As discussed in previous articles in this series, the Centers for Medicare and Medicaid Services has proposed a fixed payment bundle system for dialysis.

A provision of the Medicare Improvements for Patients and Providers Act of 2008, the new system is required by law to be implemented in January 2011. The rules have not been finalized, but the bundled payments may include composite-rate services, separately billable drugs related to end-stage renal disease (ESRD), laboratory tests for dialysis not in the current composite rate, and dialysis-related supplies (, accessed October 2, 2009).

This new schema will represent a major change in the reimbursement for dialysis, probably the largest change since the current composite rate was established on August 1, 1983.

Continue Reading

These changes should not impact the salary stream to support nephrology trainees or the availability of patients for training purposes.

However, the new bundling schema will provide a case study from which trainees can gain insight into their chosen profession, allowing them opportunities to reflect upon historic payment patterns, understand implications of the current reimbursement system, and consider the potential pros and cons of future models for dialysis in this country.

This article will focus on ways in which the upcoming bundling system could impact nephrology training in this country. The discussion will include opportunities to meet educational objectives and potential enhancement of recruitment.

The outcome project

The current major body providing accreditation for nephrology fellowship training is the Accreditation Council for Graduate Medical Education (ACGME). The ACGME wants to increase attention “to how adequately physicians are prepared to practice medicine in the changing health care delivery system” (

To fulfill its mission to ensure and improve the quality of graduate medical education, the ACGME has initiated the Outcome Project. The first activity of this project was to identify six competencies in which to assess outcomes endorsed by the ACGME in 1999. The six areas are (1) patient care, (2) medical knowledge, (3) professionalism, (4) systems-based practice, (5) practice-based learning and improvement, and (6) interpersonal and communication skills (

Training programs are now required to provide educational outcomes data to improve fellow and overall program performance. The plan to bundle dialysis payments can provide a direct and innovative way to train fellows in one area underemphasized in the traditional curriculum – the meeting of medical practice and finances.

Starting with the areas of patient care and medical education, we note the changes that may occur with drug prescribing. The current payment mechanism for medications comes primarily from the separately billable rate, which accounted for 40% ($3.1 billion) of dialysis payments in 2005. (The composite rate, which covers supplies, equipment, personnel, and some laboratory studies accounts for 60% of payments.)

The injectable medication erythropoietin accounts for 70% of all dialysis drug expenditure reimbursements. Prescribing patterns of erythropoietin, for example, may differ under a bundled rate. Previously, reimbursement occurred on a per-unit basis; now the medication will be administered as part of the ”package deal.” Nephrology fellows may actually see IV and subcutaneous dosing of erythropoietin in a practical setting, rather than only learning about the comparative effectiveness of the various forms of administration in textbooks. IV dosing requires up to 50% more erythropoietin for equivalent effectiveness.

Thus, subcutaneous routes may be utilized more often. Fellows may be taught further subtleties of existing studies as their findings apply to the clinical practice recommendation of a hemoglobin level of 11-12 g/dL from the National Kidney Foundation Kidney Disease Outcomes Quality Initiative versus FDA dosing guidelines to achieve hemoglobin of 10-12 g/dL. We may see more extensive education about oral versus IV dosing of vitamin D since the former may be equally effective at a lower cost.

This may highlight the fact that guidelines regarding bone mineral disorders are primarily based on expert opinion, calling into question the current algorithms to change dosage. Nephrologists in training may see more or less use of medications, such as alteplase, depending on price and effectiveness studies. Antibiotics may be used in a more judicious manner if the data are unclear in certain situations, such as possible—but not probable—line infections.

Meeting ethical obligations

The third ACGME competency is professionalism, which encompasses the commitment to carry out professional responsibilities and adhere to ethical principles. As we embark on a new payment system, we need to make sure that patients whose care is costlier than average do not face barriers to dialysis-unit access, since a fixed payment system may provide disincentives to treat sicker patients who require more time and medication.

We have an ethical obligation to our patients to ensure equal access. To guarantee this, the bundle uses case-mix adjusters. An independent contractor, the University of Michigan Kidney Epidemiology and Cost Center, created such adjusters, using data from 3,254 dialysis facilities between 2000 and 2002. These adjusters include age, BMI, and body surface area.

Other possible adjusters include facility-level wages, gender, dialysis vintage, a dozen specific comorbidities, and racial background. These adjusters should help more costly, resource-intensive patients attain equal access to care. There may be other barriers not yet recognized, and as mentors, we must teach trainees to advocate for patients.

The next area of focus is practice-based learning and improvement. This refers to the ability of trainees to investigate and evaluate their care of patients, understand scientific evidence, and then improve care based on self-evaluation and lifelong learning. Such evaluation and comparisons of current practice are facilitated by the introduction of a new system.

A primary goal of this major reform is to maintain or improve quality of care while cutting cost. Trainees and practitioners, alike, can actively participate in or avidly follow the implementation of the new system. We will hope for increases in desirable clinical outcomes, including survival and quality of life, while observing the effect on costs. Critics have asserted that the Medicare dialysis payment system is outdated and in need of modernization, with payment rates not rebased or recalibrated to reflect recent cost data.

Previous data have shown that the composite rate equivalent of nearly $140 in 1974 would equate to more than $1,300 in today’s dollars. Nephrology trainees should understand the financial implications of this change on their chosen field, including incentives to attract providers. Adding to this point is the possibility that less expensive, equally efficacious modalities may be considered for a greater number of individuals. For example, the cost of peritoneal dialysis has been estimated at 70% of in-center hemodialysis, with similar or improved outcomes during the first two years of care. Thus, the opportunity is again ripe to compare prior outcomes and costs of operating.

Interpersonal and communication skills are always essential to be an effective care provider. This fifth competency is tantamount to working effectively as a member or leader of the care team. While this skill may not appear specific to implementation of the new dialysis bundle, communication is essential for the system to become effective on a local level.

Providing optimal care

The sixth competency, systems-based practice, refers to awareness of and responsiveness to the larger system of health care. Included is the effective use of other resources to provide optimal health care. As trainees enter the field of nephrology, they often imagine their day consumed by physiology and electrolyte disorders (Nephrology [Carlton]. 2008;13:116-123).

Using the dialysis bundle as a case study, we can teach our trainees about the finances of the system that they are about to enter. This allows them to ask questions that we all need to ponder as we change from a fee-for-service system to a prospective payment system: How much will we increase efficiency? How do we implement uniformly a new system that must be tailored to the needs of a highly complex group of patients? What new incentives will arise from this? An effective mechanism to teach our trainees about this important component of practice will better prepare them for their profession. Many nephrology trainees are concerned that training neglects the “real world.” These discussions will smooth the transition between training and practice.

In addition to considering the six ACGME educational objectives discussed here, we must also bear in mind that there is a worldwide shortage of nephrologists. This shortage is primarily due to inability to recruit trainees (Kidney Int. 2009;76:594-596). In the United States, a continuing inability to recruit our own nephrology trainees has resulted in increasing numbers of foreign medical graduates in our field, the highest among the medical subspecialties in 2006 and rising (Clin J Am Soc Nephrol. 2009;4:242-247).

We need to attract well-spoken, interested advocates within the ranks of our providers in order to gain financial independence for now and the future. By considering the aspects of the dialysis bundling system that can interest our trainees and improve their prospects, we will be doing just that – ensuring the health and longevity not only of dialysis patients, but of our own field.

Dr. Watnick is Assistant Professor of Medicine and Nephrology Program Director of Oregon Health & Science University in Portland, Ore. and the Portland VA Medical Center.