The National Taxpayer Union (NTU) has come out with a position statement on the Medicare Secondary Payer provision of the US dialysis program. In NTU's letter to the Senate Finance Committee NTU's Pete Sepp, Vice President for Policy and Communications, comes out in favor of extending the MSP to 60 months. I've blogged about the MSP provision before: giving MSP's legislative history, the current administration's MSP extension proposal contained in the 2009 budget, and I've outlined how Medicare pays for dialysis, putting the MSP provision in context.
Forced to switch to Medicare?
The NTU letter is long and convoluted but the gist is that they can't understand why people on dialysis are "forced to switch to Medicare as their primary provider after 30 months of treatment" (actually its 33 months of treatment incenter because of the three month initial waiting period). First it isn't that people are forced to switch to Medicare - it's that they get to switch to Medicare.
NTU continues, "Apparently this strange process is a relic of a time when private facilities for dialysis, and private coverage of their services, was thought to be inadequate." Um yeah, most people think that having people go before a committee to decide whether they could continue to live constitutes inadequate coverage. The US dialysis program under Medicare exists so that people don't die of a treatable condition. Dialysis is unique - it's like a switch - with it you live, without it you die. If there was not a dialysis entitlement those with severe kidney disease and without insurance, would be forced into emergency rooms a couple times a week to receive life extending treatment, an even greater burden to taxpayers.
Someone's understanding of the numbers is off
As uninformative as that is, the letter really goes off the tracks when it gets to numbers. NTU acknowledges the opposition of large employers to extending MSP but is puzzled:
Like many other proposed changes to Medicare that should be non-controversial, supporters of the current ESRD policy doggedly cling to fearful predictions of chaos if this burden to taxpayers is lightened. One common assertion is that extending the 30-month coverage period would amount to a "cost shift" that would severely disrupt private employers' insurance plans. General Motors, for example, attests that extending primary payer coverage for ESRD by 12 months (to 42 months total) would increase their insurance costs.
Here again, words can be deceiving. According to U.S. Renal Disease System statistics cited in an analysis by Kidney Care Partners, the average dialysis patient cost amounts to $180,000 per year. By that standard, GM's estimate would have to assume an average cost of four times that amount, for an average number of patients 2-1/2 times greater than those typically found in the general population.
Medicare's cost (their 80% share of the allowed charges) for someone on dialysis and not in a skilled nursing facility is about $55,000/year. Of that about $24,000 is for Part B outpatient dialysis services. You can back into how many people are thought would be impacted from the projected savings NTU cites: "[extending MSP to 60 months would] save Medicare $1.02 billion over five years and $3.07 billion over 10 years" or about 41,000 patient years of coverage over five years.
I believe, though NTU's letter is not clear about this, that "the average dialysis patient cost amounts to $180,000 per year" is the average Part B costs of someone on dialysis to a private insurance plan. The costs to private payers of extending the private pay period to 60 months would be over $7,000,000,000. And that's using the $180,000 yearly cost which implies a per treatment rate of about $600 for dialysis and $500 for separately billable services (e.g. medications, labs). Another data point to keep in mind are the dialysis charges reveled in a recent court filling of $2,900 per dialysis treatment and $9,000 total charges per visit. However, acknowledging these number would be a problem for NTU's analysis.
NTU does grant that "insurance choice is limited, and we support legislation to provide more options for Americans. Yet the fact remains that consumers, employers, and small businesses have at least a few voluntary options for seeking and negotiating health care coverage." However, NTU does not mention recent legislative efforts at the state level to circumvent the imagined negotiation process. You would think an organization called the National Taxpayer Union would be better with numbers.
Don't decrease support of the US dialysis program
NTU does not care about the provision of dialysis or the people on dialysis beyond the financial costs of the program. They see extending the MSP as a good in and of itself, rather than as a bitter compromise to pay for desperately needed improvements to the federal dialysis program. An extension to 42 months is barley acceptable if it allows a mechanism to routinely adjust dialysis reimbursement for inflation; funds community outreach and screening; funds pre-dialysis education for individuals with kidney disease to help
slow progression of CKD; and provides enhanced training for caregivers (sign the petition). Extending MSP to 60 months should not be on the table.
NTU is advocating for a cut to the US dialysis program, and an effective end to a federal program that for 35 years has meant people with severe kidney disease can have confidence that they will have access to routine treatment. NTU is giving the Senate Finance Committee bad advice.