On Jan. 25, a federal court in Texas prohibited the Centers for Medicare & Medicaid Services from placing new regulations on dialysis providers that pay the premiums for individual health plans issued as part of the Affordable Care Act.
The regulations, issued as an Interim Final Rule (IFR), must be re-introduced by the Trump administration and go through traditional rulemaking procedures if they are to be implemented. With the entire ACA facing the chopping block, this is unlikely to happen. So this story, with it’s many twists and turns, might have come to an end.
But there is a message in it that I hope will not be buried. Simply put, dialysis providers should not be responsible for helping patients chose proper insurance coverage.
Background on the rule
The IFR was released after CMS issued a request for information seeking public comment on concerns that some health care companies, including dialysis providers, may be steering people eligible for, or receiving, Medicare and/or Medicaid benefits into Affordable Care Act individual market plans for the purpose of obtaining higher reimbursement rates.
The lawsuit, brought by DaVita Inc., Fresenius Medical Care North America, U.S. Renal Care Inc., and Dialysis Patient Citizens, focused on the IFR requirement that dialysis facilities must ensure that plan issuers are informed of and have agreed to accept the third party payments. This part of the rule has stirred the most controversy because it seems to give insurance companies the right to reject premium payments that come from third parties.
But the rule did not give insurance companies this right. They already had it.
CMS does not require that insurers accept premium payments made by third parties except in certain circumstances, and many insurers have provisions in their contracts that voids coverage if payment is made by anyone other than the enrollee. Commenters told CMS that providers and third parties are attempting to disguise their payments to avoid detection by insurance companies.
This lack of transparency, CMS said, puts patients at risk for sudden coverage disruption if the insurance company finds out that payments are coming from third parties. The agency said it was trying to avoid disruption of coverage by forcing dialysis providers to get plan issuer agreement prior to enrollment.
At it’s heart, this is really a disagreement between insurance companies and health care providers. And patients are stuck in the middle.
Dialysis providers have contended for years that Medicare does not reimburse enough for dialysis treatments, and they must subsidize the low pay by charging private payers more. This does not sit well with private payers who often believe they should not be charged more than Medicare rates.
The ACA created an opportunity for more dialysis patients to receive private insurance. And there is a clear financial incentive for dialysis providers to encourage patients to join more lucrative ACA plans.
“The comments in response to the RFI, data related to CMS’ administration of the risk adjustment program, and registry data from the USRDS demonstrate that dialysis facilities can be paid tens or even hundreds of thousands of dollars more per patient when patients enroll in individual market coverage rather than public coverage,” CMS wrote in the IFR. “On the other hand, the premiums for enrollment in individual market coverage average $4,200 per year according to data related to CMS’ administration of the risk adjustment program.”
Bringing it back to the patients
Regardless of whether providers are steering patients towards more lucrative plans, or are simply trying to help them get the best coverage available, there is a clear conflict of interest. Patients need help navigating complex coverage decisions, and the assistance should be provided by someone with no financial stake in the game.
This is easier said then done, because even patient groups like the American Kidney Fund and Dialysis Patient Citizens are largely funded by the dialysis industry.
The choice between Medicare or Medicaid and various marketplace plans is not an easy one. They come with their own premiums, deductibles, co-pays, and provider networks. Some patients benefit from private plans. With premium assistance from the American Kidney Fund, they might have less out-of-pocket expenses. They might be able to enroll their children in a plan. They might gain access to other specialists who do not accept Medicare.
But, according to CMS, some plans can also put patients at financial risk or hurt their chances of getting a transplant. In the IFR, CMS highlighted three reasons why an individual marketplace plan might be harmful to an ESRD patient.
1.Interference with transplant readiness
Transplant centers must determine that transplant candidates will have access to continuous health coverage before they can be deemed ready for a transplant. But ESRD patients who are enrolled in marketplace plans and receiving premium assistance from a third party can lose their premium assistance after transplantation.
“Documents in the comment record indicate that major non-profits that receive significant financial support from dialysis facilities will support payment of health insurance premiums only for patients currently receiving dialysis,” CMS wrote. Premium assistance will not continue after a patient receives a kidney transplant, and the non-profits will not cover any costs of the transplant itself.
AKF CEO Lavarne Burton told NN&I that assistance from AKF helps many ESRD patients go through the transplant workup process and have a transplant. She also said the AKF, and often dialysis providers, help patients transition to and enroll in Medicare.
“We continue charitable premium assistance to these individuals post-transplant, for up to one quarter. We make clear to grant applicants, through our program materials, program application and patient newsletter, that premium assistance from AKF is for dialysis patients; after someone has had a successful transplant, we will discontinue the assistance. We provide this information so that patients can incorporate it into their planning process to ensure a continuum of coverage post-transplant.”
2. Exposure to additional costs
CMS said that dialysis only makes up 32% of the yearly amount Medicare spends on ESRD patients, and at least half of Medicare spending on ESRD patients is on care delivered by providers other than dialysis companies. Often these costs are not covered by the third parties providing premium assistance.
3. Disruption of coverage
“The lack of transparency around third party payments has therefore resulted in a situation in which patients are at significant and ongoing risk of losing access to coverage based on their issuer detecting payment of their premiums by parties other than the enrollee,” CMS wrote in the IFR.
CMS attempted to protect patients from these negative outcomes by placing new regulations on providers. In addition to the requirement for providers to get insurance carrier agreement to accept third party payments, the IFR also required facilities to make patients aware of potential coverage options, and created a patient right standard that required facilities to provide information that explains how plans will affect access to and costs for services, medications, and transplantation.
Patients deserve transparency
Patients should be clearly informed if a plan will hurt their chances of getting a transplant (it is the gold standard treatment for ESRD after all), expose them to costs they cannot afford, or put them in danger of sudden coverage disruption.
The AKF did create new safeguards to its premium assistance program, including:
- A new requirement that grant applicants will need to demonstrate to AKF why a Marketplace plan is a better option for them personally than Medicare or Medicaid
- A Provider Code of Conduct that each referring dialysis provider must sign, requiring dialysis providers to keep the best interests of the patient in mind when referring patients to AKF for assistance.
- A Patient Bill of Rights that outlines for patients their rights and responsibilities regarding their receipt of HIPP grant assistance.
These safeguards are a step in the right direction. I hope they are enough to protect patients and keep their interests at the forefront of all coverage decisions, where they belong.