How are ESRD Networks funded?

By Bill Peckham

When Mark Neumann calls for the creation of Network 19, or Gary Peterson writes that "the federal government should embed a national patient organization in its policy making" pointing to the existing Network funding structure, they have something specific in mind. Both Mark and Gary are very familiar with the existing ESRD Networks. For those of us less familiar with the ESRD Networks, this three page overview from CMS (pdf link) provides a good primer.

When reading calls for the creation of a Patient Network one thing to understand is where the Networks get their funding. From CMS (pdf link)(my emphasis):

Funding for the ESRD Network Program is outside of the Agency apportionment. Per statute, the ESRD Network Program is self-funded by withholding 50 cents per patient, per dialysis treatment from the composite rate payment made to the dialysis facilities and an equivalent withholding amount for each managed care ESRD patient. This 50 cent withhold has not been increased, since 1989 when it became effective, despite associated cost increases and a significant increase in the consumer price index. The 2006 apportionment for the ESRD Network program is $24,650,000. In 2005, the average one year ESRD Network base contract was $1,045,362.

I think it is fair to say that the existing networks would see this as a zero sum game - they would take the view (correctly) that an additional Network would take resources from their budget. But as the CMS document says the withhold has not changed since 1989. Increasing the withhold by five cents would be about the same percentage increase as the composite rate has received over the last 20 years, then going forward the withhold could be indexed at the rate provided for under HR 6331, the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008.

Section 153 of HR6331 provides that:

beginning in 2012, the Secretary shall annually increase payment amounts established under this paragraph by an ESRD market basket percentage increase factor for a bundled payment system for renal dialysis services that reflects changes over time in the prices of an appropriate mix of goods and services included in renal dialysis services minus 1.0 percentage point.

ESRD Network funding should accommodate inflation.

Comments

[Rich Berkowitz]

Is anybody starting an initiative to get CMS to consider 19th Network. Perhaps a petition is in order as the first step. This could be a good test to see if Facebook could be used with other avenues to organize around dialysis issues.

[Zach]

Before you start increasing the compensation to the ESRD Networks, it might be wise to evaluate if they are doing a good job.

I suspect some are doing a very good job, while others are lacking.

[Rich Berkowitz]

You're right that not all of the individual Networks are as good as others. But there are two propositions on the table: zero sum game with the current proceeds split 19 ways instead of 18; increase contribution to finance 19th. The larger question I see is what the structure of 19 would be and how its determined.

[Wendy Ramsay]

Bill, I am thrilled about your advocacy work. I look forward to reading more of your posts over the next few days. Thank you.

My insurance company has denied my home hemo coverage stating it is 'investigational'. I am in the process of an appeal with Regence Blue Shield Boeing Traditional. So far, I have Davita, my nephrologist and Home Dialysis Central working on the appeal. If you have information on additional resources that you can direct me to, I'd greatly appreciate it. Thanks again Bill.