End-Stage Renal Disease
CMS Should Assess Adequacy of Payment When Certain Oral Drugs Are Included and Ensure Availability of Quality Monitoring Data Gao ID: GAO-11-365 March 23, 2011For most individuals with end-stage renal disease (ESRD), Medicare purchases a bundle of dialysis-related services using a single payment. In 2014, the Centers for Medicare & Medicaid Services (CMS) plans to include in this bundled payment "oral-only" ESRD drugs used to treat mineral and bone disorder. Currently, Medicare generally pays for these drugs only if the beneficiary has Part D prescription drug coverage. This report (1) describes the rationales for including oral-only ESRD drugs in the bundled payment, (2) examines dialysis organizations' recent experience providing oral-only ESRD drugs and their future ability to provide these drugs, (3) examines the data sources that CMS could use to account for oral-only ESRD drugs in the bundled payment, and (4) examines CMS's ability to monitor treatment of mineral and bone disorder. GAO interviewed CMS officials, experts in mineral and bone disorder, and representatives of 4 large and 16 small dialysis organizations. GAO also reviewed ESRD payment regulations, related reports, clinical guidelines, and state pharmacy licensure requirements in 10 selected states.
There are three key reasons for including oral-only ESRD drugs in the bundled payment for dialysis care. First, including these drugs could promote more efficient dialysis care, because organizations that provide this care receive a fixed payment and gain financially to the extent they reduce their costs for the items and services included in the bundle. Second, including the oral-only ESRD drugs could promote clinically appropriate care. Currently, dialysis organizations gain financially if beneficiaries receive oral-only ESRD drugs instead of drugs that are in the bundle because this reduces costs without reducing the payment these organizations receive. Including oral-only ESRD drugs in the bundle would remove financial incentives under the payment system to use certain drugs over others. Finally, including oral-only ESRD drugs in the bundled payment could improve access to these drugs for certain beneficiaries, such as those who currently lack separate prescription drug coverage for these drugs. Three of the 4 large dialysis organizations interviewed by GAO reported that they provided oral-only ESRD drugs to some of the beneficiaries they served in 2010. In contrast, all of the 16 small dialysis organizations that GAO interviewed reported that they did not provide these drugs in 2010. Regardless of their recent experience providing oral-only ESRD drugs, the large and small organizations GAO interviewed identified issues that could affect their ability to provide these drugs in 2014. For example, most organizations expressed concern about whether the bundled payment for dialysis care would adequately cover the costs of providing oral-only ESRD drugs. To account for oral-only ESRD drugs in the payment bundle in 2014, CMS officials noted that they would be limited to using data on payments for these drugs under Medicare Part D. However, these data may understate the costs that dialysis organizations would incur to provide these drugs, in part, because Medicare currently pays for these drugs primarily for those beneficiaries with Part D coverage. Although CMS does not know whether the bundled payment in 2014 will be sufficient to cover the costs that efficient dialysis organizations would incur to provide the entire bundle of dialysis-related items and services, a potential underestimate of the total cost to provide oral-only ESRD drugs raises questions about payment adequacy beginning in 2014. GAO and others have stated that inadequate payments could lead to access and quality of care issues for beneficiaries on dialysis. CMS is developing new, consensus-based measures that it could use to monitor treatment of mineral and bone disorder. CMS is also developing a new Web-based system to collect data for such measures. However, full implementation of this new system has been delayed repeatedly, and dialysis organizations and others GAO interviewed expressed concern about the reliability of data collected using this system. Recognizing the importance of timely and reliable quality monitoring under bundled payment systems, CMS officials told GAO that they intend to collect data using an alternative mechanism in 2011. GAO recommends that CMS assess payment adequacy when oral-only ESRD drugs are included in the bundled payment and ensure availability of reliable data for monitoring treatment of mineral and bone disorder. CMS agreed with GAO's recommendations.
RecommendationsOur 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.
Director: James C. Cosgrove Team: Government Accountability Office: Health Care Phone: (202) 512-7029GAO-11-365, End-Stage Renal Disease: CMS Should Assess Adequacy of Payment When Certain Oral Drugs Are Included and Ensure Availability of Quality Monitoring Data
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United States Government Accountability Office:
GAO:
Report to Congressional Committees:
March 2011:
End-Stage Renal Disease:
CMS Should Assess Adequacy of Payment When Certain Oral Drugs Are
Included and Ensure Availability of Quality Monitoring Data:
Oral End-Stage Renal Disease Drugs:
GAO-11-365:
GAO Highlights:
Highlights of GAO-11-365, a report to congressional committees.
Why GAO Did This Study:
For most individuals with end-stage renal disease (ESRD), Medicare
purchases a bundle of dialysis-related services using a single
payment. In 2014, the Centers for Medicare & Medicaid Services (CMS)
plans to include in this bundled payment ’oral-only“ ESRD drugs used
to treat mineral and bone disorder. Currently, Medicare generally pays
for these drugs only if the beneficiary has Part D prescription drug
coverage. This report (1) describes the rationales for including oral-
only ESRD drugs in the bundled payment, (2) examines dialysis
organizations‘ recent experience providing oral-only ESRD drugs and
their future ability to provide these drugs, (3) examines the data
sources that CMS could use to account for oral-only ESRD drugs in the
bundled payment, and (4) examines CMS‘s ability to monitor treatment
of mineral and bone disorder. GAO interviewed CMS officials, experts
in mineral and bone disorder, and representatives of 4 large and 16
small dialysis organizations. GAO also reviewed ESRD payment
regulations, related reports, clinical guidelines, and state pharmacy
licensure requirements in 10 selected states.
What GAO Found:
There are three key reasons for including oral-only ESRD drugs in the
bundled payment for dialysis care. First, including these drugs could
promote more efficient dialysis care, because organizations that
provide this care receive a fixed payment and gain financially to the
extent they reduce their costs for the items and services included in
the bundle. Second, including the oral-only ESRD drugs could promote
clinically appropriate care. Currently, dialysis organizations gain
financially if beneficiaries receive oral-only ESRD drugs instead of
drugs that are in the bundle because this reduces costs without
reducing the payment these organizations receive. Including oral-only
ESRD drugs in the bundle would remove financial incentives under the
payment system to use certain drugs over others. Finally, including
oral-only ESRD drugs in the bundled payment could improve access to
these drugs for certain beneficiaries, such as those who currently
lack separate prescription drug coverage for these drugs.
Three of the 4 large dialysis organizations interviewed by GAO
reported that they provided oral-only ESRD drugs to some of the
beneficiaries they served in 2010. In contrast, all of the 16 small
dialysis organizations that GAO interviewed reported that they did not
provide these drugs in 2010. Regardless of their recent experience
providing oral-only ESRD drugs, the large and small organizations GAO
interviewed identified issues that could affect their ability to
provide these drugs in 2014. For example, most organizations expressed
concern about whether the bundled payment for dialysis care would
adequately cover the costs of providing oral-only ESRD drugs.
To account for oral-only ESRD drugs in the payment bundle in 2014, CMS
officials noted that they would be limited to using data on payments
for these drugs under Medicare Part D. However, these data may
understate the costs that dialysis organizations would incur to
provide these drugs, in part, because Medicare currently pays for
these drugs primarily for those beneficiaries with Part D coverage.
Although CMS does not know whether the bundled payment in 2014 will be
sufficient to cover the costs that efficient dialysis organizations
would incur to provide the entire bundle of dialysis-related items and
services, a potential underestimate of the total cost to provide oral-
only ESRD drugs raises questions about payment adequacy beginning in
2014. GAO and others have stated that inadequate payments could lead
to access and quality of care issues for beneficiaries on dialysis.
CMS is developing new, consensus-based measures that it could use to
monitor treatment of mineral and bone disorder. CMS is also developing
a new Web-based system to collect data for such measures. However,
full implementation of this new system has been delayed repeatedly,
and dialysis organizations and others GAO interviewed expressed
concern about the reliability of data collected using this system.
Recognizing the importance of timely and reliable quality monitoring
under bundled payment systems, CMS officials told GAO that they intend
to collect data using an alternative mechanism in 2011.
What GAO Recommends:
GAO recommends that CMS assess payment adequacy when oral-only ESRD
drugs are included in the bundled payment and ensure availability of
reliable data for monitoring treatment of mineral and bone disorder.
CMS agreed with GAO‘s recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-11-365] or key
components. For more information, contact James C. Cosgrove at (202)
512-7114 or cosgrovej@gao.gov.
[End of section]
Contents:
Letter:
Background:
Including Oral-Only ESRD Drugs in the Bundled Payment Could Promote
Efficiency, Clinically Appropriate Care, and Access to These Drugs:
Most Large Dialysis Organizations Provided Oral-Only ESRD Drugs to
Some Beneficiaries in 2010; Both Large and Small Organizations
Identified Potential Issues with Providing These Drugs in 2014:
CMS Is Limited to Using Part D Data to Account for Oral-Only ESRD
Drugs in the Bundled Payment; These Data May Understate Dialysis
Organizations' Costs:
CMS Is Developing New Quality Measures Related to Mineral and Bone
Disorder; However, CMS's System for Collecting Data for Its Quality
Measures Has Been Delayed:
Conclusions:
Recommendations for Executive Action:
Agency and Other Comments and Our Evaluation:
Appendix I: Comments from the Department of Health and Human Services:
Appendix II: GAO Contact and Staff Acknowledgments:
Figure:
Figure 1: Summary of Changes in Medicare Payment Methods through 2014
for Dialysis and Related Items and Services:
Abbreviations:
AAKP: American Association of Kidney Patients:
AKF: American Kidney Fund:
CKD-MBD: chronic kidney disease-mineral and bone disorder:
CMS: Centers for Medicare & Medicaid Services:
CPM: Clinical Performance Measure:
CROWNWeb: Consolidated Renal Operations in a Web-Enabled Network:
ESRD: end-stage renal disease:
KCC: Kidney Care Council:
KDIGO: Kidney Disease: Improving Global Outcomes:
K/DOQI: Kidney Disease Outcomes Quality Initiative:
MedPAC: Medicare Payment Advisory Commission:
MIPPA: Medicare Improvements for Patients and Providers Act of 2008:
NKF: Nation Kidney Foundation:
NQF: National Quality Forum:
NRAA: National Renal Administrators Association:
PDP: prescription drug plan:
PPACA: Patient Protection and Affordable Care Act:
PTH: parathyroid hormone:
QIP: Quality Incentive Program:
RPA: Renal Physicians Association:
USRDS: United States Renal Data System:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
March 23, 2011:
Congressional Committees:
Regardless of age, most individuals with end-stage renal disease
(ESRD), a condition of permanent kidney failure, are eligible for
health care coverage under Medicare.[Footnote 1],[Footnote 2] Since
the implementation of Medicare's ESRD benefit in 1973, hundreds of
thousands of lives have been extended through Medicare-covered
dialysis treatment--a process that removes excess fluids and toxins
from the bloodstream. According to the Centers for Medicare & Medicaid
Services (CMS), the agency within the Department of Health and Human
Services that administers Medicare, in 2007, Medicare spent about $9.2
billion on dialysis treatment and related items and services for
approximately 329,000 beneficiaries on dialysis.[Footnote 3]
Medicare pays dialysis organizations[Footnote 4] a single rate for
providing dialysis treatment and certain related items and services,
which is a common form of Medicare payment known as bundling. Medicare
pays the bundled rate per dialysis treatment--generally for three
treatments per week. Effective January 1, 2011, the bundled payment
for dialysis care expanded to include payment for some additional
items and services.[Footnote 5] As a result, the bundled payment
covers the following under Medicare Part B: (1) dialysis treatment and
associated routine services, such as nursing, equipment, supplies, and
ESRD-related laboratory tests; (2) injectable drugs used to treat
complications related to ESRD; and (3) oral ESRD drugs that have
injectable equivalents.[Footnote 6]
This payment change was consistent with our previous recommendation
that the bundled payment for dialysis care be expanded to include all
ESRD services in order to improve efficiency and remove financial
incentives to provide more injectable ESRD drugs than necessary.
[Footnote 7] However in a subsequent report, we noted that bundled
payment systems may give providers an incentive to underserve the most
costly beneficiaries to avoid financial losses.[Footnote 8] We
emphasized that beneficiaries on dialysis are particularly vulnerable
to any disruptions in care because of their need for life-sustaining
dialysis. As a result, we recommended that CMS monitor access to and
quality of dialysis care to identify any adverse effects of this
payment system change on beneficiaries.
The current Medicare bundled payment for dialysis care covers most,
but not all, of the items and services typically provided to dialysis
patients. In particular, this bundled payment does not include oral
ESRD drugs that do not have injectable equivalents, which consist of
two classes of drugs--calcimimetics and phosphate binders--and are
used to treat a complication of ESRD known as mineral and bone
disorder. CMS plans to include oral-only ESRD drugs in the bundled
payment for dialysis care beginning in 2014.[Footnote 9],[Footnote 10]
At that time, dialysis organizations will be responsible for providing
these drugs to beneficiaries.
The Patient Protection and Affordable Care Act (PPACA) requires us to
examine issues associated with including oral-only ESRD drugs in
Medicare's bundled payment for dialysis care.[Footnote 11] As
discussed with the committees of jurisdiction, this report: (1)
describes the rationales for including oral-only ESRD drugs in the
bundled payment for dialysis care, (2) examines dialysis
organizations' recent experience with providing oral-only ESRD drugs
and their ability to provide these drugs under the bundled payment
system, (3) examines the data sources that CMS could use to account
for oral-only ESRD drugs in the bundled payment system, and (4)
examines CMS's ability to monitor treatment of mineral and bone
disorder under the bundled payment system.
To describe the rationales for including oral-only ESRD drugs in the
bundled payment for dialysis care, we conducted interviews with CMS
officials responsible for the design of the payment system as well as
experts on treatment of mineral and bone disorder. In addition, we
reviewed CMS's recently published proposed and final rules for the
current bundled payment system in order to understand the payment
system's design. We also reviewed related reports by the Medicare
Payment Advisory Commission (MedPAC) and others as well as the
clinical literature on dialysis and oral-only ESRD drugs.
To examine dialysis organizations' recent experience with providing
oral-only ESRD drugs and their ability to provide these drugs under
the bundled payment system, we conducted semistructured interviews
with representatives from 20 dialysis organizations--4 large and 16
small organizations. We selected the 4 large dialysis organizations
because they owned the largest number of dialysis facilities
nationwide. At the time of our study, these large dialysis
organizations reported that they owned about 150 to 1,750 dialysis
facilities and served about 12,400 to 130,500 dialysis patients. In
addition, 3 of these organizations collectively owned about 61 percent
of dialysis facilities and served about 63 percent of dialysis
patients in 2008. We randomly selected the 16 small dialysis
organizations from 10 states: California, Florida, Georgia, Illinois,
New York, North Dakota, Ohio, Pennsylvania, Texas, and Utah.[Footnote
12] These 10 states were located in all four census regions and
accounted for about 50 percent of all beneficiaries on dialysis as of
December 31, 2008. We selected the 16 small dialysis organizations
based on data from Medicare's Dialysis Facility Compare database.
[Footnote 13] Each of these 16 small dialysis organizations contained
1 to 112 dialysis facilities and served 23 to about 6,200 dialysis
patients.[Footnote 14] We selected at least 2 small dialysis
organizations from each of the 5 largest states in our review and 1
small organization from each of the other 5 states in our review.
Seven of the 16 small dialysis organizations were hospital-based and
10 of these 16 small organizations owned at least 1 facility in an
urban area.[Footnote 15] The 16 small dialysis organizations in our
review did not constitute a representative sample. Because dialysis
organizations likely would need to comply with state pharmacy
licensure requirements to directly provide oral-only ESRD drugs, we
reviewed these requirements in each of the 10 states we selected and
interviewed state officials responsible for compliance with these
requirements. We also conducted interviews with representatives of
professional organizations and beneficiary advocacy organizations.
To examine the data sources that CMS could use to account for oral-
only ESRD drugs in the bundled payment system, we conducted interviews
with CMS officials responsible for designing this payment system. We
also reviewed provisions of the Medicare Improvements for Patients and
Providers Act of 2008 (MIPPA),[Footnote 16] which requires the
implementation of the current bundled payment system, as well as CMS's
proposed and final rules for this payment system. As part of this
review, we analyzed the potential implications that these data sources
could have on the extent to which payments will be adequate when CMS
expands the bundled payment to include oral-only ESRD drugs.
To examine CMS's ability to monitor treatment of mineral and bone
disorder under the bundled payment system, we reviewed relevant
documentation from CMS and clinical practice guidelines for care
related to the treatment of mineral and bone disorder. In addition, we
conducted interviews with CMS officials responsible for the quality
monitoring of dialysis care; nephrology clinicians with expertise in
the treatment of mineral and bone disorder, including individuals who
helped develop quality measures and guidelines for the treatment of
this condition; representatives of dialysis organizations; and
officials from organizations that represent nephrology clinicians,
researchers, and beneficiaries on dialysis.
We conducted this performance audit from July 2010 through March 2011
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
Treatment options for ESRD include kidney transplantation and
dialysis.[Footnote 17] Kidney transplants are not a practical option
on a wide scale, as suitable donated organs are scarce. In contrast,
dialysis is the treatment used by most beneficiaries with ESRD.
Hemodialysis, the most common form of dialysis, is generally
administered three times a week at facilities that provide these
services.[Footnote 18],[Footnote 19] During hemodialysis, a machine
pumps blood through an artificial kidney and returns the cleansed
blood to the body.
One common complication of ESRD is mineral and bone disorder, which
can result in a variety of negative clinical conditions in ESRD
patients, including weak and brittle bones and cardiovascular disease.
Because mineral and bone disorder is associated with abnormal calcium,
phosphorus, and parathyroid hormone (PTH) levels in the blood,
treatment of mineral and bone disorder typically involves monitoring
the levels of these substances in the blood and providing a
combination of medications to control these levels.[Footnote 20] The
medications that are generally provided to treat mineral and bone
disorder are vitamin D,[Footnote 21] calcimimetics, and phosphate
binders. Vitamin D and calcimimetics are used to help maintain normal
levels of calcium and PTH, while phosphate binders are used to reduce
excessive phosphorus levels. Vitamin D is generally administered
intravenously, although a small number of patients--usually those who
receive dialysis in their home--are treated with the oral form of the
drug. Calcimimetics and phosphate binders are available only in oral
form.
Under the bundled payment system for dialysis care, dialysis
organizations are responsible for providing injectable ESRD drugs as
well as oral ESRD drugs with injectable equivalents.[Footnote 22]
Dialysis organization personnel typically administer injectable ESRD
drugs to beneficiaries when they come in for their dialysis
treatments. In contrast, dialysis organization personnel generally are
not licensed to dispense oral ESRD drugs with injectable equivalents.
As a result, dialysis organizations may operate or contract with a
community or mail-order pharmacy to provide these drugs to
beneficiaries.[Footnote 23] Because dialysis organizations are not
currently responsible for providing oral-only ESRD drugs under the
bundled payment system for dialysis care, beneficiaries typically have
coverage for these drugs through other sources, such as Medicare Part
D prescription drug plans (PDP) and employer-or union-sponsored drug
plans.
Medicare Payment for Dialysis Care:
CMS implemented the bundled payment system for Medicare-covered
dialysis care in 1983. CMS has also developed bundled payment systems
for other Medicare-covered services in several settings, including
inpatient hospitals, skilled nursing facilities, and home health
agencies. When implementing a bundled payment system, CMS may
determine what services will be covered under the bundle and what the
payment rate to providers will be for those services. This rate is
generally designed to cover the costs that an efficient provider would
incur to provide the bundled services.[Footnote 24]
As required by MIPPA, in January 2011, CMS made the most substantial
change in Medicare's bundled payment for dialysis care since this
bundled payment system was implemented in 1983--expanding the bundled
payment to cover additional items and services. The bundled payment
will be expanded further in 2014.
* Prior to 2011, Medicare's bundled payment covered dialysis treatment
and certain associated items and services under Part B.[Footnote 25]
This bundled payment did not cover all dialysis-related items and
services. Specifically, Medicare paid separately under Part B for
injectable ESRD drugs.[Footnote 26] In addition, for beneficiaries who
were enrolled in Medicare Part D PDPs, Medicare covered oral ESRD
drugs under Part D.[Footnote 27]
* For 2011 through 2013, the bundled payment for dialysis care was
expanded to cover, under Part B, additional dialysis-related items and
services such as injectable ESRD drugs and oral ESRD drugs with
injectable equivalents.[Footnote 28],[Footnote 29] Medicare continues
to cover oral-only ESRD drugs under Part D.
* Beginning in 2014, the bundled payment will be expanded again--this
time to include coverage for oral-only ESRD drugs.[Footnote 30] As a
result, Medicare will begin paying for these drugs with the bundled
payment under Part B rather than covering them under Part D. (See
figure 1 for a summary of changes over time in Medicare's payment
methods for dialysis and related items and services.)
Figure 1: Summary of Changes in Medicare Payment Methods through 2014
for Dialysis and Related Items and Services:
[Refer to PDF for image: illustration]
Paid for under Part B with Bundled Payment for Dialysis Care:
Prior to 2011: [Paid for under Part B]
Dialysis and certain associated items and services[A].
2011 through 2013: [Paid for under Part B]
Dialysis and certain associated items and services[A];
Oral ESRD drugs with injectable equivalents[C];
Injectable ESRD Drugs[D];
Other items and services[E].
2014 and beyond: [Paid for under Part B]
Dialysis and certain associated items and services[A];
Oral-only ESRD drugs[B];
Oral ESRD drugs with injectable equivalents[C];
Injectable ESRD Drugs[D];
Other items and services[E].
Paid for Separately under Part B or Part D:
Prior to 2011:
Oral-only ESRD drugs[B]; [Paid for under Part D]
Oral ESRD drugs with injectable equivalents[C]; [Paid for under Part D]
Injectable ESRD Drugs[D]; [Paid for under Part B]
Other items and services[E]. [Paid for under Part B]
2011 through 2013:
Oral-only ESRD drugs[B]. [Paid for under Part D]
Source: Medicare Program: End-Stage Renal Disease Prospective Payment
System, 75 Fed. Reg. 49,030 (Aug. 12, 2010).
[A] Dialysis and certain associated services include dialysis
treatment and associated routine items and services, such as nursing,
equipment, and supplies.
[B] Oral-only ESRD drugs consist of calcimimetics and phosphate
binders.
[C] Oral ESRD drugs with injectable equivalents are oral vitamin D and
oral levocarnitine (used to address a deficiency in carnitine, which
helps the body produce energy).
[D] Injectable ESRD drugs include erythropoiesis stimulating agents,
injectable iron, injectable vitamin D, and other injectable drugs such
as levocarnitine and vancomycin (an antibiotic used for treatment of
certain infections).
[E] Other items and services include, for example, medical equipment
and ESRD-related laboratory tests.
[End of figure]
Monitoring the Quality of Dialysis Care:
In response to a provision in the Balanced Budget Act of 1997, which
required CMS to develop a method to measure and report on the quality
of dialysis care provided under the Medicare program, CMS developed
the ESRD Clinical Performance Measures (CPM) Project.[Footnote 31],
[Footnote 32] Through the CPM Project, CMS develops quality measures
for monitoring various aspects of dialysis care and collects data to
support these quality measures. From 1999 through 2008, CMS's CPM
Project collected data to support its quality measures annually using
a random national sample of beneficiaries and a paper data collection
form completed by dialysis facilities.[Footnote 33] However, because
CMS's CPM Project collected data for only a national sample of
beneficiaries, CMS was limited to using these data to monitor the
quality of dialysis care at the national level and not the facility
level.
Due in part to the limited amount of data that CMS could collect
through the paper data collection form, CMS has been developing a new
Web-based data collection system--referred to as the Consolidated
Renal Operations in a Web-Enabled Network (CROWNWeb). CROWNWeb is
designed to collect data for all Medicare beneficiaries receiving
dialysis care, rather than for a sample of beneficiaries, and to allow
CMS to monitor the quality of dialysis care at both the national level
and the facility level. In general, CMS plans for facilities that are
part of large dialysis organizations participating in Medicare to
transmit data for their patients from the organization's data
management system to CROWNWeb using an automated process--referred to
as "batch" submission.[Footnote 34] In contrast, CMS plans for
facilities that are part of small dialysis organizations participating
in Medicare to submit data for their patients to CROWNWeb by manually
entering data via the Web.
Including Oral-Only ESRD Drugs in the Bundled Payment Could Promote
Efficiency, Clinically Appropriate Care, and Access to These Drugs:
There are three key reasons for including oral-only ESRD drugs in the
bundled payment for dialysis care: to encourage more efficient care,
to encourage more clinically appropriate care, and to increase access
to these drugs for certain beneficiaries. As we and others have noted,
bundling payments for items and services related to dialysis care is
designed to give dialysis organizations an incentive to provide care
more efficiently because organizations retain the difference if
Medicare's bundled payment exceeds the cost of providing such items
and services.[Footnote 35] Therefore, including oral-only ESRD drugs
in the bundled payment for dialysis care could introduce an incentive
for organizations to select the oral-only ESRD drugs and associated
doses that lead to efficient dialysis care in order to increase the
amount of money they retain from the bundled payment.[Footnote 36]
Including oral-only ESRD drugs in the bundled payment for dialysis
care could also promote clinically appropriate care by removing the
financial incentive to use these drugs instead of drugs currently
included in the bundled payment. Specifically, dialysis organizations
are not responsible for the cost of phosphate binders and
calcimimetics because these drugs currently are not included in the
bundled payment for dialysis care. As a result, dialysis organizations
gain financially if beneficiaries receive these drugs to treat mineral
and bone disorder instead of drugs included in the bundled payment,
such as vitamin D, even though doing so may not always represent the
most clinically appropriate care. For example, two experts on
treatment of mineral and bone disorder who we interviewed noted that
this financial incentive under the current bundled payment system
could lead to increased use of calcimimetics and decreased use of
vitamin D to control beneficiaries' PTH levels. Although calcimimetics
can be effective at lowering PTH levels, these drugs may not be
appropriate for all beneficiaries and could result in adverse side
effects for some beneficiaries.[Footnote 37]
Finally, including oral-only ESRD drugs in the bundled payment for
dialysis care could improve access to these drugs for certain
beneficiaries, including beneficiaries who do not currently have
prescription drug coverage and beneficiaries with Part D prescription
drug coverage whose annual drug costs are within a certain range.
Approximately 17 percent of all Medicare beneficiaries on dialysis did
not have any prescription drug coverage in 2007.[Footnote 38] Studies
have shown that, due to the higher out-of-pocket drug costs they
incur, individuals who lack prescription drug coverage are less likely
to use prescription drugs than individuals with drug coverage.
[Footnote 39] Furthermore, beneficiaries on dialysis with standard
drug coverage through Part D may be subject to increased cost sharing
for oral-only ESRD drugs when these beneficiaries' total annual
spending on all prescription drugs falls between $2,840 and $6,448--a
coverage gap sometimes called the "doughnut hole."[Footnote 40],
[Footnote 41] However, when oral-only ESRD drugs are included in the
bundled payment, all beneficiaries on dialysis will be eligible for
coverage for these drugs under Medicare Part B, and will not be
subject to the Medicare Part D coverage gap for these drugs.
Most Large Dialysis Organizations Provided Oral-Only ESRD Drugs to
Some Beneficiaries in 2010; Both Large and Small Organizations
Identified Potential Issues with Providing These Drugs in 2014:
Three of the 4 large dialysis organizations in our review reported
that they provided oral-only ESRD drugs to some of the Medicare
beneficiaries they served in 2010. In contrast, all 16 of the small
dialysis organizations in our review reported that they did not
provide these drugs to beneficiaries in 2010. Regardless of their
experience with providing these drugs to beneficiaries, the large and
small dialysis organizations in our review identified several issues
that could affect their ability to provide these drugs to
beneficiaries in 2014.
Three Large Dialysis Organizations Provided Oral-Only ESRD Drugs to
Some Beneficiaries in 2010, While Small Organizations We Interviewed
Did Not Provide These Drugs:
The four large dialysis organizations in our review generally had some
experience with providing oral-only ESRD drugs to Medicare
beneficiaries. Specifically, three of the large dialysis organizations
in our review reported that they provided oral drugs, including oral-
only ESRD drugs, to some of their patients in 2010.[Footnote 42]
Representatives from these three large dialysis organizations
explained that their organizations operated community or mail-order
pharmacies and provided oral drugs to about 2 to 22 percent of their
patients, including some Medicare beneficiaries who were enrolled in a
Part D PDP. For example, representatives from one of these large
dialysis organizations noted that their organization operated a mail-
order pharmacy and provided oral drugs to about 26,000 of its 120,000
patients. These representatives told us that their dialysis
organization's pharmacy typically mailed oral drugs to patients either
at their homes or at dialysis facilities. The representatives also
said that their dialysis organization's pharmacy promoted and
monitored patients' adherence to their prescriptions by, among other
things, sending reminders to patients when their prescriptions needed
to be refilled and notifying clinicians when patients did not fill
their prescriptions on schedule.
In contrast to most of the large dialysis organizations in our review,
all 16 of the small dialysis organizations in our review reported that
they did not provide oral-only ESRD drugs to Medicare beneficiaries in
2010. The National Renal Administrators Association (NRAA), a
nonprofit organization that represents small dialysis organizations
throughout the United States, also told us that small dialysis
organizations generally did not provide oral-only ESRD drugs or any
other oral drugs in 2010. However, small dialysis organizations--
including those in our review--may have recently gained some
experience with providing oral ESRD drugs that have injectable
equivalents. Since January 2011, under the bundled payment system for
dialysis care, all dialysis organizations--large and small--are
responsible for providing oral ESRD drugs that have injectable
equivalents to all of the Medicare beneficiaries they serve who need
these drugs. However, the small dialysis organizations in our review
generally noted that less than 2 percent of their patients had
prescriptions for oral ESRD drugs that have injectable equivalents,
while most of their patients had prescriptions for oral-only ESRD
drugs.[Footnote 43],[Footnote 44]
In addition to having different experiences with providing oral-only
ESRD drugs to Medicare beneficiaries in 2010, the large and small
dialysis organizations in our review generally reported that they were
at different stages of planning for providing these drugs to
beneficiaries in 2014. Specifically, the same 3 large dialysis
organizations that provided oral-only ESRD drugs to some beneficiaries
in 2010 reported that they had started planning for providing these
drugs in 2014. Representatives from 2 of these 3 large dialysis
organizations reported that their organizations planned to use their
own mail-order pharmacies to provide these drugs to beneficiaries in
2014. The third large dialysis organization was still considering
whether to use its own mail-order pharmacy or to contract with another
mail-order pharmacy to provide these drugs to beneficiaries in 2014.
In contrast, representatives from only 1 of the 16 small dialysis
organizations in our review reported that their organization had plans
for providing oral-only ESRD drugs to beneficiaries in 2014.
Specifically, representatives from a small hospital-based dialysis
organization reported that their organization planned to use the
hospital's pharmacy to provide oral-only ESRD drugs to beneficiaries.
[Footnote 45]
Both Large and Small Dialysis Organizations Identified Several Issues
That Could Affect Their Ability to Provide Oral-Only ESRD Drugs in
2014:
Both the large and small dialysis organizations in our review
identified several issues that could affect their ability to provide
oral-only ESRD drugs in 2014. One issue that both the large and small
dialysis organizations in our review generally expressed concern about
was the uncertainty surrounding Medicare's bundled payment amount for
dialysis care. Specifically, 3 of the 4 large dialysis organizations
and 11 of the 16 small dialysis organizations in our review noted that
they were concerned about the extent to which the bundled payment for
dialysis care would cover their costs of obtaining oral-only ESRD
drugs and providing these drugs to beneficiaries. For example,
representatives from 2 of the 20 dialysis organizations in our review
indicated that, if the bundled payment amount for dialysis care was
inadequate, beneficiaries might not receive certain high-cost oral-
only ESRD drugs--even if these drugs were the most clinically
effective. Additionally, experts on mineral and bone disorder noted
that, to minimize costs, dialysis organizations could choose to
increase their provision of calcium-based phosphate binders, which
tend to be relatively inexpensive. However, the use of calcium-based
phosphate binders could increase beneficiaries' blood calcium levels,
which could have adverse clinical effects.[Footnote 46] Furthermore,
representatives from 2 of the small dialysis organizations in our
review noted that the weaker purchasing power of small dialysis
organizations relative to that of large dialysis organizations would
make it difficult for them to negotiate competitive prices for oral-
only ESRD drugs with drug manufacturers and pharmacies.
In addition to their concerns about payment adequacy, all 4 of the
large dialysis organizations in our review told us that complying with
different state pharmacy licensure requirements in multiple states
could pose challenges. Similarly, 9 of the 16 small dialysis
organizations in our review noted that the need to comply with these
requirements would make it difficult for them to operate their own
pharmacies. These requirements generally pertain to staffing, drug
storage, security, and delivery. For example, all 10 states we
selected for our review required that:
1. a pharmacist be in charge of a pharmacy;[Footnote 47]
2. a pharmacist supervise drug dispensing at a pharmacy;
3. a pharmacy meet drug storage standards, such as securely storing
drugs in a designated space; and:
4. a pharmacy follow security procedures, such as restricting access
to a pharmacy when a pharmacist is off duty.
Representatives from the 3 large dialysis organizations that operated
pharmacies in 2010 said that providing oral-only ESRD drugs to all of
the Medicare beneficiaries they will serve in 2014 would be
challenging. These representatives noted that complying with drug
delivery requirements would be challenging because certain states
prohibited particular drug delivery methods. For example, officials
from the Board of Pharmacy in 2 states--Georgia and Ohio--told us that
their states generally prohibited pharmacies in their states from
mailing drugs to beneficiaries at dialysis facilities. Representatives
from 1 of these 3 large dialysis organizations also noted that,
although their dialysis organization operated a pharmacy, the pharmacy
served only about 2 percent of the dialysis organization's current
patients and served patients in only 1 of the 27 states in which the
dialysis organization operated. As a result, this dialysis
organization would need to comply with the pharmacy licensure
requirements of the other 26 states to provide oral-only ESRD drugs to
the Medicare beneficiaries it will serve in these states. Furthermore,
representatives from 9 of the small dialysis organizations in our
review indicated that state pharmacy licensure requirements would make
it difficult to operate their own pharmacies. Some of the
representatives from these small dialysis organizations indicated that
it would be more feasible for their dialysis organizations to contract
with community or mail-order pharmacies to provide oral-only ESRD
drugs to Medicare beneficiaries.
Another potential issue raised by all 4 of the large dialysis
organizations and 11 of the 16 small dialysis organizations in our
review was related to the need for additional resources to implement
organizational changes associated with providing oral-only ESRD drugs
to Medicare beneficiaries. Specifically, representatives from 1 of the
large dialysis organizations and 5 of the small dialysis organizations
in our review noted that their organizations may need to hire or train
staff to, among other things, assist with the distribution of oral-
only ESRD drugs to beneficiaries or monitor beneficiaries' adherence
to their prescriptions for these drugs. Additionally, representatives
from all 4 of the large dialysis organizations and 3 of the 16 small
dialysis organizations in our review indicated that their
organizations may need to develop new systems for various purposes,
such as billing or monitoring beneficiary adherence to prescriptions.
Finally, some of the large and small dialysis organizations in our
review identified other issues that could affect their ability to
provide oral-only ESRD drugs to Medicare beneficiaries. For example, 2
of the 4 large dialysis organizations and 1 of the 16 small dialysis
organizations in our review expressed concern that including oral-only
ESRD drugs in the bundled payment for dialysis care could lead to
additional fragmentation of care because beneficiaries would receive
prescription drug coverage from multiple, unconnected sources.
[Footnote 48] Representatives from these dialysis organizations noted
that, if beneficiaries obtain their oral-only ESRD drugs from their
dialysis organizations but obtain their other prescription drugs from
another source such as their Medicare Part D PDPs, then their PDPs
could lack information on the oral-only ESRD drugs that these
beneficiaries take. These representatives expressed concern that this
lack of information could impair the ability of PDPs to identify
potential negative drug interactions.
CMS Is Limited to Using Part D Data to Account for Oral-Only ESRD
Drugs in the Bundled Payment; These Data May Understate Dialysis
Organizations' Costs:
According to CMS officials, CMS is limited to using data on payments
under Medicare's Part D program to account for oral-only ESRD drugs in
the bundled payment. In particular, CMS officials stated that federal
law limits the agency to using data on payments under Medicare for
dialysis and related items and services such as oral-only ESRD drugs
in 2007, 2008, or 2009 to calculate the bundled payment for dialysis
care. In addition, federal law limits the estimated total payments
that CMS may use when implementing the new bundled payment system in
2011 to 98 percent of what total payments under Medicare would have
been if the previous system had remained in place.[Footnote
49],[Footnote 50] CMS officials told us that they had identified two
potential sources of data on payments under Medicare for oral-only
ESRD drugs that they could use to account for these drugs in the
bundled payment--payments for these drugs under Medicare's Part D and
Retiree Drug Subsidy programs.[Footnote 51] Part D payment data
represent PDP payments to pharmacies for each medication provided to
beneficiaries, and these data also include information on beneficiary
cost-sharing and the amounts beneficiaries paid for drugs while they
were in the coverage gap.[Footnote 52] Retiree Drug Subsidy data
represent the total amounts that Medicare paid to groups such as
employers or unions to subsidize the drug coverage of Medicare
beneficiaries in these groups. However, CMS officials stated that it
would not be feasible to use Retiree Drug Subsidy data because these
data do not indicate which payments were for oral-only ESRD drugs for
beneficiaries on dialysis.
Although CMS is limited to using data on payments under Part D for
oral-only ESRD drugs to account for oral-only ESRD drugs in the
bundled payment, certain aspects of these data suggest that the data
on total payments under Part D for 2007 through 2009 may understate
the costs that dialysis organizations would incur to provide these
drugs. Specifically:
* Part D data for 2007 through 2009 accounted for only about two-
thirds of beneficiaries on dialysis.[Footnote 53] In 2007, for
example, Part D payments for oral-only ESRD drugs for beneficiaries on
dialysis with Part D coverage totaled about $445 million; however,
this amount did not include payments for oral-only ESRD drugs for the
approximately one-third of beneficiaries on dialysis who lacked Part D
coverage. Because it is unclear whether or to what extent
beneficiaries with and without Part D coverage are comparable in their
utilization of oral-only ESRD drugs, using Part D data to account for
beneficiaries without Part D coverage presents challenges.[Footnote
54] If the two groups of beneficiaries were comparable in their
utilization of oral-only ESRD drugs, total spending on these drugs for
all beneficiaries on dialysis--including the approximately one-third
of beneficiaries without Part D coverage--could have been an estimated
$216 million higher in 2007.[Footnote 55]
* Part D drug coverage in 2007 through 2009 generally was less
comprehensive than the coverage that dialysis organizations will be
required to provide. Most stand-alone Part D PDPs during this time did
not cover drugs when beneficiaries' annual drug costs were in the
coverage gap.[Footnote 56],[Footnote 57] However, beginning in 2014,
dialysis organizations will be responsible for covering the cost of
oral-only ESRD drugs for beneficiaries on dialysis.[Footnote 58]
Moreover, some studies suggest that more comprehensive coverage of
oral-only ESRD drugs, which dialysis organizations will be required to
provide, could lead to greater use of and adherence to prescriptions
for these drugs.[Footnote 59] As a result, beneficiaries' use of oral-
only ESRD drugs, and therefore dialysis organizations' costs of
providing these drugs, could be higher than the historical Part D data
indicate.
* Part D data reflect payment rates that may be lower than dialysis
organizations' costs. Part D data reflect payment rates that PDPs
negotiated with drug manufacturers and pharmacies. Because PDPs
generally have larger numbers of beneficiaries than dialysis
organizations and are providing a wider range of drugs, these plans
may be able to negotiate larger volume discounts for purchasing oral-
only ESRD drugs.[Footnote 60],[Footnote 61] Furthermore, these Part D
data do not account for PDPs' administrative costs of providing
prescription drugs, including oral-only ESRD drugs.[Footnote 62]
CMS does not know whether the payment amount for the entire bundle of
items and services, including oral-only ESRD drugs, will be adequate--
that is, whether it will cover the costs incurred by an efficient
dialysis organization to supply oral-only ESRD drugs in addition to
the range of other items and services included in the bundle. However,
the possibility that Part D data may understate the costs of providing
oral-only ESRD drugs raises questions about the adequacy of the
overall bundled payment rate. We and others have noted that inadequate
payments under bundled payment systems could impair the ability of
providers such as dialysis organizations to furnish beneficiaries with
access to high-quality care.[Footnote 63] CMS officials stated that
they had not yet determined what the bundled payment rate will be when
oral-only ESRD drugs are included, because CMS was focused on
implementing the current payment system for dialysis care. As a
result, CMS does not know whether or the extent to which the bundled
payment rate will be adequate when, beginning in 2014, CMS includes
oral-only ESRD drugs in the bundled payment for dialysis care.
CMS Is Developing New Quality Measures Related to Mineral and Bone
Disorder; However, CMS's System for Collecting Data for Its Quality
Measures Has Been Delayed:
CMS is currently developing new quality measures for monitoring
treatment of mineral and bone disorder in order to identify measures
for which a consensus target level can be proposed based on the
clinical evidence available. CMS is also developing a new data
collection system, called CROWNWeb, which the agency plans to use to
collect data to support these new measures. However, due to repeated
implementation delays and data reliability issues associated with
CROWNWeb, it is uncertain when CMS will be able to rely on CROWNWeb to
collect data for these measures.
CMS Is Developing New Quality Measures Related to Mineral and Bone
Disorder:
CMS is developing new quality measures related to treatment of mineral
and bone disorder in order to identify measures for which a consensus
target level can be proposed based on the clinical evidence available.
CMS's current quality measures use target levels for serum calcium and
serum phosphorus that are based on clinical guidelines recommended by
the 2003 Kidney Disease Outcomes Quality Initiative (K/DOQI) Clinical
Practice Guidelines for Bone Metabolism and Disease in Chronic Kidney
Disease.[Footnote 64] However, more recent clinical guidelines issued
in 2009 state that there is insufficient clinical evidence to support
target levels for serum calcium and serum phosphorus, such as those
recommended by the K/DOQI guidelines.[Footnote 65] Furthermore, four
of the five experts we interviewed also noted that there is a lack of
clinical evidence to support target levels for these indicators.
CMS's current quality measures for monitoring treatment of mineral and
bone disorder are:[Footnote 66]
1. The percentage of patients in a dialysis facility with serum
calcium measured at least once within the month.
2. The percentage of patients in a dialysis facility with serum
phosphorus measured at least once within the month.
3. The percentage of patients in a dialysis facility with mean serum
calcium between 8.4 and 10.2 milligrams per deciliter (mg/dL).
4. The percentage of patients in a dialysis facility with mean serum
phosphorus between 3.5 and 5.5 mg/dL.
CMS does not currently have a quality measure related to PTH; however,
all of the experts we interviewed noted that PTH is an important
indicator for monitoring treatment of mineral and bone disorder.
[Footnote 67]
As part of its efforts to develop new quality measures, CMS recently
submitted two new mineral and bone disorder measures, in addition to
measures related to other aspects of dialysis care, to an independent
consensus-building body known as the National Quality Forum (NQF).
[Footnote 68] NQF evaluates quality measures to determine which ones
should be endorsed--that is, recognized--as national standards.
[Footnote 69] The measures related to treatment of mineral and bone
disorder that CMS submitted to NQF are:
1. The percentage of patients in a dialysis facility with a 3-month
rolling average of total uncorrected serum calcium greater than 10.2
mg/dL.
2. The percentage of patients in a dialysis facility with a 3-month
rolling average of serum phosphorus less than 2.5 mg/dL.
In January 2011, the NQF ESRD Steering Committee recommended that the
measure related to serum calcium continue through the consensus
development process toward possible endorsement by NQF but did not
recommend that the measure related to serum phosphorus continue
through this process.[Footnote 70] A final decision on whether NQF
will endorse these and other quality measures is scheduled for June
2011. Once this process is complete, CMS plans to decide how it will
incorporate any NQF-endorsed quality measures into its quality
monitoring activities.[Footnote 71]
CMS's System for Collecting Data for Its Quality Measures Has Been
Delayed:
Due in part to repeated implementation delays, it is uncertain when
CMS will be able to rely on CROWNWeb to collect the data it needs to
support its quality measures related to treatment of mineral and bone
disorder, as well as other aspects of dialysis care. Beginning in
2009, CMS stopped collecting data via a paper data collection form for
the quality measures included in the CPM Project because CMS intended
to begin collecting data for these measures from all dialysis
facilities in CROWNWeb in February 2009. However, CMS officials told
us that full, national implementation of CROWNWeb was delayed because
a contractor tasked with designing and implementing CROWNWeb performed
poorly. CMS officials told us that CMS hired a new contractor in
September 2009 and scheduled full implementation of CROWNWeb for
December 2009. According to CMS officials, full implementation of
CROWNWeb was delayed again because CMS needed to update CROWNWeb to
address security requirements for federal data systems.[Footnote 72]
Due in part to these delays, CMS modified the implementation of
CROWNWeb to a "phase-in" approach whereby the number of facilities
submitting data to CROWNWeb increases in phases until full
implementation is achieved.[Footnote 73] Specifically, about 180
dialysis facilities currently submit data to CROWNWeb, and CMS planned
to begin collecting data from all dialysis facilities--approximately
5,600--in June 2011. However, due to continued implementation
challenges, CMS recently delayed the full, national implementation of
CROWNWeb until February 2012.
In addition to concerns about implementation delays,[Footnote 74]
dialysis organizations and others we spoke with expressed concern
about the reliability of the data in CROWNWeb. For example, 9 of the
20 dialysis organizations we interviewed expressed concern about the
reliability of manually entered data and CMS noted that there is a
data error rate of over 20 percent for data submitted to CROWNWeb via
the batch submission process in the current phase of CROWNWeb
implementation.[Footnote 75] According to CMS officials, CMS has
contracted with two vendors that are responsible for evaluating the
accuracy and reliability of data in CROWNWeb. However, the results of
this evaluation will not be available until CROWNWeb is fully
implemented.
CMS officials told us that, due to the delays with the implementation
of CROWNWeb, from 2008 through 2010 data for quality measures related
to mineral and bone disorder and other aspects of dialysis care were
collected through a project--referred to as the Elab Project--
administered by the ESRD Network Program.[Footnote 76] The ESRD
Network Program, which was established in 1978, consists of 18 ESRD
Networks, covering each U.S. state, territory, and the District of
Columbia, which are responsible for helping CMS monitor the quality of
dialysis care provided by dialysis facilities in their geographic
area.[Footnote 77] Through the Elab Project, the ESRD Networks
collected data for nearly 100 percent of dialysis patients in the
United States in 2009, the most recent year for which data are
available.[Footnote 78] The ESRD Networks used these data to monitor
the quality of dialysis care at both the national level and the
facility level.[Footnote 79] Given the implementation challenges
associated with CROWNWeb, CMS officials noted that they plan to
continue the Elab Project in 2011 and that it may be necessary to
continue this initiative in subsequent years.[Footnote 80]
Conclusions:
Expanding the bundled payment for dialysis care to include oral-only
ESRD drugs has the potential to promote efficiency, clinically
appropriate care, and access to these drugs for the over 300,000
beneficiaries on dialysis. However, Part D data, which CMS officials
noted they were limited to using to expand the bundled payment to
include oral-only ESRD drugs, may understate the costs that dialysis
organizations would incur to provide these drugs. This raises
questions about whether, in its entirety, the bundled payment for
dialysis care will provide adequate payments for dialysis
organizations when, beginning in 2014, CMS uses the payment to cover
the provision of oral-only ESRD drugs, along with other services.
Because inadequate payments could impair the ability of dialysis
organizations to provide beneficiaries with access to high-quality
dialysis care, it will be important for CMS to know--before
implementing this payment change--whether or to what extent the
bundled payment for dialysis care will be adequate when the payment
also includes oral-only ESRD drugs.
In addition to the need to assess payment adequacy, the importance of
quality monitoring under bundled payment systems has been well
established to help ensure that any improvements in efficiency
associated with these payment systems are not realized by compromising
the quality of dialysis care for beneficiaries. Specifically, we
emphasized in our March 2010 report the need for CMS to monitor
beneficiaries' quality of dialysis care as soon as possible after the
payment system for dialysis care was implemented in January 2011. CMS
recognizes the importance of monitoring the quality of dialysis care,
including treatment of mineral and bone disorder, and the agency has
conducted such monitoring for decades. However, the substantial and
repeated delays associated with CROWNWeb, in addition to potential
problems with data reliability associated with that system, raise
questions about when CMS will be able to rely on the data collected in
CROWNWeb to monitor the quality of dialysis care. Due to significant
recent changes in CMS's method for paying for dialysis care, it is
imperative that CMS identify an alternate source of data for quality
monitoring until CROWNWeb is fully operational. CMS officials
recognize the need for an alternate data source and intend to continue
the Elab Project in 2011. These officials also recognize that, given
the uncertainties with CROWNWeb implementation, it may be necessary to
continue the Elab Project in future years.
Recommendations for Executive Action:
To help ensure that Medicare beneficiaries have access to high-quality
dialysis care, we recommend that the Administrator of CMS assess the
extent to which the bundled payment for dialysis care will be
sufficient to cover an efficient dialysis organization's costs to
provide such care when the bundled payment expands to cover oral-only
ESRD drugs. The Administrator should conduct this assessment before
implementing this expanded bundled payment.
In order to ensure effective monitoring of treatment of mineral and
bone disorder, we recommend that the Administrator of CMS continue
collecting data for quality measures related to this condition from
sources such as the Elab Project until CROWNWeb is fully implemented
and concerns about its data reliability have been adequately addressed.
Agency and Other Comments and Our Evaluation:
We received written comments on our draft report from the Department
of Health and Human Services on behalf of CMS. These comments are
reprinted in appendix I. We also obtained oral comments on our draft
report from groups representing ESRD patients, large and small
dialysis organizations, and nephrologists.
Comments from CMS:
In written comments on a draft of this report, CMS agreed with both of
our recommendations. In response to our recommendation that CMS assess
the adequacy of the bundled payment when oral-only ESRD drugs are
included, CMS stated that it would carefully analyze data on the
utilization of these drugs before including them under the bundled
payment. CMS also noted that, before implementing this payment change,
the agency would allow for public comment through the rulemaking
process and would carefully examine any concerns expressed by the
public to ensure that beneficiaries continue to have access to needed
medications. Furthermore, CMS stated that it was confident that the
additional amount to be included in the ESRD prospective payment
system to account for oral-only ESRD drugs would be adequate to
account for the average patient's oral drug needs. They noted that
particular aspects of the payment system are intended to account for
the higher drug costs of some patients. Consistent with our findings,
CMS also noted that including oral-only ESRD drugs in the payment
bundle would be advantageous because it would allow for the selection
of drugs that are in the best clinical interests of the patients
without regard to financial incentives.
With regard to our recommendation that CMS ensure the availability of
data for monitoring the treatment of mineral and bone disorder, CMS
noted that it plans to include measures related to mineral and bone
disorder in the ESRD Quality Incentive Program (QIP). Recognizing the
importance of collecting data on ESRD quality measures, CMS noted that
it has collected and used data through a number of quality initiatives
over the last two decades and currently collects such information
through multiple sources. In its comments CMS also explained that
although the agency plans to eventually collect patient-level quality
data through CROWNWeb and another mechanism developed in consultation
with the NRAA, the Elab Project will be funded for the year 2011.
According to CMS the agency plans to make continuing the project a
funding priority until other data sources are available, making the
project redundant. CMS emphasized that all of these data collection
vehicles include clinical indicators on mineral and bone metabolism.
CMS also provided an updated schedule for national CROWNWeb
implementation and noted that data validity and reliability issues
will be addressed over this period. CMS also provided technical
comments which we incorporated as appropriate.
Comments from Groups Representing the Dialysis Industry and Patients:
In their oral comments to us regarding our draft report,
representatives from the American Association of Kidney Patients
(AAKP), the American Kidney Fund (AKF), the Kidney Care Council (KCC),
the National Renal Administrators Association (NRAA), and the Renal
Physicians Association (RPA) generally agreed with our message and
recommendations to CMS. The representatives generally noted that our
draft report was well-written and balanced and that they appreciated
that we collected data and perspectives from a variety of
organizations. The groups also underscored our findings related to
dialysis organizations' ability to provide oral-only ESRD drugs.
Specifically, representatives from all of the groups reiterated some
of the possible challenges we described in our draft report related to
providing these drugs, including the complexity of complying with
state pharmacy licensure requirements, the potential for fragmentation
of care, and the potential influence of the payment change on
physician prescribing behaviors for oral-only ESRD drugs. The groups
representing large and small dialysis providers also expressed unease
about the additional costs they will incur to provide these drugs. The
five groups' comments on our draft report generally focused on three
areas of concern: (1) the reasons for including oral-only ESRD drugs
in the bundled payment system, (2) the data CMS intends to use to
account for oral-only ESRD drugs in the bundled payment system, and
(3) CMS's ability to monitor the quality of care provided to dialysis
beneficiaries. Industry and patient group representatives also
provided technical comments, which we incorporated as appropriate.
In commenting on our findings related to the reasons for including
oral-only ESRD drugs in the bundled payment, representatives of RPA,
NRAA, and AKF expressed concern that potential increases in
beneficiaries' out-of-pocket costs for oral-only ESRD drugs could
affect beneficiaries' access to these drugs when they are included in
the bundled payment. For example, representatives of RPA and NRAA
commented that beneficiaries' cost sharing for these drugs could be
higher than it would be if the drugs remained covered under Part D
because the Part D coverage gap will be reduced.[Footnote 81] In
addition, representatives of AKF noted that some beneficiaries
currently receive financial assistance to help cover their out-of-
pocket costs for Part D drugs and once oral-only ESRD drugs are
included in the Part B payment bundle, these beneficiaries will no
longer receive this assistance.
We did not assess the extent to which beneficiaries' cost sharing will
change when oral-only ESRD drugs are included in the bundled payment
system because doing so was beyond the scope of our study. Although
beneficiaries' out-of-pocket costs for drugs covered under Part D will
decrease once the Part D coverage gap is eliminated, beneficiaries
will continue to be responsible for cost sharing for Part D-covered
drugs. As noted in the preamble to the final rule for the design of
the bundled payment system for dialysis care, whether a particular
beneficiary's cost sharing for oral-only ESRD drugs increases or
decreases when these drugs are included in the bundled payment will
depend on his or her individual circumstances.[Footnote 82] However,
as we noted in the report, beneficiaries who currently lack any
prescription drug coverage could experience a reduction in out-of-
pocket costs related to oral-only ESRD drugs when these drugs are
included in the bundled payment.
In commenting on our findings related to the Part D data CMS intends
to use to account for oral-only ESRD drugs in the bundled payment for
dialysis care, representatives from RPA, NRAA, KCC, and AAKP restated
the potential limitations of these data that we identified in the
draft report. Representatives from RPA and NRAA commented that these
data may not reflect changes in treatment patterns since 2007. In
addition, representatives from KCC commented that MIPPA did not limit
CMS to using Part D data from 2007, 2008, or 2009 to account for oral-
only ESRD drugs in the bundled payment. KCC representatives also
asserted that it was not CMS's position that MIPPA limited the agency
to using these data to expand the bundled payment to include oral-only
ESRD drugs. They noted further that in the proposed rule for the new
payment system, CMS calculated $14 per dialysis treatment to account
for oral-only ESRD drugs in the bundled payment amount. However, KCC's
estimate of the cost of providing these drugs was $45 per treatment.
KCC representatives suggested that we note the true cost of providing
oral-only ESRD drugs in the report. Representatives of NRAA also
commented that if the amount of the bundled payment were not adequate,
small dialysis organizations could go out of business, which could
create access problems for beneficiaries.
In our draft report, we noted the potential limitations of Part D data
and recommended that CMS assess the extent to which the bundled
payment for dialysis care would be sufficient to cover an efficient
dialysis organization's costs to provide these drugs. CMS asserted
that MIPPA limited the agency to using data on Medicare payments for
oral-only ESRD drugs in 2007, 2008, or 2009 to account for these drugs
in the bundled payment system. In addition, CMS officials also
reiterated that they were limited to using data from the Part D
program. However, assessing the true cost of providing oral-only ESRD
drugs and CMS's interpretation of MIPPA was beyond the scope of our
study. Of most concern is whether the payment for the entire bundle of
services will be adequate to cover the costs of efficient dialysis
organizations. We agree that if the bundled payment is not adequate,
access problems for beneficiaries could result. In our report, we
recommended that CMS assess the adequacy of the bundled payment amount
before expanding the bundled payment to include oral-only ESRD drugs.
Finally, in commenting on our findings related to CMS's ability to
monitor the quality of care provided to dialysis beneficiaries under
the bundled payment system, representatives of RPA and AKF agreed with
our finding that there is not consensus around appropriate quality
measures for monitoring treatment of mineral and bone disorder. In
addition, representatives of RPA, KCC, and AAKP commented that the
report should place stronger emphasis on the CROWNWeb implementation
challenges and representatives of RPA and KCC underscored their
concerns about the reliability of the data in CROWNWeb.
In our draft report, we noted that CMS submitted two new quality
measures related to treatment of mineral and bone disorder to NQF in
an effort to identify measures for which a target level can be
proposed based on the clinical evidence available. Although the
phosphorus measure submitted by CMS has been rejected by NQF, the
calcium measure submitted by CMS was still under consideration when we
conducted the data collection for this report. In addition, we
highlighted in our draft report the challenges associated with
CROWNWeb implementation--including repeated and significant delays
with national implementation and concerns about data reliability--and
recommended that CMS continue to collect data for quality measures
related to treatment of mineral and bone disorder from sources such as
the Elab Project until CROWNWeb is fully operational.
We are sending copies of this report to the Administrator of CMS. In
addition, the report is available at no charge on the GAO Web site at
[hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-7114 or cosgrovej@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made major
contributions to this report are listed in appendix II.
Signed by:
James C. Cosgrove:
Director, Health Care:
List of Congressional Committees:
The Honorable Max Baucus:
Chairman:
The Honorable Orrin G. Hatch:
Ranking Member:
Committee on Finance:
United States Senate:
The Honorable Fred Upton:
Chairman:
The Honorable Henry A. Waxman:
Ranking Member:
Committee on Energy and Commerce:
House of Representatives:
The Honorable Dave Camp:
Chairman:
The Honorable Sander Levin:
Ranking Member:
Committee on Ways and Means:
House of Representatives:
[End of section]
Appendix I: Comments from the Department of Health and Human Services:
Department Of Health and Human Services:
Office Of The Secretary:
Assistant Secretary for Legislation:
Washington, DC 20201:
March 17, 2011:
James Cosgrove:
Director, Health Care:
U.S. Government Accountability Office:
441 G Street N.W.
Washington, DC 20548:
Dear Mr. Cosgrove:
Attached are comments on the U.S. Government Accountability Office's
(GAO) draft report entitled, "End-Stage Renal Disease: CMS Should
Assess Adequacy of Payment When Certain Oral Drugs Are Included and
Ensure Availability of Quality Monitoring Data" (GAO 11-369).
The Department appreciates the opportunity to review this report prior
to publication.
Sincerely,
Signed by:
Jim R. Esquea:
Assistant Secretary for Legislation:
Attachment:
[End of letter]
General Comments Of The Department Of Health And Human Services (HHS)
On The Government Accountability Office's (GAO) Draft Report Entitled,
"End Stage Renal Disease: CMS Should Assess Adequacy Of Payment When
Certain Oral Drugs Are Included And Ensure Availability Of Quality
Monitoring Data" (GAO-11-365):
The Department appreciates the opportunity to review and comment on
this draft report.
GAO found that while there were positive aspects of including oral-
only end stage renal disease (ESRD) drugs in the ESRD bundled payment,
there were concerns that the payment amount included might be
understated. The report also indicated that the Centers for Medicare
and Medicaid Services (CMS) is developing new, consensus-based
measures to monitor bone and mineral disorders and could be collecting
data using alternative mechanisms in 2011 until the new Web-based
system is operational. GAO payment findings were based on interviews
with 4 large dialysis organizations and 16 small dialysis
organizations.
GAO Recommendation:
To help ensure that Medicare beneficiaries have access to high-quality
dialysis care, we recommend that the Administrator of CMS assess the
extent to which the bundled payment for dialysis care will be
sufficient to cover an efficient dialysis organization's costs to
provide such care when the bundled payment expands to cover oral-only
ESRD drugs. The Administrator should conduct this assessment before
implementing this expanded bundled payment.
CMS Response:
CMS concurs with this recommendation. Before payment for these drugs
is included in the bundle, we will carefully analyze the data on
usage, and include a proposed payment change based on the data, in a
notice of proposed rulemaking. The public will be given 60 days to
comment and to express any concerns about the proposal. CMS will then
review those concerns carefully to ensure that beneficiaries continue
to have access to the medications they need. We continue to assess the
usage of oral-only drugs and will continue to do so prior to their
implementation in the bundled payment. We are confident that the
additional amount to be included in the ESRD Prospective Payment
System (PPS) per treatment base rate to account for oral-only ESRD-
related drugs will be adequate to account for the average patient's
oral drug needs. We would note that the ESRD PPS base rate amount is
multiplied by the applicable case-mix and facility adjusters to arrive
at the bundled payment amount for each patient. The ESRD PPS
adjustment factors were developed to reflect the higher costs of some
patients which include higher costs for drugs. Finally, the intent of
the outlier policy is primarily to account for the higher drug costs
for some patients.
One advantage of including oral-only ESRD drugs in the payment bundle
is that doing so creates a level playing field for the selection of
drugs that are in the best clinical interests of the patients, without
regard to financial incentives posed by including some drugs and
excluding others from the ESRD PPS.
GAO Recommendation:
In order to ensure effective monitoring of treatment of mineral and
bone disorder, we recommend that the Administrator of CMS continue
collecting data for quality measures related to this condition from
sources such as the Elab Project until CROWNWeb is fully implemented
and concerns about its data reliability have been adequately addressed.
CMS Response:
CMS concurs with this recommendation. We plan to include treatment of
mineral and bone disorder in the ESRD Quality Incentive Program (QIP).
We are developing measures and will have a vehicle to collect data.
CMS recognizes the importance of collecting data for ESRD quality
measures. CMS has collected and used data as part of a number of
quality initiatives over the last two decades. CMS clinical quality
data is currently collected via claims, administrative forms, the ESRD
Network Quality Improvement Elab Project, PQRI, and the ESRD Networks.
CMS plans to collect patient level quality data from all dialysis
facilities using the CROWNWeb system that is slated for national
release in early 2012. In addition, CMS is working with the National
Renal Administrators Association to put in place a National Health
Information Network (NHIN) Electronic Health Record reporting system
that will collect patient level data. The Elab project will be funded
for the current year and we plan to make it a funding priority and
continue the project until other data sources make this effort
redundant. Each of these data collection vehicles (CROWNWEB, NHIN, and
Elab) includes the collection of bone and mineral metabolism clinical
indicators. The Elab project has collected serum phosphorus and
calcium data since 1998.
The implementation date for the national release of CROWNWeb has been
delayed beyond June 2011 due to ongoing efforts to address security
and interoperability issues. CROWNWeb Phase III (version 4.0) is
scheduled for pilot release late November 2011; its national release
is scheduled for early 2012. We anticipate that all CROWNWeb data
validity and reliability issues will be addressed over this next year.
Monitoring clinical care in order to assure quality of care and access
to care are key components to meeting the needs and expectations of
beneficiaries. Consequently, CMS plans to continue the monitoring of
mineral and bone disorder through data from Elab project until
CROWNWeb is fully implemented and any concerns about its data
reliability have been adequately addressed.
We appreciate the effort that went into this draft report and look
forward to working with GAO on this and other issues in the future.
[End of section]
Appendix II: GAO Contact and Staff Acknowledgments:
GAO Contact:
James C. Cosgrove, (202) 512-7114 or cosgrovej@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Jessica Farb, Assistant
Director; William Black; Manuel Buentello; Krister Friday; David
Grossman; Aubrey Naffis; and Jennifer Whitworth made key contributions
to this report.
[End of section]
Footnotes:
[1] Medicare coverage generally begins in the fourth month after
patients start dialysis. For individuals who have employer group
coverage, Medicare is the secondary payer for the first 30 months of
Medicare entitlement, after which Medicare becomes the primary payer.
42 U.S.C. § 1395y(b)(1)(C).
[2] Most individuals diagnosed with ESRD are eligible to receive
Medicare benefits under Medicare Part A, Part B, and Part D. 42 U.S.C.
§§ 426-1, 1395w-101(a)(3)(A). Medicare Part A covers inpatient
hospital, skilled nursing facility, and hospice care, as well as some
home health care, and generally does not require a monthly premium. In
addition, individuals diagnosed with ESRD who choose to enroll in
Medicare Part B and/or Part D are subject to monthly premiums.
Medicare Part B covers outpatient dialysis treatment, injectable ESRD
drugs, certain oral ESRD drugs, physician services, hospital
outpatient services, and certain other services, such as physical
therapy. Medicare Part D covers outpatient prescription drugs.
[3] The expenditures we report include beneficiary cost-sharing
amounts. The $9.2 billion that Medicare spent on dialysis treatment
and related items and services in 2007 includes about $8.8 billion in
Medicare Part B spending in addition to about $0.4 billion that
Medicare spent under Part D for certain oral ESRD drugs. CMS was
unable to provide us with data that were more recent than 2007.
[4] For purposes of this report, we define a dialysis organization as
an organization that owns at least one facility that provides dialysis
services. The dialysis industry is very concentrated, with many
facilities owned and operated by a few organizations. For example,
about 61 percent of the approximately 5,600 dialysis facilities are
owned by three large organizations.
[5] Throughout this report, we use the term bundled payment for
dialysis care to refer to the base bundled payment rate to which CMS
has not made any adjustments to account for factors such as
beneficiary characteristics that are associated with the cost of
dialysis care.
[6] Prior to January 2011, Medicare's bundled payment for dialysis
care covered dialysis treatment and certain associated routine
services. Injectable ESRD drugs were paid for separately under Part B,
and oral ESRD drugs were generally covered under Part D. Dialysis
organizations have the option of transitioning to the current payment
system over 4 years by being paid through a combination of the
previous and current payment systems.
[7] See GAO, End-Stage Renal Disease: Bundling Medicare's Payment for
Drugs with Payment for All ESRD Services Would Promote Efficiency and
Clinical Flexibility, [hyperlink,
http://www.gao.gov/products/GAO-07-77] (Washington, D.C.: Nov. 13,
2006).
[8] See GAO, End-Stage Renal Disease: CMS Should Monitor Access to and
Quality of Dialysis Care Promptly after Implementation of New Bundled
Payment System, [hyperlink, http://www.gao.gov/products/GAO-10-295]
(Washington, D.C.: Mar. 31, 2010).
[9] CMS, in the preamble to the proposed rule for the current ESRD
prospective payment system, included oral-only ESRD drugs in the
bundled payment for dialysis care. Medicare Program; End-Stage Renal
Disease Prospective Payment System, 74 Fed. Reg. 49,922, 49,941
(proposed Sept. 29, 2009). In the preamble to the final rule for the
ESRD prospective payment system, CMS noted its decision to delay the
inclusion of these drugs until 2014. CMS's decision was due in part to
allow dialysis organizations additional time to develop the necessary
arrangements or infrastructure to provide oral-only ESRD drugs and
negotiate prices with drug manufacturers and pharmacies. In addition,
CMS needed additional time to thoroughly educate beneficiaries,
dialysis organizations, and pharmacies on aspects of the bundled
payment system involving the provision of oral-only ESRD drugs.
Medicare Program; End-Stage Renal Disease Prospective Payment System,
75 Fed. Reg. 49,030, 49,044 (Aug. 12, 2010).
[10] For purposes of this report, we use the term bundled payment
system for dialysis care to refer to the Medicare Part B ESRD
Prospective Payment System.
[11] Pub. L. No. 111-148, § 10336, 124 Stat. 119, 974.
[12] We selected 8 of these 10 states because they contained the most
beneficiaries on dialysis. We selected the other 2 states--North
Dakota and Utah--because large dialysis organizations in these states
constituted the smallest portion of the dialysis market.
[13] Dialysis Facility Compare is a database on Medicare's Web site
that allows users to compare dialysis facilities nationwide based on
factors such as the types of services and quality of care provided.
[14] Dialysis facilities can be freestanding or hospital-based and for-
profit or not-for-profit. In 2009, about 89 percent were freestanding
and about 81 percent were for-profit. Medicare Payment Advisory
Commission, Report to the Congress: Medicare Payment Policy
(Washington, D.C.: March 2010).
[15] We defined hospital-based organizations as those where the
organization was owned by a hospital. We defined urban areas as those
areas that are classified either as Metropolitan Statistical Areas or
Micropolitan Statistical Areas. Metropolitan Statistical Areas have at
least one urbanized area with a population of 50,000 or more, plus
adjacent territory that has a high degree of social and economic
integration with the core as measured by commuting ties. Micropolitan
Statistical Areas have at least one urban cluster with a population of
at least 10,000 but less than 50,000, plus adjacent territory that has
a high degree of social and economic integration with the core as
measured by commuting ties.
[16] Pub. L. No. 110-275, § 153, 122 Stat. 2494, 2553 (codified at 42
U.S.C. § 1395rr).
[17] ESRD is the last of five stages of chronic kidney disease.
Chronic kidney disease is typically observed as a gradual decline in
kidney function.
[18] In 2008, approximately 93 percent of all dialysis patients
underwent hemodialysis therapy. United States Renal Data System
(USRDS), USRDS 2010 Annual Data Report: Atlas of Chronic Kidney
Disease and End-Stage Renal Disease in the United States (Bethesda,
Md.: National Institutes of Health, National Institute of Diabetes and
Digestive and Kidney Diseases, 2010).
[19] Patients can also receive hemodialysis in their home, but only
about 1 percent of all dialysis patients did so in 2008. Peritoneal
dialysis is the other treatment method and generally occurs in the
home. Peritoneal dialysis utilizes the peritoneal membrane, which
surrounds the patient's abdomen, as a natural blood filter. Patients
remove wastes and excess fluids from their abdomen manually throughout
the day, or a machine automates the process while patients sleep at
night. About 7 percent of all dialysis patients in 2008 received
peritoneal dialysis. USRDS, USRDS 2010 Annual Data Report: Atlas of
Chronic Kidney Disease and End-Stage Renal Disease in the United
States.
[20] PTH is produced by the parathyroid glands, which are located in
the neck. PTH controls calcium, phosphorus, and vitamin D levels
within the blood and bone. High levels of PTH in the blood can lead to
a condition known as secondary hyperparathyroidism.
[21] Throughout this report, we use the term vitamin D to refer to the
active form of this vitamin, which is generally not available without
a prescription. The nonactive form of vitamin D is available over the
counter in the form of a dietary supplement.
[22] Dialysis organizations are responsible for providing bundled
services such as ESRD drugs either directly to beneficiaries or
through contracts with other entities.
[23] Mail-order pharmacies may send drugs to beneficiaries at their
homes or dialysis facilities.
[24] MedPAC, Report to the Congress: Medicare Payment Policy
(Washington, D.C.: March 1999). The payment rate under bundled payment
systems may be adjusted based on beneficiary characteristics and other
factors associated with the cost of care, such as geographic
differences in wages.
[25] This bundled payment was referred to as the composite rate.
[26] These drugs were not covered under the bundled payment prior to
2011 because they were either not routine or not available when CMS
first implemented the bundled payment system in 1983. Injectable ESRD
drugs include erythropoiesis stimulating agents, injectable iron, and
injectable vitamin D. Erythropoiesis stimulating agents and injectable
iron are commonly used to treat anemia, a condition in which an
insufficient number of red blood cells are available to carry oxygen
throughout the body.
[27] Of the approximately $9.2 billion in Medicare expenditures on
dialysis care in 2007, dialysis treatment and other services covered
under the bundled payment accounted for about 61.7 percent, injectable
ESRD drugs accounted for about 29.2 percent, oral-only ESRD drugs
accounted for about 4.8 percent, oral ESRD drugs with injectable
equivalents accounted for about 0.1 percent, and other items and
services accounted for the remaining 4.2 percent.
[28] The base bundled rate is $229.63 in 2011 and is adjusted based on
factors such as beneficiaries' characteristics such as age and
comorbid conditions that are associated with the cost of dialysis
care. Medicare pays amounts in addition to the bundled payment for
beneficiaries whose dialysis care is unusually costly. Dialysis
organizations may choose to transition to the new payment system over
a 4-year phase-in period during which these organizations would be
paid under a combination of the previous and current payment systems.
[29] The oral ESRD drugs with injectable equivalents that are
currently covered under the bundled payment are oral vitamin D and
levocarnitine.
[30] The oral-only ESRD drugs that Medicare plans to cover under the
bundled payment beginning in 2014 are calcimimetics and phosphate
binders. 75 Fed. Reg. at 49,042.
[31] Pub. L. No. 105-33, § 4558(b) 111 Stat. 215, 463-64.
[32] State survey agencies also participate in monitoring the quality
of dialysis care when they periodically evaluate dialysis
organizations' adherence to Medicare's Conditions for Coverage for
ESRD Facilities. The conditions for coverage are the minimum health
and safety rules that dialysis facilities participating in Medicare
must meet. 42 C.F.R. Part 494 (2010). In particular, the conditions
for coverage direct dialysis facilities to develop, implement, and
maintain an ongoing internal quality oversight program that focuses on
indicators related to improved health outcomes. 42 C.F.R. § 494.110
(2010). In addition, as required, CMS plans to promote the quality of
dialysis care by linking payments for dialysis care to performance
beginning in 2012. Medicare Program; End-Stage Renal Disease Quality
Incentive Program, 76 Fed. Reg. 628 (Jan. 5, 2011). This initiative,
the Quality Incentive Program, will reduce payments to dialysis
facilities by up to 2 percent if the care furnished by a facility does
not meet certain quality standards established by CMS.
[33] Electronic data for some of the data elements were accepted from
certain large dialysis organizations. These electronically submitted
data were printed onto paper forms and these paper forms were sent to
facilities to supply the data not already provided on the form.
[34] The batch submission process is currently in a pilot phase.
Although the majority of data for large dialysis organizations that
participate in this process is automatically transmitted to CROWNWeb,
representatives from these organizations must manually enter certain
data for their patients, such as demographic data.
[35] See, for example, GAO, End-Stage Renal Disease: Bundling
Medicare's Payment for Drugs with Payment for All ESRD Services Would
Promote Efficiency and Clinical Flexibility, [hyperlink,
http://www.gao.gov/products/GAO-07-77] (Nov. 13, 2006); MedPAC, Report
to the Congress: Medicare Payment Policy (Washington, D.C.: March
2010); and U.S. Department of Health and Human Services, Report to
Congress: A Design for a Bundled End Stage Renal Disease Prospective
Payment System (2008).
[36] Under the bundled payment system, CMS expects ESRD facilities
will evaluate the potential use of less expensive yet equally
effective ESRD items and services, where those alternatives are
available and not contraindicated by the patient's clinical status. 75
Fed. Reg. at 49,041.
[37] See, for example, Official Journal of the International Society
of Nephrology, Kidney Disease: Improving Global Outcomes (KDIGO)
Clinical Practice Guideline for the Diagnosis, Evaluation, Prevention,
and Treatment of Chronic Kidney Disease-Mineral and Bone Disorder (CKD-
MBD), vol. 76, supplement 113 (August 2009); Piergiorgio Messa, et
al., "The OPTIMA Study: Assessing a New Cinacalcet (Sensipar/Mimpara)
Treatment Algorithm for Secondary Hyperparathyroidism," The American
Society of Nephrology (2008); and Sharon M. Moe, et al., "Achieving
NKF-K/DOQI Bone Metabolism and Disease Treatment Goals with Cinacalcet
HCI," Kidney International, vol. 67 (2005).
[38] See Wendy St. Peter, et al., "Sources of Drug Coverage among
Medicare Beneficiaries with End-Stage Renal Disease" (poster presented
at the American Society of Nephrology Renal Week meeting, Denver,
Colo., November 2010).
[39] See, for example, Laurie E. Felland and James D. Reschovsky,
"More Nonelderly Americans Face Problems Affording Prescription
Drugs," Center for Studying Health System Change, Results from the
Community Tracking Study, no. 22 (January 2009); Yuriy Pylypchuk,
"Adverse Selection and the Effect of Health Insurance on Utilization
of Prescribed Medicine Among Patients with Chronic Conditions,"
Advances in Health Economics and Health Services Research, vol. 22
(2010); and Dana Gelb Safran, et al., "Prescription Drug Coverage and
Seniors: Findings from a 2003 National Survey," Health Affairs (2005).
[40] This total annual spending amount is calculated based on spending
by the Part D PDP on behalf of the beneficiary as well as the
beneficiary's total out-of-pocket costs.
[41] In 2007, approximately 60 percent of Medicare beneficiaries with
Part D coverage who were on dialysis reached the Part D coverage gap.
See Wendy L. St. Peter, "Medication Trends in Dialysis Patients--Focus
on Medicare Part D" (presentation at the American Society of
Nephrology Renal Week meeting, Denver, Colo., November 2010). Prior to
2011, beneficiaries were responsible for 100 percent of the cost of
drugs while they were subject to the coverage gap. Beginning in 2011,
provisions in the health care reform law will gradually reduce the
amount that Part D beneficiaries are required to pay for drugs while
they are subject to the coverage gap by phasing in different levels of
subsidies for these drugs. For example, in 2014, beneficiaries will be
responsible for approximately 48 percent of the cost of brand-name
drugs and 72 percent of the cost of generic drugs while they are
subject to the coverage gap. By 2020, beneficiaries will be
responsible for only 25 percent of the cost of both brand-name and
generic drugs while they are subject to the coverage gap.
[42] These three large dialysis organizations served about 63 percent
of dialysis patients nationwide in 2008. USRDS, USRDS 2010 Annual Data
Report: Atlas of Chronic Kidney Disease and End-Stage Renal Disease in
the United States.
[43] Nine of the 16 small dialysis organizations in our review
reported that less than 2 percent of their patients needed oral ESRD
drugs with injectable equivalents. An additional 3 small organizations
noted that from 5 to 15 percent of their patients needed these drugs.
The other 4 small organizations in our review did not provide exact
data on the percentage of their patients who needed these drugs.
[44] Nearly 80 percent of beneficiaries with ESRD enrolled in Medicare
Part D PDPs in 2007 needed phosphate binders--a common oral-only ESRD
drug. USRDS, USRDS 2010 Annual Data Report: Atlas of Chronic Kidney
Disease and End-Stage Renal Disease in the United States.
[45] Five of the other six hospital-based small dialysis organizations
in our review reported that their hospitals' pharmacies were not
licensed to provide oral drugs to outpatients.
[46] See, for example, David J.A. Goldsmith and Adrian Covic, "Calcium
and the Saga of the Binders: Accumulating Controversy, or Building
Consensus?" International Urology and Nephrology, vol. 40 (December
2008); Goce B. Spasovski, "Bone Health and Vascular Calcification
Relationships in Chronic Kidney Disease," International Urology and
Nephrology, vol. 39 (December 2007); and Marcello Tonelli, Neesh
Pannu, and Braden Manns, "Oral Phosphate Binders in Patients with
Kidney Failure," The New England Journal of Medicine, vol. 362 (April
2010).
[47] Four of the 10 states in our review also required that a
pharmacist work at only one pharmacy.
[48] A small percentage of beneficiaries may already experience
fragmentation of care with regard to oral prescription drugs because
oral ESRD drugs with injectable equivalents are currently included in
the bundled payment. According to CMS, from 2007 through 2009 about 9
to 10 percent of ESRD beneficiaries who had Part D coverage received
oral ESRD drugs with injectable equivalents. 75 Fed. Reg. 49,030 (Aug.
12, 2010).
[49] 42 U.S.C. § 1395rr(b)(14). To make this determination, this
provision requires that CMS use per-patient utilization data for 2007,
2008, or 2009, whichever year has the lowest per patient utilization.
To calculate the bundled payment rate under the current bundled
payment system for dialysis care, CMS (1) calculated the average
payment per dialysis treatment based on total payments under Medicare
Part B and Part D for dialysis and related items and services in the
bundle and (2) adjusted this amount to account for changes between
2007 and 2011 in the prices of these items and services. 75 Fed. Reg.
at 49,074.
[50] According to CMS officials, MIPPA did not specify the data
sources that CMS could use to account for changes in drug prices
between the data collection year and the year in which the drugs would
be included in the bundle.
[51] The Retiree Drug Subsidy program subsidizes drug coverage that is
sponsored by groups such as employers or unions. Under this program,
Medicare pays 28 percent of the allowable cost of drug coverage for
beneficiaries in plans that are eligible to receive the subsidy. In
2007, Medicare made approximately $3.8 billion in subsidy payments on
behalf of about 16 percent of all Medicare beneficiaries.
[52] Medicare does not pay directly for prescription drugs for
beneficiaries in Part D PDPs. Instead, Medicare pays these PDPs a
single rate per beneficiary per month to subsidize the drug coverage
of each beneficiary enrolled in Part D. Part D PDPs then pay
pharmacies per prescription to provide a given drug to a beneficiary,
and this amount includes the cost of the drug and of dispensing the
medication.
[53] CMS found that 67 to 69 percent of beneficiaries on dialysis in
2007, 2008, or the first three quarters of 2009 had Part D
prescription drug coverage. 75 Fed. Reg. at 49,071.
[54] CMS officials noted that they did not have reason to believe that
the utilization of oral-only ESRD drugs for beneficiaries with Part D
coverage differed from beneficiaries without such coverage. However,
they did not provide any evidence that utilization of oral-only ESRD
drugs was similar for these two groups of beneficiaries.
[55] To calculate this $216 million estimate, we assumed that Part D
payments per dialysis treatment for oral-only ESRD drugs for
beneficiaries without Part D coverage were the same (i.e., $18) as
payments per treatment for beneficiaries with this coverage.
[56] Jack Hoadley et al., Medicare Part D 2009 Data Spotlight: The
Coverage Gap, The Henry J. Kaiser Family Foundation (November 2008).
[57] A PDP can either be a stand-alone plan or be part of a Medicare
Advantage plan, which also provides Medicare services covered under
Part A and Part B. However, beneficiaries with ESRD are not eligible
for most Medicare Advantage plans unless they develop the disease
while enrolled in a Medicare Advantage plan. 42 U.S.C. § 1395w-
21(a)(3)(B).
[58] CMS addressed this shortcoming and the lack of payment data for
beneficiaries without Part D coverage when it used Part D data to
include oral ESRD drugs with injectable equivalents in the 2011
bundled payment. Specifically, CMS first calculated the average Part D
payment per dialysis treatment for these drugs for beneficiaries on
dialysis who had Part D coverage. In doing so, CMS included
beneficiary payments, including those made while in the coverage gap,
as well as payments made by PDPs. CMS then added the average payment
for these drugs to the bundled payment amount for all beneficiaries on
dialysis--including beneficiaries without Part D coverage.
[59] See Vicki Fung et al., "Falling into the Coverage Gap: Part D
Drug Costs and Adherence for Medicare Advantage Prescription Drug Plan
Beneficiaries with Diabetes," Health Services Research, vol. 45, no. 2
(April 2010); Patricia Neuman et al., "Medicare Prescription Drug
Benefit Progress Report: Findings from a 2006 National Survey of
Seniors," Health Affairs, vol. 26, no. 5 (2007); Shawn X. Sun., Kwan
Y. Lee, and Meghana Aruru, "Examining Part D Beneficiaries' Medication
Use in the Doughnut Hole," The American Journal of Pharmacy Benefits,
vol. 1, no. 1 (Spring 2009); and Yuting Zhang et al., "The Impact of
Medicare Part D on Medication Adherence Among Older Adults Enrolled in
Medicare-Advantage Products," Medical Care, vol. 48, no. 5 (May 2010).
[60] Average beneficiary enrollment in Part D PDPs in 2007--one of the
years of data that CMS could use--was about 168,000. In contrast, the
large dialysis organizations in our study served about 12,000 to
130,000 patients, and some of the small organizations we interviewed
noted that they served fewer than 50 patients.
[61] According to CMS officials, the inclusion of oral-only ESRD drugs
may provide the opportunity for dialysis organizations to affiliate to
enhance their purchasing power.
[62] Although Part D data do not account for the administrative costs
associated with providing Part D drugs, CMS officials noted that these
data do include the payments PDPs made to pharmacies for dispensing
these drugs.
[63] For example, see GAO, End-Stage Renal Disease: CMS Should Monitor
Access to and Quality of Dialysis Care Promptly after Implementation
of New Bundled Payment System, [hyperlink,
http://www.gao.gov/products/GAO-10-295] (Washington, D.C.: Mar. 31,
2010); MedPAC, Report to the Congress: Medicare Payment Policy
(Washington, D.C.: March 1999); and Joseph P. Newhouse, Melinda
Beeuwkes Buntin, and John D. Chapman, "Risk Adjustment and Medicare:
Taking a Closer Look," Health Affairs, vol. 16, no. 5 (1997).
[64] K/DOQI was established by the National Kidney Foundation to
develop clinical practice guidelines for dialysis and other aspects of
kidney disease. The National Kidney Foundation is a nonprofit health
organization which advocates for individuals affected by kidney
disease.
[65] See the Official Journal of the International Society of
Nephrology, KDIGO Clinical Practice Guideline for the Diagnosis,
Evaluation, Prevention and Treatment of Chronic Kidney Disease-Mineral
and Bone Disorder (CKD-MBD), vol. 76, supplement 113 (August 2009).
[66] CROWNWeb is designed to collect data for all four of these
measures; however, only the first two measures are currently included
in the CPM Project. CMS officials told us that they plan to use the
data collected in CROWNWeb to refine CMS's quality measures over time.
[67] CMS officials stated that CMS has not focused on developing a
measure for PTH because of the lack of consensus around PTH levels and
measures. Laboratories differ in the assays, or measures, they use to
assess PTH levels, and PTH levels vary depending on the assays used.
[68] NQF is a nonprofit organization that endorses national consensus
standards for measuring and publicly reporting on health care
performance. The measures that CMS submitted to NQF were recommended
by a panel of experts that CMS convened in March 2010. CMS did not
submit a measure related to PTH to NQF; however, CROWNWeb is designed
to collect data on PTH levels when it is fully implemented and CMS
officials stated that they may use these data in the future if an
appropriate quality measure related to PTH is developed.
[69] NQF's process of endorsing quality measures includes: (1) issuing
a call for organizations to submit measures to NQF for consideration;
(2) using a steering committee and, if applicable, a technical
advisory panel to evaluate the measures submitted to NQF; (3) allowing
the public to comment on the measures proposed by the steering
committee for endorsement; (4) allowing members of NQF to vote on the
measures proposed by the steering committee for endorsement; and (5)
gaining the approval of both the NQF Consensus Standards Approval
Committee and the NQF Board of Directors on the final measures
proposed for endorsement.
[70] The Steering Committee noted that the phosphorus measure would
apply to less than 1 percent of the population receiving dialysis and
is a measure of nutrition rather than mineral and bone disorder.
[71] A CMS official noted that CMS may use a serum phosphorus measure
for monitoring the quality of mineral and bone disorder despite the
lack of NQF endorsement at this time.
[72] See CMS, QualityNet System Security Policy, Version 6.0 (November
2009). CMS officials told us that initially CMS planned to allow
dialysis organization personnel to access CROWNWeb using a
personalized username and password. However, because of the new
security requirements, CROWNWeb users will also be required to input a
randomly generated one-time password that is valid for 12 hours and is
sent to them via e-mail, telephone, or text message.
[73] Eight dialysis facilities participated in Phase 1 of CROWNWeb
implementation, which began in February 2009. Approximately 180
facilities are participating in Phase 2--the current phase--which
began in August 2009. CMS plans to expand Phase 2 participation to
approximately 630 dialysis facilities beginning in April 2011. CMS
officials noted that Phase 3 and Phase 4 of CROWNWeb implementation--
which will be combined--are scheduled to begin in November 2011 and
full, national implementation of CROWNWeb is currently scheduled for
February 2012. Once national implementation of CROWNWeb is achieved,
CMS estimates approximately 5,600 dialysis facilities will participate
in CROWNWeb.
[74] Eleven of the 16 small dialysis organizations in our review noted
that the process of entering data manually in CROWNWeb would be
administratively burdensome. CMS is working with NRAA to develop the
capacity for NRAA to act as a third-party Health Information Exchange
that will allow small dialysis organizations to have their data
uploaded directly to CROWNWeb. The Health Information Exchange would
allow small dialysis organizations to submit their data to NRAA, which
would then format and submit the data to CROWNWeb. CMS officials told
us that CMS does not expect to have this capacity available until 2012
or later.
[75] CMS did not specify the error rate associated with manually
entered data.
[76] The Elab Project was established by ESRD Network 11 in 1999 to
determine whether or not electronic laboratory data, which the Network
used for quality improvement purposes, could be collected directly
from the corporate offices of large dialysis organizations or national
laboratory chains to decrease the data submission burden on dialysis
facilities. Beginning in 2002, the project stopped collecting data
directly from national laboratory chains and all facilities not
affiliated with a large dialysis organization were required to submit
their data via an electronic data collection form. The Elab Project
uses quality measures related to treatment of mineral and bone
disorder that identify the percentages of dialysis patients with serum
calcium and serum phosphorus levels maintained within certain ranges.
[77] Each network is charged with monitoring and promoting the quality
of dialysis care in a specific geographic area, which generally covers
one or more states.
[78] In 2009, the Elab Project collected data on about 97 percent of
patients on dialysis in the United States.
[79] Officials from ESRD Network 11 noted that the most recent test of
the reliability of the data collected by the Elab Project revealed
that the data were reliable approximately 95 percent of the time.
[80] In addition to CMS's quality monitoring activities such as the
Elab Project, CMS officials noted that they recently began conducting
surveillance using Medicare claims data to identify changes in health
outcomes and the use of dialysis-related items and services that could
be associated with the recent change in Medicare's payment method for
dialysis care. For example, to examine changes related to treatment of
mineral and bone disorder, CMS is reviewing data on Medicare items and
services provided under Part A, Part B, and Part D to identify changes
in incidences of bone fractures, as well as changes in the use of
vitamin D, phosphate binders, and calcimimetics. This effort is part
of a broader CMS effort to examine changes in health outcomes and the
use of health care items and services associated with changes in
Medicare payment policy. A CMS official leading this effort noted
that, in contrast to CMS's quality monitoring activities, this effort
does not evaluate whether the level of an outcome or the use of an
item or service represents good quality care.
[81] Beginning in 2011, provisions in the health care reform law will
gradually reduce the amount that Part D beneficiaries are required to
pay for drugs while they are subject to the coverage gap by phasing in
different levels of subsidies for these drugs.
[82] 75 Fed. Reg. at 49,041.
[End of section]
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