Before getting into the stop loss industry, I had been talking with a manufacturer of dialysis machines and thought I would be a good candidate to become a trainer for this company. While fulfilling the prerequisite year of experience working at an outpatient hemodialysis facility (nephrologist owned), I realized this was not the next career move for me: It was like working in a 25-bed Intensive Care Unit that changes patients multiple times a day. (My hats off to the nurses and techs that have made this career!)
Now, as a Registered Nurse who provides medical underwriting and claim management support for ASG, I’ve seen first-hand how Chronic Renal Failure (CRF) has become quite the challenge to manage. Over the past 10 years or so, CRF has cost self-insured plans and excess carriers up to $1M per year for an individual’s treatment until Medicare coverage becomes primary.
CRF develops in five stages and can be related to diabetes, hypertension, polycystic kidney disease, sepsis, or obstruction. Individuals who progress through the stages of CKD may eventually wind up with V-End Stage Renal Disease (ESRD), which may require renal replacement therapy such as dialysis or transplant.
When renal function falls below 20%, a claimant may qualify for transplant; at 10% function, dialysis is typically warranted. Peritoneal dialysis costs typically range from $135,000 to $175,000 per year, but can be much higher depending on the provider. Often, Type 1 diabetes is shown to be the underlying cause of kidney failure; when this is the case, a kidney-pancreas transplant may be an option.
The Changing Attitude Toward Transplants
A lot has changed over the years since many outpatient dialysis facilities were owned by nephrologists. At the time, there was widespread belief that pre-emptive transplants may not have been suggested in the early days of treatment because of revenue received from the commercial payers until Medicare became primary.
Most of these independents were eventually bought by major national corporations – and along with the acquisitions came soaring costs.
When health plans began to exercise their out-of-network benefit language that paid claims at Usual and Customary (U & C) – resulting in drastic reduction or reasonable negotiated costs – these corporations began to join networks that offered a percentage off billed charges (typically 15% to 30%) and simply increased their billed charges to maximize revenue from private plans until Medicare became primary for the insured.
This meant that plans were paying an average of $35,000 to $65,000 per month for hemodialysis – and something more needed to be done. New, creative plan language was instituted to pay these claims at a percentage of Medicare allowable (such as 150%), pay as out-of-network applying Reasonable and Customary (R & C), cap the monthly payment for dialysis, or refer them to a specific vendor for repricing.
Fast forward to today and we all want to know when Medicare will become primary and these high ongoing claims will end.
Without specific plan language, these are still very large claims.
– Hemodialysis costs typically range from $175,000 per year, with plan limitations and to $500,000 or more with PPO discounting. Treatment can be done in an outpatient facility or at home.
– Renal transplants cost $200,000 to $230,000, but with transplant network rates between $110,000 and $135,000.
– Kidney-pancreas transplants cost $330,000 to $350,000, but with transplant network rates between $200,000 and $235,000.
For now, it is important that claimants enroll in Medicare. The Group Health Plan pays as primary for a 30-month coordination period, and there is a three-month waiting period that is waived if the claimant participates in a self-dialysis training program.
On the Horizon: The wearable artificial kidney
Patient Trial Confirms Proof of Concept
The results of an exploratory clinical trial indicate that a wearable artificial kidney could be developed as a viable, new dialysis technology. Some redesigns would be required to overcome device-related, technical problems observed during the testing. The technology is being developed as an alternative to conventional hemodialysis for people with end-stage kidney disease. Such a device would allow more freedom and mobility, and the benefits of more frequent, longer dialysis.
Read more at Science Daily