The Impact of COVID-19 on Postdischarge Outcomes for Dialysis Patients in the United States: Evidence from Medicare Claims Data.

Background: Recent investigations have shown that, on average, patients hospitalized with coronavirus disease 2019 (COVID-19) have a poorer postdischarge prognosis than those hospitalized without COVID-19, but this effect remains unclear among patients with end-stage kidney disease (ESKD) who are on dialysis. Methods: Leveraging a national ESKD patient claims database administered by the US Centers for Medicare and Medicaid Services, we conducted a retrospective cohort study that characterized the effects of in-hospital COVID-19 on all-cause unplanned readmission and death within 30 days of discharge for patients on dialysis. Included in this study were 436,745 live acute-care hospital discharges of 222,154 Medicare beneficiaries on dialysis from 7871 Medicare-certified dialysis facilities between January 1 and October 31, 2020. Adjusting for patient demographics, clinical characteristics, and prevalent comorbidities, we fit facility-stratified Cox cause-specific hazard models with two interval-specific (1-7 and 8-30 days after hospital discharge) effects of in-hospital COVID-19 and effects of prehospitalization COVID-19. Results: The hazard ratios due to in-hospital COVID-19 over the first 7 days after discharge were 95% CI, 1.53 to 1.65 for readmission and 95% CI, 1.38 to 1.70 for death, both with P<0.001. For the remaining 23 days, the hazard ratios were 95% CI, 0.89 to 0.96 and 95% CI, 0.86 to 1.07, with P<0.001 and P=0.50, respectively. Effects of prehospitalization COVID-19 were mostly nonsignificant. Conclusions: In-hospital COVID-19 had an adverse effect on both postdischarge readmission and death over the first week. With the surviving patients having COVID-19 substantially selected from those hospitalized, in-hospital COVID-19 was associated with lower rates of readmission and death starting from the second week.

COVID-19 Risk Factors and Mortality Outcomes Among Medicare Patients Receiving Long-term Dialysis.

Importance: There is a need for studies to evaluate the risk factors for COVID-19 and mortality among the entire Medicare long-term dialysis population using Medicare claims data. Objective: To identify risk factors associated with COVID-19 and mortality in Medicare patients undergoing long-term dialysis. Design, Setting, and Participants: This retrospective, claims-based cohort study compared mortality trends of patients receiving long-term dialysis in 2020 with previous years (2013-2019) and fit Cox regression models to identify risk factors for contracting COVID-19 and postdiagnosis mortality. The cohort included the national population of Medicare patients receiving long-term dialysis in 2020, derived from clinical and administrative databases. COVID-19 was identified through Medicare claims sources. Data were analyzed on May 17, 2021. Main Outcomes and Measures: The 2 main outcomes were COVID-19 and all-cause mortality. Associations of claims-based risk factors with COVID-19 and mortality were investigated prediagnosis and postdiagnosis. Results: Among a total of 498 169 Medicare patients undergoing dialysis (median [IQR] age, 66 [56-74] years; 215 935 [43.1%] women and 283 227 [56.9%] men), 60 090 (12.1%) had COVID-19, among whom 15 612 patients (26.0%) died. COVID-19 rates were significantly higher among Black (21 787 of 165 830 patients [13.1%]) and Hispanic (13 530 of 86 871 patients [15.6%]) patients compared with non-Black patients (38 303 of 332 339 [11.5%]), as well as patients with short (ie, 1-89 days; 7738 of 55 184 patients [14.0%]) and extended (ie, ≥90 days; 10 737 of 30 196 patients [35.6%]) nursing home stays in the prior year. Adjusting for all other risk factors, residing in a nursing home 1 to 89 days in the prior year was associated with a higher hazard for COVID-19 (hazard ratio [HR] vs 0 days, 1.60; 95% CI 1.56-1.65) and for postdiagnosis mortality (HR, 1.31; 95% CI, 1.25-1.37), as was residing in a nursing home for an extended stay (COVID-19: HR, 4.48; 95% CI, 4.37-4.59; mortality: HR, 1.12; 95% CI, 1.07-1.16). Black race (HR vs non-Black: HR, 1.25; 95% CI, 1.23-1.28) and Hispanic ethnicity (HR vs non-Hispanic: HR, 1.68; 95% CI, 1.64-1.72) were associated with significantly higher hazards of COVID-19. Although home dialysis was associated with lower COVID-19 rates (HR, 0.77; 95% CI, 0.75-0.80), it was associated with higher mortality (HR, 1.18; 95% CI, 1.11-1.25). Conclusions and Relevance: These results shed light on COVID-19 risk factors and outcomes among Medicare patients receiving long-term chronic dialysis and could inform policy decisions to mitigate the significant extra burden of COVID-19 and death in this population.

Acute Kidney Injury Requiring Dialysis and Incident Dialysis Patient Outcomes in US Outpatient Dialysis Facilities.

BACKGROUND AND OBJECTIVES: About 30% of patients with AKI may require ongoing dialysis in the outpatient setting after hospital discharge. A 2017 Centers for Medicare & Medicaid Services policy change allows Medicare beneficiaries with AKI requiring dialysis to receive outpatient treatment in dialysis facilities. Outcomes for these patients have not been reported. We compare patient characteristics and mortality among patients with AKI requiring dialysis and patients without AKI requiring incident dialysis. DESIGN, SETTING, PARTICIPANTS, & MEASUREMENTS: We used a retrospective cohort design with 2017 Medicare claims to follow outpatients with AKI requiring dialysis and patients without AKI requiring incident dialysis up to 365 days. Outcomes are unadjusted and adjusted mortality using Kaplan-Meier estimation for unadjusted survival probability, Poisson regression for monthly mortality, and Cox proportional hazards modeling for adjusted mortality. RESULTS: In total, 10,821 of 401,973 (3%) Medicare patients requiring dialysis had at least one AKI claim, and 52,626 patients were Medicare patients without AKI requiring incident dialysis. Patients with AKI requiring dialysis were more likely to be White (76% versus 70%), non-Hispanic (92% versus 87%), and age 60 or older (82% versus 72%) compared with patients without AKI requiring incident dialysis. Unadjusted mortality was markedly higher for patients with AKI requiring dialysis compared with patients without AKI requiring incident dialysis. Adjusted mortality differences between both cohorts persisted through month 4 of the follow-up period (all P=0.01), then, they declined and were no longer statistically significant. Adjusted monthly mortality stratified by Black and other race between patients with AKI requiring dialysis and patients without AKI requiring incident dialysis was lower throughout month 4 (1.5 versus 0.60, 1.20 versus 0.84, 1.00 versus 0.80, and 0.95 versus 0.74; all P<0.001), which persisted through month 7. Overall adjusted mortality risk was 22% higher for patients with AKI requiring dialysis (1.22; 95% confidence interval, 1.17 to 1.27). CONCLUSIONS: In fully adjusted analyses, patients with AKI requiring dialysis had higher early mortality compared with patients without AKI requiring incident dialysis, but these differences declined after several months. Differences were also observed by age, race, and ethnicity within both patient cohorts.

Characteristics of Markets and Patients Served by ESRD Seamless Care Organizations.

Under the Comprehensive End-stage Renal Disease (ESRD) Care (CEC) Model, dialysis facilities and nephrologists form ESRD Seamless Care Organizations (ESCOs) to deliver high value care. This study compared the characteristics of patients and markets served and unserved by CEC and assessed its generalizability. ESCOs operated in 65 of 384 markets. ESCO markets were larger than non-ESCO markets, had fewer White patients, higher household income, and higher Medicare spending per patient. Patients in ESCOs were similar to eligible nonaligned patients in age and sex but differed in race/ethnicity and were more often treated in an urban area; comorbidity prevalence differed modestly. CEC is available to a meaningful share of the dialysis population and relatively few dialysis patients resided in a market where no provider could meet the participation threshold, so market size may not be the primary barrier for potential new participants in CEC or future kidney care models.

Evaluating national trends in outcomes after implementation of a star rating system: Results from dialysis facility compare.

OBJECTIVE: To examine which factors are driving improvement in the Dialysis Facility Compare (DFC) star ratings and to test whether nonclinical facility characteristics are associated with observed longitudinal changes in the star ratings. DATA SOURCES: Data were collected from eligible patients in over 6,000 Medicare-certified dialysis facilities from three annual star rating and individual measure updates, publicly released on DFC in October 2015, October 2016, and April 2018. STUDY DESIGN: Changes in the star rating and individual quality measures were investigated across three public data releases. Year-to-year changes in the star ratings were linked to facility characteristics, adjusting for baseline differences in quality measure performance. DATA COLLECTION: Data from publicly reported quality measures, including standardized mortality, hospitalization, and transfusion ratios, dialysis adequacy, type of vascular access for dialysis, and management of mineral and bone disease, were extracted from annual DFC data releases. PRINCIPAL FINDINGS: The proportion of four- and five-star facilities increased from 30.0% to 53.4% between October 2015 and April 2018. Quality improvement was driven by the domain of care containing the dialysis adequacy and hypercalcemia measures. Additionally, independently owned facilities and facilities belonging to smaller dialysis organizations had significantly lower odds of year-to-year improvement than facilities belonging to either of the two large dialysis organizations (Odds Ratio [OR]: 0.736, 95% Confidence Interval [CI]: 0.631-0.856 and OR: 0.797, 95% CI: 0.723-0.879, respectively). CONCLUSIONS: The percentage of four- and five-star facilities has increased markedly over a three-year time period. These changes were driven by improvement in the specific quality measures that may be most directly under the control of the dialysis facility.

Comparative effectiveness analysis of Medicare dialysis facility survey processes.

BACKGROUND: To assure and improve the quality and safety of care provided by dialysis facilities, federal oversight has been conducted through periodic survey assessment. However, with the growing number of individuals living with ESRD and dialysis facilities, state survey agencies have faced challenges in time and resources to complete survey activities. Therefore, the survey process ('Basic Survey' used prior to 2013) was redesigned in order to develop a more efficient process ('Core Survey' newly implemented since 2013). The purpose of this analysis was to evaluate and compare dialysis facility survey outcomes between the Core and Basic Survey processes, using a causal inference technique. The survey outcomes included condition-level citations, total citations (condition- and standard-level), and citation rate per survey-hour. METHODS: For comparisons of non-randomly assigned survey types, propensity score matching was used. Data were drawn from CMS' Quality Improvement Evaluation System (QIES) database from January 1, 2013 through July 31, 2014. Covariates available included survey type, facility characteristics (state, urban, practices catheter reuse, dialysis modalities offered, number of patients, mortality, hospitalization, infection) and survey-related characteristics (number of surveyors, time since last survey). RESULTS: Compared to the Basic Survey, the Core Survey identified 10% more total citations (P = 0.001) and identified condition-level citations more frequently, although the latter finding did not reach statistical significance. These findings suggest an increase of 10% in citation rate (i.e. ratio between citations and survey time) with the Core survey process (P = 0.002). CONCLUSIONS: Greater efficiency has implications for attenuating the time-intensive burden of the state survey process, and improving the safety and quality of care provided by dialysis facilities.

Paying for Frequent Dialysis.

In late 2017, the 7 regional contractors responsible for paying dialysis claims in Medicare proposed new payment rules that would restrict payment for hemodialysis treatments in excess of 3 weekly to exceptional acute-care circumstances. Frequent hemodialysis is performed more frequently than the traditional thrice-weekly pattern, and many stakeholders-patients, providers, dialysis machine manufacturers, and others-have expressed concern that these payment rules will inhibit the growth of this treatment modality's use among US dialysis patients. In this Perspective, we explain the role of these contractors in the context of Medicare's in-center hemodialysis-centric dialysis payment system and assess how well this system accommodates the higher treatment frequencies of both peritoneal dialysis and frequent hemodialysis. Then, given the available evidence concerning the relative effectiveness of these modalities versus thrice-weekly in-center hemodialysis and trends in their use, we discuss options for modifying Medicare's payment system to support frequent dialysis.

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.

Risk Adjustment and the Assessment of Disparities in Dialysis Mortality Outcomes.

Standardized mortality ratios (SMRs) reported by Medicare compare mortality at individual dialysis facilities with the national average, and are currently adjusted for race. However, whether the adjustment for race obscures or clarifies disparities in quality of care for minority groups is unknown. Cox model-based SMRs were computed with and without adjustment for patient race for 5920 facilities in the United States during 2010. The study population included virtually all patients treated with dialysis during this period. Without race adjustment, facilities with higher proportions of black patients had better survival outcomes; facilities with the highest percentage of black patients (top 10%) had overall mortality rates approximately 7% lower than expected. After adjusting for within-facility racial differences, facilities with higher proportions of black patients had poorer survival outcomes among black and non-black patients; facilities with the highest percentage of black patients (top 10%) had mortality rates approximately 6% worse than expected. In conclusion, accounting for within-facility racial differences in the computation of SMR helps to clarify disparities in quality of health care among patients with ESRD. The adjustment that accommodates within-facility comparisons is key, because it could also clarify relationships between patient characteristics and health care provider outcomes in other settings.

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.