Issue Brief

Caring for ESRD Beneficiaries in Medicare & Medicare Advantage

Overview

This paper analyzes the potential impacts of expanding the choice of Medicare Advantage to all End Stage Renal Disease (ESRD) beneficiaries in Medicare. It concludes that the benefits of Medicare Advantage would only be fully realized for these beneficiaries if the Medicare Advantage ESRD payment system is accurate, which is currently not the case. The analysis includes background information on kidney failure and its treatments, including dialysis, as well as a summary of Medicare ESRD payment policies. Finally, the paper includes recommendations on how to improve ESRD care in Medicare. Recommendations include the expansion of more ESRD beneficiaries in Medicare Advantage to ensure high- quality care and prevent negative effects on the Medicare Advantage program, which 1/3 of beneficiaries rely on for their Medicare.

This Issue Paper Shows:

  • ESRD prevalence continues to increase and these patients have complex, high-cost treatment needs. 
  • Medicare Advantage provides a high-value care framework well- suited to vulnerable patients with chronic conditions like ESRD.
  • To provide these benefits, Medicare Advantage relies on payment accuracy, and current ESRD payment in Medicare Advantage is inadequate.
  • Medicare Advantage ESRD payment is inadequate due to significant discrepancies in the cost of dialysis care in Traditional Fee-For-Service (FFS) Medicare versus Medicare Advantage. This discrepancy is due to an inability to negotiate lower rates closer to Traditional FFS Medicare dialysis costs.
  • The Centers for Medicare & Medicaid Services (CMS) must ensure payment for ESRD beneficiaries in Medicare Advantage is adequate, especially if more beneficiaries are given the ability to choose Medicare Advantage.
  • Additional policies should be enacted to improve ESRD care in Medicare by increasing the focus on prevention, encouraging treatment innovations, and removing barriers to care.