How Bundling Could Affect Home HD

How Bundling Could Affect Home HD
Christopher R. Blagg, MD
September 01 2009

Home hemodialysis (HD) was developed in the ear1y 1960s, and by 1965, thrice-weekly nocturnal home HD was becoming routine in some American programs. The advantages were clear: more hours of dialysis, improved patient well-being and opportunity for rehabilitation, and significantly lower costs than conventional in-center HD. In 1972, before the Medicare End-Stage Renal Disease (ESRD) Program was established, about 40% of the 10,000 or so U.S. dialysis patients were on home HD. Thereafter, the use of home HD declined steadily. As a result, only 1,756 patients (0.57% of all dialysis patients) were on home HD in 2002.

Interest in this modality began to revive in the later 1990s following reports from Canada of the benefits of nightly home HD and development of new patient-friendly machines designed specifically for home HD. By 2007, 3,764 U.S. patients were estimated to be on home HD—about the same number as in the early 1970s but still making up only 1.02% of all dialysis patients. Of these, 2,923 patients were dialyzing more frequently than three times a week (Hemodial Int. 2008;12:548-550). Between 2002 and 2006, the increase in the number of home HD patients averaged 8.7% a year, then jumped to 22% between 2006 and 2007, according to the U.S. Renal Data System 2008 Annual Data Report.

Overnight thrice-weekly HD at home or in-center, and particularly more frequent daily or nightly home HD (3.5-7 times a week), are all better than conventional center treatment in terms of patient well-being, complications during and between treatments, hospitalization, opportunity for rehabilitation and employment, lower costs, and improved patient survival (Hemodial Int. 2008;12 Suppl 1:S1-S65; Adv Chronic Kidney Dis. 2009;16:156-220).

Almost every patient who has undergone more frequent home HD would reject a return to conventional thrice-weekly in-center HD. Two recent observational studies have shown that patient survival with either short daily or long nightly HD is significantly better than with conventional thrice-weekly in-center HD and is comparable to survival with a deceased-donor kidney transplant (Nephrol Dial Transplant. 2008;23:3283-3289; Nephrol Dial Transplant. 2009; published online ahead of print). Many nephrologists believe that at-home therapies are underutilized (NDT Plus. 2008;1:403-408) and are appropriate for many more patients than are currently using them (Am J Kidney Dis. 2001;37:22-29).

Payment policy

For the first 10 years of the Medicare ESRD Program, payment for in-center HD was very generous compared with that for home HD and was one reason for the latter modality's rapid decline. The composite rate was introduced by Congress in 1983 to equalize reimbursement at home and in HD centers and to encourage more home dialysis. This proved ineffective because few of the many new programs had any experience with this modality, reimbursement for in-center HD was still generous, and for-profit programs were uninterested in home HD (Hemodial Int. 2000;4:55-58).

The Centers for Medicare and Medicaid Services (CMS), Congress, and the Medical Payment Advisory Commission (MedPAC) all have expressed support for greater use of home dialysis. The recent “Conditions for Coverage” from CMS encourage home dialysis by requiring all patients to be fully informed of all modalities of treatment, including home dialysis and transplantation. If a facility does not provide home dialysis, patients must be informed of the nearest facility that does. Similarly, Congress has expressed support for policies to encourage patient access to home dialysis, including more frequent home HD and peritoneal dialysis (PD). In a 2007 report to Congress, MedPAC noted that between 1990 and 2004, less than 1% of new patients chose home HD, that home HD patients “usually dialyze five to seven times per week either during the day or while they sleep,” and the commission plans to continue monitoring the use of home dialysis.

Bundling

The Medicare Improvements for Patients and Providers Act (MIPPA) of 2008 requires changes in payment for dialysis. Beginning in 2011, CMS implements a bundled payment for routine dialysis services. This would incorporate the items and services in the current composite payment and the costs of certain drugs and laboratory tests that previously have been billed separately. The potential impact of this bundled approach on home HD is a serious cause for concern among home HD patients and their physicians.

In 2006, Congress required the General Accounting Office (GAO) to report on the costs of home HD, home HD training, and PD and asked for a review of the potential implications of an expanded bundle on home HD. In its report this past May, the GAO expressed concern about possible adverse effects of bundling on home HD, also noting that current reimbursement for home HD training ($20 above the composite rate) is woefully inadequate and that reliable data on the actual cost of training is not available from CMS. In fact, payment for patient training has not been updated since 1983 and does not reflect the cost of current practice.

Responding to the GAO report, CMS commented that the expanded bundle may incentivize providers to use home HD because, while supply costs may be higher, these would be offset by lower costs for drugs, staff, and overhead expenses. However, CMS has not performed any analysis to check whether these assumptions are correct. CMS intends to assess the effect of the expanded bundle payment on home dialysis but has not set up formal plans to monitor this. CMS is also considering factoring the costs of home dialysis training into the expanded bundle rather than having a separate additional payment for training. Recently, some home HD providers have been given medical necessity exceptions to receive Medicare payments for more than three treatments a week, but CMS officials told the GAO that they are unlikely to allow these additional payments under the expanded bundle system.

CMS anticipates bundling will encourage home dialysis, but the extremely low number of home HD patients and declining numbers of PD patients suggest that economic disincentives to home therapy will only be exacerbated by the cost pressures of bundling. The supply and equipment costs for more frequent HD are quite different from in-center costs. Training payments need to reflect the actual costs of training, and staffing costs generally will have to rise to meet the new requirements in the “Conditions for Coverage.” Unfortunately, at this time, Medicare does not completely capture the cost data needed to see whether by 2011 the bundle will provide adequate payment for home dialysis, including the costs of patient training and of more frequent HD.

At this writing, the “Notice of Proposed Rulemaking” dealing with bundling has not been published and whether the bundle will have a per-treatment, weekly, or monthly basis is still unknown. Also unknown are exactly what drugs, laboratory tests, or other services will be included and whether payment for more frequent treatments based on medical reasons will still be allowed. Payment for home HD and PD training has been inadequate since the start of the Medicare Program, so payment for this must be excluded from the bundle and based on actual costs.

Research funding

The federal government's economic stimulus package includes funding for comparative-effectiveness research to find the best treatments at the lowest prices. The Institute of Medicine was directed to recommend priority topics for this research, and its report Initial National Priorities for Comparative Effectiveness Research includes several topics related to nephrology, one of which may affect home dialysis: “Compare the effectiveness (including survival, hospitalization, quality of life, and costs) of renal replacement therapies (e.g., daily home hemodialysis, intermittent home hemodialysis, conventional in-center dialysis, continuous ambulatory peritoneal dialysis, renal transplantation) for patients of different ages, races, and ethnicities.” Laudable, but how will this be done?

Randomized controlled trails (RCTs) are regarded as the pinnacle of such research, but there are problems with using them to compare ESRD treatment modalities. A recent editorial helps explain why such trials will be difficult (Nat Rev Nephrol. 2009;5:301). First, there is the matter of cost: about $15,000 per patient. In 2001, the NIH Task Force on Daily Dialysis estimated that a study of more frequent nocturnal HD would require randomization of more than 1,500 patients to answer all the outcome questions (Hemodial Int. 2000;4:55-58). The second consideration relates to ethics. Can nephrologists legitimately allow their patients to be randomized when observational clinical studies already have shown the effectiveness of home HD and more frequent HD? As with the current small NIH Frequent Hemodialysis Network Daily Trial and Nocturnal Trial, some are concerned that such an RCT could be used to delay a payment decision for several more years, denying many more patients the best dialysis modalities available today

CMS still has questions about certain issues. For example, what is the evidence that home HD is better, the same, or worse than conventional in-center HD? Why is home HD not used more by nephrologists and programs? For which patient populations might home HD and more frequent HD be best suited? Are patients really being given comprehensive and unbiased education about the various dialysis modalities? What these questions from CMS and comments from members of Congress show is that it is not just the patients who need detailed education about the benefits of home HD and more frequent HD.

The answers to most of these questions are well-known and in some cases have been known for years. Governments in most Australian states, British Columbia, and the Netherlands actively (and financially) support home HD and more frequent HD. In 2007, more than 93% of all HD patients in Australia and New Zealand dialyzed significantly more hours per week than U.S. patients, and slightly more than 8% of Australian and New Zealand HD patients dialyzed more frequently than three times a week compared with 0.9% of HD patients in the United States.

Conclusions

A single, bundled payment for all dialysis modalities paid on a weekly or monthly basis (which assumes a conventional thrice-weekly treatment schedule and ignores training costs) will exacerbate current disincentives toward all forms of home dialysis and discourage rather than encourage its use. CMS should maintain the treatment as the unit of payment; retain the existing provision for Medicare payment for more frequent prescribed, medically justified treatments; and keep home dialysis training payment separate from the bundle, with updates based on current costs of training. CMS should institute cost reporting to allow better tracking of home dialysis and self-dialysis training and their costs.

Patients who have benefited from home HD and the physicians who care for them have a responsibility to make a concerted effort to educate CMS and Congress about the advantages of home HD.

Dr. Blagg is Professor Emeritus of Medicine at the University of Washington in Seattle and Executive Director Emeritus at Northwest Kidney Centers in Seattle.

Acknowledgements

The author wishes to acknowledge significant contributions from helpful discussions with the Home Hemodialysis Workgroup and information from patients Bill Peckham and Rich Berkowitz.

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