By Rob Blaser



In the Washington political landscape, a week is a lifetime. If that is true, the past 12 months have been an eternity. On a macro level, the global economic crisis has irreversibly changed the prism through which all funding priorities, domestic and otherwise, are viewed-and not for the better. This of course occurred in the midst of an election year that resulted in the selection of Barack Obama, a new chief executive with polar opposite views on many issues from the Bush Administration, and with a mandate and congressional majority seemingly primed to foster vigorous pursuit of his agenda. As a result, president-elect Obama has been presented with both challenges and opportunities unseen in decades.

The health policy landscape has undergone profound change as well in the past year, particularly in the kidney arena. Enactment of the Medicare Improvements for Patients and Providers Act (MIPPA) through override of a presidential veto in July paved the way for the most significant overhaul of Medicare's end-stage renal disease program in more than a generation. Among the most significant kidney-related provisions of the bill were the establishment of a bundled payment methodology for the composite rate reimbursement provided to dialysis facilities, and beginning in 2012, a market basket update for the composite rate. The legislation also wholly addressed chronic kidney disease beyond any previous measures, primarily through the creation of a CKD education benefit for Stage 4 CKD patients and higher.

And, after 26 years, CMS implemented revised Conditions for Coverage for dialysis facilities, providing new guidance for dialysis clinics on how to treat ESRD patients. Finally, Congress addressed the ongoing and annual shortfall in physician reimbursement in a more comprehensive manner than in previous years, providing not only an 18-month fix but also a change to the CMS's methodology for achieving budget neutrality that had been sought by organized medicine in recent years.
So, with recent history as a backdrop, what can we expect in 2009? Will broad reform of the American health care system be achieved, or will only incremental changes occur? Will all of the elements of the MIPPA legislation stand the test of time, or will there be some rollback? Will physician payment undergo substantial reform, or will the current formula remain in place and the 20% payment cut go forward? The answers to these questions are outlined below, with a nephrology-specific outlook for 2009 included as well.

Impact of the elections
If only one conclusion can be drawn from the results of this historic election cycle, it is that the U.S. electorate wants change. While that's not a profound observation, the metrics of the Democratic victory may be harbingers of a realignment that could remain intact for years to come. Obama's capturing of nearly 53% of the vote is the largest percentage in any presidential election in 20 years. In congressional races, Senate Democrats gained several seats, but did not achieve the magic 60-vote veto-proof majority.

On health system reform specifically, the Obama camp has been signaling that the global economic woes will not serve as a justification for delaying action, and the nominee as head of the Office of Management and Budget (OMB), Peter Orszag, is known to be keenly interested in the issue. Thus, if the Democratic executive branch and Congress are unable to achieve meaningful health care reform, it will not be for the lack of a mandate or will. An alternative viewpoint is that while there may be a political mandate and will, there is still not clarity or consensus on what specific policy changes should be pursued and implemented, which may lead to incremental revision only.

Impact of the economy
The conventional wisdom in Washington is that the implosion of the economy will likely have a chilling dual effect on major health care reform, specifically diverting attention from the issue and reducing the potential fiscal resources available to such change. This is certainly a reasonable perspective, as the budget to pursue fundamental reworking of the health care system seems to simply not exist. However, a divergent perspective held by some in Washington is that the economic crisis could actually enhance the likelihood of major reform occurring, as the impact of the various rescue packages being used to address macro-level fiscal concerns may be to soften opposition to an enhanced federal government role in regulating markets and underwriting compelling national priorities.

Impact of MIPPA
When considered in the light of economic developments in the last two quarters of 2008, the passage of the MIPPA legislation seems ages ago, but the impact of the bill should not be forgotten. For some sectors of the health care community, MIPPA enacted some of the most fundamental changes seen in the history of the Medicare program (the kidney care community being among these sectors). The bill also went farther than any recent legislation in addressing the perennial shortfall in Medicare physician/Part B provider payment. However, one characteristic of the legislative process pertaining to Medicare in recent years is that when large, sweeping bills are passed, frequently there is a subsequent pushback effort in the next congressional session to review some of the provisions of the previous year's legislation, and this may through process may apply to MIPPA in 2009. Further, while the physician payment fix in MIPPA was considered a tremendous victory for organized medicine, it was a time-limited 18-month fix that expires on Dec. 31, 2009, after which time medicine will be staring down the barrel of a 20% or greater pay cut. As a result, one side effect of how the MIPPA played out is that there will be enormous pressure on Congress and the executive branch to address reductions in reimbursement that could cripple access to medical care and the physician workforce.

Key issues-current status
With regard to the current status of the issues raised above, they are either completed and/or implemented, or in varying states of development. Among the changes mandated by MIPPA, the increase in the 2009 composite rate payment for dialysis facilities was implemented as part of the 2009 Medicare Fee Schedule, and was effective Jan. 1. The lion's share of the other ESRD provisions in MIPPA, such as the development of the composite rate bundle and the implementation of the CKD education benefit, are in some stage of rulemaking. The Conditions for Coverage were effective this past Oct. 14, and despite some ongoing tweaking being performed by CMS in the form of instructions to state surveyors, these are essentially in place and both the surveyors and the dialysis provider community are adjusting to the brave new world created by the revised requirements. Most importantly for the Part B providers, the physician pay fix for 2009 is already in place, as well as the methodological change that calls for budget neutrality adjustments to be made to the MFS conversion factor (CF: the variable expressed as a dollar figure through which medicine receives a pay increase or decrease each year) rather than the work values. This second provision is a change sought by organized medicine over the last three years and is responsible for the curious circumstance of reimbursements for most Part B services increasing despite a reduction in the CF, due to the restoration of physician work values in the fee schedule to 2006 levels. While the CF was reduced by more than $2, the restoration of the work values to pre-2006 levels resulted in an increase of approximately 20% for the work values of a majority of Part B services.




Impact on nephrology in 2009 (and beyond)
For nephrologists, the two issues with the most immediate consequence are the implementation of the Conditions for Coverage affecting the responsibilities of dialysis facility medical directors, and the future of the Medicare fee schedule. The Conditions outlined the major areas of responsibility for medical directors with a degree of specificity previously unseen. Included in these areas were:

• Patient assessment

• Quality Assessment and Performance Improvement program

• Staff education, training, and performance

• Policies and procedures

• Infection control

• Discharge and transfer policies

Dialysis facility medical directors will now be responsible for participation in the development, periodic review, and approval of a patient care policies and procedures manual; ensuring adherence to these procedures and policies; and overseeing patient care delivery and outcomes.

These and other changes in the Conditions obviously up the ante for nephrologists serving as dialysis facility medical directors. They must fulfill the regulatory burden order to remain compliant, and will be required to make and oversee substantive changes in policies and activities. While the revised Conditions will likely provide clarity and standardization on many issues surrounding certification of ESRD facilities in the Medicare program, the impact of the regulatory burden on providers and medical directors will have to be monitored closely. Resources to assist medical directors in complying with the Conditions requirements may be found at www.kidneypatientsafety.org.

As for the 2009 Medicare Fee Schedule, it presents benefits and challenges for nephrology (See box). Overall, paments to nephrology as a specialty are increased by approximately 2% for 2009, and reimbursement for the two high volume services most commonly provided by nephrologists-the four-visit adult monthly dialysis service and the inpatient hemodialysis single evauation service-are increased by 2.5% and 2%, respectively. However, other challenges for nephrology remain in the fee schedule, as reimbursement for many interventional services provided by nephrologists experienced substantial reductions. Further, CMS has indicated it will seek further review of the values recently established for many of the outpatient dialysis codes. More information about the changes in the Medicare Fee Schedule may be found at www.renalmd.org.

Summary  
These are times of turbulence and change at many levels-for the nation at large, within the health care delivery arena broadly, and for nephrology specifically. The factors outlined above have created a degree of complexity in developing solutions for these issues never seen before. We'll see how the next 12 months unfolds.


 Mr. Blaser is director of public policy for the Renal Physicians Association, based in Rockville, Md.