The Centers for Medicare & Medicaid Services issued an interim final rule rule Dec. 12 that cracks down on dialysis providers who counsel patients about health care plans.
The rule is the culmination of a CMS request for information (RFI) in August about whether health care providers were counseling patients to bypass Medicaid and Medicare coverage and steer them to Affordable Care Act marketplace plans that are more lucrative to providers. This form of steering can be particularly harmful for ESRD patients because many of those plans didn’t include coverage for transplant, had higher deductibles and co-pays, and put patients at risk of mid-year disruption of coverage. The final rule is effective Jan. 15.
CMS said they received more than 800 public comments on the request for information, the overwhelming majority of which concerned ESRD patients and dialysis providers. The comments “documented a range of concerning practices, with providers and suppliers influencing enrollment decisions in ways that put the financial interest of the supplier above the needs of patients.”
The agency said many comments came from social workers and other nephrology professionals, and they describe a variety of ways that dialysis facilities have attempted to influence patients’ coverage decisions or failed to disclose information that would have been in a patient’s best interest. Commenters indicated that this practice is widespread, CMS said.
The agency said they did receive comments that demonstrated that some dialysis patients are satisfied with their premium arrangements. “In particular, more than 600 individuals currently receiving assistance for premiums participated in a letter writing campaign in response to the RFI and stated that charitable premium assistance supports patient choice and is valuable to avoid relying on ‘taxpayer dollars.’”
CMS said they used data provided by commenters, the U.S. Renal Data System, the Truven MarketScan database, and data related to CMS’ administration of the risk adjustment program, to conclude that dialysis providers “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,” while the premiums for enrollment in market plans average $4,200 per year, which the majority of dialysis providers are paying through a third party.
Market plans often not in dialysis patients’ best interest
While supporting premium payments to facilitate enrollment of their patients is in the financial interest of dialysis providers, it is often not in the best interest of the patients, CMS concluded from its RFI.
The agency 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.
“This policy is consistent with the conclusion that these third-party payments are being targeted based on the financial interest of the dialysis facilities who contribute to these non-profits, rather than the patients’ interests,” CMS wrote. “Once a patient has received a transplant, it is no longer in the dialysis facility’s financial interest to continue to support premium payments, although there are severe consequences to individuals when that support ceases.”
CMS notes that ESRD patients can arrange for Medicare to begin at the time of transplant, but said that this is a difficult process to navigate, especially during a period when the patient is particularly sick and preparing for major surgery. The agency said that some commenters noted how vulnerable these patients are, and how difficult it is for them to navigate the insurance process. Many patients are low income and lack sufficient resources to help them with these transitions, CMS said, making them particularly vulnerable to steering by providers.
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.
CMS also noted that marketplace plans might be particularly problematic for ESRD patients eligible for Medicaid. Many Medicaid patients face no cost sharing or out of pocket expenses, while patients enrolled in marketplace plans can be responsible for out-of-pocket costs up to $7,150 in 2017.
3. Disruption of coverage
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. Many commenters told CMS that providers and third parties are attempting to disguise their payments to avoid detection by insurance companies. “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.”
In response to the rule, Kidney Care Partners said in a statement that it “is extremely disappointed by the CMS’ failure to address a growing practice of discriminatory behavior among insurers in designing plans that prohibit a vulnerable class of individuals who require life-sustaining dialysis from receiving assistance from non-profit charitable organizations to pay their health care premiums.”
New requirements for dialysis facilities
CMS said it is establishing new Conditions for Coverage standards for dialysis facilities that make payments of premiums for individual market health plans whether directly, through a parent organization, or through another entity (including by providing contributions to entities that make such payments).
- Dialysis facilities will be required to make patients aware of potential coverage options and educate them about the benefits of each to improve transparency for consumers.
- Facilities must ensure that plan issuers are informed of and have agreed to accept the payments.
The agency is also creating a new patient right standard that requires dialysis facilities that provide premium assistance directly or through a third party to provide information that explains how plans in the individual market will affect the patient’s access to and costs for the providers and suppliers, services, and prescription drugs that are currently within the individual’s care plan, as well as those likely to result from other documented health care needs. This must include an overview of the health-related and financial risks and benefits of the individual market plans available to the patient (including plans offered through and outside the exchange). This information must reflect local, current plans, and would need to be updated at least annually. Coverage of transplantation and associated transplant costs must be included in information provided to patients.
“CMS’ stated goal in issuing the IFR [interim final rule] is to create a more transparent process for patient education and referral to nonprofits for charitable assistance for health insurance premiums,” the American Kidney Fund president LaVarne A. Burton said in a statement issued in response to the rule. “We wholeheartedly support that goal—but in reality, the IFR effectively removes kidney patients from the insurance decision-making process. It leaves to insurers the decision of whether to provide ACA coverage to low-income kidney patients who need charitable assistance to afford premiums.”
CMS estimates it will cost applicable dialysis facilities nearly $700 million in administrative costs to comply with the rule between 2017 and 2026.
“By focusing on transparency, we believe we can promote patients’ best interests, the agency wrote. “CMS remains concerned, however, about the extent of the abuses reported.”
CMS is seeking comments on whether patients would be better off if premium payments were more strictly limited. “Given the magnitude of the potential financial conflict of interest and the abusive practices described above, we are unsure if disclosure standards will be sufficient to protect patients.”