Study: CMS penalized clinics in ESRD demonstration with patients at greater social risk
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Key takeaways:
- Dialysis clinics treating patients with high social risk faced higher financial penalties in the ESRD Treatment Choices model.
- Such facilities often operate with less robust quality improvement programs.
CMS levied fines for poor performance in the first year of its End-Stage Renal Disease Treatment Choices model against dialysis clinics with higher proportions of patients at social risk, a recently published study shows.
“The [ESRD Treatment Choices] ETC model disproportionately penalized dialysis facilities serving patients with higher social risk during the first year of implementation,” Kalli G. Koukounas, MPH, from the department of health policy and practices at Brown University, and colleagues wrote.
CMS launched the ETC model in January 2021 to “establish incentives to encourage greater use of home dialysis and kidney transplantation, while reducing Medicare expenditures and preserving or enhancing quality of care provided to beneficiaries with ESRD,” according to a report by the Lewin Group that evaluated the performance of the demonstration in its first 2 years.
The model, which ends in June 2027, includes dialysis facilities selected at random in approximately 30% of hospital referral regions (HRRs) in the United States. The dialysis facilities and clinicians, defined as managing clinicians, receive performance-based payment adjustments based on increasing the number of patients using home dialysis and placed on the waitlist for deceased donor transplant, living donor transplantation and arranged preemptive transplantation.
Effective Jan. 1, 2022, the model also included health equity provisions that were intended to reduce disparities in home dialysis and transplantation, including additional financial incentives.
Adjustments range from bonuses of 4% to penalties of 5% depending on performance in the ETC model, the authors wrote.
Specific characteristics
In the study, Koukounas and colleagues reviewed patient charts of 2,191 dialysis facilities from the first year of the demonstration – Jan. 1 through Dec. 31, 2021.
The data review included 125,984 incident patients, with a median age of 65 years. Within that group, 41.8% were women, 28.6% were Black and 11.7% were Hispanic.
Within the group of incident patients, the researchers identified a population with specific characteristics: “non-Hispanic” Black patients, Hispanic patients, patients living in a highly disadvantaged neighborhood and patients who were uninsured or covered by Medicaid at the start of dialysis.
In reviewing patients with these characteristics and where they were treated, the researchers identified 1,071 dialysis facilities (48.9%) participating in the ETC model treating patients with no social risk features and 491 (22.4%) treating patients with two or more social risks.
“In the first year of the ETC model, compared with those with no social risk features, dialysis facilities with two or more had lower mean performance scores (3.4 vs. 3.6, P = .002) and lower use of home dialysis (14.1% vs. 16%, P < .001). These facilities had higher receipt of financial penalties (18.5% vs. 11.5%, P < .001), more frequently had the highest payment cut of 5% (2.4% vs. 0.7%; P = .003) and were less likely to achieve the highest bonus of 4% (0% vs. 2.7%; P < .001),” the authors wrote.
“Compared with all other facilities, those in the highest quintile of treating uninsured patients or those covered by Medicaid experienced more financial penalties (17.4% vs. 12.9%, P = .01) as did those in the highest quintile in the proportion of patients who were Black (18.5% vs. 12.6%, P = .001).”
Social inequities
Researchers noted in the paper that social inequities have been previously identified among patients with ESRD seeking access to other modality options. “Dialysis facilities that disproportionately serve populations who are non-Hispanic Black, Hispanic, uninsured, covered by Medicaid or living in highly disadvantaged neighborhoods have been shown to have lower use of home dialysis and rates of kidney transplant, raising concerns that these sites may fare poorly in the ETC model.
“Furthermore,” the researchers wrote, “dialysis facilities that primarily serve as a social safety net often operate with low margins and with a less robust quality-improvement infrastructure, providing less flexibility to respond to novel payment programs.”
But CMS did not adjust the payment model for such facility characteristics, the researchers wrote. “ ... CMS did not consider any measures of social disadvantage in calculating performance. Without additional support or adjusted measurement, dialysis facilities that disproportionately care for marginalized populations may be at risk of increasing financial penalties as the model escalates payment cuts to as much as 10% of Medicare
dialysis reimbursement rates by 2026,” they wrote.
In an editorial published with the article, Jenny I. Shen, MD, MS, and colleagues wrote that CMS could create a better balance among facilities treating patients with and those without social risks by adding the area deprivation index to the performance payment model “to help eliminate the higher rate of penalization for facilities (especially due to transplant outcomes) simply because they serve patient populations with two or more social risk features.
“The addition could therefore help to promote facility-level reimbursement equity by
accounting for a case mix composed of more vulnerable patients already adversely impacted by society’s discriminatory maldistribution of health-affirming resources,” Shen and colleagues wrote.
References:
Negrusa B, et al. End-Stage Renal Disease Treatment Choices (ETC) model second annual evaluation report. https://www.cms.gov/priorities/innovation/data-and-reports/2024/etc-2nd-eval-rpt. Published Jan. 8, 2024. Accessed Jan. 11, 2024.
Shen JI, et al. JAMA. 2023;doi:10.1001/jama.2023.18590.
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