June 27, 2000 - In conjunction with yesterday's Senate hearing on dialysis, three reports have been released by different government agencies about US dialysis facilities and their compliance with quality care regulations. These reports are:

A General Accounting Office (GAO) document entitled "Oversight of Kidney Dialysis Facilities Needs Improvement" (pdf file) which reports that the number of dialysis facilities subjected to inspections each year has declined from 52 percent in 1993 to 11 percent in 1999. The report further states that of the 409 facilities inspected last year, 15 percent had deficiencies severe enough that, if uncorrected, would warrant expulsion from Medicare. In 1993, only 6 percent were found to have similar deficiencies.

A report from the Office of the Inspector General (OIG) of the Health and Human Resources Department entitled "External Quality Review of Dialysis Facilities: A Call for Greater Accountability" (pdf file)

Another report from the OIG entitled "External Quality Review of Dialysis Facilities: Two Promising Approaches" (pdf file)

Senator Grassley announced that the public record will be open for two more weeks for additional comments.

June 26, 2000 - The text of the testimony of the eight witnesses that appeared at the Kidney Dialysis hearing of Senate Special Committee on Aging today is now available for viewing.

Highlights (with some commentary):

• The quality of care for US dialysis patients as measured in URR, anemia management, and mortality has been steadily improving. Money spent per patient has been essentially unchanged over the last several years.
• More facilities are out of compliance with regulations. The number of yearly inspections of dialysis facilities has been decreasing and needs to be stepped up again.
  
• ESRD Networks and state surveyors need to work more closely together to address deficiencies in problem facilities.
  
• A wider range of punishments (reducing and/or withholding reimbursement) is needed to keep facilities from adopting a pattern of falling in and out of compliance.
  
• Facility surveys (inspections) and quality reporting data will be made public starting next year.
  
• Dialysis chains provide sophisticated medical informatics systems, economies of scale, and comparable quality care as it is measured today, but may be associated with lower patient satisfaction.
  
• Complaint handling and medical error reporting processes need improvement. With current system, patients and staff feel vulnerable and fear retaliation if they complain. Patients suffer complications due to undertrained staff and knowledgeable patients find themselves in the uncomfortable position of having to supervise staff members.
  
• Tools need to be developed for evaluating the entire dialysis patient experience, not just URR and Hct.
  
• There was very little discussion on the economics of dialysis unit staffing, patient-to-staff ratios, and its effect on patient satisfaction.
  
• Dialyzer reuse and adequacy of dialysis are complex issues that will require further expedited study.
  

To remedy the diminishing amount of oversight of dialysis facilities, the Clinton administration has requested that Congress increase Medicare's budget for inspections of dialysis facilities to $6.3 million in 2001, up from $2.2 million this year.

June 22, 2000 - On Monday, June 26, the US Senate Special Committee on Aging will hold a hearing to explore the hardships that dialysis patients endure and the options for improving the government's oversight. The hearings will convene at 1:30 PM EDT. Here is the press release from the Special Committee on Aging.

Here is the web site of the Senate Special Committee on Aging. The committee is headed by Senator Chuck Grassley, a Republican from Iowa. The ranking Democrat on the committee is Senator John Breaux from Louisiana.

Expect to hear testimony calling for fixed patient-to-staff ratios, dialysis technician licensing, and increases and/or changes in the Medicare composite rate for dialysis treatments.

Background information:

Before 1972, just a few dialysis centers existed. A person with end-stage renal disease (ESRD) who required dialysis either had to pay for the treatments themselves or had to petition to be accepted into a dialysis program. At that time, most dialysis programs were supported solely by donations, grants, and private subsidies. So called "death committees", made up of physicians and community members, selected a few patients to receive dialysis treatments from long lists of candidates. The unsuccessful petitioners simply died.

In 1972, Congress passed the Right to Life Bill. The federal government agreed to cover 80% of the costs of dialysis treatments for ESRD patients. With reimbursement now guaranteed, dialysis programs sprang up across the country. The government reimbursed the dialysis centers for their costs, which the centers essentially determined on their own.

By 1983, the costs of the ESRD program had far exceeded projections. As the government simply reimbursed for all reasonable costs incurred, there was no financial incentive for dialysis centers to operate efficiently. In order to get costs under control, the government moved to a composite rate system (one fixed fee for all supplies and services). Dialysis centers were then paid based on a $138 per treatment cost. If a dialysis center could deliver a treatment for less than $138, they made money. If the dialysis center spent more than $138 per treatment, they lost money and needed to change their operations.

The US government reimbursement rate for dialysis treatments has been virtually unchanged since 1983. While the cost of dialysis supplies has decreased since 1983, labor costs have vastly increased over the last seventeen years. Many hospitals, seeing their dialysis unit profit margins shrink with each successive year, sold their dialysis operations in the 1980's and 1990's to dialysis provider chains (Fresenius, Gambro, TRC, RCG, etc.) that could take advantage of the economies of scale.

The biggest expense of an in-center hemodialysis treatment is nursing/technician labor. In the 1970's, patient-to-staff ratios of 2:1 were common. At that time, registered nurses made up the majority of the patient-care staff. Today, the stagnant reimbursement rate has resulted in patient-to-staff ratios of 3:1, 4:1, and even 5:1 in some facilities.

Dialysis technicians, rather than RN's, now make up the majority of the staff. Dialysis technicians earn between $15,000 and $35,000 per year, depending on geographic location, experience, market demand, and level of responsibility. The vast majority of dialysis technicians only receive on-the-job training. No states require certification or licensing as a condition of initial employment.

MedPAC (Medicare Payment Advisory Commission) advises Congress on provider reimbursement for Medicare programs, such as dialysis. You can read the MedPAC report for fiscal year 2000 that was delivered to the Ways and Means Health subcommittee on March 2, 1999. MedPAC recommended a 2.4 - 2.9 % increase in the dialysis composite rate. Use the "Edit/Find (in Page)" feature on your browser to locate the references to "dialysis".

In November 1999, President Clinton signed a bill raising the composite rate 2.4% over the course of two years. It was the first increase in nine years. Drug price increases announced since then have wiped out this revenue gain for dialysis centers.

Congress has been receiving information about the need to improve the care of ESRD patients. In June of 1999, MedPAC delivered another report which recommended several changes be made in dialysis-related government reimbursements. See Chapter 8 of this report which is entitled " Improving the quality of care for beneficiaries with end-stage renal disease". Here are the four recommendations of that report:

8a - The Secretary (of HHS) should determine clinical criteria for dialysis patients to receive increased frequency or duration of dialysis. The Secretary should then examine the feasibility of a multi-tiered composite rate that would allow different payments based on the frequency and duration of dialysis prescribed, as well as other factors related to adequacy of dialysis.

8b - MedPAC reiterates the recommendation made in its March 1998 and March 1999 reports calling for an increase in the composite rate.

8c - The Secretary should determine clinical criteria for ESRD patients to be eligible for oral, enteral, or parenteral nutritional supplements. Coverage for these supplements should then be provided to eligible ESRD patients as a renal benefit apart from the composite rate.

8d - In fulfilling the requirements of the BBA regarding improving the quality of dialysis care, the Secretary should take into consideration the quality assessment and assurance efforts of renal organizations.