How the ESRD Quality Incentive Program Drives Improvement

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The ESRD QIP is the first pay-for-performance program that penalizes dialysis facilities for not meeting performance thresholds.

Medicare’s Quality Incentive Program (QIP) was launched in 2012 by the Centers for Medicare & Medicaid Services (CMS) to promote high-quality services in outpatient dialysis facilities treating patients with End Stage Renal Disease (ESRD). The QIP is the first mandatory federal pay-for-performance program, requiring that payment for renal services be directly tied to quality measures. The QIP works by linking Medicare payments for dialysis to a facility’s performance on quality measures. Facilities that fail to meet or exceed specific performance thresholds are penalized, losing 2% of the payment amount. The QIP focuses on clinical and reporting measures that address ESRD-specific outcomes such as infection rates, readmission rates, and patient experience scores.

Two objectives of the QIP are to promote transparency and influence decision-making for healthcare consumers; as such, dialysis facilities are required to post their QIP scores, and CMS publicly reports all scores. CMS also annually evaluates quality measures for inclusion based on importance, validity, and performance gap, and publishes proposed and final changes in its annual ESRD payment rule. This has been particularly relevant in the last three years in light of the COVID-19 pandemic and the focused lens on health equity.

The QIP has evolved drastically over the last 10 years, driven by rising healthcare costs and drug prices, the disproportionate and expanding impact of ESRD on racial and ethnic minorities, and worsening clinical outcomes that continue to highlight ESRD as one of the most expensive conditions to treat in the US health care system. The QIP began with three measures and currently includes 14, weighted and distributed across four measure domains:

  1. Patient and Family Engagement (e.g., In-Center Hemodialysis Consumer Assessment of Healthcare Providers and Systems)
  2. Care Coordination (e.g., Standardized Readmission Ratio)
  3. Clinical Care (e.g., Standardized Fistula Rate)
  4. Safety (e.g., Medication Reconciliation)

The QIP has received scrutiny in recent years, showcasing in some studies that the incentives from the QIP disproportionately penalize facilities serving the most vulnerable populations. To address this, CMS has explored improvements in data collection methods, such as the possibility of building an ESRD facility equity score that would synthesize results for a range of measures using multiple social risk factors, such as the dual-eligibility status, race, and ethnicity of the Medicare beneficiaries a facility serves. CMS continues to collect feedback for future development and expansion of health equity quality measurement efforts.

Avalere continually monitors updates and changes to the QIP to advise our clients how those changes could impact various stakeholders. For more information on how Avalere can help to provide support on quality issues and the ESRD market, connect with us.


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