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Dialysis Facilities Serving Disadvantaged Populations More Frequently Penalized Under Pay-For-Performance Model

MedicalResearch.com Interview with:

Kalli Koukounas, MPHPh.D. Student, Health Services Research Brown University School of Public Health Providence, RI

Kalli Koukounas

Kalli Koukounas, MPH
Ph.D. Student, Health Services Research
Brown University School of Public Health
Providence, RI

MedicalResearch.com: What is the background for this study?

Response:  On Jan. 1st, 2021, the Centers for Medicare and Medicaid Services (CMS) implemented the End-Stage Renal Disease Treatment Choices (ETC) Model, one of the largest randomized tests of pay-for-performance incentives ever conducted in the US.

The goal of the model was to enhance the use of home dialysis and kidney transplant or waitlisting among kidney failure patients in traditional Medicare. The model randomly assigned approximately 30% of US dialysis facilities and nephrologists to receive financial incentives, ranging from bonuses of 4% to penalties of 5%, based on their patients’ use of home dialysis and kidney transplant/waitlisiting. The payment adjustments apply to all Medicare-based reimbursement for dialysis services. Prior research has demonstrated that dialysis facilities that disproportionately serve populations with high social risk have lower use of home dialysis and kidney transplant, raising concerns that these sites may fare poorly in the payment model. Using data released by CMS, we examined the first year of ETC model performance and financial penalties across dialysis facilities, stratified by the measured social risk of the facilities’ incident patients.

MedicalResearch.com: What are the main findings?

Response: Our analysis found that dialysis facilities serving higher proportions of patients with identified social risk features, including those who were non-Hispanic Black, Hispanic, living in a highly disadvantaged neighborhood, or uninsured/Medicaid-covered at dialysis initiation, received lower performance scores and had higher receipt of financial penalties in the first year of the End-Stage Renal Disease Treatment Choices model. These results were primarily driven by lower use of home dialysis in these facilities, rather than kidney transplant or waitlisting. Facilities with the highest proportion of non-Hispanic Black and uninsured/Medicaid-covered patients were most associated with the receipt of financial penalties and lower home dialysis use.

MedicalResearch.com: Might the imposed penalties discourage dialysis providers from entering markets with increased social risk factors?

Response: While this may be a concern if the payment incentives continue past the current model end point (set for 2027), the larger concern our team had was the immediate impact of payment cuts to safety-net dialysis centers. The End-Stage Renal Disease Treatment Choices model’s 5% penalty on all Medicare dialysis reimbursements is larger than past payment cuts in other value-based payment models related to kidney care and set to escalate to 10% by the end of the model.

Cuts of this magnitude may threaten the financial viability of some dialysis facilities, particularly those that serve high proportions of low-income and socially vulnerable patients. The resultant closure of these facilities would likely have harmful consequences to their patients, including extended travel times and missed dialysis sessions.

MedicalResearch.com: Is there anything else you would like to add? Any disclosures?

Response: The End-Stage Renal Disease Treatment Choices model measures facilities’ home dialysis and transplant utilization relative to other providers as well as relative to their own historical performance, affording the opportunity to improve via two mechanisms. Despite this design, facilities serving patients with greater social risk were still disproportionately penalized relative to their peers serving patients with lower social risk.

Further, starting in 2022 CMS will make additional adjustments to their model scoring process, to account for the proportion of Medicare beneficiaries who are dually enrolled in Medicaid or receive low-income subsidies. Our study found that less than 3% of the facilities in the model, and only ~10% of those with the highest social risk score are likely to qualify for this “Health Equity Adjustment”. Going forward, our study supports closely monitoring the consequences of the ETC model for safety-net dialysis facilities and the patients who receive care in these sites.

Note: The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of the US Department of Veterans Affairs or the US government. The study was funded by a grant from the National Institute of Minority Health and Health Disparities. No other disclosures required.


Koukounas KGThorsness RPatzer RE, et al. Social Risk and Dialysis Facility Performance in the First Year of the ESRD Treatment Choices Model. JAMA. 2024;331(2):124–131. doi:10.1001/jama.2023.23649

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Last Updated on January 11, 2024 by Marie Benz MD FAAD