Medicare Dialysis Patients

Medicare is the leading payer for dialysis and other medical treatments for end-stage renal disease. Medicare enrollment by kidney patients more than doubled between 1984 and 1994, while expenditures more than trebled--to $8.4 billion. Medicare does not scrutinize the level of laboratory tests for patients on dialysis, and GAO found that similar patients received laboratory tests at widely different rates. At one extreme, Medicare may be paying for excessive tests, while at the other, patients may not be receiving the tests needed to monitor their condition. Fee-for-service reimbursement does not give physicians adequate incentives to order tests judiciously, and neither Medicare nor its claims processing contractors routinely analyze the kind of claims data that GAO reviewed when it found anomalies. GAO recommends that Medicare profile doctors ordering laboratory tests for Medicare dialysis patients and notify contractors of unusual test rates. In addition, Congress should consider holding physicians liable when they order excessive tests.

GAO noted that: (1) despite the large volume of laboratory services provided to end stage renal disease (ESRD) patients, HCFA does not scrutinize the level of laboratory tests ordered for patients receiving dialysis; (2) GAO's study in 1994 showed that clinically similar patients received laboratory tests at widely disparate rates; (3) this variation suggests that Medicare may be paying for an excessive number of tests or that patients may not be receiving the tests needed to adequately monitor their condition; (4) renal disease experts GAO consulted found questionable usage rates for 20 of 34 individual laboratory tests identified in two data samples; (5) they determined that many of these tests provided to patients at 100 facilities with the highest average number of tests ordered per patient were either provided too often or ordered for an implausibly large proportion of patients; (6) low rates of laboratory tests for patients of some facilities were also found; (7) the nature of fee-for-service reimbursement does not give physicians adequate incentives to be judicious in ordering tests; (8) the likelihood of excessive testing may increase when a company owns both a dialysis facility and a laboratory and includes unnecessary tests in standing orders; (9) these and other physician-related factors, such as the physician's knowledge of the latest testing techniques and medical practice differences, help explain the wide variation in laboratory test rates; (10) neither HCFA nor its claims-processing contractors analyze claims data that would reveal the dramatic variation in test rates found in GAO's study; (11) neither knows if Medicare is paying for unnecessary tests for some patients or if other patients receive too few tests to ensure high-quality treatment; (12) because claims for tests are submitted by the laboratories performing the tests, contractors' reviews of claims data would likely identify the laboratories and not the test rate patterns found when the data are arrayed by the patient's ordering physician or dialysis facility; (13) without knowledge of these patterns, HCFA has no indication of whether laboratory claims made on behalf of ESRD patients receiving dialysis are for an appropriate level of tests; and (14) without a process for identifying the physicians who order tests for dialysis patients and for notifying contractors of providers whose test order rates are aberrant, HCFA is unable to identify physicians who order unneeded or inadequate numbers of tests.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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