Hemodialysis conducted in a facility typically consists of three dialysis  treatments per week. Selected Dialysis Providers Reported Wide Variation in the Costs of Providing Dialysis at Home Compared to Facility Dialysis

The self-reported cost information we obtained from the six dialysis  providers indicated variation in the cost to provide home dialysis when  compared with dialysis provided in a facility. The six dialysis providers  reported lower costs per treatment to provide home dialysis than to  provide dialysis at a facility, though the amount by which home dialysis  costs were lower varied widely among the providers. Because patients  who dialyze at home typically receive dialysis treatments more than three  times per week, some providers’ costs to provide home dialysis on a  weekly basis can be higher than their costs to provide dialysis at a facility. Additionally, several dialysis providers indicated that, for home dialysis  patients, the costs of a dialysis treatment with a training session were  significantly higher than the costs of a dialysis treatment without a training  session. Some Dialysis Providers Reported Higher Costs per Week for Home Dialysis Compared to Dialysis Provided in a Facility, While Other Dialysis Providers Reported Lower Costs per Week for Home Dialysis

All six dialysis providers in our review reported lower average costs per  treatment for home dialysis when compared to dialysis provided in a  facility; however, some dialysis providers reported higher costs per week  for home dialysis compared with dialysis provided in a facility, while  others reported lower costs per week for home dialysis. CMS Is Considering Factoring Current Home Dialysis Costs into the Expanded Bundled Payment, but Concerns Have Been Raised That Home Dialysis May Not Be Encouraged as CMS Expects

At the time of our review CMS officials indicated that they are considering  factoring the costs of home dialysis treatments and training into the  expanded bundled payment, but the details for the expanded bundled  payment are still under development. CMS officials told us that the  expanded bundled payment could create incentives for providers to offer  home dialysis instead of dialysis in a facility, because although some costs  associated with home dialysis may be higher for providers, other  efficiencies will offset those costs. However, concerns have been raised  that the way in which the expanded bundled payment may account for  home dialysis costs might not encourage providers to offer home dialysis,  as CMS expects. CMS officials indicated that it intends to assess the effect  of the expanded bundled payment on home dialysis utilization rates, but  CMS has not established formal plans to monitor this utilization. Appendix I: Scope and Methodology

This report examines (1) the extent to which the costs of home dialysis  differ from the costs of dialysis provided in a facility, and (2) the Centers  for Medicare & Medicaid Services’ (CMS) plans to account for home  dialysis costs in the expanded bundled payment for end-stage renal  disease (ESRD) services. To meet our objectives, we conducted interviews with representatives  from 12 dialysis providers—including large chain providers, small  nonprofit providers, and a hospital-based provider. We also used the cost information reported  to us to calculate the providers’ weekly costs for providing home dialysis  and dialysis in a facility.
Why GAO Did This Study

Medicare covers dialysis--a process that removes excess fluids and toxins from the bloodstream--for most individuals with end-stage renal disease (ESRD), a condition of permanent kidney failure. Most patients with ESRD receive dialysis in a facility, while some patients with ESRD are trained to self-perform dialysis in their homes. The Centers for Medicare & Medicaid Services (CMS)--the agency that administers the Medicare program--has taken steps to encourage home dialysis and is in the process of changing the way it pays for dialysis services. Effective 2011, CMS will pay for dialysis services using an expanded bundled payment. The Tax Relief and Health Care Act of 2006 required GAO to report on the costs of home dialysis treatments and training. GAO examined (1) the extent to which the costs of home dialysis differ from the costs of dialysis received in a facility, and (2) CMS's plans to account for home dialysis costs in the expanded bundled payment. GAO obtained information from CMS, the U.S. Renal Data System, ESRD experts, and self-reported cost information from six dialysis providers.

What GAO Found

The self-reported cost information GAO obtained from dialysis providers--including a large chain provider, small nonprofit providers, and a hospital-based provider--indicated variation in the costs to provide home dialysis when compared with costs to provide dialysis in their facility. The six dialysis providers reported lower costs per treatment to provide home dialysis than to provide dialysis at a facility, though the amount by which home dialysis costs were lower varied widely among the providers. Because patients who dialyze at home typically receive dialysis treatments more than three times per week, some providers' costs to provide home dialysis on a weekly basis can be higher than their costs to provide dialysis at a facility. However, other dialysis providers reported lower costs per week to provide home dialysis compared with dialysis provided in a facility. Additionally, several dialysis providers indicated that, for home dialysis patients, the costs of a dialysis treatment with a training session were significantly higher than the costs of a dialysis treatment without a training session. At the time of GAO's review CMS officials said they are considering factoring the costs of home dialysis treatments and training into the expanded bundled payment, but the details for the expanded bundled payment are still under development and subject to change. CMS officials told GAO that the expanded bundled payment would create incentives for providers to offer home dialysis instead of dialysis at a facility, because although some costs associated with home dialysis may be higher for providers, other efficiencies will offset those costs. For example, although supply costs may be higher for home dialysis, other costs of providing home dialysis--such as drugs, staff, and overhead--will be lower, and thus, in CMS's view, will encourage providers to offer home dialysis. However, concerns have been raised that the way that CMS is considering accounting for the costs of home dialysis in the expanded bundled payment might not encourage providers to offer home dialysis, as CMS expects. For example, some dialysis providers raised concerns that because home dialysis generally consists of more than three dialysis treatments per week--which may result in higher weekly costs to provide home dialysis compared with dialysis received in a facility--providers may not be encouraged to offer home dialysis. CMS officials indicated that CMS intends to assess the effect of the expanded bundled payment on home dialysis utilization rates, but CMS has not established formal plans to monitor this effect.