Proposed Dialysis Payment Changes Could Hurt Rural Facilities

On July 2, 2014 the Centers for Medicare & Medicaid Services (CMS) released its annual proposed rule on dialysis payment and quality. This week, we address changes to the payment and its effect on patients’ access to dialysis. Next week, check back as we discuss proposed changes to quality measures that facilities are judged on.

As expected, CMS proposes to keep payment for dialysis services relatively flat in 2015.  However, proposed changes to how CMS calculates annual updates to payment will result in a cut to rural dialysis facilities by half a percent next year and likely another half percent in 2016.  This is because CMS is proposing to use more recent information on dialysis facility costs to determine how much they should be paying dialysis facilities.

In previous years, CMS used 2008 cost information, but facility costs have changed in recent years. In 2011, Medicare payment for dialysis services, staff wages, and drugs were bundled together into one payment. According to CMS, dialysis facilities are now spending less on drugs, but more on staff wages than in 2008. Therefore, CMS is proposing to weigh payment more heavily on staff wages and reduce the weight on drugs.

Impact on Rural Dialysis Facilities

While basing payment on more recent costs may be a fairer way to control federal health care spending, it will result in lower payments to facilities in areas where wages are typically lower and a small increase to dialysis facilities in areas where wages are higher.  Wages are typically lower in rural areas because the cost of living is also less.  Unfortunately, on average, rural facilities are already losing money on treatments for patients who have only Medicare and/or Medicaid as their insurance.  Some dialysis providers have indicated that in the face of flat and declining payments by Medicare, Medicaid and even by some private insurance companies, they may decide to close some of their clinics that are losing money.

While we expect overall access to dialysis facilities to remain stable in the near term, the National Kidney Foundation  is concerned that providers may decide to close clinics that are in rural areas, causing patients in those areas to have to travel even further to obtain dialysis care.  Longer travel times for dialysis have been associated with an increase in death and hospitalization because patients are more likely to miss treatments when they have more challenges getting to dialysis.  CMS is giving the public 60 days to comment on the proposed rule.  Over the next several weeks, NKF will evaluate the impact of the proposed rule on patients’ access to care; particularly in rural areas.  We will then offer recommendations on how CMS can modify its proposal to make sure that patients are able to receive high quality dialysis care near their homes.

How far do you have to travel to dialysis? Do you consider this to be a burden or do you frequently encounter difficulties getting to your scheduled appointment? Share your comments below.