CMS Announces New Models for Kidney Care and Radiation Oncology

Faegre Drinker Biddle & Reath LLP
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Faegre Baker Daniels

New payment models – both voluntary and mandatory – are on the way for Medicare-participating providers treating kidney disease and offering radiation oncology services.

On July 10, the White House, in conjunction with the Department of Health and Human Services (HHS), announced the latest Medicare payment models in what has been a whirlwind year for the Center for Medicare and Medicaid Innovation (Innovation Center) at the Centers for Medicare & Medicaid Services (CMS). And with Director Adam Boehler’s announced departure from the Innovation Center, these models are likely to be the last announced under his leadership.

The new models include two voluntary models –Kidney Care First (KCF) and Comprehensive Kidney Care Contracting (CKCC) – and a proposed regulation for two mandatory models – End-Stage Renal Disease Treatment Choices (ETC) and Radiation Oncology (RO).

KCF is directed at nephrologists and will include beneficiaries at earlier stages of kidney disease (chronic kidney disease stages 4 and 5) in addition to end-stage renal disease (ESRD) patients, and will tie payments to health outcomes and utilization as well as for successful transplants. CKCC also includes beneficiaries at earlier stages of kidney disease and is directed at both nephrologists and transplant providers. CKCC offers three tracks of total-cost-of-care models of varying risk.

The proposed ETC model would randomly select physicians and ESRD facilities that provide care to roughly half of all ESRD beneficiaries and provide payments to the providers based on the rate of home dialysis and transplant success. Under the proposed RO Model, Medicare providers would receive a bundled payment to cover radiation therapy for a 90-day episode of care. The ETC and RO models mark the first mandatory payment models proposed by this administration and follow Administrator Seema Verma’s recent hints that the administration would test mandatory models.

Mandatory models—in which some number of providers are compelled to participate in reimbursement arrangements not established by Congress—are controversial. Critics in both parties oppose the concept as federal overreach. However, the high cost of dialysis (which costs Medicare over $100 billion per year) and the lagging adoption of in-home dialysis in the United States creates a compelling case for a mandatory model.

The ETC model establishes multiple tracks which vary in several respects but coalesce around the themes of moving ESRD treatment toward value-based reimbursement and creating incentives for providing lower-cost in-home dialysis when medically appropriate. A rare consensus of stakeholders that includes patient groups and the two dominant dialysis facility operators—Fresenius and DaVita—issued supportive statements on the announced kidney models.

As with the other payment models announced this year (Direct Contracting, Primary Care First, etc.), this week’s model announcement was short on key financial methodology details that are still under development. Needless to say, health systems and provider organizations have a full plate this summer making participation decisions for these opportunities. And the ever-growing payment model portfolio further increases the urgency for the Innovation Center to develop a comprehensive overlap policy addressing the interactions between the models.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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