Surviving the Shift: How Dialysis Centers Can Tackle Medicare Advantage Hurdles

Dialysis programs across the nation this year have been increasingly aware of the new challenges they face due to the increasing proliferation of Medicare Advantage (MA) plans and their impact on patients with end-stage renal disease (ESRD). As dialysis programs adapt, understanding Medicare and MA plans and educating patients on how these plans affect access to care is essential for financial sustainability and quality patient care. 

Enrollment Challenges 

Traditional Medicare open enrollment runs from October 15 to December 7, allowing coverage adjustments for the next year. In contrast, MA plans, which bundle hospital, physician, and pharmacy coverage, may include extra benefits like dental, vision, and rebates for prescriptions, groceries, and transportation. These perks make MA plans attractive, but patients may not understand their limitations. 

MA plans have a separate open enrollment period from January 1 to March 31, offering flexibility to change plans. Certain patients can switch MA plans more often, but each change resets their out-of-pocket maximum, creating a financial burden. Some MA plans provide minimal out-of-pocket costs for in-network care but offer no out-of-network coverage, which can be problematic if the patient’s dialysis center, nephrologist, or hospital is out of network. 

Challenges in Medicare Advantage Billing for ESRD Care 

Despite the benefits to patients, MA plans pose billing and reimbursement challenges for dialysis programs. Unlike the traditional standardized billing rules of Medicare, MA plans often lack transparency, with each plan employing different policies and requirements. This inconsistency necessitates constant monitoring and adjustments to billing systems, increasing administrative burden. 

Other billing issues include rigid treatment frequency, timely filing, and authorization rules, which often fail to accommodate holiday schedules or partial weeks, and a lack of support for comprehensive claims that include both treatments and necessary medications. 

The introduction of new payment models, such as the Transitional Drug Add-On Payment Adjustment, has been implemented slowly among MA plans, resulting in further reimbursement barriers for dialysis programs. 

Reimbursement Differences Between Traditional Medicare and Medicare Advantage 

A critical issue for dialysis programs is the difference in reimbursement between traditional Medicare and MA plans. While both payers cover ESRD treatments, MA plans often yield lower revenue due to maximum out-of-pocket costs and no bad debt reimbursement. For example, a typical dialysis patient under traditional Medicare could generate annual revenue ranging from $38,896 to $42,278 based on a base rate of $271.02 and 156 treatments, depending on secondary insurance. Under an MA plan, the same patient may only bring in $33,729, leading to a $5,000 shortfall per patient. 

This discrepancy can have a significant impact on dialysis programs, particularly those with a high proliferation of patients with Medicare Advantage. With 54% of patients enrolled in MA plans, a typical center could see a significant annual revenue shortfall compared to revenue from traditional Medicare patients. These financial realities underscore the need for providers to carefully monitor MA contract terms and manage their patient mix strategically. It is worth mentioning that, based on the MA rate books (www.cms.gov/medicare/payment/medicare-advantage-rates-statistics/ratebooks-supporting-data), MA plans are receiving a significant monthly capitation amount from CMS to administer benefits, explaining the aggressive marketing to ESRD patients. 

Strategies to Navigate Medicare Advantage Expansion  

Given the expanding MA market and its challenges, dialysis programs must adopt proactive strategies to manage their patient care and financial stability. Effective approaches include: 

 Contract Monitoring: Regularly review and negotiate MA contracts to ensure fair reimbursement and clarity in billing requirements. 

Payment and Claims Monitoring: Implement systems to track payments and quickly identify discrepancies.  

Patient Education: Inform patients about their coverage options and potential out-of-pocket costs. Monthly insurance verification can help avoid disruptions in care, and clear internal communication about medication pricing and protocols is essential. 

While these plans can offer comprehensive coverage for patients, the variability in billing and reimbursement requires careful management. By staying informed, maintaining strong contract negotiation practices, and educating patients, providers can navigate the expanding MA landscape effectively and ensure high-quality care for patients with ESRD.   

The opinions expressed in this column are the contributor’s own and do not represent those of Nephrology Times.