Is HCFA’s Reimbursement Policy Controlling Quality of Care for End-Stage Renal Disease Patients?

In the Social Security amendments of 1972, Congress created entitlement to Medicare for all people with end-stage renal disease (ESRD) who were eligible for benefits under Social Security. This amendment was passed to sustain the lives of patients with ESRD, with the hope that patients would return to work and main stream America. 1 Since that time, more than 1,000,000 patients have been supported with dialysis and transplants. 2 Unfortunately, the vast majority of patients have not returned to work and their mortality rates are unacceptable, at 20% per year. Lynchburg Nephrology Dialysis (LND) started a nightly home hemodialysis (NHHD) program in September 1997, patterned after Dr. Pierratos’ program in Toronto. 3,4 Patients dialyze 7–9 hours, 6 nights a week, using the Fresenius 2008H machine, while asleep. This new modality has reduced hospital days by 50%, erythropoietin (EPO) usage by 25%, Calcijex/Zemplar (Abbott Laboratories, Abbott Park, Illinois) usage by 100%, and out of pocket medication expense for patients on an average of $1,060.68 per year. Nightly home hemodialysis is not being offered to patients in the United States because of Health Care Financing Administration’s (HCFAs) three treatment payments per week reimbursement policy. This policy is a financial disincentive for nephrologists and the dialysis industry to provide daily dialysis as an option, resulting in reduced quality of care for ESRD patients. Lynchburg Nephrology Dialysis started its NHHD program in September 1997 to improve the quality of life of patients, reduce the mortality rate, and to find a more cost effective way to care for patients with ESRD for LND and the Medicare ESRD programs. These ideas were based on reports of Pierratos and others 3, 4 that presented excellent results of nocturnal hemodialysis in Toronto, and more than 60 articles supporting daily dialysis as a better option for patients with ESRD. 5,6 The literature reports that daily hemodialysis offers a higher quality of care for patients at an overall lower cost to the Medicare ESRD program. 7 In the United States, the annual mortality rate of 20% for ESRD patients exceeds that of patients with breast cancer or prostate cancer. 8 Methods Data were collected from September 1, 1997 to June 1, 2000. Twenty patients have completed training as of June 1, 2000. Of these 20 patients, 2 patients have received transplants and 2 left the program for medical reasons. In addition to these 20 patients trained, 1 patient did not complete training because of social problems. Data are based on 250 patient-months on NHHD, 6,053 treatments at home, with a mean patient time in the program of 15.6 months. The longest patient time in the program was 31.8 months, and the shortest, 1.3 months. Cost analysis of the average training period of 6 weeks is based on performing 25 dialysis treatments during training. Monthly cost analysis is based on performing 26 dialysis treatments per month. Cost analysis of the LND NHHD program is based on 232 patients in-center, 20 receiving continuous cyclical peritoneal dialysis (CCPD), two receiving continuous ambulatory peritoneal dialysis (CAPD), one receiving home hemodialysis, three times a week, and 16 receiving NHHD. Reimbursement for training is $138.83 per treatment, three times a week. Reimbursement for monthly treatments is $118.83 per treatment, three times a week. NHHD training and monthly supplies were determined by creating an inventory of the first seven patients in the program during the training period and for the third month on NHHD. Hospital days were tracked from May 1, 2000 in a retrospective analysis, comparing each patient’s time on NHHD to the same time preNHHD as long as the patient was on dialysis. A monthly dosage of Epogen (Amgen, Inc., Thousand Oaks, CA) was measured at 6 months and 3 months before beginning treatment with NHHD, and at 3, 6, 9, 12, 15, and 18 months thereafter. Blood pressure medication and phosphate binder cost was measured on 13 patients, 3 months before NHHD and on February 1, 2000. Drug costs of blood pressure medications and phosphate binders were obtained from Wal-Mart, CVS, Kroger, and Rite Aid Pharmacies. The lowest cost of each medication was applied to the analysis. Results Nightly home hemodialysis training and monthly supply cost is depicted in Table 1. The average cost for these periods assume a training period of 6 weeks, with 25 treatments and a monthly schedule of 26 treatments. The 6 week training cost was $5,798.75 per patient. This cost was divided into the following categories: supplies, $633.00; laboratory, $5.00; plumbing, $750.00; machine delivery, $550.00; refrigerator, $130.00; coolers, $30.00; nursing salary, $2,610.00; support staff, $348.00; reuse, $60.00; rent, $246.75; infrastructure, $214.00; intangibles $75.00; and medical director fee, $147.00. Reimbursement for the 6 week training period was $2,498.94. Monthly cost was $2,106.00 per patient. This cost was divided into the following categories: supplies/machines, $1,184.00; laboratory, $5.00; nursing salary, $150.00; support staff, $232.00; reuse, $62.00; rent, $165.00; delivery of supplies, $17.00; infrastructure, $143.00; intangibles, $50.00; medical director fee, $98.00. Monthly reimbursement for thirteen treatments was $1,544.79. Table 1: NHHD Training Supplies and NHHD Monthly SuppliesHospitalization rates for 195 patient-months before NHHD was 0.63 hospital days per patient-month. Hospitalization rates for 233 patient-months on NHHD was 0.24 hospital days per patient month. These data demonstrate a 50% reduction in hospital days using each patient as his or her own control. The average monthly Epogen dosage at 6 and 3 months before NHHD, and at 3, 6, 9, 12, 15, and 18 months after beginning NHHD are shown in Figure 1, demonstrating a 25% reduction in monthly Epogen dosage. Calcijex/Zemplar usage was eliminated by NHHD. Blood pressure and phosphate binder medication cost for 13 patients, 3 months before NHHD and on February 1, 2000 are shown in Figure 2. A $1,060.68 savings per patient per year was demonstrated. Figure 1Figure 2Discussion The composite reimbursement rate of three times per week for dialysis has not changed significantly since 1983. In their reports to Congress in March, 1999; June, 1999; and March, 2000, Medpac expressed concern that HCFAs reimbursement policy may be effecting quality of care for ESRD patients. 9 There are less than 60 published articles supporting daily dialysis and its provision of a better quality of care for patients with ESRD, dating back to 1969. This cost analysis demonstrates a $3,299.81 loss for training and a $561.21 loss per patient per month on NHHD. Health Care Financing Administration’s reimbursement policy is a financial disincentive for nephrologists to place patients on daily dialysis because of lost revenue from reduction in hospital days, and lost revenue because of the increased time requirement of starting a program. Health Care Financing Administration’s reimbursement policy is a financial disincentive for the dialysis industry to institute a daily dialysis program because of lost revenue from cost of training and supplies, lost revenue from reduced use of Epogen, and lost revenue from elimination of the use of Calcijex/Zemplar. Conclusion There are significant data that supports daily hemodialysis as a new modality that will improve quality of care for ESRD patients and reduce overall cost to the Medicare ESRD program. The cost analysis of the LND NHHD program demonstrates excessive cost but significant savings. Health Care Financing Administration’s reimbursement policy is a financial disincentive for nephrologists and the dialysis industry to provide this new modality option. Health Care Financing Administration needs to change their reimbursement policy to create an incentive for nephrologists and the dialysis industry to provide daily dialysis as an option that will result in the goal of higher quality of care for ESRD patients. Nephrologists, the dialysis industry, and HCFA share this goal.

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