A need to fill excess capacity, brought on by an overbuild of dialysis clinics in the last 25 years, along with better profit margins for in-center patients, has led providers to de-emphasize home dialysis, a new report released yesterday by the Government Accountability Office says. In addition, nephrologists feel that they should get paid the same each month for patient care whether a patient is dialyzing at home or in-center.

“The growth in facilities’ capacity to provide in-center hemodialysis from 1988 to 2008 outpaced the growth in the dialysis patient population over the same time period, “ the GAO noted. “Specifically, the number of dialysis stations…increased at an average annual rate of 7.3 percent during this time period, while the number of patients increased at an average annual rate of 6.8 percent.” Recent data shows that the growth in new starts on dialysis is in the 3-5% range.

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The need to fill that capacity is coupled with better profit margins because of the efficiency of in-center care. “Although over the long term facilities may have a financial incentive to encourage the use of one or both types of home dialysis, the impact of this incentive could be limited in the short term,” said the GAO. “This is because, in the short term, we found that expanding the provision of in-center hemodialysis at a facility generally tends to increase that facility’s Medicare margin and that the estimated increase is more than would result if the facility instead expanded the provision of either type of home dialysis.”

The report also found that dialysis facilities have financial incentives in the short term to increase in-center use, rather than increasing home dialysis. “For example, facilities may be able to add an in-center patient without paying for an additional dialysis machine, because each machine can be used by six to eight in-center patients. In contrast, for each new home patient, facilities may need to pay for an additional machine.”

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The GAO was asked to study Medicare patients’ use of home dialysis by House Ways and Means Subcommittee on Health chairman Kevin Brady. R-Texas, and Committee member Jim McDermott, D-Washington. who heads the House Kidney Caucus. The report focuses on three areas: 1) trends in home dialysis use and estimates of the potential for wider use, 2) incentives for home dialysis associated with Medicare payments to dialysis facilities, and 3) incentives for home dialysis associated with Medicare payments to physicians. The agency completed the report using data from the Centers for Medicare and Medicaid Services (2010-2015), the U.S. Renal Data System (1988-2012), and Medicare cost reports (2012). GAO also interviewed CMS officials, selected dialysis facility chains, physician and patient associations, and experts on home dialysis.

The growth and decline of home dialysis

The percentage of dialysis patients who received home dialysis generally declined between 1988 and 2008 and then slightly increased thereafter through 2012, and providers told the GAO that future increases in the use of home dialysis are possible. Physicians and other stakeholders estimated that 15 to 25% of patients could realistically be on home dialysis, suggesting that future increases in use are possible, the GAO said.

But the agency pointed to the peritoneal dialysis fluid shortage that began in 2014 as the cause of a big drop in the number of PD patients from August 2014 to March 2015. “Some stakeholders were also concerned the shortage could have a long-term impact,” the GAO report said.

Payment for home dialysis training lacking

The adequacy of Medicare payments for home dialysis training— a sore point between CMS and providers, particularly for home hemodialysis training—may have an affect on facilities’ financial incentives for home dialysis. “Although CMS recently increased its payment for home dialysis training, it lacks reliable cost report data needed for effective fiscal management, which involves assessing payment adequacy. In particular, if training payments are inadequate, facilities may be less willing to provide home dialysis.”

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Medicare payment policies may constrain physicians’ prescribing of home dialysis, the GAO asserted. “Specifically, Medicare’s monthly payments to physicians for managing the care of home patients are often lower than for managing in-center patients, even though physician stakeholders generally said that the time required may be similar.”

Medicare also pays for predialysis education—the Kidney Disease Education (KDE) benefit—that could help patients learn about home dialysis. However, the GAO said that less than 2% of eligible Medicare patients received the benefit in 2010 and 2011, and “use has declined since then.” According to stakeholders, the low usage was due to statutory limitations in the categories of providers and patients eligible for the benefit.

“CMS has established a goal of encouraging home dialysis use among patients for whom it is appropriate, but the differing monthly payments (for nephrologists) and low usage of the KDE benefit could undermine this goal,” the GAO concluded.