The Centers for Medicare & Medicaid Services announced last month it was approving new applicants for its Comprehensive ESRD Care Model demonstration for end-stage renal disease patients. The program began Oct.1, 2015 with 13 approved End-Stage Renal Disease Seamless Care Organizations. The addition of the new applicants nearly triples that number, totaling 37 ESCOs in the demonstration.

Twenty-four of those ESCOs are being managed by Fresenius Medical Care North America. We asked William McKinney, president of the company’s Integrated Care Group, about ESCOs and why FMCNA expanded its presence in the demonstration.

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McKinney

NN&I: What makes up the Integrated Care Group at Fresenius Medical Care?

William McKinney: The Integrated Care Group manages the various assets supporting our dialysis clinics and drives the strategy for our value-based initiatives. Today that includes our health plans, Fresenius Health Partners, our specialty pharmacy, FreseniusRx, and our 40 MedSpring Urgent Care centers.

NN&I: Can you tell us how you define integrated care and how that works within the FMC approach?

McKinney:  If I simplify the idea of integrated care down to its most basic form, it’s really all about becoming the focal point for all medical care being provided to our patients and helping ensure they can access the care they need, when they need it—kidney related or otherwise. But it’s also about creating the incentive and funding to allow that coordination to happen.

It’s always interesting to ask a group of nephrologists what we could do to lower the cost and improve the outcomes for the patients we serve. They all have ideas – many proven – for enhanced patient care.  Many times, the biggest constraint to this improved care is funding the needed investments in time, systems, and staff.

The great thing about the integrated care programs is that when we can improve outcomes and lower the cost to the system, we can share in that savings which gives us the ability to make continued investment in our patients.

Finally, integrated care also means assembling the best provider capabilities to serve patients, whether provided by Fresenius Medical Care or our preferred partners. Vascular services. Pharmacy. Home health. Over time we see integrated care becoming more and more about how we find the best partners to support the clinical needs of our patients.

NN&I: Is it practical to say that all ESRD patients can be in an integrated care system? Do you see any exceptions to that?

McKinney:  ESRD patients are a high-cost, high-need population and among the frailest in the Medicare program. Although ESRD patients account for only 1% of the Medicare population, they represent more than 20% of the spending in the traditional 65+ beneficiary segment and nearly 45% of the spending among beneficiaries younger than 65.

We believe that programs which provide better care coordination to these patients can have an extremely positive impact, both on their quality of life, and the cost to the health care system.

Obviously different payor segments may lead to slightly different solutions, but I believe there should and will be a time when all of our patients are being managed consistent with the idea of integrated care.

NN&I: Medicare has bought into the value-based approach to care, and the ACO demos they have launched in multiple specialties are a good indicator. What about the commercial insurance industry?

McKinney: As a company and along with our affiliated nephrologists, our strategy is to be responsible for the total cost, quality, and outcome for our patients. Our first value-based program was launched over a decade ago in 2006, and we ran a number of programs between then and 2013. It was really in 2014, however, that the overall healthcare environment became truly primed for the shift to value-based care that we’re seeing now.

The ESCOs are a significant program for us, but we also have our own Medicare Advantage special needs plan for patients with ESRD. In addition, we’re entering an increasing number of value-based arrangements, such as global capitation and shared savings programs, with payors of all other sorts. These programs cross markets and facilities not covered by the ESCOs today.

What we’re finding is that we have a complex and expensive population and that just about every risk bearing entity out there – traditional insurers, ACOs, state governments – needs help managing the complex and expensive renal patient population. It’s such a small, specialized group that many of the traditional care management programs just aren’t set up to address the needs of these patients.

As a result, over the coming years – similar to what we’ve seen in other provider segments and markets – we’ll increasingly talk to payers about total medical cost and capitation. Negotiating per-treatment rates will be the exception, not the norm.

NN&I: CKD care is not part of the CEC/ESCO demonstration, but does Fresenius have a system or an approach to identifying and monitoring patients with advanced CKD?

McKinney: We’ve had a number of approaches to CKD over time, but there is certainly more that we’d like to do in this space. CKD is important not just from an ESRD prevalence standpoint, but it’s also impossible to get the best outcomes for our patients if 50% of them are crashing into dialysis. Unfortunately, the current kidney disease programs, including our own Medicare Advantage ESRD chronic special needs plans (C-SNPs) and the ESCOs, don’t give us a mechanism to go upstream to CKD. There is a greater opportunity when we’re working with health plans through global capitation arrangements since they tend to be very focused on the health and cost of their CKD members.

That said, we’re doing a number of things now and revamping some existing programs to improve care coordination for patients with CKD stages 3-5. In addition to predictive models, treatment modality education, and other capabilities you’d naturally expect Fresenius Medical Care to have, we have had a program for a number of years called our renal care coordinator program. These have traditionally been nurses embedded in the nephrology practices and helping patients with the transition from late stage CKD to ESRD, everything from education to timely access placement.

In many ways that program was just a longstanding pilot, but with the launch of the ESCOs we have a chance to reinvent that program for the ESCOs. While we can’t do everything the same since we don’t have the protection of ESCO waivers, there is a lot we can do and investments we can make in these CKD patients when we’re in a market where we know we’ll ultimately be at risk for their outcomes in the incident period.

NN&I: Fresenius did a major expansion in the second round of the CEC application process – from the original six to now 24. Was this decision to expand based on what you learned in the first year of the demo?

McKinney: It’s both what we learned – that we can have a real and positive impact on these patients’ outcomes and the cost to the health care system – and also how the industry has continued to progress. I think the idea of value-based care has moved even faster than most expected, and the MACRA legislation has made it even more important to our nephrologist partners for us to take advantage of the advanced APM [alternative payment model] opportunity.

The ESCO program is a demo. We knew it wasn’t going to be perfect. CMS and CMMI [Center for Medicare and Medicaid Innovation] have acknowledged that it is not perfect, and we’ve been learning and innovating together along the way. In the end, we felt that expansion was the right thing for our patients, our partners, and Fresenius Medical Care.

Obviously expanding from 6 to 24 ESCOs has been a significant undertaking. To do so required building a significant infrastructure, but the good news is that we had a big head start. When we launched our own Medicare Advantage plan, we had to build a compliance program, a regulatory affairs department, hire actuaries, etc. We knew we would likely go down the ESCO path as well, so it pushed us to build a comprehensive infrastructure from the start. For the ESCOs we put a significant investment into building data warehouses, and we needed a medical economics team to consume and interpret the data – we’re dealing with an unbelievable amount of claims data on a monthly basis for our ESCOs.

The growth in 2017 has provided us with more scale, and therefore more opportunity to make an impact on patient care and deepen our expertise, both within and outside our dialysis clinics.

NN&I: And how did physician practices influence the ESCO models? What was their role? 

McKinney: Nephrologist participation is a key part of the model. Not only is it a requirement under the program, I believe that the improvements we’re trying to make in care coordination simply won’t work without engaged nephrologist partners.

On our first six ESCOs, we looked for very strong and engaged nephrology (group) partners who believed in the idea of value-based care and thought nephrologists should take the lead for patients with ESRD. We also needed practices able to meet the minimum attribution requirement of 350 patients in each service area.

In the second year, it was unclear how many expansion applications CMS might award. We submitted applications in markets where we had interested practices who we felt could effectively contribute to the program. We were delighted when CMS awarded us 18 new ESCO markets.

NN&I: What can you tell us about outcomes to date?

McKinney: Overall, based on our own analysis, we’ve had a reduction in hospitalizations just under 18%. When you roll all of the ESCOs together, we can feel pretty good about the credibility of our results. Before we get CMS’ official results for quality and outcomes, it’s a bit early to talk about ESCO-by-ESCO results. But one of the requirements for the ESCOs is for us to publish those results on our ESCO websites once they’re available.

NN&I: So you see integrated care as the future for improving kidney disease management?

McKinney: I think you’ll find us excited about any programs that lead us to an increasingly value-based environment. That’s why we believe so strongly in the ESCOs…they’re still a demonstration, but they are a huge step in the right direction. Our community serves a very high-cost, high-need population, and I don’t think any of us has the luxury to sit on the sidelines while the rest of healthcare moves to value. It not right for us and it’s certainly not the right answer for our patients.