	ESRD and Medicare Eligibility

End-stage renal disease (ESRD) is the final phase of chronic kidney disease — a gradual loss in kidney function over time. Medicare is a federal program that pays for covered health care services, which include kidney transplantation for eligible beneficiaries. For beneficiaries who are eligible for Medicare due to ESRD, Medicare may provide coverage on the first month of eligibility if the beneficiary is admitted to a Medicare-approved hospital to undergo a kidney transplant procedure or elects to receive dialysis treatment at home. Medicare Coverage of ESRD-Related Services

Medicare consists of four distinct parts: Part A (Hospital Insurance, or HI), Part B (Supplementary Medical Insurance, or SMI), Part C (Medicare Advantage), and Part D (outpatient prescription drugs). For ESRD-related services, Medicare Part A includes coverage for inpatient services in an approved hospital for covered kidney transplants and cost of care for the kidney donor. According to the United States Renal Data System (USRDS), in 2010, total Medicare expenditures for beneficiaries with ESRD were estimated to be $32.9 billion, or roughly 6.3% of total Medicare expenditures. Part B immunosuppressive drug expenditures consisted of $345 million in 2010. Of the individuals under the age of 65 that have received a successful kidney transplant at a prior date and no longer required dialysis treatment in 2010 (142,923 patients), roughly 41% were not eligible for Medicare coverage (58,728 patients); see Figure 1 . Medicare Coverage of Immunosuppressive Drugs for Kidney Transplant Recipients

Individuals with a functioning kidney transplant usually require immunosuppressive drugs for life to minimize the risk of their immune system rejecting the "foreign" donor kidney. Currently, Medicare provides coverage for immunosuppressive drugs under Part B if the transplant was covered by Medicare and in an approved facility. Beginning January 1, 2014, beneficiaries with a functioning kidney transplant who are no longer entitled to Medicare may have greater access to health insurance in the private market (and therefore potential coverage of immunosuppressive drugs), due to provisions in the Patient Protection and Affordable Care Act (ACA, P.L. Beginning in 2005, Medicare's Part B drug payment methodology is based on manufacturers' reported average sales price (ASP) for each drug, plus a 6% handling and storage payment. Part D Payment Policy of Immunosuppressive Drugs

Beneficiaries enrolled in Medicare Part D can receive coverage for any additional outpatient prescription drugs and/or for immunosuppressive drugs if the transplant was not covered by Medicare. Medicare Part D will not provide immunosuppressive drug coverage for beneficiaries who have received a Medicare-covered transplant regardless if the beneficiary is enrolled in Part B and/or Part D. Payment for drugs is determined by the prescription drug plan and cost-sharing amounts for covered drugs vary by plan; however, in general, prescription drug plans have lower cost-sharing amounts for generics compared to brand name drugs. While beneficiaries with ESRD who received a functioning kidney transplant no longer require dialysis treatment to survive, such individuals are not considered "cured" of the disease—instead requiring immunosuppressant therapy rather than dialysis as a form of treatment. Since the 105 th Congress, legislation has been introduced in each Congress to extend some form of Medicare coverage after the 36 months following a kidney transplant for individuals who are not otherwise eligible to enroll in Medicare. In addition, in 2014, individuals with a functioning kidney transplant may have greater access to immunosuppressive drug coverage from private health plans in the individual and small business marketplace.
End-stage renal disease (ESRD) is substantial and permanent loss in kidney function. Persons with ESRD require either a regular course of dialysis treatment (a process that removes harmful waste products from an individual's blood stream) or a kidney transplant to survive. The Medicare program provides coverage for health care services for the vast majority of individuals diagnosed with ESRD, regardless of age.
In 2010, roughly 489,000 Medicare beneficiaries received ESRD-related services—less than 1% of the total Medicare population. According to the United States Renal Data System (USRDS), in 2010, Medicare expenditures for the ESRD-related services totaled $32.9 billion, or roughly 6.3% of total Medicare expenditures.
The Medicare program consists of four parts: Part A (Hospital Insurance, or HI), Part B (Supplementary Medical Insurance, or SMI), Part C (Medicare Advantage), and Part D (outpatient prescription drug coverage). Under Part A, Medicare-covered ESRD-related services include dialysis treatments upon admission to a hospital, inpatient services in an approved hospital for covered kidney transplants, and the cost of care for the individual donating a kidney. Under Part B, Medicare-covered ESRD-related services include dialysis treatments in a dialysis facility or at home, physicians' services for kidney transplant procedures, and certain prescription drugs—including immunosuppressive drugs (for individuals who received a Medicare-covered transplant). Under Part D, beneficiaries can also enroll in a prescription drug plan to receive coverage for drugs that treat ESRD-related symptoms and any additional outpatient prescription drugs. Coverage of immunosuppressive drugs for individuals whose transplant was not covered by Medicare may be covered under Part D.
Individuals who have received a kidney transplant usually require immunosuppressive drugs for the rest of their life to minimize the risk of their immune system rejecting the donor kidney. In 2010, Part B expenditures for immunosuppressive drugs totaled $345 million. Under Part B, Medicare provides payment for immunosuppressive drugs based on manufacturers' reported average sales price (ASP), for each drug, plus a 6% handling and storage payment. Since 2009, the ASP for commonly used immunosuppressive drugs has decreased by over 50%—most likely due to the use of generics.
For ESRD beneficiaries, Medicare covers a lifetime of dialysis treatments. For Medicare-eligible individuals with a functioning kidney transplant, Medicare covers the cost of the transplant and 36 months of follow-up care (which includes immunosuppressive medication). According to the USRDS, at the end of 2010, approximately 41% of individuals under the age of 65 who had a functioning kidney transplant and thus no longer required dialysis were not covered by Medicare. Since the 105th Congress, legislation has been introduced in each Congress to provide some form of Medicare coverage for post-transplant recipients who are no longer entitled to Medicare following 36 months of a successful kidney transplant. Individuals who are not covered by Medicare who require immunosuppressive drugs and do not have health insurance may have to pay the cost of immunosuppressive drugs out-of-pocket. In 2014, individuals who are not covered by Medicare and who have a functioning kidney transplant may have greater access to immunosuppressive drug coverage from private health plans due to provisions in the Patient Protection and Affordable Care Act and a recent decline in the price of commonly used immunosuppressive drugs.