Bundling Redux

Here’s an update on the recent financial upheaval in the world of dialysis reimbursement. The expanded bundling payment system was officially implemented in January 2011, and most dialysis units have now switched over to this new billing practice.

Bundling affects reimbursement to the dialysis providers (more than two-thirds of whom are affiliated with either DaVita or Fresenius in the US). Prior to January 2011, providers used to get paid about $130 per treatment for:

• Labor: nurses, techs, dieticians and social workers

• Supplies: tubing, dialyzer

• A limited number of simple laboratory tests (example: CBC and BMP)

Now Medicare has bundled those components and added:

• Medications: ESAs, Injectable (or oral) vitamin D, Injectable (or oral) iron, antibiotics if used for infection related to access/dialysis procedure, thrombolytics including TPA

• Laboratory testing: CBC, iron studies, hepatitis B, BMP, clearance calculations, PTH, ca/phos, blood cultures if drawn for infection related to access/dialysis procedure

into one lump sump payment. The total payment will go up to about $230 per treatment, with some adjustment upwards if the patient is at a low volume facility, a new start or has co-morbidities like myleodysplastic syndrome or MGUS (things that tend to make patients ESA resistant). By creating this expanded lump sum, Medicare plans to save 2% of its projected costs for 2011, mainly because it will no longer be responsible for the previously “separately billable” ESAs and vitamin D.

Rolling out in 2012 will be quality measures, which are tentatively set at:

• HgB under 10 mg/dL or over 12 mg/dL

• URR over 65% But are subject to change and debate.

If a facility doesn’t meet these quality measures, then they will get a unit wide reduction of 2% in their reimbursement. At a later date (2014), Medicare also plans to fold in oral drugs (like cinacalcet and sevelamer) into their expanded bundle.

RFN has touched on the implications of bundling before, especially the mixed feelings of physicians who are continually pressured to cut costs as they attempt to care for a vulnerable population. On the plus side, bundling eliminates the incentive to “overtreat” patients with ESAs or IV vitamin D just so the dialysis facility can bill Medicare—usually at an amount significantly above their purchase price—and generate profit.

On the other hand, patients who have a tendency to be ESA resistant, or don’t have a good working access and therefore struggle to achieve their prescribed URR, will be much less attractive to the dialysis unit. Will the trade off from reducing ESA use be more blood transfusions? Will the dialysis unit send a patient with a fever and a tunneled catheter to the ER instead of drawing blood cultures and giving antibiotics that could cut into their “bundle”? A good discussion of these issues can be found here.

The bottom line is this system has been adopted. We’ll have to wait and see if it truly affects outcomes. Luckily the DOPPS people are helping us track a number of outcomes on their well organized website.

Suchi Anand, MD