Full potential of Medicare kidney-care ACOS ‘won’t be realized’

“It’s critical to move upstream and start looking at chronic kidney disease patients before they reach end-stage disease.”

Dr. Allen Nissenson has been chief medical officer for Denver-based DaVita Kidney Care, a division of DaVita HealthCare Partners, since 2008. DaVita Kidney Care has more than 2,000 outpatient dialysis centers in 46 states and is one of the largest dialysis providers in the U.S. Nissenson formerly served as associate dean and director of the dialysis program at the David Geffen School of Medicine at UCLA, and as president of the Renal Physicians Association. Before that, he served as a Robert Wood Johnson health policy fellow of the Institute of Medicine, working with the late Sen. Paul Wellstone. Modern Healthcare editor Merrill Goozner recently spoke with Nissenson. This is an edited transcript.

Modern Healthcare: How are dialysis patients faring today?

Dr. Allen Nissenson: If you look at the outcomes for all U.S. patients over the past decade, they’ve improved significantly. The patients are still really sick but survival is better. They’re in the hospital less and they’re generally healthier.

MH: How have Medicare payment changes for end-stage renal disease, specifically going to a bundled payment system, affected DaVita?

Nissenson: The problem is, Medicare payment is not equal to the cost of the treatment, so for the 85% of patients we treat who depend on Medicare, we lose money on every treatment. That only works because the 10% of patients who have private insurance subsidize all of the others.

MH: In 2012, DaVita acquired Los Angeles-based HealthCare Partners. Yet the deal hasn’t paid off in the short run. What’s happening?

Nissenson: The reason we acquired HCP is that their vision of healthcare for the broader American population is exactly our vision for kidney patients. We’ve got to figure out a way to take the current fragmented system and coordinate it. In the short term, HCP is not thriving to the extent we’d like it to.

HealthCare Partners was a physician-led, physician-focused organization. Naturally there’s some tension there. So we’re in the process of figuring out how do we take the best of HealthCare Partners and the best of DaVita, with its business discipline and organizational skills, and bring these two together.

MH: How do you see working with chronic kidney disease patients served by HCP?

Nissenson: It’s critical to move upstream and start looking at chronic kidney disease (CKD) patients before they reach end-stage disease. HealthCare Partners has thousands of CKD patients. We have a program called Kidney Smart, which is a CKD educational program directed at primary-care doctors and patients, that we are introducing in Southern California in HCP. The upstream work is really going to pay off in the long run.

MH: The Medicare Innovation Center is coming out with pilots to coordinate care for endstage renal disease patients, called ESRD Seamless Care Organizations. How do you plan to participate in ESCO pilots?

Nissenson: We’re hoping to do anywhere from two to five of them. We haven’t heard yet if we’ve been selected to do that many, but we’re confident we’ll do some. We really believe in the accountable care organization approach. We would have liked to do this much more broadly. But there are some issues around the way the financing is done and other important issues in terms of the regulations. We’re enthused but kind of sad that the full potential probably won’t be realized.

MH: Before CKD patients wind up in dialysis, they usually are covered by private insurance. But once they are on dialysis, they’re covered by Medicare. What can be done to coordinate care across these two payers?

Nissenson: There’s no question this is a problem. When you go on dialysis, your private insurance remains the primary payer for 30 months. Because of the inadequacy of the Medicare payment, that gives us 30 months working with the commercial payer so it can help us cover the cost of the Medicare patients. The whole renal care community has been trying to get the CMS to extend that period, so that commercial insurance will be the primary payer for a longer period. In the past, private insurers were against it because they said they’d be stuck with these really sick patients for longer. What they found is, if they collaborate on care coordination, their total costs of care actually go down. So now even the private insurers aren’t against it. We’re working very hard to get Medicare to extend this, which we think would help everybody.