Exploring the Kidney Care Environment: Key Players, Treatment, and Payment Systems

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Tune into the first episode in the Avalere Health Essential Voice podcast miniseries focused on the evolving kidney care landscape. In this segment, our Market Access experts discuss the kidney disease patient population as well as treatment and payment systems this space.
“There is increased attention on prevention in the ESRD space because by the time you're an ESRD patient, you have limited treatment options and a poor quality of life. Even though Medicare will eventually cover the cost of your treatment, it's costing Medicare, i.e., taxpayer dollars, a lot of money for you to live.” Emily Belowich, Consultant, Market Access


Mark Gooding , Managing Director, Market Access & Reimbursement

Mark Gooding provides strategic guidance to life sciences clients on policy developments and reimbursement considerations.

Emily Belowich , Associate Principal, Market Access & Reimbursement

Emily Belowich supports clients across the healthcare system seeking to optimize payment and care-delivery strategies as they adapt their business models toward value-based environments.

Jack Fagan , Consultant II, Market Access & Reimbursement

Jack supports clients with evidence-based research and analysis that spans healthcare sectors and stakeholders.

This interview was originally published as a podcast. The audio is no longer available, but you can read the transcript below. For updates on our newly released content, visit our Insight Subscription page.

If you would like to watch the video version, please visit our video page.


Mark: Hi there and welcome to another episode of Avalere Health Essential Voice. My name is Mark Gooding, and I’m a Principal in the Market Access practice here at Avalere.

March is National Kidney Month, a time to raise awareness about chronic kidney disease (CKD) and ways in which patients and other stakeholders can play a role in supporting kidney health. Today’s episode will be the first in a miniseries focused on the evolving kidney care landscape. Here at Avalere Health, we partner with stakeholders across the healthcare spectrum to focus on some of the key issues in this space, including the unique end-stage renal disease (ESRD) payment system, the evolving payer and provider landscape, and new care delivery models that are highlighting opportunities to reduce gaps in health equity.

I’m excited to be joined today by two of my colleagues—Jack Fagan and Emily Belowich, two consultants in our Market Access practice. Today we’ll discuss the treatment and payment landscape as well as the patient population.

Emily, can you get us started with an overview of this patient population, some of the key considerations, and the challenges that they face.

Emily: Thanks so much, Mark. I’m happy to. There are a couple of things I want to call attention to in order to set the stage.

First is the CKD and ESRD population. Currently, more than 37 million Americans have CKD, which makes up about 15% of the adult population. This number is likely an underestimate, since CKD is often not detected early enough. Importantly, CKD disproportionately impacts minority populations, specifically predominantly Black and Hispanic individuals who are at a higher risk of prevalence of CKD than non-Hispanic Whites. The disease is also vastly more common in individuals with diabetes and self-reported cardiovascular disease.

There is a substantial economic impact to treat patients in this population. The annual cost of treating ESRD Medicare beneficiaries is about $36 billion per year. So, patients have a poor quality of life, they have trouble accessing care, and there’s a disproportionate impact on minority populations.

The other thing I wanted to call attention to is where we are in our current healthcare system reform. We’re still trying to dig our way out of a fragmented healthcare system where there are misaligned payments, rising costs, a lack of information, and variable treatment options. We’re seeing an increased focus on a shift to a system that’s driven by value, one that revolves around affordable healthcare, transparent information, efficient incentives, and optimal treatment. This is a new paradigm where we’re trying to figure out the world of reimbursement aligning with a value-based healthcare system that focuses on quality.

I bring this up because CKD and ESRD fit smack dab in the middle of this. Driven by the Affordable Care Act (ACA), Centers for Medicare & Medicaid Services (CMS) and Center for Medicare & Medicaid Innovation (CMMI) are focused on driving innovation in the kidney care space. There is increased attention on prevention in the ESRD space because by the time you’re an ESRD patient, you have limited treatment options and a poor quality of life. Even though Medicare will eventually cover the cost of your treatment, it’s costing Medicare, i.e., taxpayer dollars, a lot of money for you to live.

It’s important to note that the US kidney care system is lagging behind other countries when it comes to mortality rates, optionality for treatment, and transplant rates. We’re looking to create incentives for healthcare professionals to provide more coordinated, high-quality care in the current environment.

Mark: Thanks so much, Emily. That’s helpful in understanding the patient population and some of the unique challenges that they’re facing. You mentioned the size and the unique care challenges. Those are some really astounding numbers—20% mortality rate for individuals in their first year of dialysis, and then thinking about the cost of dialysis itself. Less than 1% of the Medicare population is on dialysis, but those patients represent about 7% of program costs.

Now, when we think about dialysis or kidney care in the US, we often think about the dialysis bundle. Jack, what is this Medicare bundle? How is it organized and what are some changes we’re seeing in recent years?

Jack: Thanks, Mark. I find ESRD reimbursement dynamics to be really interesting. Back in 2011, CMS shifted from a traditional fee-for-service approach to the Medicare ESRD bundle where CMS provides a per-patient per-treatment rate. This bundled rate includes a variety of services that are used incident to dialysis. This includes supplies, equipment, labs, Part B drugs, and some part D drugs.

CMS has also developed 2 adjustments that provided a limited period of add-on payment for new products to promote innovation and assess utilization before being brought into the bundle.

First, there’s Transitional Drug Add-on Payment Adjustment (TDAPA) for drugs. Then there’s Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) for devices, equipment, and supplies. These payment adjustments are similar, but for TPNIES, CMS requires manufacturers demonstrate significant clinical improvement over the standard of care. CMS has changed requirements and timelines for these add-on payment adjustments consistently in rulemaking. It’ll be interesting to see if CMS opts to propose any changes to reimbursement mechanisms or requirements this year in rulemaking.

Mark: That’s helpful background on this per-patient per-treatment, bundled system, understanding that it’s a relatively young payment system and the changes we’ve seen in recent years, at least in terms of creating payment designations, should incentivize innovation and investment into this space.

Outside of the Medicare payment system, who are some of the other key stakeholders in this treatment area, and is there anything that you’re watching in the year ahead?

Jack: When you think about the dialysis market, you have to start with large dialysis organizations (LDOs), given their ability to dictate treatment protocols within this space. Payers generally have a lack of influence over specific treatment decisions but have started to take a more active role in managing costs upstream.

There have also been a lot of new entrants in this space in the past couple of years. These new kidney care specialty companies are looking to disrupt the established market through new data-driven patient recognition approaches and providing additional care management services to patients, which aligns broadly with what payers are trying to do in this space as well. I’m interested to see how these new entrants like Somatus and Strive will evolve and expand over the next couple of years.

Mark: Thank you, Jack and Emily, for sharing this information. It’s really helpful as we think through, who is the patient population, what’s the role of Medicare, particularly with the dialysis bundle, and who are the other stakeholders that are really driving patient identification and patient treatment, whether that is ESRD, CKD, or kidney transplantation.

Thanks to you both and thank you to everyone who tuned in today. Please stay tuned throughout March as we have additional conversations as part of this Avalere Health Essential Voice miniseries. If you would like to learn more about our work, please visit us at Avalere.com.

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