Medicare to pay dialysis clinics for quality

Dialysis centers are about to get hit with financial penalties - up to 2 percent of their reimbursements - if they fail to reach certain quality benchmarks, starting in 2012, according to a recently completed federal proposal.

The Centers for Medicare and Medicaid Services' dialysis quality initiative, which aims to get a handle on sky-high costs for the treatments, is the agency's first pay-per-performance system, and it won't be the last.

CMS has launched a number of demonstration projects offering incentive payments to a range of providers, including doctors and hospitals, for high-quality care. Providers anticipate that those extra payments for high performance soon may turn to penalties for low performance.

The operator of Chattanooga Kidney Centers said the dialysis company is ready to handle the new payment standards, which were announced at the end of July.

"A lot of people are worried, but we're not worried about it," said Lou Devin, chief operating officer for Chattanooga Kidney Centers, a physician-owned dialysis company with three dialysis clinics in the region. "Bottom line to it this is: If you're doing good patient care, you'll be all right."

Starting next year, CMS also will implement a new "bundled payment" system in which facilities receive one predetermined payment for dialysis services and drugs provided to patients to encourage facilities to be judicious in their use of these medications.

END-STAGE RENAL DISEASE$23.9 billion: Medicare costs for end stage renal disease patients $17.6 billion: Medicare costs for hemodialysis$9.2 billion: Medicare payments for dialysis and related services437,000: Medicare patients with end stage renal diseaseSource: U.S. Renal Disease System, 2007 statisticsWHAT IS DIALYSIS?Without a kidney transplant, kidney failure patients have to undergo regular dialysis to stay alive. During dialysis - usually done a few hours a day, multiple times a week - a machine does the job typically done by the kidneys, filtering waste out of the patient's bloodstream.

The previous setup - paying separately for medications and other services - seemed to encourage overuse of some drugs for kidney patients, the agency said.

The change, unrelated to federal health care reform, has been in the works for years, as federal officials watched ballooning costs for treatments related to kidney failure. In the United States, the vast majority of the 330,000 people receiving outpatient dialysis are covered by Medicare, which accepts enrollees with end-stage renal disease regardless of age, according to CMS.

In 2007, CMS paid $9.2 billion for dialysis and related services, according to the centers. The agency estimates the quality and payment changes will result in a more than $17 million reduction in reimbursements to dialysis facilities.

The number of dialysis clinics in Chattanooga has grown - along with demand - from three in the 1990s to at least 11 today, local nephrologists say.

Factors including rising obesity rates have contributed to a boom in Type 2 diabetes. Diabetes is the leading cause of chronic kidney disease, with hypertension a close second, according to the U.S. Renal Disease System.

By the time patients have symptoms of renal failure, it's usually too late and the patient ends up on dialysis, said Dalton nephrologist Rafael Duchesne, with Nephrology and Hypertension Specialists.

"That's what's very sad about it. It's very difficult to know whether you have kidney problems or not," he said. "(Symptoms) usually occur when it's too late and ... there's not that much that can be done to reverse the damage."

But renal failure from diabetes actually has plateaued in recent years, which doctors attribute to earlier detection and prevention efforts.

GROWING TREND

Dialysis centers long have reported the quality data to CMS, and Chattanooga Kidney Centers historically have performed well enough to avoid any payment cuts once those penalties go into effect, Mr. Devin said.

For example, one measure looks at how many dialysis patients have a healthy red blood count, determined by their hemoglobin levels. Dialysis centers are penalized for having too many patients that fall either above or below a certain threshold.

Last year, Chattanooga Kidney Centers met both standards, with no patients falling below and only 3 percent of patients above the threshold, according to CMS' Dialysis Facility Compare website.

Officials with Fresenius Medical Care and the Dialysis Clinic Inc., the other dialysis providers in the area, did not return calls for comment.

Doctors also report patient quality data to CMS and it seems likely that data soon will be tied to payments, said Kathie Joseph, practice manager for Nephrology and Hypertension Specialists.

Dr. Duchesne said he's apprehensive about the move to base doctors' payments on patient outcomes which, in some cases, may be out of the doctors' control.

"Patients on dialysis, they have to follow a strict diet but very seldom they do because it's very hard," he said. "Their compliance is not the best. If that's going to reflect on the doctors, it's going to be very difficult to reach those expectations that the government will have. For the things we can control, I think that's fair that we get evaluated on that."

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