Note: This insight was originally posted on December 16, 2021. It was updated on October 20, 2023, to include new information.

The open enrollment period from October 15 to December 7, 2020, was the first opportunity for all Medicare beneficiaries with end-stage renal disease (ESRD) to enroll in an MA plan. The 21st Century Cures Act, enacted into law in December 2016, allowed all ESRD patients to enroll in MA coverage effective for January 1, 2021. According to an Avalere Health analysis, 40,248 ESRD patients who were in Fee-for-Service (FFS) Medicare in December 2020 were enrolled in MA in January 2021. As a result of this enrollment shift, the proportion of all ESRD patients enrolled in MA grew from 22.7% prior to open enrollment to 30.3% after the 2021 open enrollment period (Figure 1).

The shift in ESRD patient enrollment from FFS to MA (Figure 2) has substantial implications for stakeholders. According to the Centers for Medicare & Medicaid Services (CMS), per-patient costs for those with ESRD in 2022 will be more than eight times higher than those without ESRD. Receiving Medicare through FFS or MA influences a number of factors that impact a patient’s overall health, cost, and experience with the healthcare system—and include special considerations for patients on dialysis.

• For instance, MA plans may cover a different set of drugs relevant to kidney health compared to a standalone Part D plan for beneficiaries enrolled in FFS.
• Benefits and cost-sharing may differ, including the availability of supplemental benefits intended to address social-risk factors and non-clinical needs (e.g., transportation, meals benefits, in-home support services).
• Access to providers may also differ, even after accounting for recent changes made by the CMS to MA network adequacy requirements, in which the CMS updated network adequacy standards by removing outpatient dialysis facilities from the types of providers that must meet time and distance requirements.

Implications

In addition to direct patient impacts, healthcare stakeholders should examine how the shifting source of coverage among kidney patients may affect their business.

Manufacturers

• While dialysis-related therapy utilization is typically driven by nephrologist decision-making and dialysis organization/facility formularies, MA plans have greater flexibilities to drive coverage and access for the broader set of therapies prescribed to ESRD patients. This includes the ability to apply step therapy requirements for Part B therapies.
• MA organizations are increasingly partnering with specialty care organizations (e.g., Cricket Health, Somatus, Strive) to better identify late-stage chronic kidney disease patients and manage comorbidities. As the MA footprint in the ESRD space grows, these specialty care organizations will represent an important potential partner for manufacturers as they seek to support the complex clinical needs and limit potential costs related to these patients.

Health Plans

• Almost half of all patients with ESRD in 2021 resided in the South Census Region​ (Figure 3). National health plans that have a disproportionate number of members located in the southern region of the US or regional plans focused on the south may face challenges managing the unique clinical and financial considerations dialysis presents.
• The calculation methodology is different than the methodology for non-ESRD enrollees. While payment rates for ESRD are eight times more than those without ESRD, these payments may not be sufficient relative to the plans’ costs for this complex population.
• Previous Avalere analysis has found that in certain areas of the country, MA payment for ESRD patients may be insufficient. Understanding how the costs of the ESRD patients who elected to enroll in MA compares to MA payment is critical.
• The CMS determines MA payment for ESRD patients based on the statewide average of the costs for all ESRD patients enrolled in FFS. Because the relative number of total ESRD patients in FFS is small, any substantial movement of ESRD patients from FFS to MA could influence this statewide average, and in turn impact payment to plans. Furthermore, given the large costs associated with ESRD patients, a small change in the statewide average can have a large impact on the payment rate. Understanding the differences in costs between ESRD patients who remain in FFS compared to those who enroll in MA could help plans predict how payment rates may change in the next several years.
• Certain characteristics of ESRD patients (e.g., duals status, time on dialysis, other comorbidities, preference for certain providers) may influence enrollment decisions. Understanding which subgroups of ESRD patients choose MA plans for 2021 may help plans project future MA enrollment trends of ESRD patients.

Providers

• Dialysis providers and nephrologists have the opportunity to participate in new value-based care models implemented by the Center for Medicare and Medicaid Innovation, which seek to improve outcomes and cost of care for Medicare FFS patients with kidney disease. As more patients enroll in MA, the population eligible for these total-cost-of-care models may evolve.
• This shift in enrollment from FFS to MA may offer new opportunities for providers to partner directly with MA plans to more effectively manage care and outcomes for patients with ESRD.

Looking Ahead

As the 2022 MA open enrollment period begins on October 15, stakeholders will have a year of experience to better understand how the MA market will continue to evolve. ESRD patients may be more informed about their enrollment choices, and dialysis providers will have seen a great proportion of their Medicare patients enrolled in an MA plan.

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Methodology

Under a research-focused data use agreement with the CMS, Avalere examined data from CMS’s Medicare Beneficiary Summary File and compared MA and FFS enrollment information from 2020 to 2021 to capture enrollment changes made during the annual election period for 2021. This analysis identified all beneficiaries with ESRD who were enrolled in Medicare during December of 2020 and January of 2021 during both time periods. Avalere then identified ESRD patients who were enrolled in FFS in December 2020 and switched to MA for January 2021.