Association of VA Payment Reform for Dialysis with Spending, Access to Care, and Outcomes for Veterans with ESKD

Abstract

Background and objectivesBecause of the limited capacity of its own dialysis facilities, the Department of Veterans Affairs (VA) Veterans Health Administration routinely outsources dialysis care to community providers. Prior to 2011—when the VA implemented a process of standardizing payments and establishing national contracts for community-based dialysis care—payments to community providers were largely unregulated. This study examined the association of changes in the Department of Veterans Affairs payment policy for community dialysis with temporal trends in VA spending and veterans’ access to dialysis care and mortality.Design, setting, participants, & measurementsAn interrupted time series design and VA, Medicare, and US Renal Data System data were used to identify veterans who received VA–financed dialysis in community-based dialysis facilities before (2006–2008), during (2009–2010), and after the enactment of VA policies to standardize dialysis payments (2011–2016). We used multivariable, differential trend/intercept shift regression models to examine trends in average reimbursement for community-based dialysis, access to quality care (veterans’ distance to community dialysis, number of community dialysis providers, and dialysis facility quality indicators), and 1-year mortality over this time period.ResultsBefore payment reform, the unadjusted average per-treatment reimbursement for non–VA dialysis care varied widely ($47–$1575). After payment reform, there was a 44% reduction ($44–$250) in the adjusted price per dialysis session (P<0.001) and less variation in payments for dialysis ($73–$663). Over the same time period, there was an increase in the number of community dialysis facilities contracting with VA to deliver care to veterans with ESKD from 19 to 37 facilities (per VA hospital), and there were no changes in either the quality of community dialysis facilities or crude 1-year mortality rate of veterans (12% versus 11%).ConclusionsVA policies to standardize payment and establish national dialysis contracts increased the value of VA–financed community dialysis care by reducing reimbursement without compromising access to care or survival.

Rates of Medicare Enrollment Among Dialysis Patients After Implementation of Medicare Payment Reform and the Affordable Care Act Marketplace

“…The associated trends shown in this analysis of patients with incident ESKD newly eligible to enroll in Medicare’s ESKD program lends credence to allegations of patients being encouraged to maintain private insurance, which reimburses dialysis treatments at substantially higher rates than Medicare. 2 , 3 , 4 Other dynamics of the dialysis industry—such as growth in consolidation, private equity ownership, and kickbacks—may also underlie the behavior of organizations that provide health care and changes in ESKD payer mix but were not examined here. Organizations such as hospitals, nursing homes, and dialysis facilities commonly help patients navigate and identify sources of payment coverage for dialysis.…”

“…These results augment prior research reporting that dialysis facilities’ share of Medicare enrolled patients with prevalent ESKD declined after 2011 and during a period of expansion of non-Medicare, private sources of coverage. The associated trends shown in this analysis of patients with incident ESKD newly eligible to enroll in Medicare’s ESKD program lends credence to allegations of patients being encouraged to maintain private insurance, which reimburses dialysis treatments at substantially higher rates than Medicare . Other dynamics of the dialysis industry—such as growth in consolidation, private equity ownership, and kickbacks—may also underlie the behavior of organizations that provide health care and changes in ESKD payer mix but were not examined here.…”

“…Organizations that provide health care, such as hospitals, nursing homes, and dialysis facilities, are acutely sensitive to changes in Medicare reimbursement, which is lower than private payer rates. 2 , 3 , 4 , 5 When Medicare reimbursements are deemed too low, dialysis providers may care for fewer Medicare patients or pursue other revenue (payer) sources. Policy changes in the past decade may have induced dialysis facilities to shift their payer mix away from Medicare.…”

“…A smaller proportion of patients with ESKD have private insurance or lack coverage. Organizations that provide health care, such as hospitals, nursing homes, and dialysis facilities, are acutely sensitive to changes in Medicare reimbursement, which is lower than private payer rates . When Medicare reimbursements are deemed too low, dialysis providers may care for fewer Medicare patients or pursue other revenue (payer) sources.…”