Peritoneal Dialysis Patient Outcomes under the Medicare Expanded Dialysis Prospective Payment System.

BACKGROUND AND OBJECTIVES: Peritoneal dialysis (PD) use increased in the United States with the introduction of a new Medicare prospective payment system in January 2011 that likely reduced financial disincentives for facility use of this home therapy. The expansion of PD to a broader population and facilities having less PD experience may have implications for patient outcomes. We assessed the impact of PD expansion on PD discontinuation and patient mortality. DESIGN, SETTING, PARTICIPANTS, & MEASUREMENTS: A prospective cohort study was conducted of patients treated with PD at 90 days of ESKD. Patients were grouped by study start date relative to the Medicare payment reform: prereform (July 1, 2008 to December 31, 2009; n=10,585), interim (January 1, 2010 to December 31, 2010; n=7832), and reform period (January 1, 2011 to December 31, 2012; n=18,742). Patient characteristics and facility PD experience were compared at baseline (day 91 of ESKD). Patients were followed for 3 years for the major outcomes of PD discontinuation and mortality using Cox proportional hazards models. RESULTS: Patient characteristics, including age, sex, race, ethnicity, rurality, cause of ESKD, and comorbidity, were similar or showed small changes across the three study periods. There was an increasing tendency for patients on PD to be treated in facilities with less PD experience (from 34% during the prereform period being treated in facilities averaging <14 patients on PD per year to 44% in the reform period). Patients treated in facilities with less PD experience had a higher rate of PD discontinuation than patients treated in facilities with the most experience (hazard ratio [HR], 1.16; 95% confidence interval [95% CI], 1.10 to 1.23 for the first versus fifth quintile of PD experience). Nevertheless, the risk of PD discontinuation fell during the late interim period (HR, 0.88; 95% CI, 0.82 to 0.95) and most of the reform period (from HR, 0.85; 95% CI, 0.79 to 0.91 to HR, 0.94; 95% CI, 0.87 to 1.01). Mortality risk was stable across the three study periods. CONCLUSIONS: In the context of expanding PD use and declining facility PD experience, the risk of PD discontinuation fell, and there was no adverse effect on mortality. PODCAST: This article contains a podcast at https://www.asn-online.org/media/podcast/CJASN/2019_09_12_CJN01610219.mp3.

Secular Trends in the Cost of Immunosuppressants after Solid Organ Transplantation in the United States.

BACKGROUND AND OBJECTIVES: Immunosuppressive medications are critical for maintenance of graft function in transplant recipients but can represent a substantial financial burden to patients and their insurance carriers. DESIGN, SETTING, PARTICIPANTS, & MEASUREMENTS: To determine whether availability of generic immunosuppressive medications starting in 2009 may have alleviated some of that burden, we used Medicare Part D prescription drug events between 2008 and 2013 to estimate the average annualized per-patient payments made by patients and Medicare in a large national sample of kidney, liver, and heart transplant recipients. Repeated measures linear regression was used to determine changes in payments over the study period. RESULTS: Medicare Part D payments for two commonly used immunosuppressive medications, tacrolimus and mycophenolic acid (including mycophenolate mofetil and mycophenolate sodium), decreased overall by 48%-67% across organs and drugs from 2008 to 2013, reflecting decreasing payments for brand and generic tacrolimus (21%-54%), and generic mycophenolate (72%-74%). Low-income subsidy payments, which are additional payments made under Medicare Part D, also decreased during the study period. Out-of-pocket payments by patients who did not receive the low-income subsidy decreased by more than those who did receive the low-income subsidy (63%-79% versus 24%-44%). CONCLUSIONS: The decline in payments by Medicare Part D and by transplant recipients for tacrolimus and mycophenolate between 2008 and 2013 suggests that the introduction of generic immunosuppressants during this period has resulted in substantial cost savings to Medicare and to patients, largely reflecting the transition from brand to generic products.

Persistent Variation in Medicare Payment Authorization for Home Hemodialysis Treatments.

OBJECTIVE: To analyze variation in medical care use attributable to Medicare's decentralized claims adjudication process as exemplified in home hemodialysis (HHD) therapy. DATA SOURCES/STUDY SETTING: Secondary data analysis using 2009-2012 paid Medicare claims for HHD and in-center hemodialysis (IHD). STUDY DESIGN: We compared variation across Medicare administrative contractors (MACs) in predicted paid treatments per standardized patient-month for HHD and IHD patients. We used ordinary least-squares regression to determine whether higher paid HHD treatment counts expanded HHD programs' presence among dialysis facilities. DATA COLLECTION: We identified HHD and IHD treatments using procedure, revenue center, and claim condition codes on type 72x claims. PRINCIPAL FINDINGS: MACs varied persistently in predicted HHD treatments per patient-month, ranging from 14.3 to 21.9 treatments versus 10.9 to 12.4 IHD treatments. The presence of facilities' HHD programs was uncorrelated with average HHD payment counts. CONCLUSIONS: Medicare's claims adjudication process promotes variation in medical care use, as we observe among HHD patients. MACs' discretionary decision making, while potentially facilitating innovation, may admit inefficiency in care practice as well as inequitable access to health care services. Regulators should weigh the benefits of flexibility in local coverage decisions against those of national standards for medical necessity.

Has dialysis payment reform led to initial racial disparities in anemia and mineral metabolism management?

Implementation of the Medicare ESRD prospective payment system (PPS) and changes to dosing guidelines for erythropoiesis-stimulating agents (ESAs) in 2011 appear to have influenced use of injectable medications among dialysis patients. Given historically higher ESA and vitamin D use among black patients, we assessed the effect of these policy changes on racial disparities in the management of anemia and mineral metabolism. Analyses used cross-sectional monthly cohorts for a period-prevalent sample of 7384 maintenance hemodialysis patients at 132 facilities from the Dialysis Outcomes and Practice Patterns Study (DOPPS) Practice Monitor. Linear splines with knots at each policy change were used in survey-weighted regressions to estimate time trends in hemoglobin (Hgb), erythropoietin (EPO) dose, intravenous (IV) iron dose, ferritin, transferrin saturation (TSAT) concentration, parathyroid hormone (PTH), IV vitamin D dose, cinacalcet use, and phosphate binder use. From August 2010 to December 2011, mean Hgb declined from 11.5 to 11.0 g/dl (P<0.001), mean EPO dose declined from 20,506 to 14,777 U/wk (P<0.001), and mean serum PTH increased from 340 to 435 pg/ml (P<0.001). No meaningful differences by race were observed regarding the rates of change of management practices or laboratory measures (all P>0.21). Mean EPO and vitamin D dose and serum PTH levels remained higher in blacks. Despite evidence that anemia and mineral metabolism management practices have changed significantly over time, there was no immediate indication of racial disparities resulting from implementation of the PPS or ESA label change. Further studies are needed to examine effects among patient and facility subgroups.

Blood transfusion practices in dialysis patients in a dynamic regulatory environment.

BACKGROUND: In 2011, Medicare implemented a prospective payment system (PPS) covering an expanded bundle of services that excluded blood transfusions. This led to concern about inappropriate substitution of transfusions for other anemia management methods. STUDY DESIGN: Medicare claims were used to calculate transfusion rates among dialysis patients pre- and post-PPS. Linear probability regressions adjusted transfusion trends for patient characteristics. SETTING & PARTICIPANTS: Dialysis patients for whom Medicare was the primary payer between 2008 and 2012. PREDICTOR: Pre-PPS (2008-2010) versus post-PPS (2011-2012). OUTCOMES & MEASUREMENTS: Monthly and annual probability of receiving one or more blood transfusions. RESULTS: Monthly rates of one or more transfusions varied from 3.8%-4.8% and tended to be lowest in 2010. Annual rates of transfusion events per patient were -10% higher in relative terms post-PPS, but the absolute magnitude of the increase was modest (-0.05 events/patient). A larger proportion received 4 or more transfusions (3.3% in 2011 and 2012 vs 2.7%-2.8% in prior years). Controlling for patient characteristics, the monthly probability of receiving a transfusion was significantly higher post-PPS (ß = 0.0034; P < 0.001), representing an -7% relative increase. Transfusions were more likely for females and patients with more comorbid conditions and less likely for blacks both pre- and post-PPS. LIMITATIONS: Possible underidentification of transfusions in the Medicare claims, particularly in the inpatient setting. Also, we do not observe which patients might be appropriate candidates for kidney transplantation. CONCLUSIONS: Transfusion rates increased post-PPS, but these increases were modest in both absolute and relative terms. The largest increase occurred for patients already receiving several transfusions. Although these findings may reduce concerns regarding the impact of Medicare's PPS on inappropriate transfusions that impair access to kidney transplantation or stress blood bank resources, transfusions should continue to be monitored.

The initial impact of Medicare's new prospective payment system for kidney dialysis.

BACKGROUND: Medicare implemented a new prospective payment system (PPS) on January 1, 2011. This PPS covers an expanded bundle of services, including services previously paid on a fee-for-service basis. The objectives of the new PPS include more efficient decisions about treatment service combinations and modality choice. METHODS: Primary data for this study are Medicare claims files for all dialysis patients for whom Medicare is the primary payer. We compare use of key injectable medications under the bundled PPS to use when those drugs were separately billable and examine variability across providers. We also compare each patient's dialysis modality before and after the PPS. RESULTS: Use of relatively expensive drugs, including erythropoiesis-stimulating agents, declined substantially after institution of the new PPS, whereas use of iron products, often therapeutic substitutes for erythropoiesis-stimulating agents, increased. Less expensive vitamin D products were substituted for more expensive types. Drug spending overall decreased by ∼$25 per session, or about 5 times the mandated reduction in the base payment rate of ∼$5. Use of peritoneal dialysis increased in 2011 after being nearly flat in the years prior to the PPS, with the increase concentrated in patients in their first or second year of dialysis. Home hemodialysis continued to increase as a percentage of total dialysis services, but at a rate similar to the pre-PPS trend. CONCLUSION: The expanded bundle dialysis PPS provided incentives for the use of lower cost therapies. These incentives seem to have motivated dialysis providers to move toward lower cost methods of care in both their use of drugs and choice of modalities.

Using race as a case-mix adjustment factor in a renal dialysis payment system: potential and pitfalls.

BACKGROUND: Racial disparities in health care are widespread in the United States. Identifying contributing factors may improve care for underserved minorities. To the extent that differential utilization of services, based on need or biological effect, contributes to outcome disparities, prospective payment systems may require inclusion of race to minimize these adverse effects. This research determines whether costs associated with end-stage renal disease (ESRD) care varied by race and whether this variance affected payments to dialysis facilities. STUDY DESIGN: We compared the classification of race across Medicare databases and investigated differences in cost of care for long-term dialysis patients by race. SETTING & PARTICIPANTS: Medicare ESRD database including 890,776 patient-years in 2004-2006. PREDICTORS: Patient race and ethnicity. OUTCOMES: Costs associated with ESRD care and estimated payments to dialysis facilities under a prospective payment system. RESULTS: There were inconsistencies in race and ethnicity classification; however, there was significant agreement for classification of black and nonblack race across databases. In predictive models evaluating the cost of outpatient dialysis care for Medicare patients, race is a significant predictor of cost, particularly for cost of separately billed injectable medications used in dialysis. Overall, black patients had 9% higher costs than nonblack patients. In a model that did not adjust for race, other patient characteristics accounted for only 31% of this difference. LIMITATIONS: Lack of information about biological causes of the link between race and cost. CONCLUSIONS: There is a significant racial difference in the cost of providing dialysis care that is not accounted for by other factors that may be used to adjust payments. This difference has the potential to affect the delivery of care to certain populations. Of note, inclusion of race into a prospective payment system will require better understanding of biological differences in bone and anemia outcomes, as well as effects of inclusion on self-reported race.

Do resource utilization and clinical measures still vary across dialysis chains after controlling for the local practices of facilities and physicians?

BACKGROUND: Because of adverse survival effects, anemia management and financial incentives to increase doses of erythropoiesis-stimulating agents (ESAs) have been controversial. Prior studies showed more aggressive anemia management in dialysis facilities owned by for-profit chains, but have been criticized for not accounting for practices of individual physicians and facilities. OBJECTIVE: To improve understanding of how dialysis practices and resource utilization are influenced by physicians, facilities, and chains. DESIGN: Mixed models with chain fixed effects and facility and physician random effects. SETTING: Medicare hemodialysis patients in 2004. PARTICIPANTS: A total of 234,158 patients, 3995 facilities, 4838 physicians, and 7 chain classifications were included. MEASUREMENTS: Spending per session for dialysis-related services billed separately from the dialysis treatment and for ESAs. Achievement of hematocrit (HCT) and urea reduction ratio (URR) targets. RESULTS: Of the 4 largest for-profit chains, 3 had higher resource use than independents, with differences up to $17.92 higher ESA/session. Utilization was positively associated with achieving target HCT. Despite incurring lower costs, patients treated by a large nonprofit chain were as likely as patients of independents to achieve the HCT target. The largest chains were more likely than independents to achieve the URR target. Substantial variation occurred across physicians and facilities, and adjustment for chain only modestly decreased this variation. LIMITATION: Chains' methods of influencing practices were not directly observed. CONCLUSIONS: Chains appear to have the ability to implement protocols that shift practices, but not the ability to substantially reduce local variation. Assertions that chain effects found by earlier studies were spurious are not supported.

When payment systems collide: the effect of hospitalization on anemia in renal dialysis patients.

BACKGROUND: Different types of providers often face differing financial incentives for providing similar types of care. This may have implications for payment systems that target improvements in care requiring multiple types of providers. OBJECTIVES: The objective of this study was to determine how hospitalization influences the anemia of Medicare patients with chronic renal failure, where anemia is treated under a prospective payment system during hospitalizations and under a fee-for-service system during outpatient renal dialysis. METHODS: We examined the effects of time in hospital and reason for hospitalization on levels of anemia among 87,263 Medicare renal dialysis patients with a hospital stay of 3 days or more during 2004. Medicare claims were used to measure changes in hematocrit between the month before and the month after hospital discharge, and to classify admissions with a high risk of anemia. Multilevel models were used to study variation in outcomes across providers. RESULTS: Longer time in the hospital was associated with worsening anemia. As expected, larger declines in hematocrit occurred following admissions for conditions or procedures with a high risk of anemia. However, we observed a similar effect of time in the hospital for admissions both with and without a high risk of anemia. There were relatively large differences in anemia outcomes across both individual hospitals and physicians. CONCLUSIONS: Hospitalization-related anemia increases the need for care by outpatient renal dialysis providers. Efforts to improve care through payment system design are more likely to be successful if financial incentives are aligned across care settings.

Provider monitoring and pay-for-performance when multiple providers affect outcomes: An application to renal dialysis.

OBJECTIVE: To characterize the influence of dialysis facilities and nephrologists on resource use and patient outcomes in the dialysis population and to illustrate how such information can be used to inform payment system design. DATA SOURCES: Medicare claims for all hemodialysis patients for whom Medicare was the primary payer in 2004, combined with the Medicare Enrollment Database and the CMS Medical Evidence Form (CMS Form 2728), which is completed at onset of renal replacement therapy. STUDY DESIGN: Resource use (mainly drugs and laboratory tests) per dialysis session and two clinical outcomes (achieving targets for anemia management and dose of dialysis) were modeled at the patient level with random effects for nephrologist and dialysis facility, controlling for patient characteristics. RESULTS: For each measure, both the physician and the facility had significant effects. However, facilities were more influential than physicians, as measured by the standard deviation of the random effects. CONCLUSIONS: The success of tools such as P4P and provider profiling relies upon the identification of providers most able to enhance efficiency and quality. This paper demonstrates a method for determining the extent to which variation in health care costs and quality of care can be attributed to physicians and institutional providers. Because variation in quality and cost attributable to facilities is consistently larger than that attributable to physicians, if provider profiling or financial incentives are targeted to only one type of provider, the facility appears to be the appropriate locus.

Using knowledge of multiple levels of variation in care to target performance incentives to providers.

BACKGROUND: In developing "pay-for-performance" and capitation systems that provide incentives for improving the quality and efficiency of care, policymakers need to determine which healthcare providers to evaluate and reward. OBJECTIVES: This study demonstrates methods for determining and understanding the relative contributions of facilities and physicians to the quality and cost of care. Specifically, this study distinguishes levels of variation in resource utilization (RU), based on research to support the development of an expanded Medicare dialysis prospective payment system. RESEARCH DESIGN: Mixed models were used to estimate the variation in RU across institutional providers, physicians, patients, and months (within patients), after adjusting for case-mix. SUBJECTS: The study includes 10,367 Medicare hemodialysis patients treated in a 4.2% stratified random sample of dialysis facilities in 2003. MEASURES: Monthly RU was measured by the average Medicare allowable charge per dialysis session for separately billable dialysis-related services (mainly injectable medications and laboratory tests) from Medicare claims. RESULTS: There was financially significant variation in RU across institutional providers and to a lesser degree across physicians, after adjusting for differences in case-mix. The remaining variation in RU reflects unexplained differences across patients that persist over time and transitory fluctuations for individual patients. CONCLUSIONS: The greater variation in RU occurring across dialysis facilities than across physicians is consistent with targeting payments to facilities, but alignment of incentives between facilities and physicians remains an important goal. Similar analytic methods may be useful in designing payment policies that reward providers for improving the quality of care.

Case-mix adjustment for an expanded renal prospective payment system.

Medicare is considering an expansion of the bundle of dialysis-related services to be paid on a prospective basis. Exploratory models were developed to assess the potential limitations of case-mix adjustment for such an expansion. A broad set of patient characteristics explained 11.8% of the variation in Medicare allowable charges per dialysis session. Although adding recent hematocrit values or prior health care utilization to the model did increase explanatory power, it could also create adverse incentives. Projected gains or losses relative to prevailing fee-for-service payments, assuming no change in practice patterns, were significant for some individual providers. However, systematic gains or losses for different classes of providers were modest.

Understanding the basic case-mix adjustment for the composite rate.

In April 2005, Medicare began adjusting payments to dialysis providers for composite-rate services for a limited set of patient characteristics, including age, body surface area, and low body mass index. We present analyses intended to help the end-stage renal disease community understand the empirical reasons behind the new composite-rate basic case-mix adjustment. The U-shaped relationship between age and composite-rate cost that is reflected in the basic case-mix adjustment has generated significant discussion within the end-stage renal disease community. Whereas greater costs among older patients are consistent with conventional wisdom, greater costs among younger patients are caused in part by more skipped sessions and a greater incidence of certain costly comorbidities. Longer treatment times for patients with a greater body surface area combined with the largely fixed cost structure of dialysis facilities explains much of the greater cost for larger patients. The basic case-mix adjustment reflects an initial and partial adjustment for the cost of providing composite-rate services.

Economic impact of case-mix adjusting the dialysis composite rate.

The Medicare program reimburses dialysis providers a flat rate for a bundle of services that comprise the basic dialysis treatment. This payment system is being modified to incorporate case-mix adjustment for age and body size, which have been shown to influence dialysis costs. This study simulated the economic impact of the recently issued Medicare rule on case-mix adjustment by estimating the variation in payments across patients, facilities, and broad classes of facilities. Case-mix adjustment results in considerable patient-level variation in payments (dollar 12.99 SD in case-mix adjusted payments). The variation across dialysis facilities is smaller but still economically significant (dollar 3.77 SD). However, there was little evidence that particular classes of facilities (e.g., ownership, chain membership, size) will be substantially advantaged or disadvantaged by case-mix adjustment. There do seem to be modest changes in the regional distribution of payments.

Chronic illness, treatment choice and workforce participation.

Choices with respect to labor force participation and medical treatment are increasingly intertwined. Technological advances present patients with new choices and may facilitate continued employment for the growing number of chronically ill individuals. We examine joint work/treatment decisions of end stage renal disease patients, a group for whom these tradeoffs are particularly salient. Using a simultaneous equations probit model, we find that treatment choice is a significant predictor of employment status. However, the effect size is considerably smaller than in models that do not consider the joint nature of these choices.

Does quality influence consumer choice of nursing homes? Evidence from nursing home to nursing home transfers.

We estimated Cox proportional hazards models using assessment data from the Minimum Data Set to test whether nursing home residents and their proxies respond to quality of care by changing providers. Various indicators of poor quality increased the likelihood of transfer. Residents of for-profit homes or homes with excess capacity also were more likely to transfer. Inability to participate in care decisions and factors indicating frailty limited residents' ability to transfer. The apparent responsiveness to quality is encouraging. Nonetheless, because the absolute transfer rate is low, significant barriers to movement among nursing homes still may exist.