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The Changes to End-Stage Renal Disease Coverage in Medicare Advantage

  • By Cindy Dyer
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End-stage renal disease, also called chronic kidney disease, is a difficult, costly condition that requires lengthy dialysis to maintain. Depending on the severity, many patients may face transplants. There have been strict guidelines surrounding ESRD coverage through Medicare and even more limited opportunities to enroll in Medicare Advantage plans.

However, one of the significant changes for MA in 2021 is individuals with preexisting ESRD can now enroll in these plans. Since ESRD is an important condition for value-based care providers, health plans, payers, and other industry members, I want to take a deep-dive into MA coverage changes for patients.

The New Opportunities from The Cures Act

With the Office of the Inspector General’s (OIG) 21st Century Cures Act removing the previous exclusion of new enrollees with existing ESRD, this means those enrollees now make up a portion of the increased membership for 2021. However, it will not change the cost of care or affect bids substantially if organizations have already implemented processes for successfully managing ESRD in their plans.

America’s Health Insurance Plans (AHIP) shared that the Centers for Medicare & Medicaid Services (CMS) estimates approximately 83,000 additional ESRD patients will enroll in MA plans by 2026 because of these changes. As we collect more and more data around ESRD, we should note there are no new changes to the model, but one thing that could impact overall costs is the impact of a third maximum out-of-pocket limit on this population.

According to AHIP, due to the enrollment changes for ESRD patients this year, CMS proposed to slightly increase the maximum annual limits for total out-of-pocket spending and cost-sharing for select inpatient services.

CMS requires Medicare covers kidney transplant acquisition costs under the Cures Act. But CMS proposed to exclude these costs in the 2021 MA benchmark rates. CMS reported that data based on 2015 to 2017 indicates the average total spending for ESRD treatment was approximately $86,000 per member per year.

ESRD Fee-For-Service Costs Compared to MA Benchmarks

In 2019, healthcare consulting firm Avalere Health did a study revealing MA plan payments may be less than the actual cost of care for managing ESRD. In their research, Avalere looked at American cities with the highest MA penetration and compared their benchmarks to the actual fee-for-service (FFS) costs.

The cities where payments were less than the FFS costs were among the most populous in the nation, including New York, Los Angeles, and Chicago. Overall, Avalere found the FFS costs exceeded benchmarks in 45.6% of the highest MA penetration areas included in the study.

The most significant takeaway is organizations must implement sound programs and workflows to manage ESRD patients’ care if they have not already. Providers who work with these patients must also ensure all coding related to ESRD is accurate and the highest specificity possible.

I am pleased to announce soon Lightbeam will be releasing our exclusive e-book, “Mastering the 2021 Medicare Advantage Changes.” The new downloadable piece will contain in-depth analyses of the changes to MA in 2021, like those with ESRD, and strategies to maximize the patient experience and affect 2023 Star Ratings. Stay tuned!

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Cindy Dyer is a Project Manager at Lightbeam.

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