The Centers for Medicare and Medicaid Services announced today that it has finalized the End-Stage Renal Disease (ESRD) Treatment Choices (ETC) Model, meant to improve or maintain quality of care and reduce Medicare expenditures for patients with chronic kidney disease.
The ETC Model is a component of President Trump's Advancing Kidney Health Executive Order and encourages increased use of home dialysis and kidney transplants to help improve the quality of life of Medicare beneficiaries with ESRD. The ETC Model is expected to impact about 30% of kidney care providers, and will be implemented on January 1, 2021 at an estimated savings of $23 million over five and a half years.
"President Trump is tackling a longstanding problem for people with kidney disease because they deserve better than a system that perpetuates costly care and poor outcomes," said CMS Administrator Seema Verma. "He challenged us to deliver a new model that focuses on prevention and better quality of life for our Medicare beneficiaries, so they can spend less time in dialysis centers and more time living fuller lives."
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Roughly 20% of dollars in traditional Medicare – $114 billion a year – are spent on Americans with kidney disease, according to CMS. While more than 100,000 American begin dialysis to treat end-stage renal disease each year, one in five will die within a year.
WHAT'S THE IMPACT?
Many beneficiaries with ESRD suffer from poor health outcomes and face increased risk of complications with underlying diseases. For example, those with ESRD who contract COVID-19 have higher rates of hospitalization. The current Medicare payment system, and a lack of beneficiary education, may encourage in-center hemodialysis as the default treatment for patients beginning dialysis. Having to travel to dialysis centers for their treatment also potentially exposes those with ESRD to illnesses like the coronavirus.
The ETC Model will test shifting Medicare payments from traditional fee-for-service payments to payments in which providers are incentivized for encouraging the receipt of home dialysis, and of kidney transplants. This value-based payment model is intended to encourage participating providers to invest in and build their home dialysis programs, which allow patients to receive care in the comfort and safety of their home. Home dialysis gives patients the freedom to choose the therapy that works best with their lifestyles, without being tied to the dialysis facility's schedule.
The ETC Model also incentivizes transplantation by financially rewarding ESRD facilities and clinicians based on their transplant rate, calculated as the sum of the transplant wait-list rate and the living donor transplant rate. Transplant wait-listing means that a beneficiary becomes eligible to get a kidney when one becomes available at their transplant center.
Transplantation is widely viewed as the optimal treatment for most patients with ESRD, generally increasing survival and quality of life while reducing medical expenditures. In 2017 only 29.9 % of people with ESRD in the U.S. had a functioning transplant kidney, and only 2.9 % of such patients received a transplant before needing to start dialysis. The model provides financial incentives to increase transplant wait-listing and avoid instead of dialysis, when appropriate.
Providers are encouraged to have early conversations with patients about treatment options. All beneficiaries attributed to participants in the ETC Model will maintain freedom of choice among healthcare providers, and all current beneficiary protections under Medicare are maintained in the model. The model's incentive structure encourages clinicians to care for the whole person and make real improvements to the beneficiaries' quality of life. CMS will monitor the financial impact over the course of the ETC Model.
THE LARGER TREND
Refinements to eligibility for the transitional drug add-on payment adjustment to better target the additional payment to innovative renal dialysis drugs and biological products is based on the Food and Drug Administration's New Drug Application Classifications.