President Trump’s overall strategy of addressing the ballooning of expenditures for End Stage Renal Disease (ESRD) care by encouraging less expensive home dialysis and transplantation is brilliant but the devil is in the details. The tactics the Administration proposes to use are unnecessarily complicated and resemble a communist Chinese large scale transformative policy experiment rather than a democratic American legislative initiative.

At 4:45PM EST today on 7/11/2019 the detailed proposal was released for public inspection at https://s3.amazonaws.com/public-inspection.federalregister.gov/2019-14902.pdf. The proposed rules are 413 pages. Ironically, the authority for the regulation comes from the Obamacare Law that the Administration supports eliminating.

Here is the experiment being proposed: The USA will be divided into 306 groups of zip codes called Hospital Referral Regions.  153 Hospital Referral Regions will be randomized to provide incentives for nephrologists to refer for home dialysis (mainly peritoneal dialysis) and transplantation and 153 regions will be randomized to the status quo.  The providers whose payments will be affected by the randomization will be the dialysis unit and the nephrologist.  Since this is a legislative experiment rather than a clinical trial the requirement for informed consent will be waived; rather, participation will be mandatory for the providers. It is called the ESRD Treatment Choices Model (ETC Model).

When the study is concluded in 2026, the data can be analyzed to determine whether the clinical and financial outcomes are better with the payment incentives and whether the administration’s goal of increasing home dialysis and transplantation through the incentive program is being achieved. Then the incentives could be implemented systemwide.

As we well know, in recent years, CMS has been trying to reduce ESRD expenditures by reducing the payment rates for the services are were needed to maintain hemodialysis access and has run into increasingly loud resistance from providers (like myself)  that performed those services and who had an opposing concentrated interest. This policy does an end-run around the HD maintenance payment conflict by incentivizing home dialysis (mainly peritoneal dialysis) and transplantation which all virtually all specialists agree is much cheaper to maintain. 

That home dialysis and transplantation are less costly than in-center hemodialysis there is no doubt. Whether the clinical outcomes of home dialysis are better than the clinical outcomes of in-center dialysis are presently uncertain. In my opinion the data currently available suggests clinical outcomes are about the same.  CMS proposes to resolve this uncertainty by structuring the payment reform measures as a massive nationwide prospective randomized non-blinded study that will study the effect of home dialysis/transplant payment incentives on cost and outcomes.

It is obvious that the costs of ESRD care have grown so high that something must be done or the Medicare system will be bankrupted.  But America doesn’t need a grand social experiment to decide whether to  incentivize less costly home dialysis and transplantation.  The administration has the legal authority under the Obamacare Act to implement the proposed innovation systemwide without limiting them to  randomly chosen geographic areas.  I would urge that the regulations be revised before the final rule is issued making the incentives applicable throughout the America, while it monitors clinical and financial outcomes.  Ultimately, the Secretary of HHS has the authority to stop the study  program as soon as it is clear that money is being saved without adversely affecting clinical outcomes and make the changes permanent. I hope this is done as soon as possible.

Sincerely,

Eric

Eric Ladenheim MD

LDAC Vascular Centers