Congressional advisory group advises no additional increase in dialysis payments for 2024
Click Here to Manage Email Alerts
Key takeaways:
- In its March report, the Medicare Payment Advisory Commission recommended no additional increase in payment for dialysis in 2024.
- Dialysis providers have said that current payments are “woefully inadequate.”
Despite complaints by some dialysis providers that Medicare payments for treatments are “woefully inadequate,” a Congressional advisory panel concluded that no additional increase beyond current recommendations is needed for 2024.
“Measures of the capacity and supply of outpatient dialysis providers, beneficiaries’ ability to obtain care, and changes in the volume of services suggest that Medicare payments [for dialysis services] are adequate,” the Medicare Payment Advisory Commission (MedPAC) wrote in its March report to Congress. “Under current law, the Medicare (fee-for-service) FFS base payment rate for dialysis services is projected to increase by 1.8[%] in 2024. Given that most of our indicators of payment adequacy are positive, the commission recommends that, for 2024, the Congress update the calendar year 2023 [end-stage renal disease] ESRD [Prospective Payment System] PPS base rate by the amount determined under current law.”
MedPAC advises Congress on payment and health care reform issues through its bi-annual reports. In the March edition, it advised that Medicare payment to physicians be updated yearly based on inflation tied to the Medicare Economic Index.
Cost of care
Dialysis providers, however, said in a letter to Congressional leaders in December 2022 that the planned 3% increase in the Medicare bundled payment rate for dialysis care for 2023 would not cover higher costs for staffing and the losses incurred from the pandemic.
“Congressional intervention is desperately needed to avoid catastrophic cuts that pose especially significant threats to the future survival of many independent dialysis providers,” Caprice Vanderkolk, MS, RN, BC-NE, president of the Renal Healthcare Association (RHA), wrote in the letter. “A mere 3% increase to the base rate for [calendar year] 2023 is woefully inadequate in this time of economic and staffing instability. With absent action from Congress, access to care and the quality of care for individuals relying on Medicare for their dialysis services will be jeopardized.”
Vanderkolk wrote in the letter, sent to Rep. Nancy Pelosi, D-Calif., Sen. Charles Schumer, D-N.Y., Kevin McCarthy, R-Calif., and Sen. Mitch McConnell, R-Ky., that an analysis done by the RHA “found that [dialysis facilities] have accumulated $1.7 billion in losses over the last 3 years. On average, facilities lost 42% of operating expenses in excess of revenues, totaling $320,000 per facility per year,” Vanderkolk wrote.
Access to capital
In its report to Congress, MedPAC wrote that dialysis centers caring for patients with end-stage renal disease are making adequate profits despite higher costs for labor and the impact of the pandemic. “An estimated 20[%] marginal profit in 2021 suggests that dialysis providers have a financial incentive to continue to serve Medicare beneficiaries,” MedPAC wrote. Dialysis providers also have good access to capital to make investments in equipment and facilities, the commission wrote.
Cost growth for providers under the payment bundle for dialysis services between 2020 and 2021 rose by 1.3% per treatment, from $266 per treatment to nearly $270 per treatment, MedPAC wrote. “This change results from a 21[%] decline in ESRD drug costs offset by an increase in the cost of administrative and general expenses, which rose by 7[%] and accounted for 27[%] of cost per treatment in 2021; capital costs, which rose by 6[%] and accounted for 18[%] of cost per treatment in 2021; labor costs, which rose by 2[%] and accounted for 34[%]of cost per treatment in 2021; and supplies and labs, which rose by 2[%] and accounted for 13[%],” MedPAC wrote.
The number of in-center treatment stations grew by 1% between 2020 and 2021 – faster than the number of Medicare fee-for-service (FFS) and Medicare Advantage (MA) dialysis beneficiaries, the commission wrote. “The number of facilities’ in-center treatment stations grew more slowly annually between 2020 and 2021 compared with growth from 2017 through 2020 (1[%] per year vs. 3[%] per year) but exceeded growth in the number of dialysis FFS or MA beneficiaries (which declined about 2[%]between 2020 and 2021),” MedPAC wrote. “The slower growth of in-center capacity may be partly attributable to the coronavirus pandemic.
“In addition, researchers have shown that the ESRD PPS was associated with an increase in home dialysis use among patients starting dialysis.”
“The evidence suggests that Medicare’s outpatient dialysis payments are adequate,” MedPAC concluded. “It appears that facilities have become more efficient under the ESRD PPS, as measured by declining use of most injectable dialysis drugs, with little to no measurable impact on beneficiaries’ health outcomes.”
References:
- Medicare Payment Advisory Commission. Chapter 6. Outpatient dialysis services. https://www.medpac.gov/wpcontent/uploads/2023/03/Ch4_Mar23_MedPAC_Report_To_Congress_SEC.pdf. Accessed April 11, 2023.
- RHA urges Congress to take action. www.renalhealthcare.org. Published Dec. 14, 2022. Accessed April 11, 2023.
Read more about
Click Here to Manage Email Alerts