Combating the Rising Costs of Kidney Disease
Early Detection and Claims Discipline Key to Cost-Containment
By Ken Olszewski, Assistant Vice President, Claims, AXIS Accident & Health
Kidney disease continues to be one of the most dangerous and costly worldwide health threats. The rate of End Stage Renal Disease (ESRD) worldwide is growing faster than the population.1 In fact, nearly 616,000 people in the US are currently on dialysis2 and those already on dialysis are living longer. Commercially paid dialysis charges can run as high as $700,000+ per year3 and those costs are climbing.
A convergence of events leading to increased costs
Over 80% of all patients receiving dialysis today receive Medicare benefits on a primary basis. Medicare reimbursement rates are currently less than $245 per treatment, which is significantly less than what commercial plans pay.3 any cuts in Medicare payments often lead to cost shifting to the private sector. In 2011, Medicare adopted a bundled payment methodology for ESRD patients which reduced the average payment per Medicare primary beneficiary. There has been much speculation that the Medicare rates are going to be cut by an additional 9%, which may lead to a closing of some facilities and further pressure on commercial rates.
The majority of people with ESRD have a diagnosis of diabetes or hypertension – the top two causes of kidney failure among dialysis patients. As our population ages, along with the growing number of diagnosed diabetics, confirmed hypertension cases and the obesity rate, we are starting to see numbers of patients change rapidly. According to Dr. Bruce Tyler with MedWise, there are 25.8 million diabetics in America today, representing 8.3% of the population. Of those, seven million are undiagnosed, and there are an estimated 1.9 million new cases per year.
Due to a lack of symptoms, and little or no preventive care in many cases, patients often experience their first kidney-related treatment at the emergency room, and are diagnosed with kidney failure. Patients are often so overwhelmed with the situation that they do not ask about their treatment options, and often accept whatever referral suggestion has been made. The lack of advance planning for these patients may leave the payor at risk.
Illustrating the need for cost containment services
The current level of ESRD costs mandate additional diligence in the review of all such claims and relying on the electronic adjudication of such claims may not always be adequate. For example, a leading cost- containment services provider, Golden Triangle Specialty Network (GTSN), was asked to review four months of dialysis claims submitted by a single independent provider and adjudicated by a major TPA. Claims had been reviewed, approved and paid as clean claims via an electronic process by the TPA and the PPO Network and the stop loss carrier was to reimburse $969,000.
However, GTSN’s consulting review revealed mismatched codes for the dialysis treatments, so claims should have been denied at this point.
Further review showed inconsistent pricing for the same drug and dose ($15,000 one treatment, $50,000+ the next treatment). This should have raised additional concern, but claims were paid electronically and these serious clean claim issues were completely missed.
Early identification is key to keeping costs down
Early identification and intervention of potential ESRD cases may slow the progress or even reverse the process of renal failure. Appropriate medication, diet modifications and an increase in exercise may slow the progression of kidney disease to ESRD and the start of dialysis. At a minimum, patients enter treatment healthier and with a much better understanding of their situation.
With early identification and education, the patient will have made a better decision as to which treatment modality works for them. Equally important, other co-morbidities such as hypertension and diabetes will be better managed and controlled which can lead to fewer hospitalizations and a better quality of life.
Until early identification and intervention becomes more widespread, claims costs related to kidney disease are only likely to continue to escalate. As such, contracting with an expert in the treatment of kidney disease can be an effective strategy to more effectively manage these substantial and rising costs.