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Special Thank you! Pentec Health For Sponsoring Speaker Mark Neumann, Nephrology News & Issues! Special Thank you! Pentec Health For Sponsoring Speaker Mark Neumann, Nephrology News & Issues! www. floridarenaladministrators. com

Payment and Measuring Quality: Next Steps for the ESRD Program Florida Renal Administrators Association Payment and Measuring Quality: Next Steps for the ESRD Program Florida Renal Administrators Association 42 nd Annual Meeting July 18, 2015

The ESRD Program: 1972 -2015 Payment • composite rate • monthly capitated payment • The ESRD Program: 1972 -2015 Payment • composite rate • monthly capitated payment • the Prospective Payment System (the bundle) • Accountable Care Organizations (ESCOs) • sustainable growth rate Fee Schedule and pay-for-performance

What we will cover: 1972 -2015 Quality • Conditions of Coverage • Core Survey What we will cover: 1972 -2015 Quality • Conditions of Coverage • Core Survey • Quality Incentive Program • Five-Star Ratings

What could we do to help dialysis and transplant care with 1. 425 billion? What could we do to help dialysis and transplant care with 1. 425 billion?

Legal settlements between dialysis providers and the federal government 2000: $486 million FMC settles Legal settlements between dialysis providers and the federal government 2000: $486 million FMC settles fraud and criminal charges; Employees indicted 2012: $55 million Da. Vita settles charges of using EPO overfill 2014: $389 million Da. Vita settles anti-kickback charges with physicians practices 2015: $495 million Da. Vita settles charges over excessive use of iron and Vitamin D. 1. 425 billion!

"I think our overwhelming feelings about this—forget the thoughts—are just we're very disappointed in ourselves and really humbled by the fact that we are having to write a check this big… this is not how we ever envisioned ourselves spending time or your (investors) money. We did make some mistakes and we're accountable for that. ” –– Da. Vita Healthcare CEO Kent Thiry "We should be held to high standards of accountability. Our 67, 000 teammates across 11 countries look forward to putting this behind us. We can now renew our focus on collaborating with regulators to avoid situations like this going forward. ” –– Da. Vita Kidney Care CEO Javier Rodriguez

History of politics and dialysis November 4, 1971: Shep Glazier, VP of the National History of politics and dialysis November 4, 1971: Shep Glazier, VP of the National Association of Patients on Hemodialysis, dialyzes on the floor of Congress “I am going to tell the [House Ways and Means] Committee that if dialysis can be performed on the floor of Congress, it can be performed anywhere. Kidney patients don’t have to be confined to hospitals, where expenses are $25, 000 a year and more per patient. It’s much cheaper in a satellite unit or at home. I want to show the Committee what dialysis is really like. I want them to remember us. ” -- Addressing the media

History of politics and dialysis 1972: • Original cost estimate: $250 million a year, History of politics and dialysis 1972: • Original cost estimate: $250 million a year, “and most of that will be recovered as patients return to productive lives. ” • By 1979: $1 billion, • By 1990: $5 billion • By 1998: $12. 3 billion NOW: $16 billion

Developing a payment system 1982: Composite rate created How much? $127/treatment for independent facilities Developing a payment system 1982: Composite rate created How much? $127/treatment for independent facilities $131/treatment for hospital-based facilities Separate billing allowed for IV drugs, some labs (our first bundle!) 33 years later? Our “second” bundle Composite rate + payment for most labs + IV drugs = $239. 33

Payment and new regulations 1976: Conditions of Coverage released (updated again in 2006) (starting Payment and new regulations 1976: Conditions of Coverage released (updated again in 2006) (starting to look at it again in 2015) 1978: CMS pays for home patients on day one and eliminates the 90 -day delay (still applicable to in-center patients). 1983: Monthly capitated payment set for physicians 1989: Cost for Epogen covered by Medicare.

Payment and new regulations 2000: Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act Payment and new regulations 2000: Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act (BIPA) - Congress required the Secretary to issue a report on a bundled system that would include separately billable drugs and clinical laboratory services routinely used in furnishing dialysis. 2003: “Toward a Bundled Outpatient Medicare End Stage Renal Disease Prospective Payment System, ” released. .

Developing a (new) payment system 2003: The Medicare Prescription Drug, Improvement, and Modernization Act Developing a (new) payment system 2003: The Medicare Prescription Drug, Improvement, and Modernization Act (MMA), Public Law 108 -173 - Required the Secretary to submit to the Congress a report detailing the elements and features for the design and implementation of a bundled ESRD PPS. Section 623(f)(1) of the MMA specified that such a system should include the bundling of separately billed drugs, clinical laboratory tests, and other items “to the maximum extent feasible. ” Section 623(e) of the MMA also REQUIRED a demonstration project testing the feasibility of using a fully bundled case-mix adjusted ESRD PPS.

Developing a (new) payment system 2011: Prospective Payment System takes effect - demonstration project? Developing a (new) payment system 2011: Prospective Payment System takes effect - demonstration project? (Didn’t happen. ) BUT…over 90% of clinics agreed to accepted the bundled payment In January 2011 (offered a blended rate) Why? • favorable drug payment (even with 2% overall cut) • yearly market basket review

Renal ACO demonstration Each applicant builds an ESCO (ESRD Seamless Care Organization) Integrated care: Renal ACO demonstration Each applicant builds an ESCO (ESRD Seamless Care Organization) Integrated care: Hub-and-spoke approach Hub: nephrologists Spokes: Endocrinologists, cardiologists, psychiatrists, vascular surgeons, cancer specialists LAUNCH: JULY 2015 (we think…)

New Payment Models for ESRD • CMS wants to promote coordination of care, decrease New Payment Models for ESRD • CMS wants to promote coordination of care, decrease hospitalizations and ER visits, and decrease overall costs of ESRD • Current silos of payment (Medicare parts A, B, and D) and of care (dialysis facilities, hospitals, extended care facilities) do not align incentives • End-stage renal disease seamless care organizations (ESCOs) are one approach

For Physicians Only The “New” Sustainable Growth Rate • Congress wrestled each year with For Physicians Only The “New” Sustainable Growth Rate • Congress wrestled each year with a 21% cut in Medicare physician pay triggered by the SGR. • Finally got enough votes to “kill it” in 2015. What new payment model does: • eliminated the SGR, physicians will get a modest payment increase of 0. 5% this year and for the next three years. • Beneficiaries are expected to see a $100 million reduction in out-of-pocket costs. • Starting in 2019, doctors who have at least 25% of their patients in value-based payment models eligible for 5% bonus payments through 2024. After that: annual payment bumps of 0. 75%, three times the level of increase for physicians that remain on the fee-for-service track.

The Quality Incentive Program 2015 -2018 • Discussion continues on tying in hospitalization, morbidity The Quality Incentive Program 2015 -2018 • Discussion continues on tying in hospitalization, morbidity and mortality data. Includes measures dealing with pain management, depression in the future New Developments • Kidney Care Partners’ “A Strategic Blueprint for Advancing Kidney Care Quality” Identify key areas for advancing improvement in kidney care. Four patient-centric goals • Improve patient survival • Reduce hospitalizations • Improve health-related quality of life • Improve patient experiences with care Fluid Management a top priority for a Clinical Performance Measure

ESRD QIP National Priorities ESRD QIP National Priorities

ESRD QIP Performance Year vs. Payment Year Performance Year 2010 2011 2012 Payment Year ESRD QIP Performance Year vs. Payment Year Performance Year 2010 2011 2012 Payment Year 2012 2013 2014 2015 2016 2017 2018

QIP Measures PY 2012 -15 Measure 2012 2013 2014 2015 Hb <10 Yes Hb QIP Measures PY 2012 -15 Measure 2012 2013 2014 2015 Hb <10 Yes Hb >12 Yes Yes URR >65% Yes Yes Kt/V >1. 2 Yes High AVF Yes Low CVC >90 d Yes Pediatric HD adequacy Yes PD adequacy Yes ICH-CAHPS administration Yes NHSN reporting of infections Yes Anemia reporting Yes Mineral metabolism reporting Yes

QIP Measures PY 2016 Clinical Measures • Anemia Management: Hgb > 12 • Hemodialysis QIP Measures PY 2016 Clinical Measures • Anemia Management: Hgb > 12 • Hemodialysis Adequacy: Minimum delivered hemodialysis dose • NHSN Bloodstream Infection Monitoring • Peritoneal Dialysis Adequacy: Delivered dose above minimum • Pediatric Hemodialysis Adequacy: Minimum sp. Kt/V • Vascular Access Type: Arterial Venous (AV) Fistula • Vascular Access Type: Catheter >= 90 days • Hypercalcemia

QIP Measures PY 2016 Reporting Measures • Anemia Management Reporting • ICH CAHPS Administration QIP Measures PY 2016 Reporting Measures • Anemia Management Reporting • ICH CAHPS Administration • Mineral Metabolism Reporting

QIP Measures PY 2018 • Clinical Measures: • NHSN Bloodstream Infection in Hemodialysis Outpatients QIP Measures PY 2018 • Clinical Measures: • NHSN Bloodstream Infection in Hemodialysis Outpatients • Standardized Readmission Ratio • Hemodialysis Adequacy: Minimum delivered hemodialysis dose • Peritoneal Dialysis Adequacy: Delivered dose above minimum • Pediatric Hemodialysis Adequacy: Minimum sp. Kt/V • Vascular Access Type: Arterial Venous (AV) Fistula • Vascular Access Type: Catheter >= 90 days • Hypercalcemia • ICH CAHPS Patient Experience of Care • Standardized Transfusion Ratio • Pediatric Peritoneal Dialysis Adequacy: Delivered dose above minimum

QIP Measures PY 2018 • Reporting Measures: • • • Mineral Metabolism Reporting Anemia QIP Measures PY 2018 • Reporting Measures: • • • Mineral Metabolism Reporting Anemia Management Reporting Pain Assessment and Follow-Up Clinical Depression Screening and Follow-Up NHSN Healthcare Personnel Influenza Vaccination

Five-Star Rating System • Based on data from the Dialysis Facility Compare website • Five-Star Rating System • Based on data from the Dialysis Facility Compare website • Providers don’t like the “bell curve” methodology that forces clinics into certain star ratings • No real accounting for acuity of patients, location of facility • Confusing verbiage from CMS about how patients should use the stars

Five-Star Rating System: The Arizona Test • comparison of three dialysis clinics in Scottsdale: Five-Star Rating System: The Arizona Test • comparison of three dialysis clinics in Scottsdale: • a one star, three star, and a four-star clinic. -All were within 20 miles of my location. What Dialysis Facility Compare and Five Star said: (3/3) hospital admission and hospital readmission rates “as expected. ” (2/3) The three-star and four-star facilities also had mortality rates as expected. The one star clinic had a mortality rate “worse than expected, ” according to the profile. But it’s not clear how much: if 1. 00 is “as expected, ” was this clinic 1. 03? The data isn’t provided.

Five-Star Rating System: The Arizona Test Clinical measures: Kt/V, dialyzing with a fistula, patients Five-Star Rating System: The Arizona Test Clinical measures: Kt/V, dialyzing with a fistula, patients with hypercalcemia (calcium >10. 2 mg/dl). In a side-by-side comparison of these three clinics the four-star clinic did better in several categories – but not always by much. • The one-star clinic had 94% of its patients with a Kt/V greater than 1. 2; the four-star clinic had 95% of its patients hit that quality measure. • Both the one-star and the four-star clinic had no patients with hypercalcemia. • But the one-star clinic did have more patients with catheters (57% vs. 74%) and 26% of its patients still had catheters after 90 days (v. 9% for the four-star clinic). • And that one-star clinic did have a higher mortality rate, although we don’t know how much. So those differences in criteria made the difference in the star ratings.

Other Hot Topics • Dialyzing at (nursing) home CMS may be preparing new regs Other Hot Topics • Dialyzing at (nursing) home CMS may be preparing new regs for home, including dialysis inside a nursing home - Not much regulation now • Outcomes are improving when clinics dialyze inside the nursing home vs. sending patients to the clinic.

Other Hot Topics PD fluid shortage “The Baxter shortage has been a real challenge Other Hot Topics PD fluid shortage “The Baxter shortage has been a real challenge to the entire health care community. The late decision to maintain a rationing of cycler solution beyond the first quarter timetable set by Baxter and discontinuing the Irish importation despite the FDA view that a solution shortage still existed caught physicians and patients off guard. The potential for future Baxter shortages for other components of PD has also raised concerns. “At this time we do not have a clear answer from Baxter as to when things will be back to supply levels which will support growth or whether Baxter will move to shrink their footprint in the U. S. in favor of overseas market expansion. ” Martin Schreiber, MD, Vice President of Clinical Affairs, Home Modalities, Da. Vita Kidney Care

ESRD Drug Pipeline • Keryx - ferric citrate approved Sept. 5, 2014 - binds ESRD Drug Pipeline • Keryx - ferric citrate approved Sept. 5, 2014 - binds phosphorus, reduces iron, EPO needs • Rockwell Triferic approved January 24, 2015 soluble ferric pyrophosphate citrate (Two new studies show it replaces iron loss, maintains hemoglobin, and does not increase iron stores. A smaller study published inline July 8 in Kidney International found similar results.

…and Beyond ESAs coming from • Fibrogen • Akebia • Glaxo. Smith. Kline • …and Beyond ESAs coming from • Fibrogen • Akebia • Glaxo. Smith. Kline • Roche • Hospira

…and Beyond • Relypsa “A year-long study of more than 300 patients with hyperkalemia, …and Beyond • Relypsa “A year-long study of more than 300 patients with hyperkalemia, hypertension, type 2 diabetes, and chronic kidney disease found that the investigational drug Patiromer can reduce elevated blood-potassium levels. The drug, given in this trial at one of four doses based on disease severity, returned blood potassium levels to normal when measured at four weeks and kept them under control for one year, the length of the trial.

Payment and Measuring Quality: Next Steps for the ESRD Program Florida Renal Administrators Association Payment and Measuring Quality: Next Steps for the ESRD Program Florida Renal Administrators Association 42 nd Annual Meeting July 18, 2015

NN&I Resources • Mark Neumann (mneumann@nephrologynews. com) • Thrice-weekly e. News • Subscribe at NN&I Resources • Mark Neumann ([email protected] com) • Thrice-weekly e. News • Subscribe at www. nephrologynews. com, click on “e. News” tab Special Topics QIP: www. nephrologynews. com/qip ACO/ESRD demonstration: www. nephrologynews. com/aco Bundled payment: www. nephrologynews. com/esrd-bundle CMO Initiative: www. nephrologynews. com/cmo