The $450,000 "Silent Killer" Your Members Don't Know They Have

This video provides an in-depth exploration of the hidden financial and clinical risks associated with Chronic Kidney Disease (CKD) and End-Stage Renal Disease (ESRD) within self-funded health plans. Mark Masson, President of Renalogic, details how CKD is a "silent killer," affecting one in seven Americans, with a staggering 90% remaining undiagnosed until the disease is far advanced. The primary purpose of the discussion is to expose the exorbitant costs of dialysis treatment—which often runs 700% to 900% of Medicare rates—and present a dual-pronged solution involving proactive clinical intervention to slow disease progression and a powerful cost-containment model for active dialysis claims.

The discussion progresses by first defining the scope of the problem, noting that the lack of early symptoms and the limitations of standard lab reports (which often show GFR as "normal" until CKD stage 4) prevent timely diagnosis. Renalogic addresses this by using complex algorithms to mine eligibility and claims data, identifying members likely at CKD stage 2 or 3 based on co-morbidities (like uncontrolled diabetes or cardiovascular issues). Their clinical programs, such as "Impact Care," focus on "holding the line" by intervening with lifestyle changes, managing co-morbidities (e.g., sleep apnea treatment), and ensuring appropriate specialist utilization (nephrologists) to prevent progression to ESRD, thereby avoiding unnecessary ER visits and inpatient stays.

A significant portion of the conversation focuses on the dysfunctional economics of dialysis once a patient reaches ESRD. Masson attributes the $350,000 to $450,000 annual cost per patient to a market duopoly, where two major companies control nearly 80% of the market, allowing them to act as price setters rather than price takers within commercial networks. Renalogic’s cost-containment solution involves amending plan documents to allow for a carve-out, repricing claims using a usual and reasonable methodology, bringing costs down to 120%–200% of Medicare. This results in substantial savings, estimated at $80,000 to $180,000 per member annually, while ensuring the member's care is not disrupted and promoting optimal outcomes, such as home dialysis and eventual transplant candidacy. The ultimate goal for ESRD patients is not just cost containment but maximizing health span to ensure they remain viable candidates for a kidney transplant, which significantly improves quality of life and ends the need for dialysis.

Key Takeaways: • The CKD Epidemic is Hidden: One in seven Americans has some form of CKD, but 90% are undiagnosed. This is due to the disease's silent progression and standard lab reports often failing to flag GFR abnormalities until the disease is severely advanced (Stage 4 or higher). • Dialysis Costs are Exorbitant: Commercial health plans typically pay 700% to 900% of Medicare rates for outpatient dialysis, translating to an annual cost of $350,000 to $450,000 per member. This excessive cost is driven by a duopoly controlling 80% of the U.S. dialysis market. • Medicare Rates are Profitable: Despite the industry argument that Medicare reimbursement is too low, public financial disclosures suggest that dialysis providers operate profitably at or near Medicare rates, indicating that commercial overpayments are excessive profiteering. • Data Mining for Early Intervention: Effective CKD management requires sophisticated algorithms to mine claims data (diagnoses, treatments, co-morbidities) to proactively identify members at hidden or undiagnosed risk (CKD Stage 2 or 3) before they progress to catastrophic failure. • Clinical Strategy: Hold the Line: For early-stage CKD members, the clinical intervention strategy focuses on slowing or reversing progression by managing co-morbidities (like sleep apnea or uncontrolled diabetes) and ensuring utilization of specialists (nephrologists) rather than relying solely on primary care. • Cost Containment Savings: Implementing a dialysis cost-containment program can reduce reimbursement rates from 700%-900% down to 120%-200% of Medicare, yielding annual savings of $80,000 to $180,000 per patient for the self-funded plan. • Fiduciary Responsibility and Carve-Outs: Plan sponsors have an ERISA fiduciary responsibility to manage costs. If network agreements prevent the implementation of cost-saving carve-out programs like dialysis management, employers should consider changing TPAs or networks to fulfill their obligation. • Dialysis Risk Frequency: Statistically, a self-funded plan will have one dialysis patient for every 2,500 covered lives. Even small employers (500 lives) are likely to face a catastrophic dialysis claim every four years, necessitating a proactive strategy. • Optimal ESRD Outcome is Transplant: For members already on dialysis, the clinical goal is to maintain adherence and health to remain a viable candidate for a kidney transplant, which is the only way to end the need for dialysis and significantly improve quality of life. • Home Dialysis Benefits: Home dialysis is often a healthier, more efficient, and less expensive modality. Barriers include behavioral reluctance, lack of storage space for supplies, or low water pressure, but providers should be encouraged to promote this option. • Regulatory Headwinds: Network agreements are often informally or formally structured to prohibit dialysis carve-outs, protecting the high reimbursement rates of the duopoly. Increased transparency and political pressure are needed to mandate fair reimbursement schedules or infuse competition. • Future Market Evolution: The market needs more competition (more independent or regional providers) and a shift toward direct provider contracting by employers to bypass restrictive network agreements and establish transparent, fair, and forecastable reimbursement rates.

Key Concepts:

• CKD (Chronic Kidney Disease): A progressive condition where kidney function declines. Stages 1-5.
• ESRD (End-Stage Renal Disease): Kidney failure requiring dialysis or transplant.
• GFR (Glomerular Filtration Rate): A test used to measure kidney health; often appears "normal" on lab reports even when CKD is progressing.
• Medicare Secondary Payer Act (MSP): Federal regulation mandating that commercial health plans pay primary for dialysis claims for 30 or 33 months after an ESRD diagnosis before Medicare takes over.
• Dialysis Duopoly: The market dominance of two major dialysis providers, enabling them to dictate high commercial reimbursement rates.