title: Medicare's payment strategy for end-stage renal disease now embraces bundled payment and pay-for-performance to cut costs.
abstract: Since 1973 Medicare has provided health insurance coverage to all people who have been diagnosed with end-stage renal disease, or kidney failure. In this article we trace the history of payment policies in Medicare's dialysis program from 1973 to 2011, while also providing some insight into the rationale for changes made over time. Initially, Medicare adopted a fee-for-service payment policy for dialysis care, using the same reimbursement standards employed in the broader Medicare program. However, driven by rapid spending growth in this population, the dialysis program has implemented innovative payment reforms, such as prospective bundled payments and pay-for-performance incentives. It is uncertain whether these strategies can stem the increase in the total cost of dialysis to Medicare, or whether they can do so without adversely affecting the quality of care. Future research on the intended and unintended consequences of payment reform will be critical.
authors.affiliation: Department of Health Services, Policy, and Practice, Brown University, Providence, Rhode Island, USA. shailender_swaminathan@brown.edu
authors.forename: Shailender
authors.initials: S
authors.lastname: Swaminathan
authors.forename: Vincent
authors.initials: V
authors.lastname: Mor
authors.forename: Rajnish
authors.initials: R
authors.lastname: Mehrotra
authors.forename: Amal
authors.initials: A
authors.lastname: Trivedi
mesh_terms: D003363:Cost Control; D006801:Humans; D007676:Kidney Failure, Chronic / Q000188:drug therapy / Q000191:economics*; D006278:Medicare; D012051:Reimbursement Mechanisms; D012052:Reimbursement, Incentive; D014481:United States