NN&I - July 2010
Renal Economics 38 Nephrology News & Issues July 2010Subscribe to our free eNewsletter at www.nephronline.com on private insurance payers to signifi -cantly reduce reimbursement for dialy -sis services. We were recently notified that a major third party payer in our area plans to revisit our long-standing negotiated agreement. They want the new agreement to be effective Jan. 1, 2011, the same date the Medicare pay-ment bundle kicks in. Although they have enjoyed deeply discounted "com-mercial" rates for many years, they are looking for ways to save money before health care reform begins looking at their costs and profits. Additionally, several other insurers have contacted us with requests for all-inclusive dialysis service contracts that will save them money. Some of their new contracts exclude any reference to escalation language, and mandate that no adjustments in reimbursement rates be made for a three-year period. Our staff will not be happy to work the next three years without a cost of liv-ing raise and a possible reduction in benefits. Payers appear to be ignoring rising costs for purchasing new equip -ment, medications, and other services and supplies. The new bundled rate is based on an already flawed payment model; we know that Medicare's reimbursement does not always cover the actual cost of care now, and that providers rely heav-ily upon the fair and equitable reim-bursements from third party payers. In this case private payers are not going to make up the difference. For years they have been paying primary care physi -cians at or near Medicare rates. Health care reform promised to lower health care costs, and this is how it is going to work for us: lower reimbursement from all parties. Stormy weather And so we have the makings of a perfect storm: reduced payments from Medicare largely independent of true facility costs, increased opera-tional costs from mandated changes and reduced payments from private payers, and a badly-designed payment plan with little or no regard for the consequences to small, rural dialysis facilities. If we have a public policy failure, who will be responsible? Batten down your hatches and hope someone in Washington will start paying attention to floundering ships at sea. Will the new ESRD payment bundle signal the end of rural hospital-based dialysis clinics? By Laura Beyer RN, BSNRight from the start, the new end-stage renal disease bundled payment system scheduled to become effective in January 2011 is expected to create a financial loss for dialysis clinics across the United States. According to the Centers for Medicare & Medicaid Services, "MIPPA [Medicare Improvements for Patients and Providers Act] specifically requires that the new system trim two percent of the estimated payments that would have been made in 2011 under the previous payment system." Although this is concerning to all providers, it is particularly alarming to non-profit hospital-based dialysis units who are already operating at a loss. These small hospital-owned dialy-sis clinics are simply trying to pro-vide a service to an underserved rural area. Resources are not available for patients to drive the extended distanc -es to urban areas where dialysis ser -vices are more available. Pella Regional Health Center (PRHC), a Critical Access Hospital (CAH) in rural Iowa, offers outpatient dialysis services. Robert Kroese, CEO of PRHC, said, "We choose to keep this dialysis clinic open despite the financial liability to the hospital for one reason only: people will have no choice but to die without it. Our com-munity needs this service." Currently, hospital-based dialysis units represent 13.6% of all dialysis facil-ities in the United States. Facilities clas-sified as rural only make up 4.4%. The current CMS payment system defines a small facility as less than 5,000 treat -ments annually, as well as other con -trol variables to include urban vs. rural and facility ownership. The proposed Ms. Beyer is the manager of dialysis services for Pella Regional Health Center, Pella, Iowa. RenalEconomics_13.indd 38 6/16/10 6:43:30 PM
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