CMS Proposes Alternative Payment Models for Chronic Kidney Disease

July 18, 2019 - CMS recently proposed five alternative payment models for chronic kidney disease (CKD) treatments.

One model is mandatory and the others are optional. All of the models are in response to the president’s executive order on kidney healthcare, signed on July 10. The executive order requires new regulations that promote preventive care, affordable treatments, and increased access to kidney transplants.

“Decades of paying for sickness and procedures in kidney care, rather than paying for health and outcomes, has produced less-than-satisfactory outcomes at tremendous cost. Through new payment models and many other actions under this initiative, the Trump Administration will transform this situation and deliver Americans better kidney health, more kidney treatment options, and more transplants,” said HHS Secretary Alex Azar in the press release.

The CDC reported that over one in seven American adults has CKD. Additionally, about nine in ten adults do not realize that they have CKD nor do half of the individuals with very low kidney function who are not on dialysis. The disease is associated with early death, heart disease and stroke, and kidney failure.

Two strong treatment solutions include dialysis and kidney transplants, however, each cure faces challenges. Twenty percent of patients on dialysis die within a year, the president noted in a recent executive order. Half of dialysis patients die within five years. Furthermore, kidney transplants have a waitlist of 100,000 patients.

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HHS plans to tackle this deadly disease with five alternative payment models.

The proposed mandatory end-stage renal disease (ESRD) treatment choices (ETC) model uses a new payment model to encourage home dialysis and kidney transplants.

ETC would link Medicare payments to participating clinicians’ and facilities’ use of home dialysis and successful transplants. Providers would be rewarded for educating beneficiaries about these two possibilities and implementing them. From 2020 to 2023, CMS would positively adjust Medicare payments to providers of home dialysis and related services.

The model would consist of providers selected at random based on geographic region across all 50 states and the District of Columbia. Beneficiaries would be attributed to a provider based on most dialysis claims per month.

ETC offers two kinds of pay adjustments: a payment that is a uniform positive adjustment on Medicare home dialysis claims and a payment that could be negative or positive for both home and in-center dialysis.

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For the second type of pay adjustment, the pay amount--whether positive or negative--would grow over the course of the five years. The second type monitors the participant’s home dialysis rate and transplant rate performance.

The ETC model aims to treat 50 percent of all ESRD Medicare patients nationwide by mandating which facilities and managing clinicians participate, based on geography. CMS intends for the model to improve the quality of ESRD treatments and cut Medicare spending.

ETC includes protections for clinicians and beneficiaries alike. Clinicians would not be penalized for having patients with more advanced ESRD because of the model’s risk adjustment. Beneficiaries would still have the freedom to choose healthcare providers with stable Medicare cost-sharing.

The model would begin January 1, 2020 and end June 30, 2026.

The other four proposed models would be optional. They are based on the Primary Care First and Direct Contracting models.

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The kidney care first (KCF) model offers adjusted fixed payments for each ESRD patient who is in the late stages of the disease. The payments would be linked to health outcomes, compared to facility and national standards, and based on quality measures performance. The model also includes a bonus payment for kidney transplants based on continued health.

The KCF model would adjust payments based on health outcomes and utilization, comparing the participants with national standards. Bonus payments would be awarded for kidney transplants by returning the full amount to the provider over the next three years if the transplant proves successful.

The comprehensive kidney care contracting (CKCC) graduated, professional, and global models offer capitated payments, similar to KCF, but the cost burden is on the kidney contracting entities, such as nephrologists, and transplant providers who will be reimbursed with a portion of the Medicare savings they attain.

The CKCC models will work similarly to the KCF model except that the payments will be split into three accountability frameworks:

• Graduated models would increase payment incrementally as providers take on greater risk
• Professional models would observe Parts A and B expenses and return 50 percent of shared savings or hold the provider liable for 50 percent of shared losses
• Global model providers would receive or ne held liable for 100 percent of Parts A and B costs.

Under the proposed voluntary models, a beneficiary in stages 4 or 5 of CKD or with ESRD would receive a team of kidney care providers. A single entity--a nephrology practice in the case of KCF or a kidney contracting entity (KCE) in the CKCC model--would oversee the patient’s treatment from late stages of CKD or ESRD to post-transplant care.

The goal of these models is to delay disease progression and provide strong support to the beneficiary. They also rely heavily on educating and involving the beneficiary in the decision-making process.

The optional proposed models would begin January 1, 2020 and continue until December 31, 2023 or until 2024 or 2025 based on CMS’s preference.