Close to 500,000 Americans suffer from kidney failure (also known as end stage renal disease, or ESRD) and require either kidney dialysis or transplantation to live. This number has more than tripled in the past 20 years and is rising most quickly in the 65 and over population, according to 2005 figures from the United States Renal Data System (USRDS).
End stage renal disease (ESRD) is also only one of Medicare’s two disease-specific programs that entitles people of all ages to Medicare coverage on the basis of their diagnosis. Yet, once an ESRD patient has Medicare, unless a person also has Medi-Cal, finding insurance to supplement Medicare is almost impossible. For example, Medicare supplement insurance (also known as Medigap policies) and Medicare Advantage plans are required at certain times to accept new enrollees regardless of health conditions, except those with end stage renal disease. Being a highly care-intensive and costly condition, this ‘exception’ has left beneficiaries who have ESRD with few options.
In an effort to remedy this situation, improve health care access for people with ESRD and test disease management effectiveness, the Centers for Medicare and Medicaid Services (CMS) started a four-year ESRD demonstration project with selected Medicare Advantage (MA) plans around the country. Beneficiaries with ESRD, who normally are excluded from joining an MA plan unless they developed ESRD while already enrolled in a MA plan, can join these demo plans.
California currently has two such plans:
- SCAN Health Plan is partnering with DaVita Dialysis in offering a Medicare Advantage Special Needs Plan (SNP) in parts of San Bernadino and Riverside counties. This Special Needs Plan (SNP) called VillageHealth also provides Medicare Part D prescription drug coverage. VillageHealth has been operating since January 1, 2006 and their ESRD demonstration plan runs through December 31, 2009. See their website villagehealthca.com for plan information.
- Fresenius Medical Care Health Plan (FMCHP), underwritten by Sterling Life Insurance, is offering a Medicare Advantage Private Fee For Service (PFFS) plan in the following northern and southern California counties respectively:
- Alameda, Contra Costa, Sacramento, San Joaquin, San Mateo, Santa Clara, and Solano counties; and
- Imperial and San Diego counties.
FMCHP’s ESRD PFFS demo plan does not offer Medicare Part D drug coverage. Fresenius began accepting patients on January 1, 2007 in its southern California counties, and January 1, 2008 in its northern California counties. Their demo plan runs through December 31, 2009. See their website fmchp.com for plan information.
Eligibility for California beneficiaries
California beneficiaries who would like to enroll in one of these plans must:
- Have Medicare Parts A and B;
- Have ESRD or post-transplant status;
- Be at least 18 years of age for VillageHealth and over 19 years of age for Fresenius; and
- Live within the plan’s service area.
Basic ESRD demo plan benefits
Each ESRD demo plan covers at least all Medicare-covered services, and some plans offer additional benefits such as waiving the Medicare Part B deductible in VillageHealth’s plan. The main difference between being in an ESRD demo plan versus Original Medicare is these plans are designed with a disease management focus. An interdisciplinary team of a nephrologist, renal nurse, renal social worker, and pharmacist coordinate the patient’s medical and psychosocial care.
For example, in the VillageHealth SNP and Fresenius’ PFFS plans, each enrollee is assigned a renal nurse who is available 24 hours a day to help coordinate the patient’s total care, not just renal care, through various care settings such as dialysis centers, hospitals and specialist offices. Enrollees are also assigned to a pharmacist to help review and manage medications. While the SNP plan has a network of providers and specialists, enrollees are not limited to only using this network. They can see any provider and use any facility that accepts Medicare. See VillageHealth website for more information.
Because Fresenius is a PFFS plan, enrollees can go to any doctor, specialist or hospital as long as these providers accept the terms and conditions of the plan’s payment. They must bill Fresenius, not Medicare for services. While Fresenius does not have a network of physicians, it does have a network of renal dialysis centers. This means for physicians, this plan works like a normal PFFS plan; for dialysis centers, it works more like a preferred provider organization (PPO) plan. Enrollees who use network renal dialysis centers have a 20 percent co-insurance whereas enrollees who use renal dialysis centers outside the network within the service area, pay a co-insurance of 35 percent. However, if enrollees are outside the plan’s service area and receive renal care services from non-FMCHP renal care facility providers, they pay the same plan deductible, coinsurance and copayment amounts as when using providers in the network. See Fresenius’ website for more information.
Note that a person in Original Medicare who receives dialysis will always only have a 20 percent co-insurance regardless of which renal dialysis center s/he goes to. This is in contrast to a beneficiary enrolled in Fresenius’ ESRD demo plan who would pay 15 percent more for dialysis if s/he uses a renal dialysis facility outside of the plan’s network.
Enrolling in and disenrolling from an ESRD demo plan
California’s eligible beneficiaries with ESRD have a continuous Special Election Period allowing them to enroll into an ESRD demo plan at any time throughout the year. Their effective enrollment date is the first of the month following the month their application was submitted. Once enrolled in a plan, however, beneficiaries may only disenroll during the appropriate election periods – the main two such periods being the Annual Election Period from November 15 through December 31 of each year, and the Medicare Advantage Open Enrollment Period (OEP) from January 1 through March 31 of each year. (See 42 CRF 422.62).
Beneficiaries with both Medicare and full Medi-Cal, and anyone with the Part D low-income subsidy (LIS), can disenroll and return to Original Medicare at any time.
Note that all demonstration plans are scheduled to end December 31, 2009 unless legislation is passed to extend the sunset date and/or make these ESRD plans a standard Medicare Advantage option. The ESRD demo plan sunset date also coincidences with the sunset date for Special Needs Plans (SNPs). If no extension or legislation to keep these ESRD and SNP plans is passed, then beneficiaries who are enrolled in these plans will have the option of being disenrolled back into Original Medicare or choosing another Medicare Advantage plan in their service area. Since these ESRD demo plans are a type of Medicare Advantage plan, if they are discontinued, all enrollees have the right to join another Medicare Advantage plan in their service area.
This potential opportunity is significant as it means ESRD patients may be able to enroll into a regular MA plan. In many cases, regular MA plans (meaning other than ESRD demonstration plans) provide more coverage and less out-of-pocket costs for things like doctors visits and hospital inpatient copays.
Coordinating with Medi-Cal and/or other Medicare supplement insurance
It appears that Medi-Cal may be paying some of the costs (Medicare deductibles, coinsurance and copayments) for dual eligible beneficiaries who enroll in one of the two ESRD demo plans. Although Medicaid programs are not required to help all dual eligibles enrolled in Medicare Advantage plans with any plan costs, they have the option of paying some costs for dual eligibles in ESRD demo plans, and some Medicaid programs, such as California’s, are agreeing to do so. (See the “End Stage Renal Disease Pilot Project: VillageHealth and Fresenius” in the Medi-Cal Provider Manual – Part 1 under ‘MCP: Special Projects,’ pp.7-9.)
Some beneficiaries with ESRD may have a Medicare supplement insurance policy (Medigap) if they bought one before being diagnosed with ESRD. If this is the case, in California these beneficiaries are likely better off financially staying with their Medigap policy and not enrolling in one of the ESRD demo plans. Companies selling Medicare supplement insurance are not required to cover claims for MA enrollees, and in California most companies selling Medigap insurance are not. Some companies in other states are covering the claims for those enrolled in these MA ESRD demo plans.
ESRD demonstration plans are subject to the same marketing guidelines as all MA plans. If you or your clients experience or hear of plans or agents not adhering to these guidelines, please let us know. Contact Julie Schoen, our Senior Medicare Patrol (SMP) Project Director at
email@example.com. You can also send your complaints to Ronald Deacon with CMS’ Center for Beneficiary Choices: ronald.deacon (at) cms.hhs.gov.
See CMS’ MA plan marketing guidelines online for detailed information.
Follow-up quality studies on these ESRD demo projects are currently being conducted by the Arbor Research Collaborative for Health (formerly the University Renal Research and Education Association) under contract with CMS. This research collaborative also conducted and published quality studies on past ESRD demo projects. Diane Frankenfield with the CMS Baltimore office is the Project Officer of this evaluation effort. Her contact number is 410-786-7293.
Cost effectiveness and payment structure
One aspect of this demonstration project is CMS’ emphasis on quality improvement and ‘pay-for-performance.’ CMS is reserving five percent of the capitation payment rates for incentive payments related to quality improvement. Participating organizations receive payment for improvement on past performance and performing above the national averages for quality measures related to dialysis.
In addition, CMS is looking to this project to help control rising healthcare costs. This result seems unlikely given that payments to MA plans average over 12 percent more than costs in traditional Medicare, and cost savings results of SNPs have also been mixed (see Center for Medicare Advocacy article). Although ESRD Medicare beneficiaries make up a small percentage of the total Medicare population, in 2002 CMS spent $17 billion on ESRD-related care, an increase of 11 percent over costs in 2001. Spending is projected to increase to $28 billion by 2010 and $54 billion by 2020 with an estimated number of people with ESRD nearing 800,000, and a dialysis population of 534,000 (see 2005 USRDS report).
The following CMS contacts are for questions regarding program operations and management:
- Denise McCague, CMS, Plan Manager for SCAN contracts, San Francisco, CA
Denise.McCague (at) cms.hhs.gov
- Mark Holly, CMS, Plan Manager for Fresenius Medical Care Health Plan contracts, Dallas, TX
Fresenius plan contact:
- Pete Sauer, Vice President and General Manager, Fresenius Medical Care Health Plan: 303 854-0440
For plan marketing concerns, contact:
- Ronald Deacon, CMS Center for Beneficiary Choices, 410-786-6622, ronald.deacon (at) cms.hhs.gov