President Donald Trump has signed an executive order meant to overhaul the way kidney care is delivered and reimbursed, opening up opportunities for startups and value-based providers offering alternatives to in-clinic dialysis.
The executive order has a three key objectives: increasing the supply of kidneys available for transplants, improving prevention and treatment of chronic kidney disease and pushing the majority of dialysis patients to get their treatment through less-costly and more convenient home care.
“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,” HHS Secretary Alex Azar said in a statement.
Medicare’s current payment structure pushes patients into in-clinic dialysis as a default option, often providing a significant burden to the lives of end stage renal disease (ESRD) patients. According to data from CMS, around 88 percent of ESRD patients in 2016 started treatment with in-center dialysis.
That same year Medicare spent $113 billion on parents in total on kidney issues, equivalent to more than one in five dollars spent on Medicare.
“More patients undergoing dialysis can do so from the comfort of their own home,” President Trump said during a news conference announcing the signing. “Doing this from the home is a dramatic long overdue reform, something people have been asking for, for many many years.”
President Trump’s executive order lays out new payment models in Medicare and Medicaid for renal disease treatments that are intended to allow flexibility in how care is delivered based on patient’s individual needs. The new payment models are expected to start next year.
The proposed mandatory payment model would induce greater use of home dialysis and kidney transplants for Medicare beneficiaries with end stage renal disease (ESRD) by making negative or positive payment adjustments to selected clinicians and clinics based on their home dialysis and transplant rates. The model would also pay bonuses to providers who educate patients about their kidney disease options.
These providers will be chosen based on their location in randomly selected geographic areas with the goal of changing the reimbursement model for around 50 percent of of adult Medicare beneficiaries with ESRD.
Beneficiaries themselves would not see a change in their Medicare cost-sharing and keep existing protections under the new value-based system.
Alongside this mandatory model, CMS has also opened up optional payment models to improve kidney care delivery.
- The Kidney Care First Model would give nephrology practices adjusted capitated payments for their kidney care patients based on their health outcomes, utilization rates and quality measures. Additionally bonuses will be given out for every patient who receives a kidney transplant and remains healthy for three years.
- The Comprehensive Kidney Care Contracting Models will open up capitated payments for kidney care patients to providers who will have responsibility for the total cost and quality of care for patients and share in Medicare savings. The three models under this umbrella vary based on the degree of risk taken by the contracting provider.
The executive order also aims to free up some of the financial burden associated with donating a kidney by reimbursing for costs like travel expenses, lost wages and child care.
Alongside efforts to boost the number of kidneys eligible for donation, the executive order is also advancing efforts to develop an artificial kidney system and public education about early diagnosis and treatment of kidney disease.
Through these efforts federal health officials aim to double the number of available kidneys, including artificial kidneys by 2030.
Ikenna Okezie, CEO of Somatus, a startup focusing on value-based care for patients with kidney disease characterized the executive order as “epic and historic” step in the advancement of kidney care.
“The team behind this proposal has done something that will literally save tens of thousands or hundreds of thousands of lives, if not more,” Okezie said.
“(The order) also creates an opportunity for nephrologists to get much more involved in the coordination of integrated care that will migrate economic wins away from joint venture dialysis centers.”
Carmen Peralta, the chief medical officer for San Francisco startup Cricket Health, which uses technology to assist chronic kidney disease and end-stage renal disease patients, said the existing system has meant that for decades the most profitable option for providers has been to keep patients on in-center dialysis.
“But what’s best for patients is intervening sooner — with early diagnosis, care management to slow progression, support for home dialysis, and time to consider dialysis alternatives such as transplants or conservative care,” said Cricket Health Chief Medical Officer Carmen Peralta. ”
“Only by changing the way we pay for care can we usher in a new era, in which patients get the kind of high quality kidney care they deserve.”
The dialysis center market is currently dominated by two companies: DaVita Healthcare Partners and Fresenius Medical Care. Current payment models have largely functioned under a fee-for-service system that disincentives providers helping patients get off treatment through a kidney transplant.
Opening up the ability for providers to contract directly with Medicare in value-based models, according to Okezie will allow providers and early stage companies with alternative models to emerge and thrive.
“I believe that what the president has done today will create widespread willingness to engage in coordination of care in both chronic kidney disease and ESRD,” Okezie said.
“The concept of having the federal government led by none other President Trump focus on this sector of healthcare that others have traditionally thought of as a niche is incredibly validating.”
Picture: Alex Wong, Getty Images