CMS offers value-based care options in Advancing American Kidney Health
Last summer, President Donald J. Trump launched Advancing American Kidney Health. In support of bold goals intended to reduce the incidence of ESRD, while dramatically increasing both renal transplants and the use of home dialysis, the initiative established five new payment models impacting nephrologists and dialysis providers (see Table 1).
These five models can be categorized as either mandatory or voluntary. The ESRD Treatment Choices (ETC) model is the mandatory model that has appropriately faced substantial criticism. ETC would basically divide the United States so half the country would continue delivering dialysis care as usual, while nephrologists and dialysis providers in the other half would face ETC.
ETC is testing the following hypothesis: If Medicare payments to nephrologists and dialysis providers are adjusted up or down based on transplant rates and home dialysis rates, will those rates improve?
Providers cannot control rates
The criticisms levied at the ETC model are substantial and include the following:
- Neither private practice nephrologists nor dialysis providers can control the transplant rate because they cannot control the organ donor supply;
- CMS admits they are a bit concerned about their ability to accurately measure a provider’s transplant and home dialysis rate; and
- The hospital referral regions, while satisfactory for the good work done by the Dartmouth Atlas Project, may be a poor choice for dividing the country’s ESRD population in preparation for ETC.
CMS offers models, options
The Kidney Care Choices (KCC) model is the label that encompasses the four voluntary models announced last summer. KCC comes in two flavors, Kidney Care First (KCF) and Comprehensive Kidney Care Contracting (CKCC). These models are patterned after the previously announced Primary Care First and Direct Contracting models which were created for primary care providers.
In many respects, KCC is the next iteration of the Comprehensive ESRD Care (CEC) model, a demonstration which CMS wraps up this year. There are several differences between KCC and the CEC model. Perhaps the most important differences are the inclusion of patients with late-stage (4 and 5) CKD and the move to drive patient alignment based on outpatient encounters with a nephrologist. In addition, unlike the CEC model, which requires nephrologists and dialysis providers to come together to form the ESRD Seamless Care Organization (ESCO), the new models are formed by nephrologists alone (KCF) or nephrologists in conjunction with a transplant provider (CKCC).
It is clear the KCC set of models are focused on the nephrologist. Importantly, while dialysis providers are optional in CKCC, based on the model’s design, dialysis providers will likely be critical to the success of the three CKCC options.
A final difference between these new models and the ESCO is the addition of an attractive transplant bonus. Payable across all four models, the bonus works as follows: If a patient with late-stage CKD or ESRD aligned with the new model receives a renal transplant and that transplant is functioning 1-year post transplant, CMS sends the model participant a check for $2,500. Another year passes and if the transplant is functioning 2 years out, CMS makes a second payment for $5,000. Finally, if the transplant continues to function at 3 years, a final payment of $7,500 is made. The bonus is worth up to $15,000 during 3 years.
Kidney Care First is not the next iteration of the ESCO, but instead it is an advanced alternative payment model (APM) in which the nephrology practice elects to place a subset of their outpatient professional fees at risk. KCF requires a minimum of 200 patients with ESRD and 500 patients with stage 4 or 5 CKD. In this model, the practice receives what amounts to a capitated payment for services which they bill for separately today. For the patients with ESRD aligned to KCF, the practice is paid at the 2 to 3 visit in-center rate, regardless of how often the patient is seen that month. For the patients with late-stage CKD, CMS has created what amounts to a CKD bundle (see Table 2). CMS intends to make a prospective payment each quarter to cover the services listed in Table 2 for the aligned stage 4 and 5 patients. The payment rate is equal to one-third of the base payment made for the adjusted monthly capitated payment (MCP).
To qualify as an advanced APM, KCF must expose nephrologists to downside financial risk. KCF meets this requirement by applying a performance-based adjustment to both the adjusted MCP and the CKD quarterly capitated payment. The mechanics behind this adjustment are complex but essentially you will be asked to clear a quality gateway and then your performance across specific utilization measures will be compared with your peers around the country (see Table 3). You receive credit both for performance against your peers and for internal improvement with respect to the utilization measures in Table 3. The adjustment will be calculated every 6 months and the net effect will be to adjust both payments such that the payment the practice receives can be as much as 30% higher than the base payment noted above or 20% lower.
Suffice it to say the performance-based adjustment may have a significant impact on the payment you receive to care for this population of patients.
CKCC model involves risk
While KCF puts your professional fees at risk, CKCC is the next iteration of the CEC model as the three CKCC options involve taking risk on the total cost of care for aligned patients. Standing up a CKCC model requires both a nephrology practice and a transplant provider, which can be a transplant center, transplant nephrologist, transplant surgeon or an organ procurement organization. The transplant bonus remains in play with a minor wrinkle, and while the nephrologist receives the same adjusted MCP and CKD payments noted above, those payments are not exposed to the performance-based adjustment described for KCF. There are three different CKCC models, each defined by varying levels of risk related to the total cost of care for the aligned population (see Table 4). Each CKCC model requires a minimum of 350 patients with ESRD and 1,000 patients with late-stage CKD.
A critical piece of any total cost of care model is the calculation of the financial benchmark, or economic target, for which the entity is held accountable. The request for application (RFA) released last fall provides a glimpse of how this may work, but the RFA falls short with respect to the detail necessary to clearly assess the approach. That said, compared with the benchmark process within the ESCO, the Center for Medicare and Medicaid Innovation (CMMI) appears to be moving toward a more transparent and predictable process.
Based on the content of the RFA, it is clear the ESRD and CKD populations will have separate benchmarks. Those benchmarks will be established by blending local claims historic experience with an adjustment to the Medicare Advantage book rate. They intend to use U.S. per capita cost to establish trend, removing yet another black box that exists in the CEC model. They plan to risk adjust the benchmark but will not use the hierarchical condition category framework used today in both Medicare Advantage and the CEC model.
The RFA leaves many questions unanswered about how risk adjustment will be accomplished. The Global CKCC model will face a 3% savings guarantee out of the gate for the ESRD population, which will rise in future years. Perhaps more troubling is what is referred to as a quality withhold. Effectively, each CKCC model will see its benchmark drop by either 2.5% (Graduated) or 5% (Professional and Global). The CKCC has the opportunity to “win back” the withhold based on performance on the CKCC quality measures (see Table 5).
The KCC model represents the next step in the evolution of Medicare’s movement to value-based care within the renal space. However, as described in the proposed rule, the mandatory ETC model is clearly a step backward in the journey to value-based care. While there is debate about whether the march from volume to value has created benefit for patients,1 there are several examples that support the notion that when providers take risk for the cost of care, costs come down, and not at the expense of quality. Although the year 3 results are not public as of this writing, during the first 2 years of the CEC model, the total cost of care for aligned patients was $174 million below the calculated benchmarks.2 During those first 2 years, combining what was shared with ESCOs that generated savings with the share of losses a few ESCOs incurred in 2017 and paid to CMS, you get a figure of roughly $114 million. So, net/net Medicare saved roughly $60 million during the first 2 years of the program. Lewin, the independent consultancy tasked with evaluating the CEC model, noted hospitalizations decreased 4% within the ESCOs compared with a control population, and they also noted patients with ESRD within an ESCO fared better than patients with ESRD within a primary care ACO.3
Nephrologists are not alone in their pursuit of advanced APMs. The final rule regarding the CMS Quality Payment Program for 2020 reports that in 2017, just more than 99,000 providers were deemed to be qualifying APM participants. The number almost doubled in 2018, and CMS projects between 210,000 and 270,000 eligible clinicians will be qualifying APM participants in 2020.4
When the CEC model ends this year, the CMS quality payment program will offer 2 additional years in which qualifying APM participants are excluded from the merit-based incentive payment system and collect a 5% bonus on their part B book of business. While ETC is not an advanced APM, three of the models within KCC will be advanced APMs. As the nephrology community contemplates these new models, it is clear the value-based train has left the station. Kidney Care Choices is the next stop for nephrologists and their care team partners. How many nephrologists board the CMMI train remains to be seen.
- Figueroa J, et al. JAMA. 2019;doi:10.1001/jama.2018.15575.
- https://innovation.cms.gov/initiatives/comprehensive-esrd-care/. Accessed Nov. 11, 2019.
- https://innovation.cms.gov/Files/reports/cec-annrpt-py2.pdf. Accessed Nov. 11, 2019.
- www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/ PFS-Federal-Regulation-Notices-Items/CMS-1715-F.html. Accessed Nov. 11, 2019.
- For more information:
- Terry Ketchersid, MD, is senior vice president and chief medical officer for Fresenius Medical Care’s Integrated Care Group where he has clinical oversight over FMCNA’s value-based care initiatives.
Disclosure: Ketchersid reports no relevant financial disclosures.