By Ken Olszewski, Assistant Vice President, Claims, AXIS Accident & Health

Kidney disease continues to be one of the most dangerous and costly worldwide health threats. The rate
of End Stage Renal Disease (ESRD) worldwide is growing faster than the population.1 In fact, nearly
616,000 people in the US are currently on dialysis2 and those already on dialysis are living longer.
Commercially paid dialysis charges can run as high as $700,000+ per year3 and those costs are climbing.

A convergence of events leading to increased costs
Over 80% of all patients receiving dialysis today receive Medicare
benefits on a primary basis. Medicare reimbursement rates are
currently less than $245 per treatment, which is significantly less
than what commercial plans pay.3 any cuts in Medicare payments
often lead to cost shifting to the private sector. In 2011, Medicare
adopted a bundled payment methodology for ESRD patients which
reduced the average payment per Medicare primary beneficiary.
There has been much speculation that the Medicare rates are
going to be cut by an additional 9%, which may lead to a closing of
some facilities and further pressure on commercial rates.
The majority of people with ESRD have a diagnosis of diabetes or
hypertension the top two causes of kidney failure among dialysis
patients. As our population ages, along with the growing number of diagnosed diabetics, confirmed
hypertension cases and the obesity rate, we are starting to see numbers of patients change rapidly.
According to Dr. Bruce Tyler with MedWise, there are 25.8 million diabetics in America today,
representing 8.3% of the population. Of those, seven million are undiagnosed, and there are an
estimated 1.9 million new cases per year.
Due to a lack of symptoms, and little or no preventive care in many cases, patients often experience
their first kidney-related treatment at the emergency room, and are diagnosed with kidney failure.
Patients are often so overwhelmed with the situation that they do not ask about their treatment
options, and often accept whatever referral suggestion has been made. The lack of advance planning for
these patients may leave the payor at risk.

Illustrating the need for cost containment services
The current level of ESRD costs mandate additional diligence in the review of all such claims and relying
on the electronic adjudication of such claims may not always be adequate. For example, a leading cost-
containment services provider, Golden Triangle Specialty Network (GTSN), was asked to review four
months of dialysis claims submitted by a single independent provider and adjudicated by a major TPA.
Claims had been reviewed, approved and paid as clean claims via an electronic process by the TPA and
the PPO Network and the stop loss carrier was to reimburse $969,000.
However, GTSNs consulting review revealed mismatched codes for the dialysis treatments, so claims
should have been denied at this point.
Further review showed inconsistent pricing for the same drug and dose ($15,000 one treatment,
$50,000+ the next treatment). This should have raised additional concern, but claims were paid
electronically and these serious clean claim issues were completely missed.

Early identification is key to keeping costs down
Early identification and intervention of potential ESRD cases may slow the progress or even reverse the
process of renal failure. Appropriate medication, diet modifications and an increase in exercise may slow
the progression of kidney disease to ESRD and the start of dialysis. At a minimum, patients enter
treatment healthier and with a much better understanding of their situation.
With early identification and education, the patient will have made a better decision as to which
treatment modality works for them. Equally important, other co-morbidities such as hypertension and
diabetes will be better managed and controlled which can lead to fewer hospitalizations and a better
quality of life.
Until early identification and intervention becomes more widespread, claims costs related to kidney
disease are only likely to continue to escalate. As such, contracting with an expert in the treatment of
kidney disease can be an effective strategy to more effectively manage these substantial and rising
costs.

Reference:
http://www.axiscapital.com/en-us