Providers of dialysis in Idaho raise alarm

Medicare’s proposed cut of 9.4 percent also leaves patients worried

adutton@idahostatesman.comAugust 26, 2013 

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Editor's Note: Jim Olson, who is quoted in this story, died after he was interviewed and before the story was published. This story has been updated to reflect his death.

For Idahoans whose kidneys have failed, treatment is basically a part-time job. Hemodialysis requires sitting in a chair three days a week, four hours at a time, attached by tube to a machine. Without dialysis — a process that filters waste and excess fluid from the blood — a patient will die.

So it alarmed some local patients recently to open letters from their dialysis centers explaining how Medicare wanted to slash payments, potentially having a ripple effect on services at those centers.

“If they cut back on treatments, I have no idea what will happen to me,” said Jim Olson shortly before his death. A 73-year-old who lost one kidney 30 years ago and the other five years ago, Olson made the trip from his Emmett home to Meridian’s Liberty Dialysis three times a week. He died Aug. 18.

Liberty Dialysis opened in Meridian seven years ago and has about 100 patients, 15 full-time staff members and four doctors who cover the three clinics in the area owned by Liberty’s parent company, Fresenius Medical Care, which is based in Germany. The other clinics are in Nampa and Caldwell.

“Our concern with the cut would be the potential ... to have to cut staffing hours,” said Maria Gumucio-Powell, nurse manager of the clinic on Louise Drive east of Eagle Road in Meridian. “We’re functioning at bare minimum anyway ... barely just enough staff to take care of the patients we already have.”

She did not say whether payment cuts would reduce patient access to dialysis or associated services at the center, only that staffing would be affected.


Most of Idaho’s nearly 2,000 people without functioning kidneys are on Medicare. Some patients also are covered by Medicaid or private insurance, but kidney-failure patients are automatically eligible for Medicare.

Without Medicare paying for his treatments during the past five years, Olson and his wife “would have been destitute,” he said. Olson also credited his center’s employees with making his treatments as pleasant as they could be.


As kidney failure becomes more common — Idaho is fourth in the nation for growth in end-stage renal disease — the industry is growing. Treasure Valley dialysis centers performed more than 34,000 treatments in 2011, according to Medicare data.

Under a new payment system implemented in 2011, Medicare pays a lump sum for a patient’s dialysis treatments and most of the stuff that goes with them, and it ties some reimbursement to the quality of care. That year, Medicare paid out $10.1 billion for all outpatient dialysis services under the new system, according to a March report from the Medicare Payment Advisory Commission. On average, each patient cost $26,600 a year.

The federal government is trying to pay based on performance and trying to lower costs in dialysis, just as in most other parts of the health care industry. “Fiscal cliff” legislation that Congress passed last year said Medicare payments should be reduced to reflect changes in the treatment of kidney failure.

Medicare’s proposal, effective Jan. 1, lowers the base rate for each four-hour dialysis session from today's $240.36 to $216.95 — 9.7 percent, though centers will receive a separate 2.5 percent increase.


The problem with that kind of cut, according to companies, is that dialysis centers don’t earn large profits.

Liberty Dialysis runs on a typical profit margin of 3 to 4 percent, said Ashley Bruning, social worker at the Meridian center.

Fresenius Medical Care’s profit margin is 7 percent, according to data from Capital IQ, a financial-data company, reported on Yahoo Finance. That’s close to the 7.15 percent average for U.S. corporations in the first quarter reported by Morgan Stanley.

Dialysis companies fought back nationwide by urging patients to contact their representatives in Congress.

The Statesman published a letter Aug. 4 by Zach Phelps, facility administrator at Table Rock Dialysis Center, across Curtis Road from Saint Alphonsus Regional Medical Center in Boise. “The effects of these proposed cuts may force reductions in staffing, reduced access to services such as social workers, nurses or dietitians and dramatically reduced access to dialysis care in Boise altogether,” Phelps wrote. “Clinics may be forced to close, requiring patients to travel greater distances for their life-sustaining care.”

“Patient and professional organizations across the country agree that if the proposed rule becomes finalized in November, the cuts could have a devastating impact on the integrity of the nation’s Medicare dialysis program, resulting in staff reductions, closures and patient access issues — especially in some rural and inner city facilities,” said Kidney Care Partners, a coalition that includes dialysis centers.

A letter sent by Liberty Dialysis to local patients warned, “The cuts in reimbursement endanger your treatments as you know them.”

At least one Idaho lawmaker already has taken their side. Republican U.S. Sen. Mike Crapo signed on to a bipartisan letter to Medicare officials asking them not to cut dialysis payments to below cost.

Bruning thinks Medicare officials “should come together with the dialysis community and find cuts that are manageable.”

Audrey Dutton: 377-6448, Twitter: @IDS_Audrey

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