1. Medicare beneficiaries with a diagnosis of ESRD have typically not been allowed to enroll in a Medicare Advantage plan (unless they are already enrolled prior to their diagnosis). This means that most Medicare beneficiaries with ESRD on dialysis have their treatments paid for by traditional Medicare. Starting in January 1, 2021, however, this restriction was lifted, allowing beneficiaries with an ESRD diagnosis to enroll in a Medicare Advantage plan.
Medicare spending for beneficiaries with ESRD is approximately eight times that for beneficiaries without ESRD. Medicare Advantage plans will be paid a monthly rate for each covered beneficiary with ESRD that is a function of the average “traditional” Medicare monthly expenditures for an ESRD beneficiary in that state.
This rule change will potentially dramatically increase the proportion of patients with ESRD enrolled in Medicare Advantage plans, thereby increasing the utilization of outpatient dialysis facilities by Medicare Advantage members. Outpatient dialysis is a highly concentrated industry, with three-quarters of treatments provided by two organizations.
a) Describe the bargaining position of Medicare Advantage plans with dialysis facilities, relative to “traditional” Medicare (all of which is paid for by CMS).
b) How do you anticipate the “carve-in” of ESRD into Medicare Advantage will affect the average price paid for a dialysis treatment for a Medicare beneficiary with ESRD?
c) Do you anticipate Medicare Advantage plans to be enthusiastic about this policy change? How might a Medicare Advantage plan respond to this policy in terms of benefit structure to incentivize or deter enrollment by those with