California voters have rejected a ballot measure to require a doctor or highly trained nurse at each of California’s 600 dialysis clinics. With more than 9 million votes tallied Tuesday, Proposition 23 had just 37% of votes. It is the second measure seeking to regulate dialysis clinics placed on the ballot in recent years by unions that represent health care workers and drew more than $110 million in spending. Opponents, financed by dialysis clinic companies, say that under that mandate, between two and three doctors would be required at every facility because most are open at least 16 hours a day, creating a financial burden that could lead some clinics to close.
CMS on Monday signed off on its proposal to pay providers extra money if they use home dialysis machines to treat end-stage renal disease patients. The final rule expands a transitional add-on payment to cover home dialysis machines that CMS Administrator Seema Verma touted in July when the agency proposed it, saying the COVID-19 highlighted the need to increase home dialysis access. CMS expects it will pay $9.3 billion in 2021 for renal dialysis services. It increased the prospective payment system rate from $239.33 to $253.13. The proposed rule also updated payment rates for acute kidney injury dialysis and made changes to the ESRD Quality Incentive Program. The changes take effect Jan. 1.
American Renal Associates Holdings, Inc. (NYSE: ARA) (“ARA” or the “Company”), a leading provider of outpatient dialysis services, today announced that it has entered into a definitive agreement to be acquired by Innovative Renal Care, LLC (“IRC”), an affiliate of Nautic Partners, LLC (“Nautic”), a middle market private equity firm, in an all-cash transaction that values the Company at an aggregate enterprise valuation of approximately $853 million excluding non-controlling interest. Under the terms of the agreement, ARA shareholders will receive $11.50 per share in cash. This consideration represents an approximate premium of 66% to the Company’s closing price on October 1st, 2020.
CMS on Friday unveiled its alternative payment model for patients with chronic kidney disease. The End-Stage Renal Disease ESRD Treatment Choices—ETC—model encourages increased home dialysis use and kidney transplants. According to the agency, it will affect nearly a third of kidney care providers and save the federal government about $23 million over five and a half years. “This new payment model helps address a broken set of incentives that have prevented far too many Americans from benefiting from enjoying the better lives that could come with more convenient dialysis options or the possibility of a transplant,” HHS Secretary Alex Azar said in a statement.
The CMS on Monday proposed paying physicians and providers additional money if they use home dialysis machines to treat end-stage renal disease patients. Medicare beneficiaries with end-stage renal disease are in the most at-risk group for COVID-19. CMS data released last month showed there were 1,341 hospitalizations per 100,000 people in this category. They often have other comorbities such as diabetes and heart failure, and are unable to shelter-in-place due to dialysis and other treatment requirements, the agency said. Monday’s proposed rule would expand a transitional add-on payment to cover home dialysis machines. About 750,000 Americans have ESRD and 530,000 have Medicare benefits. Approximately 85% of ESRD patients travel three times a week or more to receive dialysis treatment.
Nephrology Associates, P.C. has announced its participation and investment in a new entity aimed at improving healthcare outcomes for Americans living with kidney disease. This new population health management company, InterWell Health, is an alliance currently consisting of over 650 nephrologists and the nation’s leading provider of kidney care products and services, Fresenius Medical Care North America. InterWell Health participants are many of the most influential in their field, and more provider groups will be invited to join. This partnership was formed to support nephrologists nationwide towards a more rapid adoption of value-based care models in an environment that promotes the full continuum of care for renal patients. The focus spans the CKD and ESRD populations with collaboration on care models to slow progression, to maximize the availability of transplant and home therapies, as well as prioritize optimal starts on dialysis.
Nephrology Practice Solutions, a subsidiary of DaVita Inc., is now affiliated with Partners in Nephrology and Endocrinology, a large Pittsburgh-based physician practice with 34 physicians and advanced practitioners. Partners in Nephrology and Endocrinology (PINE) has been acquired by NPS Physicians Pittsburgh, LLC. “PINE’s commitment to holistic kidney care aligns with our vision for the future,” Javier Rodriguez, CEO for DaVita Inc., said in a statement. “Making real progress toward value-based care for patients with kidney disease will require us to create fundamentally different partnership models with nephrologists and payers, and we are excited to innovate with PINE.” With this transaction, PINE will have access to the practice management expertise, data and technology of NPS to help the practice rapidly transform its value-based care delivery infrastructure.
Many nephrology group practices of all sizes are facing an existential crisis driven by a confluence of factors. The first, and most notable, factor fueling this issue is the result of a significant decline in the number of physicians choosing to pursue a career in nephrology. In 2018, for example, the percentage of unfilled nephrology training tracks was 57.7% (up from 10.6% in 2009) and the number of unfilled nephrology positions was 39.9% (up from 5.2% in 2009). This declining interest in nephrology has been attributed to lower compensation (as compared against many other specialties), increasing student loan debt and lifestyle_related considerations, among other factors. As a result of this trend, many nephrology group practices around the country have experienced increasing difficulty recruiting nephrologists to fill open positions as more senior physicians retire and move into different organizational roles.
California’s governor dealt a blow to dialysis companies over the weekend when he signed into law a bill that limits the reimbursement they receive for kidney disease patients who get insurance premium assistance from third-party organizations. Gov. Gavin Newsom signed the bill, known as Assembly Bill 290, in the face of intense opposition from dialysis companies DaVita and Fresenius Medical Care, which together control most of California’s dialysis clinics. A similar measure was vetoed by then-Gov. Jerry Brown last year. The companies have argued the legislation would increase patients’ out-of-pocket medical costs and hinder their access to care.
An annual report about the Center for Medicare & Medicaid Innovation’s Comprehensive End Stage Renal Disease Care (CEC) model, said it led to lower spending, improvements in some utilization measures, and no obvious indicators of unintended or adverse consequences. The CEC Model is an Advanced Alternative Payment Model (A-APM) that creates financial incentives for dialysis facilities, nephrologists, and other Medicare providers to coordinate care for Medicare beneficiaries with ESRD. Because the CEC Model was deemed an A-APM, participating nephrologists could exempt themselves from reporting requirement and payment adjustments under MACRA’s Merit-based Incentive Payment System (MIPS).
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