to help increase recruitment of fellows to the specialty.
The concepts, developed by the task force chaired by Mark E. Rosenberg, MD, FASN, include the following:
- enhance competency-based nephrology education;
- establish individualized pathways to meet career goals;
- emphasize personalized care;
- reconsider expectations for training in procedures;
- close gaps in current nephrology training;
- promote the well-being of nephrology fellows;
- prioritize diversity, equity, inclusion and health care justice;
- ensure equal opportunities for all nephrologists;
- foster interprofessional and interdisciplinary practice; and
- inspire lifelong learning.
The recommendations, such as creating individual pathways to meet career goals, get “to the whole concept of personalized medical education, which is gaining momentum,” Rosenberg said at an ASN session outlining the report.
Improvement in training on modality options is also important, Rosenberg said. “One area that we believe needs strengthening is the ACGME program requirements, particularly in home dialysis. This is an area that is not real robust,” he said.
Expand home dialysis
Expanding the use of home dialysis is a key component of the End-Stage Renal Disease Treatment Choices model, a mandated demonstration for approximately 30% of dialysis providers. The model offers financial incentives to place more patients on home dialysis and direct more patients to be evaluated for a kidney transplant.
Nephrologists that own dialysis clinics can influence those efforts. A recently published study conducted by Eugene Lin, MD, MS, FASN, and colleagues showed that physicians who have ownership in dialysis clinics tend to refer more patients to home dialysis. The researchers reviewed U.S. Renal Data System data to look at practice patterns among nephrologists who own their own facilities vs. those who did not. Participants were a sample of all adults with fee-for-service Medicare receiving dialysis for ESKD from January 2017 to November 2017.
“Patient treatment by nephrologist owners at their owned facilities was associated with a 2.4 percentage point higher probability of home dialysis, a 2.2 percentage point lower probability of receiving an ESA, and no significant difference in anemia or blood transfusions,” Lin, an assistant professor of medicine in the division of nephrology and hypertension at Keck Medical Center of the University of Southern California, and colleagues wrote. “Patient treatment by nephrologist owners at their owned facilities was not associated with differences in missed treatments, transplant wait-listing, mortality, hospitalizations, 30-day readmissions, hemodialysis adequacy or fistula or long-term dialysis catheter use.”
Lin told Healio/Nephrology News & Issues that the increase in placing more patients on home dialysis among physician-owned facilities might result from greater engagement between patients and nephrologists.
“I think this likely has to do with the fact that an engaged nephrologist is critical for the success of home dialysis,” Lin, an Editorial Advisory Board Member of Healio/Nephrology News & Issues, said. “Our results suggests that nephrologist owners might be more engaged than non-owners, at least on the question of home dialysis.”
Cost of care
In the conclusion of the RAND study on advancing CKD care, Rettig and colleagues wrote: “The quiet revolution now occurring in nephrology has shifted attention in clinical and policy realms toward treating CKD at stages before ESRD is reached. It has given rise, however, to an unresolved tension between the specialty’s increasing ability to provide effective preventive care and the persistent barriers to doing so, including inadequate reimbursement, weak working relations between nephrology and other medical specialties, organizational impediments, ineffective clinical procedures, and a lack of [health information technology] systems.”
Nephrology practices are making those investments in infrastructure to participate in demonstrations, like the KCC, while also facing physician payment cuts.
“I think one of the challenges is that CMS does not understand the cost that practices must bear” when participating in models that push the value-based care agenda, Liang said. “We have invested money into an entire population health department that includes patient care navigators and support staff. We need to do this to get data on how we are doing and make adjustments if needed [in the KCC model] because the CMS data can take weeks for us to get.”
In a recent interview with Healio/ Nephrology News & Issues, former HHS Secretary Alex M. Azar II said “there is no turning back” on value-based care. Liang said he agrees.
“We want to stay independent. But we can no longer accept the status quo,” Liang said.
- References:
- Chronic kidney disease in the United States, 2021. www.cdc.gov/kidneydisease/publications-resources/ckd-national-facts.html#:~:text=CKD%20Is%20Common%20Among%20US%20Adults&text=More%20than%201%20in%207,are%20estimated%20to%20have%20CKD. Accessed Feb. 16, 2023.
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- Joseph Cashia can be reached at jcashia@renalcare360.com.
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- Eugene Lin, MD, MS, FASN, can be reached at eugene.lin@med.usc.edu.
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