Payer-Provider Partnership Can Provide Better Care to Dialysis Community

From RADAR on Drug Benefits

In late April, health insurers urged the federal government to stop dialysis providers from steering patients with kidney failure toward higher-reimbursing private plans. However, a new study, co-authored by Highmark Inc. and DaVita Inc., offers evidence that a dialysis provider and an insurer can work together to improve care and lower costs for patients with end-stage renal disease (ESRD).

Chris Condeluci, principal of CC Law & Policy in Washington, D.C., tells AIS Health that insurers are right that dialysis providers are making third-party premium payments to ensure patients are covered by higher-reimbursing private plans — "and therefore, the dialysis company benefits," he says. And if more and more high medical utilizers — like ESRD patients — enter the risk pool because third parties are paying premiums on their behalf, there will be an adverse impact on the risk pool overall.

It is not certain what the federal government actually can do about it, as HHS’s previous attempt to regulate third-party premium payments didn’t stand up to legal scrutiny.

Yet collaborations between payers and providers might help offer better quality of care for the dialysis community. DaVita and Highmark had come up with a pay-for-value contract "layered on top" of DaVita’s more traditional fee-for-service contract, says Bob Wanovich, vice president of ancillary provider strategy for Highmark, so the provider gets paid to perform dialysis services and can share in the savings associated with improving outcomes and lowering costs.

Their coauthored study details the results of the pay-for-value contract, which shows that the hospital admission rate, number of hospitalized days, the emergency department visit rate and the 30-day readmission rate all fell following the inception of their partnership.

Wanovich says he hopes other, similar partnerships crop up between payers and dialysis providers. "The hope is that knowing that there are additional payments and incentives if you can move the needle, it will encourage other providers to act similarly and create the infrastructure that they need to really deliver better outcomes," he says.

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