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Demand and Provider Payment for ESRD Dialysis in the VHA System: A Pilot
Virginia Wang, PhD
Durham VA Medical Center, Durham, NC
Funding Period: April 2010 - March 2011
Dialysis is a limited resource within the VA, requiring many Veterans with end-stage renal disease (ESRD) to receive dialysis treatment from non-VA providers via fee basis (FB). Historically, inconsistencies in VA payment policies to FB dialysis providers resulted in highly variable payments that often exceeded those paid by Medicare. VA recently mandated system-wide use of the Medicare fee schedule for non-VA dialysis treatments. In order to examine the effects of this new reimbursement policy for the VA and Veterans, it is important to understand the context of Veterans' ESRD care before policy implementation.
The objectives of this pilot study are to examine: 1) demand for outpatient dialysis treatment among Veterans with ESRD and 2) variation in payments to FB dialysis providers and whether this payment variation correlates with the use of non-VA dialysis services before new policy implementation.
This cross-sectional study identified a cohort of Veterans in 2 VISNs who received chronic outpatient dialysis treatment financed by VA in 2007-2008. VA inpatient and outpatient encounter and FB claims data were used to identify Veterans who received dialysis treatment in VA, non-VA FB, or both ("dual users"). Patient characteristics associated with dialysis utilization patterns were identified through bivariate and multinomial probit analyses. VA FB claims were used to examine temporal and regional variations in payments for non-VA dialysis.
In 2007 and 2008, 2,399 Veterans with ESRD received VA-financed dialysis in the 2 VISNs. Of these, 1,388 received chronic outpatient hemodialysis treatment financed by VA and this subgroup was the focus of the analysis. We found that 25% received dialysis exclusively in VA, 36% received non-VA FB dialysis, and 39% were dual users. After covariate adjustment, Veterans dialyzing in non-VA or dual dialysis settings were more likely to be married, have lower comorbidity burden, and live farther away from a VA dialysis unit than Veterans receiving VA dialysis. On average, VA payments to non-VA dialysis providers were consistent with Medicare's dialysis prospective payment. However, individual VA payments varied from 75% less to >10 times more per dialysis treatment than Medicare during the study period.
Access to timely dialysis treatment is vital for a growing population of Veterans with ESRD. Given the limited treatment capacity in VA, a significant proportion of VA-funded dialysis services is delivered via FB, and Veterans with ESRD are likely to continue receiving dialysis from non-VA providers. Non-VA providers benefit from favorable selection of Veterans with ESRD, because healthier Veterans (i.e., lower comorbidity burden) are more likely to obtain FB dialysis. VA may need to account for selection bias in determining the optimal mix of making versus buying dialysis services and in determining the optimal payment to non-VA dialysis providers. Findings from this study will inform future research that helps VA better understand the implications on the quality and cost of decisions regarding FB.
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NIH ReporterGrant Number: I01HX000241-01
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DRA: Diabetes and Other Endocrine Disorders, Health Systems
MeSH Terms: none