NN&I - July 2010
Renal Economics 36 Nephrology News & Issues July 2010Subscribe to our free eNewsletter at www.nephronline.com The ESRD bundle creates a perfect stormBy Diane Crafton, RN"The Perfect Storm" is not just the name of a good, action-adventure movie, but also a good description of the upcom -ing Medicare reimbursement changes for dialysis, which may just sink our ship. Wheeling Renal Care (WRC) is a small, independent dialysis provider located in the Upper Ohio Valley. We have three dialysis clinics serving 180 patients. Terms like critical mass, buy-ing power, and vertically integrated are not in our vocabulary. We provide com-plex, costly services to an underserved and financially challenged patient population. It has not been an easy course, but over the years we have piloted our ship with good judgment, fiscal responsi-bility, and high ethical standards. But looking ahead, we see three threats on our radar. 1. Cuts in payments under the con-gressionally-mandated Prospective Payment System (PPS) 2. Increased costs due to newly man-dated services 3. Actions by private payers under the new health care reform law. Bundled payment Most small, independent facilities tell us they cannot see through the dense fog of the bundled payment plan well enough to understand what will happen. We tried. In order to predict the impact of the Centers for Medicare & Medicaid Services' proposed bundled payment, we developed our own pay-ment calculator following the release of the draft by the CMS in September 2009. We waded through the 500-odd pages, absorbed as much as we could, and came up with the following scenario. We compared the current Medicare Allowable Payment, which includes the composite rate and separately billables for each traditional Medicare patient dialyzed in our 10-station Belmont, Ohio facility during March 2010, to the predicted payments using the new case-mix adjusters under the proposed bundle. Our calculations predicted we would receive $208 per treatment, on average, compared to $243 we received under the current payment modela loss of $35 per treatment. Two reasons were immediately apparent. 1. The Belmont facility has the low-est Core Based Statistical Area (CBSA) Wage Index in the continental United States. 2. Our patient population had very few of the comorbidities used as cost adjusters in the new bundle. Unfortunately, there is nothing in the bundle calculations accounting for the unique circumstances of the Belmont unit. It is in a rural area, and sala-ries are generally lower, but the facility is located adjacent to a skilled nurs-ing or rehabilitation facility and pro-vides dialysis care for many of its resi-dents, including ventilator- dependent patients and others with very complex, comorbid conditions. We cannot staff it with part-time technicians and nurs-es. In contrast to many urban facilities, we pay our staff medical benefits. We have to because they cannot work two jobs like nurses in other parts of the country. As for utilizing the 18 case-mix adjusters in the proposed bundle, we did not have many of the high-pay-ing comorbidities, such as septicemia, which would drive up payments. We try hard to prevent septicemia in our units. Our costs at the Belmont facil-ity have exceeded Medicare payments for the last few years by approximately $40 per treatment; cuts in reimburse-ment will increase these losses. And, this is before factoring in potential cost increases. Newly mandated services Loss of revenue is only one front of the emerging storm for our small group. The PPS mandates that facilities will be responsible for direct payment of all lab tests. Some of these tests, outside the composite rate's standard set, were pre-viously paid in full by CMS. Likewise, we will incur expenses for Medicare Part D oral drugs that patients must purchase outside the facility. We will have increased administrative costs for managing these services and the risk of uncollectable copays from our poor and indigent patients. Rough waters indeed. Commercial payers want to save money, too There on the horizon is an even big-ger threat. Under the new health care reform law, there is strong pressure Ms. Crafton has been the administrator for Wheeling Renal Care since April 2000. RenalEconomics_13.indd 36 6/16/10 6:43:29 PM
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