ETC Payment Model Unfavorable to Facilities Serving Patients at Higher Social Risk

The Centers for Medicare & Medicaid Services (CMS) implemented the End-Stage Renal Disease Treatment Choices (ETC) payment model in 2021. This pay-for-performance model randomly assigned approximately 30% of US dialysis facilities and nephrologists to receive financial bonuses or penalties based on their patients’ use of home dialysis, placement on a kidney transplant waitlist, or receipt of a transplant.

Although up to 85% of patients with kidney failure may be medically eligible for home dialysis, only 13.3% of incident patients in the United States initiated treatment with home dialysis in 2020. Dialysis rates are lower among Black patients with kidney failure, who are 24% less likely to start peritoneal dialysis than White patients.

Racial, ethnic, and socioeconomic disparities also hinder transplant rates. Dialysis facilities disproportionately serving patients who are non-Hispanic Black, Hispanic, uninsured, on Medicaid, or living in highly disadvantaged neighborhoods have lower home dialysis and transplant rates. This disparity raises concerns that the ETC model may disproportionately penalize such sites.

To determine the impact of the ETC model on dialysis facilities serving populations with higher social risk, Kalli G. Koukounas, MPH, and colleagues conducted an observational study to assess how they fared compared with facilities serving populations with lower social risk. The results were published in JAMA.

The study analyzed CMS-published data on 2021 ETC model performance and payment adjustments, stratified by a facility-level composite social risk score developed using historical data from incident patients. The study sample included 2191 dialysis facilities participating in the ETC model from January 1 to December 31, 2021.

The researchers identified which facilities were in the highest quintile of the proportion of incident patients who were non-Hispanic Black, Hispanic, living in a highly disadvantaged neighborhood, or uninsured or covered by Medicaid at the start of dialysis. Researchers then assigned each facility a composite social risk score representing those in the highest quintile of having zero, one, or at least two of those characteristics. Next, they examined 1-year proportions of achieved home dialysis, achieved and improved transplant, performance payment adjustments, and modality performance scores across facilities with a social risk score of one, two, or more compared with those with a social risk score of zero. They also compared facilities in the highest-risk quintile with those in other quintiles for each category.

Using data from 125,984 incident patients (median age, 65 years [IQR, 54-74]; 41.8% female; 28.6% Black; 11.7% Hispanic), the researchers determined that 1071 dialysis facilities (48.9%) had no social risk factors, while 49 (22.4%) had two or more. In the first year of the ETC model, dialysis facilities with two or more had lower mean performance scores (3.4 vs 3.6; P=.002) and lower use of home dialysis (14.1% vs 16.0%; P<.001) compared with sites with no social risk factors. Facilities with two or more social risk factors were more likely to incur financial penalties (18.5% vs 11.5%;
P< .001), more frequently received the highest payment cut of 5% (2.4% vs 0.7%; P=.003), and were less likely to achieve the highest bonus of 4% (0% vs 2.7%; P<.001). Compared with all other facilities, those in the highest quintile of treating uninsured patients or those covered by Medicaid experienced more financial penalties (17.4% vs 12.9%; P=.01), as did sites with the highest quintile of patients who were Black (18.5% vs 12.6%; P=.001).

The authors identified four study limitations: (1) Using historical data on incident patients to characterize facilities’ 2021 social risk could lead to misclassification. (2) CMS uses the proportion of prevalent traditional Medicare patients with dual coverage or who are eligible for a low-income subsidy to identify facilities eligible for the health equity scoring adjustment. However, the study used the proportion of patients who were uninsured or covered by Medicaid at initiation. (3) The researchers were unable to assess facility-level variations in home dialysis, transplant wait-listing, or transplant rates. (4) The small number of evaluated nonprofit facilities, which received much higher financial penalties given their lower rates of home dialysis, precludes deeper analyses.

In summary, the authors wrote, “These findings, coupled with the escalation of penalties to as much as 10% in future years, support monitoring the ETC model’s continued impact on dialysis facilities that disproportionately serve patients with social risk factors, as well as its influence on outcomes and disparities in care among patients treated in these sites.”

Source: JAMA