DaVita, Fresenius Medical Care: State Budget Bill Could Threaten Patient Access

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DaVita, Fresenius Medical Care: State Budget Bill Could Threaten Patient Access to Dialysis Care for More than 3,765 Minnesotans


By DaVita, Fresenius Medical Care
Published: Friday, Jun. 24, 2011 - 12:54 pm
ST. PAUL, Minn., June 24, 2011 -- Legislation Disproportionately Cuts Vital Medicaid Funding for Patients with Kidney Failure

ST. PAUL, Minn., June 24, 2011 /PRNewswire-USNewswire/ -- The Minnesota kidney care community expressed concern today over the Health and Human Services (HHS) omnibus budget bill (Senate File 760), which would significantly impact Minnesota dialysis patients' access to care, as well as vital health care jobs. SF 760 would cut Medicaid reimbursement to providers, including dialysis facilities, by eliminating Medicaid coverage of Medicare Part B coinsurance for Minnesotans eligible for both Medicare and Medicaid (so-called "dual eligible" patients).  Although Governor Mark Dayton vetoed SF 760, typically previously vetoed bills are hastily amended in Special Session.  Kidney dialysis providers are working in coordination with many lawmakers who are equally as concerned about this provision and its effect on patients to ensure that it is excluded from the HHS omnibus budget bill when, at some point, the Legislature is convened for passing an over-all state budget.

Although this provision of SF 760 has been estimated to save the state of Minnesota approximately $45 million over two years, industry analysis indicates that dialysis providers would bear $5.2 million of the total cost savings realized through this change. Specifically, these Medicaid cuts would negatively impact many Minnesota facilities' ability to preserve their necessary staffing levels and cover direct treatment costs, which would inevitably result in facility closures and access to care problems. Thousands of Minnesota patients with kidney failure depend on dialysis care for their survival and should not have to shoulder the burden of such a disproportionate cut in funding.

The Medicare benefit for end-stage-renal-disease (ESRD) – also known as "kidney failure" – is the only entitlement within the program guaranteed regardless of age; thereby, Medicare is most often the primary payor and Medicaid is the secondary payor. Because of this, 33 percent of dialysis provider reimbursement from Minnesota Medicaid comes from Medicaid secondary payments as part of a "dual-eligible" reimbursement structure. The high percentage of dually-eligible dialysis patients combined with the needed frequency of dialysis therapy (often thrice weekly for each patient), means that a reimbursement cut of this magnitude would seriously impact facilities' ability to continue providing care to their patients.

If this unsustainable cut were to go into effect, many dialysis facilities across the state would begin to operating at a significant loss.  If closures occur, some patients could be forced to travel to another town or city three times a week in order to receive treatment, which negatively affects their quality of life and their ability to maintain jobs and take care of their families. Furthermore, travel costs could prove to be very costly for many patients. Access to care issues for patients frequently result in increased hospitalizations and greater reliance on emergent care, which in turn places an even greater burden on the state's health care system. 

Finally, not only is a reduction in Medicaid reimbursement for dialysis harmful for patients and costly to the State, it also has a direct impact on local economies. Cuts to reimbursement will reduce local job opportunities and hinder dialysis providers' ability to expand their businesses and services in order to meet the growing demands of the increasing number of Minnesota dialysis patients.
On behalf of the Minnesota dialysis community, we are extremely appreciative of the support we have received so far from lawmakers in both the House of Representatives and the Senate as we continue efforts to protect this vital funding to ensure patients' access to care. We also urge other lawmakers to reconsider their proposal to cut Medicaid reimbursement for dialysis providers and reevaluate the tremendous impact a cut of this nature could have on the patients who rely on this treatment for survival.

SOURCE DaVita, Fresenius Medical Care



Read more: http://www.sacbee.com/2011/06/24/3725512/davita-fresenius-medical-care.html#ixzz1QGfQQ7OV

[Bill Peckham]

These cuts would effect every dialyzor in Minnesota - people with Employer Group Health Plans or Medicare Primary will also feel the impact. The dialysis treatment you receive is based on the average reimbursement at that unit or within all the units operated by that provider. COMM 1 patients may get preferential treatment but unit wide policies - staffing levels, supply choices - are set based on average reimbursement. Average reimbursement varies from unit to unit and state to state based on payer mix and Medicaid reimbursement (Medicare reimbursement is basically the same). But what needs to be remembered is that it's not just Medicaid reimbursement for the 10% of patients who are Medicaid primary but also Medicaid reimbursement for the about 40% of all dialysis patients who are Medicaid secondary.

Medicare leaves about $50/treatment unpaid, in some states Medicaid pays the full $50 in other states Medicaid pays none or a small fraction. If you do the math that $50 Medicaid copay amounts to about $20 of a statistically typical unit's average reimbursement. That is going to have an effect.

After noting South Carolina's dialysis unit's poor results in the Pro Publica database, as compared to neighboring states NC and GA Renee Dudley at the Post and Courier in Charleston, SC did some original reporting on state Medicaid reimbursement for dialysis - specifically the state policies for reimbursement of the 20% not paid by Medicare for Medicare Primary/Medicaid Secondary beneficiaries:
In Georgia, the state Medicaid agency pays the full 20 percent, according to a spokeswoman for that agency.

North Carolina's Medicaid agency pays the full 20 percent for some patients, depending on their other assets, according to a spokesman for that department.

South Carolina Medicaid pays only 6 percent, according to S.C. Department of Health and Human Services spokesman Jeff Stensland. Sometimes the remaining 14 percent goes unpaid, he said.

There are no doubt multiple reasons SC dialysis units preform worse than units in their neighboring states, but having an average reimbursement that is $14 lower has to play a role. This is what's being offered to Minnesotans.

[Jie]

Bill, you are right. DaVita and Fresenius will not be impacted much. The impacts will be passed to the private insurances which will pass to those patients who have some resources to get private insurances.