CMS goes after dialysis facilities that steer patients away from Medicare

The Centers for Medicare and Medicaid Services has issued an interim final rule intended to stop dialysis facilities from signing up patients and paying their premiums in Affordable Health Act plans rather than accepting reimbursement rates at least four times lower from Medicare.

Commercial coverage generally pays dialysis facilities an average of four times more per treatment, $1,000 compared to $260 from Medicare, according to the CMS rule. For a subset of individual market health plans, the difference is about $600 per treatment.

Based on this, the dialysis facilities are getting at least $100,000 more per year, per patient, if the patient is covered in a commercial plan rather than getting public coverage, CMS said.

For patients eligible for Medicaid, the facilities receive an additional $234,000 per year: $312,000 for commercial rates versus $78,000 from Medicaid.

What many dialysis facilities are doing, the facilities, payers, patients, and nonprofit organizations told CMS in August after the agency asked for comment, is directing patients instead to private plans and offering to pay the premiums. An estimated 600 patients wrote a letter to CMS in support of this arrangement.

[Also: Medicare pushes to increase number of at-home dialysis patients]

Lack of Medicare coverage can be detrimental to patients seeking a kidney transplant and may put them at financial risk down the road, according to CMS's Acting Administrator Andy Slavitt and Health and Human Services Secretary Sylvia Burwell.

"In other words, healthcare providers may be encouraging individual patients to make coverage decisions based on the financial interest of the healthcare provider, rather than the best interests of the individual patient," Slavitt and Burwell said in the rule. "Further, as one tool to influence these coverage decisions, healthcare providers may be offering to pay for, or arrange payment for, the premium for the individual market plans."

End-stage renal disease is the only health condition for which patients younger than 65 are eligible to enroll in Medicare, CMS said.

[Also: End-stage renal disease facilities to get additional $80 million in updated CMS payments]

Dialysis facilities that steer patients toward individual plans are targeting those younger than the regular age to get Medicare, before these consumers have signed up for the government coverage.

Those who get health insurance through the Affordable Care Act are not allowed to also enroll in Medicare.

There are about 6,737 Medicare-certified dialysis facilities in the country. As of 2014, Medicare was the payer for about 88 percent of those patients.

The interim final rule with comment period implements new requirements for Medicare-certified dialysis facilities that make payments of premiums for individual market health plans. Dialysis facilities are required to make such payments directly, through a parent organization, to a third party.

Dialysis facilities must reach out to plans to ensure they will accept insurance subsidies from a third party and will do so for a full year to ensure continuity of care.

They must also show how much the dialysis center's reimbursement differs between payers.

The standards being imposed by CMS are expected tol cost these facilities close to $700 million to implement between 2017 and 2026.

The rule becomes effective on Jan. 14, 2017, 30 days after publication in the Federal Register on Dec. 14. CMS is currently accepting comment.

Twitter: @SusanJMorse