Effects of physician payment reform on provision of home dialysis

Abstract

Objectives: Patients with end-stage renal disease can receive dialysis at home or in-center. In 2004, CMS reformed physician payment for in-center hemodialysis care from a capitated to a tiered fee-for-service model, augmenting physician payment for frequent in-center visits. We evaluated whether payment reform influenced dialysis modality assignment.

Study design: Cohort study of patients starting dialysis in the United States in the 3 years before and the 3 years after payment reform.

Methods: We conducted difference-in-difference analyses comparing patients with traditional Medicare coverage (who were affected by the policy) to others with Medicare Advantage (who were unaffected by the policy). We also examined whether the policy had a more pronounced influence on dialysis modality assignment in areas with lower costs of traveling to dialysis facilities.

Results: Patients with traditional Medicare coverage experienced a 0.7% (95% CI, 0.2%-1.1%; P = .003) reduction in the absolute probability of home dialysis use following payment reform compared with patients with Medicare Advantage. Patients living in areas with larger dialysis facilities (where payment reform made in-center hemodialysis comparatively more lucrative for physicians) experienced a 0.9% (95% CI, 0.5%-1.4%; P < .001) reduction in home dialysis use following payment reform compared with patients living in areas with smaller facilities (where payment reform made in-center hemodialysis comparatively less lucrative for physicians).

Conclusions: The transition from a capitated to a tiered fee-for-service payment model for in-center hemodialysis care resulted in fewer patients receiving home dialysis. This area of policy failure highlights the importance of considering unintended consequences of future physician payment reform efforts.

Figure 1. Dialysis Modality Assignment over Time in Areas with Small versus Larger Dialysis Facilities

Note: Dashed line represents the reimbursement reform proposed rule; solid line represents the final rule. Probabilities are unadjusted. A plot of probabilities adjusted for covariates from our primary regression model is not substantively different.

Figure 2. Change in Dialysis Modality Following Payment Reform by Dialysis Facility Sizes and Selected Patient Characteristics

Note: ^bre a statistically significant difference (p<0.01) in the change in use of home dialysis between areas with large and smaller facilities. Analyses are unadjusted.