On Jan. 31, 2013 the Centers for Medicare & Medicaid Services announced a new initiative to improve end-stage renal disease care. This initiative is the Comprehensive ESRD Care (CEC) model. CMS intends to partner with groups of health care providers and suppliers, who will form ESRD Seamless Care Organizations (ESCOs), to test and evaluate a new model of payment and care delivery specific to Medicare beneficiaries with ESRD. The goal of this project is to improve health care outcomes and reduce expenditures for this patient population. CMS reports that in 2010 Medicare ESRD beneficiaries represented 1.3% of all Medicare beneficiaries but used roughly 7.5% of overall Medicare spending, representing more than $20 billion.
ESRD patients have significant rates of hospitalization and mortality due primarily to the presence of multiple comorbid conditions that must be managed along with their care for renal failure. It makes perfect sense for CMS to seek to improve care and reduce costs for these patients, and a comprehensive care coordination model seems ideal. The Comprehensive ESRD Care model presents an opportunity for renal providers to participate in a modified version of an accountable care organization and potentially share in any savings generated from the new model of care. At present there is no ACO model for renal care, so this Comprehensive ESRD Care model may fill this gap. Unfortunately, the model offered may limit the number and types of organizations that can take part in the project. Perhaps this is not an unexpected situation, as the intent is for only 10 to 15 organizations to be selected for this initiative.
Per the request for applications, ESCOs must include at minimum a dialysis provider, a nephrologist and another Medicare provider (with a few named exclusions). A minimum of 500 patients is required for an ESCO, and the geographic restriction is no more than two consecutive core based statistical areas (CBSA). Beneficiaries cannot participate in an ESCO if they are participating in any other Medicare shared savings program (such as Medicare Advantage, ACO's, dual eligible projects, etc.). There are electronic communication requirements for exchange of information and the need for a mechanism for billing, accounting and how the shared savings or losses will be distributed.
This is by no means a comprehensive description of all the requirements or details, but reflects several key issues that may pose barriers to small or independent providers and nephrologists who might otherwise be interested in participating in this Comprehensive ESRD Care initiative.
Barriers for small- and medium-sized dialysis providers
While this innovative approach to integrating and coordinating care for ESRD Medicare beneficiaries is to be applauded, I am afraid many of us in the independent sector will have to watch with great interest from the sidelines as this plays out. I work with sixteen dialysis clinics across the United States that include physician-owned individual independents, hospital-owned clinics and community-based non-profits.
"The biggest barrier by far is the inability to take on the financial risk associated with the ESCO model."
None of my clients will be able to participate due to a variety of reasons. While these are geographically dispersed and include the states of Washington, California, Idaho, Montana, New Mexico, Arkansas and Mississippi, none of them have the patient population that is required for the ESCO, nor do most of them have other providers in a contiguous CBSA that will allow them to partner for participation. Some have electronic medical records, but only one has integrated electronic data interchange with community health care providers for sharing patient care data. The biggest barrier by far is the inability to take on the financial risk associated with the ESCO model. Most of these small dialysis organizations have meager or negative Medicare financial margins at present and cannot consider accepting risk if there is no savings under the project.
The proposed model fittingly recognizes the difference between the financial performances of the large dialysis organizations and provides a separate track for the financial modeling for these providers. These larger organizations also have the benefit of past experience with other demonstration projects related to managed care, which I believe has allowed them to build out the infrastructure to fully participate in the current Comprehensive ESRD Care project.
Most small and independent providers have not had the opportunity nor resources to develop the sophisticated systems required for integrated care models that address both care coordination and shared financial participation. I would hazard a guess that some small or independent dialysis providers may have the opportunity to partner with a larger organization for the Comprehensive ESRD Care as an ESCO participant. However, I think most of us will closely follow the development and performance of the ESCOs, certainly understanding that this may very well be the future of ESRD. I think this is one round in the Comprehensive ESRD Care game that does not easily allow small and independent dialysis providers to play, but I am hopeful we will learn from those who can.