The House of Representatives passed 355-59 HR6331*, a bill that would address the looming Medicare physician payment cut. Like the Senate bills (S3101; S3118) this bill included provisions that would change the way dialysis is reimbursed. From the ESRD perspective the Rangel bill (HR6331) is identical to the Baucus bill (S3101). Both bills use the same language in their ESRD provision, language that is problematic and entrenches the status quo.
From Thomas.gov S3101 and HR6331 Section 14(A)iii:
[a single payment] shall include a payment adjustment that reflects the extent to which costs incurred by low-volume facilities (as defined by the Secretary) in furnishing renal dialysis services exceed the costs incurred by other facilities in furnishing such services, and for payment for renal dialysis services furnished on or after January 1, 2011, and before January 1, 2014, such payment adjustment shall not be less than 10 percent;
A low volume facility - meaning a small unit, a unit with few patients - is not impacted by expanding the bundle. A low volume provider - meaning a small business entity, an entity with few units - is impacted by expanding the bundle. The renal services included in the expanded bundle have in common one thing: they are cheaper when purchased in bulk. The cost of providing the renal services included in the expanded bundle (medications, labs) is determined by the size of a unit's corporate owner, not by a unit's particular patient census.
The difference between a facility and a provider is critical. Facility size and what is an optimal facility size is usually left to states; when states choose (to the extent they wish) they can have certificate of need laws. The Grassley bill (a Republican alternative S3118) focused this adjustment on rural units; while this does not promote provider diversity it does advance the Senator's interest in supporting rural healthcare. The Baucus/Rangel bill's ESRD language doesn't do it, but the importance of nonprofit, community owned healthcare is acknowledged by both Senator Baucus and Congressman Rangel when they're speaking of healthcare and healthcare reform.
The healthcare page of the Baucus 2008 website touts the Senator's efforts to "protect Montana’s community-owned, non-profit rural health centers" - the nonprofit providers; Congressman Rangel has supported nonprofit providers at every turn in New York City and State; I had breakfast with the Congressman once and he spoke with pride of the small providers in his community. It is hard to understand why their legislation would seek to support small facilities (including those operated by a huge, international, for profit, vertically integrated company) rather than small providers (including the nation's remaining nonprofit community owned providers). An efficient small provider will operate large facilities in order to be a good steward of resources but, however large a small provider's facility grows it does not significantly impact their buying power.
There are two large dialysis providers in the US that are orders of magnitude larger than the scores of small providers. Last June in front of the Health Subcommittee of Rangel's Ways and Means Committee there was testimony that the price of EPO for DaVita and FMC is about 40 cents less a unit (according to acting CMS administrator Norwalk's testimony) than what smaller providers pay. And it's not just EPO. It is every item in the expanded bundle. Activated vitamin D. Diagnostic tests. Iron.
It is entirely justifiable to support small providers - ownership diversity is in the interest of those who require dialysis - but having an adjustment based on the size of a facility will undercut small providers. To the degree that the reimbursement system rewards economies of scale it will reward the large dialysis providers. Not having a size adjustment would be better than the size adjustment language in the Baucus/Rangel bills.
Per RenalWEB Yahoo is reporting that a Presidential veto is expected but eventually there will be a bill. If the final bill differentiates dialysis providers based on facility size rather than provider size it will hurt small providers.
*As of Tuesday night the text of the House bill HR 6331 did not have a permanent URL on Thomas.gov and searching by bill number doesn't work. To read the text: select the "Browse bills by Sponsor" option for Representative Rangel, then find the bill by number - 6331 - among the list of bills Congressman Rangel has sponsored.
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