The Trump administration has plans to overhaul how chronic kidney disease is treated. As a source of major expenditures through Medicare, chronic kidney needs an upgrade. The administration has goals of reducing the number of people diagnosed with End-Stage Renal Disease by 25 percent by 2030, promote in-home dialysis, and allow more kidney transplants. The dialysis devices market is expected to reach 5 percent CAGR between 2018 to 2028.

Why the kidney care reform is required?

More than 400,000 ESRD patients are enrolled with Medicare but less than 30 percent of beneficiaries received a functional transplant. Despite current Medicare guidelines and payment models supporting the use of home-dialysis and kidney transplants in ESRD for Medicare beneficiaries, less than 12 percent of patients used home dialysis in 2016 (Government Accountability Office data).

CMS’ new kidney-care payment models

With the aim of transforming kidney care and moderating the focus on clinical dialysis, the Centers for Medicare & Medicaid Services and the U.S. Department of Health and Human Services announced five new payment models on July 10, 2019.

  • The End-Stage Renal Disease Treatment Choices model: aims at reducing costs and improving quality of care by promoting home dialysis and transplants for ESRD patients covered under Medicare. The medical facilities and physicians for this model will be picked based on randomly selected markets. Payments to participating providers will be adjusted either upward or downward based on the rates per treatment. The ETC model, expected to launch on Jan. 1, 2020, will be applicable to Medicare claims for a period of six years through June 2026.
  • Kidney Care First model: Under this model, fixed payments per patient will be given to participating nephrology practices for patients with late-stage kidney disease and ESRD. The participants will be paid based on health outcomes, patient experience, and performance. A bonus payment will be given in case of a kidney transplant patient remaining healthy for about three years after the surgery. Contracting providers participating in the KCF model must include nephrologists, nephrology practices, and transplant providers; dialysis centers and other related providers are optional.
  • The Comprehensive Kidney Care Contracting models: These programs are like the KCF model in terms of capitated payments. The key difference is that the Kidney Contracting Entity participating in these models will be required to include nephrologists, practices, transplant providers, dialysis facilities, and other providers. The KCEs will be responsible for complete cost and quality of care and will be eligible to receive Medicare savings. The CKCC includes three types of models based on the type of risk.
  1. CKCC Graduated Model: The one-sided risk track allows participants to start with lower risk and increase it in increments. The extent of risk is directly proportional to the potential reward.
  2. CKCC Professional Model: Professional model providers are liable for 50 percent of shared losses and 50 percent of shared savings (based on total cost of Part A and Part B).
  3. CKCC Global Model: Participating providers are liable for 100 percent of risk as well as 100 percent of shared savings on total cost of Part A and B services.

The KCF and CKCC are based on the original Comprehensive End Stage Renal Disease Care Model. The main goal of the CEC model is to delay the start of dialysis and promote kidney transplant using incentives in patients with stages 4 and 5 of chronic kidney disease and ESRD. Under the model guidelines, a set of kidney care providers will be assigned to a patient and will be responsible for patient’s care through the late stage of CKD, dialysis, and post-transplant care. The payments under KCF and CKCC models will be made on claims for a period of three years between Jan. 1, 2020, and Dec. 31, 2023.

The nation’s biggest kidney care and in-home dialysis provider, DaVita, has supported the newly launched models calling them a progressive and holistic approach toward value-based care for kidney patients. Similarly, the world’s largest dialysis product provider, Fresenius Medical Care, has shown interest in focusing on home dialysis devices. Baxter has announced its plan to invest more in development of peritoneal dialysis technology.

CVS Health partnered with DEKA Research & Development Corp to develop the HemoCare Hemodialysis System and plans on including it in the CVS Kidney Care initiative. On July 17, 2019, CVS Health initiated clinical trials to determine the safety and performance of the new home dialysis product in about 70 patients.

The recent efforts by the government on improving kidney care has created ripples in the chronic kidney disease market. With pharmacy giants and medical device providers focusing more on value-based payments, the kidney-care market is likely to draw new participants soon.

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