I have no beef with the raise in reimbursement for dialysis clinics in fact I think it is long over due. But I don’t understand why if there is such a loss on providing treatments that more clinics aren’t closing and why the continuous building of new ones?
Marty
Someone asked earlier what I think is obscene profit. I’ll tell you my personal opinion (which is not necessarily the opinion of the Medical Education Institute).
The reason why clinics are not closing is because Medicare does not foot the bill for many patients. Dialysis providers spend a lot of time making sure that patients are insured through an employer group health plan if possible. When you don’t see your social worker for some time know that this is what their employers tell them to put as their first priority…not your physical and mental well-being. In the neighborhood of 25% of new patients start dialysis with insurance from an employer (theirs or spouse’s). This coverage is primary for 30 months and Medicare (if the patient signs up) is secondary. Because Medicare is paying too little. Therefore dialysis providers charge employer group health plans a lot. In fact, large dialysis organizations (LDOs) routinely charge 8-10 times Medicare’s allowable rates for dialysis and drugs. They don’t usually get that much unless the patient or spouse happens to work for a small company that is self-insured or has a small insurance provider that doesn’t have contracts with any dialysis providers and must pay the full commercial rate for dialysis and drugs.
To give you an idea of how cost shifting from Medicare to EGHPs works, the United States Renal Data System reported in its recently published 2006 Annual Data Report that from 2003 to 2004 total Medicare spending rose 9.1% while total EGHP spending rose 56%. In 2004, the cost per Medicare dialysis patient was $67,000 for all care (dialysis, doctors, hospitals, drugs, home health, nursing homes, etc.) whereas the cost per dialysis patient to EGHPs was $180,000 that year – 2.7 times what Medicare paid and an increase of 17% over 2003.
The number of patients starting dialysis with EGHP coverage is growing. If a dialysis provider has 10%-25% of its patients with EGHP coverage for the first 33 months (there’s a 3 month waiting period for Medicare unless you get a pre-emptive transplant or start on home dialysis right away) this keeps dialysis providers profitable.
In my opinion, high dialysis charges put jobs at risk. A GAO report showed that dialysis patients and their spouses who were working or looking for work were more likely to lose their jobs, lose their health insurance, or have problems getting a new job and sometimes employers even said this was due to the high cost of care for ESRD. This was before providers charged 8-10 times Medicare’s rates. I believe I’ve posted before that I’ve encouraged dialysis providers to be more reasonable in their charges or they could be “killing the goose that laid the golden egg” if that patient with that EGHP loses his/her job (or the spouse loses his/her job) or the lifetime benefits are exhausted which doesn’t take long if charges are $20,000-$40,000 per month for dialysis compared with $2,000-$4,000 with Medicare.
I’ve actually heard of charges as high as $50,000 - 70,000 per month. As Beth pointed out, these are charges, and the centers don’t necessarily get paid this much–but it’s a good idea to keep track of the billing if you have a policy with a lifetime benefit. If a dialysis center uses up your lifetime benefit, it can be next to impossible to get other, non-Medicare coverage, and if you run into another health problem or you get a transplant and no longer have good drug coverage, you could be up a creek.
Clearly, part of the reason for these exorbitant charges is that Medicare is not paying the full freight for dialysis. This is why it is so important to get an annual update, as KCP has been working toward. Dialysis is the only Medicare sector without one. But I suspect that part of it is also greed and the need to be able to report quarterly profits to Wall Street when centers are for-profit (as most are). So, it would be interesting to see, if/when the industry does get this update, will EGHP charges come down? Or will they stay the same…
[quote=Dori Schatell;11708]I’ve actually heard of charges as high as $50,000 - 70,000 per month. As Beth pointed out, these are charges, and the centers don’t necessarily get paid this much–but it’s a good idea to keep track of the billing if you have a policy with a lifetime benefit. If a dialysis center uses up your lifetime benefit, it can be next to impossible to get other, non-Medicare coverage, and if you run into another health problem or you get a transplant and no longer have good drug coverage, you could be up a creek.
Clearly, part of the reason for these exorbitant charges is that Medicare is not paying the full freight for dialysis. This is why it is so important to get an annual update, as KCP has been working toward. Dialysis is the only Medicare sector without one. But I suspect that part of it is also greed and the need to be able to report quarterly profits to Wall Street when centers are for-profit (as most are). So, it would be interesting to see, if/when the industry does get this update, will EGHP charges come down? Or will they stay the same…[/quote]
Dori, your just looking at the culprit why the dialysis industry got only a one time 1.6 raise. Its all because EGHP…in reality, they know that more money is coming in that what they present, so they decline the automatic payment update. Its like saying, get the rest through EGHP…look at how bad that’s doing to us, no one is a winner. Dialysis patients who are working are beeing depleted from their health benefits then thrown in the Medicare crowd.
That’s why dialysis clinics are not closing…
Gus, they’d have to be offered an annual update, and that has not happened. The industry is definitely not declining an automatic payment update–they’ve been fighting to get one for decades.
I think what Gus meant is that the federal government doesn’t feel responsible for paying more since dialysis providers can make so much money from commercial insurers. It appears to me that the current administration wants to shift what can be shifted to commercial payers and privatize Medicare by giving more federal dollars to private insurance companies to administer Medicare Advantage programs than what the government pays for Original Medicare.
Exactly, you know my mind! As long as dialysis clinics can make a profit from commercial insurers or those employer insurance groups then the government thinks that the dialysis industry really doesn’t need a BIG piece of the pie. so they only give a one time raise of 1.6 raise which they think is reasonable.
P.S. Out of curiosity, did you know that www.davitapatients.org disapeared from the face of the net on the week of December 23, 2006 and according to WHO IS DOMAIN SEARCH, it was available for purchase by anyone. We all know that they are very involved in lobbying. I hope that rings a bell…
I wonder if they’ll change their name to Dialysis Patient Citizens?
[quote=Bill Peckham;11737]I wonder if they’ll change their name to Dialysis Patient Citizens?
http://www.dialysispatients.org/[/quote]
Hehehe, my goodness. I guess I was looking at the wrong address. Thanks for directions Bill!
Ohh, I get it, Gus. I’m a little slow some days. 
P.S. Out of curiosity, did you know that www.davitapatients.org disapeared from the face of the net on the week of December 23, 2006 and according to WHO IS DOMAIN SEARCH, it was available for purchase by anyone. We all know that they are very involved in lobbying. I hope that rings a bell…
Their domain is http://www.dialysispatients.org, not davitapatients.org. IMHO, this is what they should have named the group in the first place.
[quote=Dori Schatell;11741]Their domain is http://www.dialysispatients.org, not davitapatients.org. IMHO, this is what they should have named the group in the first place.[/quote]If they had called it Dialyzor Citizens I may have joined.
How about dialyzors r us? 
Hehehe, its available too! Get it!..doesn’t cost that much to have a domain in that name… http://www.dialyzorsrus.org/