Featured in Health Business Daily, July 25, 2017

Fresenius Quadruples Its ESCOs In CMS 2017 CEC Model for ESRD

Reprinted from SPECIALTY PHARMACY NEWS, a monthly newsletter designed to help health plans, specialty pharmacies, pharma companies, providers and employers contain costs and improve outcomes related to high-cost specialty products. Subscribe today!

By Angela Maas, Managing Editor
March 2017Volume 14Issue 3

In 2015, more than two years after CMS said it was launching a value-based program focused on end-stage renal disease (ESRD), the agency finally unveiled the groups tapped to participate in the Comprehensive ESRD Care (CEC) model (SPN 11/15, p. 9). There were 13 initial participants when the model started in September 2015, and this year that number has risen to 37.

According to the Center for Medicare & Medicaid Innovation, more than 600,000 Americans have ESRD and must undergo dialysis multiple times a week. Because people with ESRD often have complications and comorbidities, they tend to have poorer health outcomes, leading to high rates of hospitalizations. The United States Renal Data System says that less than 1% of the Medicare population in 2014 had ESRD, but those beneficiaries represented 7.2% of total Medicare fee-for-service spending — more than $32.8 billion.

Participants in the CEC model are known as ESRD seamless care organizations (ESCOs), which consist of providers and suppliers for this patient population. ESCOs’ participant owners must include at least one nephrologist or nephrology group practice and at least one dialysis facility. Two types of ESCOs make up the CEC model: Large dialysis organizations (LDOs), which are those that own at least 200 dialysis facilities, and non-large dialysis organizations (non-LDOs), which include chains with fewer than 200 facilities, independent dialysis facilities and hospital-based dialysis facilities. LDOs can receive shared savings and are also liable for shared losses, while non-LDOs can participate in either a one-sided track where they are eligible to receive shared savings without any downside risk or a track that has higher risk and the potential for shared losses. The program will run until Dec. 31, 2020, and there are no plans to add more participants.

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In the first round of the model, Fresenius Medical Care North America (FMCNA) had six ESCO LDOs, but CMS awarded it an additional 18 in the second round, giving it a total of 24 — almost two-thirds of the ESCOs participating in the program. The company incorporates a care navigation unit (CNU) into its ESCOs, as well as some models with commercial health plans (see story, p. 3). The organization says that the CNU has reduced hospital admissions by up to 20% and readmissions by up to 27%. William McKinney, president, Integrated Care Group at Fresenius Medical Care, spoke with AIS Health about his company’s participation in the program.

AIS Health: Why is Fresenius Medical Care participating in the Comprehensive ESRD Care Demonstration Program?

McKinney: We have been leading the transformation to a value-based system for renal care because we believe it is fundamentally important for our patients. The…ESCO program drives us further into a value-based environment. It’s a demonstration program, and there is no perfect demo, but it’s an important move in the right direction. Our community serves a very expensive population with complex health care needs, and we feel strongly that our focus and movement toward value-based care is the right answer for our patients.

We launched six ESCOs during the first program year and feel very positive about the results we were able to achieve. We can have a significant impact on these patients’ outcomes and the cost to the health care system. We expanded in 2017, both because of these outcomes and the way the industry has continued to progress. I think the idea of value-based care has moved even faster than most expected, and the MACRA legislation has made it important to our nephrology partners to invest with us in this advanced alternative payment model (APM) opportunity.

AIS Health: Has CMS made any changes to the program in the second year?

McKinney: CEC has been great in receiving our input, considering our feedback and making enhancements to the program where it makes sense, even during the first program year. There were few significant changes to the program in its second year. Perhaps the largest change was setting the “drop date without liability” to July 31st. That allows each ESCO more than half of the program year to review claims data, look at progress and decide if it makes sense to continue the program. If a participant drops out of the program on or before July 31st, there is no liability for potential shared losses. Smaller changes included the possible service area definition, some enhancements to the quality measures and some small adjustments to the alignment methodology.

AIS Health: How was your experience in the first year of the model? Can you share any outcomes?

McKinney: We do not have CMS’s official results for quality and outcomes yet, so it’s a bit early to talk about ESCO-by-ESCO results; however, in reviewing hospitalizations overall, based on our own analysis we’ve had a reduction of just under 18%. And we have reason to believe we’ve had a big impact on the quality of life for our patients even beyond the reduction in admissions. When you roll all of the ESCOs together, we can feel extremely good about the credibility of our results, and one of the requirements for the ESCOs is for us to publish those results on our ESCO websites once they’re available.

AIS Health: Have you made any modifications to your approach based on that first year?

McKinney: Obviously, expanding from 6 to 24 ESCOs provides us with more scale, and therefore more opportunity to make an impact on patient care and deepen our expertise, both within and outside our Fresenius Kidney Care clinics. At this point, we have to think about the ESCOs as core to our business.

We’ll continue to innovate and find interventions that lead to the best outcomes, but beyond that, the largest change from 2016 to 2017 is the amount of staff we’ll have in the field focused on these programs. We are expanding our CNU from a 24/7 phone-based resource for patients and providers to include on-the-ground resources now. This is a team of specially trained nurses and service coordinators who provide patient support and care management services. Each ESCO market will have at least one local care navigation nurse. They will work closely with the dialysis units, engaging face-to-face with higher risk patients. We believe that this will amplify the successes we have seen from the traditional CNU service and really help make a difference in the lives of our patients.

AIS Health: How many patients did you treat through the model in the first year?

McKinney: We had approximately 9,000 beneficiaries aligned during the first program year.

AIS Health: With the addition of the 18 new locations in 2017, how many patients do you expect the ESCOs to treat over the next year?

McKinney: We expect just under 30,000 aligned beneficiaries once the attribution is complete for the second program year.

AIS Health: Is there any significance to the geographic locations of the participating ESCOs?

McKinney: For our initial ESCOs, we chose locations with willing and engaged nephrology practices who we thought would be able to effectively manage the aligned beneficiaries and were ready to take risk. There were a lot of unknown and undefined factors that first year, so we had to find partners who could tolerate that level of uncertainty.

In the second year, it was unclear how many expansion applications CMS might award. We submitted applications in markets where we had interested practices who we felt could effectively contribute to the program and who also would meet the minimum attribution requirement (350 aligned beneficiaries). We were delighted when CMS awarded us 18 new ESCO markets.

AIS Health: Have you taken a similar approach to your facilities not participating in the program? If not, is this something you may do in the future? Why or why not?

McKinney: The ESCOs are a significant program for us, but we also have our own Medicare Advantage chronic condition special needs plan for patients with ESRD. In addition, we’re entering an increasing number of value-based arrangements, such as global capitation and shared savings programs, with payers of all other sorts. These programs cross markets and facilities not covered by the ESCOs today.

Our first value-based program launched over a decade ago, and we ran a number of programs between then and 2013. It was really in 2014, however, that the overall health care environment became truly primed for the shift to value-based care that we’re seeing now.

AIS Health: Why is ESRD well-suited for an accountable care organization (ACO)-type model?

McKinney: The ESRD population is extremely high cost and generally one of the frailest populations in the Medicare program. The mortality rate is near 20%, and the overall cost of these beneficiaries approaches 10 times that of the average Medicare beneficiary. We believe that programs which provide better care coordination to these patients can have an extremely positive impact, both on their quality of life and the cost to the health care system.

One of the ongoing challenges in the ACO model, driven in large part by inherent complexity in the health care system, is beneficiary alignment to the various programs. That’s a significant advantage of the ESCO program. When a patient has ESRD, alignment to the ESCO is driven by the beneficiary’s first visit to a CEC participant, which creates a clearer and more stable basis for beneficiary alignment to the program. Even before we receive the formal alignment files from CEC, we’re able to predict with high confidence those patients who will be aligned to the program.

Read more about the CEC model at http://tinyurl.com/gqfkdmj.


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