Bundled Payment Reform and Dialysis Facility Closures in ESKD

Abstract

BackgroundIn 2011, inclusion of injectable medications into an expanded ESKD payment bundle prompted concerns that dialysis facilities facing higher costs might close, disrupting care delivery and access to care. Whether this policy change influenced dialysis facility closures is unknown.MethodsTo examine whether facility closures increased after 2011 and whether factors influencing closures changed, we analyzed US Renal Data System registry data to identify all patients receiving in-center hemodialysis from 2006 through 2015 and to track dialysis facility closures. We used interrupted time series logistic regression models and estimated marginal effects to examine immediate and longer-term changes in the likelihood of being affected by facility closures following payment reform. We also examined whether associations between selected predictors of closures indicating populations at “high risk” of closure (patient characteristics, facility characteristics, and geography-related characteristics) and closures changed after payment reform.ResultsDialysis facility closures were uncommon over the study period. In adjusted models, the relative odds of experiencing a closure declined by 37% (odds ratio [OR], 0.63; 95% confidence interval [95% CI], 0.59 to 0.67) immediately after payment reform and declined by an additional 6% (OR, 0.94; 95% CI, 0.91 to 0.97) annually thereafter, corresponding to a 0.3% lower absolute probability of closure in 2015 in association with payment reform. Patients who were black and who dialyzed at small, hospital-based facilities experienced slight increases in closures following payment reform, whereas Hispanic and Medicare/Medicaid dual-eligible patients experienced slight decreases in closures.ConclusionsExpansion of the ESKD payment bundle was not associated with increased closure of dialysis facilities, although the likelihood of closures changed slightly for some higher-risk populations.

How Did Medicare Payment Reform Affect Highly Concentrated Dialysis Markets?

“…Despite this 1-time increase in dialysis facility acquisitions associated with policy reform, no significant changes in longer-term acquisition trends were noted. Similar to a previous analysis, 6 dialysis facility closures were relatively infrequent over the 10-year study period and did not change in association with reimbursement reform. Trends in acquisitions and, to a lesser extent, closures corresponded with an increase in the proportion of all dialysis facilities operated by large dialysis organizations from 69% in 2006 to 85% in 2016.…”

Trends in Dialysis Industry Consolidation After Medicare Payment Reform, 2006-2016

“…3,6,25,30,31 These strategies all have the potential to reduce access to quality care and worsen clinical outcomes. 3,[5][6][7]12 Policy makers should be aware of the facility-and market-level characteristics that are most strongly associated with acquisitions and closures. Market size and HHI were not associated with acquisitions and had minimal association with closures.…”

“…In the run-up to the PPS, dialysis organizations, both large and small, warned of impending facility closures, decreased access to care, and increased consolidation. 9 , 10 To date, studies have shown that the number of unique dialysis facilities actually increased after 2011, 11 , 12 while facility closures declined. 12 Most facilities have adapted to the PPS by instituting clinical and organizational changes such as lowering the doses of expensive injectable medications and modestly increasing the provision of historically less expensive dialysis modalities (eg, peritoneal dialysis).…”

“…9 , 10 To date, studies have shown that the number of unique dialysis facilities actually increased after 2011, 11 , 12 while facility closures declined. 12 Most facilities have adapted to the PPS by instituting clinical and organizational changes such as lowering the doses of expensive injectable medications and modestly increasing the provision of historically less expensive dialysis modalities (eg, peritoneal dialysis). 8 , 11 , 13 But the survival of small chains and independently owned dialysis facilities, which typically have fewer resources to withstand major financial shocks, has not been specifically evaluated in the post-PPS era.…”

Estimating the effect of New Jersey’s 2005 administrative nurse mandate on mortality and hospitalizations for medicare hemodialysis patients

“…There is little evidence that the 2004 reform of the Monthly Capitation Payment led to a measurable improvement in the quality of care delivered to patients 4 . In addition, bundled payment reform in 2011 was not found to consistently lead to dialysis facility closures 5 …”