Coming Soon: Nephrology's Very Own Fiscal Cliff


Hello. This is Jeffrey Berns, Editor-in-Chief of Medscape Nephrology. I can't help but wonder whether we might be facing our own fiscal cliff in nephrology in the upcoming year or so.

First of all, there will be more oral medications added to the bundle to join vitamin D products, including oral iron, phosphate binders, calcium supplements, and other medications. Somehow, dialysis providers are going to have to figure out the logistics of all of this and deal with the costs of adding these medications to the bundle.

I recently ran across the observation that 10,000 new patients were started on hemodialysis in the United States between 2009 and 2012, clearly adding substantially to the end-stage renal disease (ESRD) program. The Medicare Payment Advisory Committee chair recommended eliminating the 2.4% composite rate increase that was planned for calendar year 2014 due to a reduction in overall costs because of decreased use of erythropoiesis-stimulating agents (ESAs).

Speaking of decreased ESA use, the Government Accountability Office (GAO) has pointed out that the Centers for Medicare & Medicaid Services (CMS) could have saved as much as $880 million in payments during the past year had they not based bundle payments on 2007 intravenous (IV) drug utilization rates, and has suggested that CMS consider updating the bundle payment rate to account for lower IV drug utilization. For instance, the use of ESAs declined by about 30% among patients who were on ESAs, and there were smaller -- although still quite significant -- declines in the use of IV iron and IV vitamin D analogs among ESRD beneficiaries. In the GAO's opinion, CMS paid between $650 and $900 million a year too much for ESRD-bundled services. Apparently, CMS does not even have legislative authority to rebase the bundle and has indicated that it doesn't have any plans to do so. It is an interesting observation that I suspect will catch the attention of those in Washington, DC, who are involved with ESRD payments, given the huge cost of that program.

We are heading into another year. It will be interesting to see what comes our way from an economic standpoint. Clearly, a great deal of focus will be on the quality of treatment of ESRD patients and pay-for-performance in this population. One good note is that the GAO report indicated that there was a reduction in stroke among ESRD beneficiaries in the past year or so. But they also noted that there was an increased rate of transfusion, and they expressed concern about the ongoing high rates of mortality, hospitalizations, and emergency department visits.

To everybody, a happy 2013. I look forward to continuing these video blogs in the upcoming year. Again, this is Jeffrey Berns from the Perelman School of Medicine in Philadelphia, Editor-in-Chief of Medscape Nephrology.