The 21st Century Cures Act: How MA Organizations Should Prepare for Important Changes to ESRD Beneficiary Eligibility

Signed into law in December of 2016, the 21st Century Cures Act aims to accelerate the discovery, development and delivery of modern patient care.

Key provisions in the Cures Act related to end-stage renal disease (ESRD) patients went into effect in 2021.  These enabled ESRD patients to enroll in Medicare Advantage (MA) plans regardless of their previous coverage.  Not surprisingly, this has resulted in an influx of ESRD patients, who have brought with them new care needs and associated costs.  Given data from our health plan and medical group partners, we expect this trend in ESRD patient enrollment in MA plans to not only continue, but also increase.

MA plans and at-risk medical groups must adapt, adopt a more data-driven approach, and align with partners that prepare and provide care specifically for ESRD patients.

Changes to ESRD Beneficiary Eligibility Will Significantly Increase Financial Risk.

ESRD is an advanced state of chronic kidney disease in which beneficiaries require ongoing dialysis treatments or a kidney transplant to stay alive. It is a significant condition that can be highly complex and costly to manage. Prior to the changes introduced by the 21st Century Cures Act, ESRD beneficiaries could only obtain MA coverage under limited circumstances. For example, a beneficiary could remain enrolled in a MA plan if their ESRD diagnosis occurred after enrollment or is an ESRD-SNP was available in their area.

Beginning in 2020, ESRD beneficiaries can now select a MA plan during open enrollment, regardless of their previous coverage or when they were diagnosed. This is reshaping the MA landscape in several ways.

MA plans and entities taking risk on MA populations will see an influx of ESRD members

It’s been expected that opening MA enrollment to ESRD patients regardless of when they were diagnosed could triple enrollment of ESRD beneficiaries for MA plans.  In fact, one analysis estimated that more than 41% of total patients on dialysis are predicted to be enrolled in MA plans by 2022, compared to 14% in 2018.

While we haven’t seen data indicating that the total number of ESRD patients enrolled in MA plans tripled in 2021, some Strive Health partners did see their MA plan populations double.  One potential reason why 2021 ESRD enrollment didn’t meet expectations is that 2020 Annual Enrollment Period (AEP; October 15th through December 7th 2020) was depressed due to the COVID pandemic.  Regardless, based on conversations with our partners and our own internal data, we expect ESRD patient enrollment into MA plans to continue to increase during the 2021 AEP and beyond.

Further, we are seeing an increase in ESRD patients being added to risk panels of medical groups participating in MA plans.  Historically, medical groups have tended to avoid adding ESRD patients to their MA plan risk panels.  We’ve seen this trend reverse in 2021.  As more ESRD patients enroll into MA, health plans are adding these patients into the risk scope of medical groups.

MA plan per-member costs will significantly increase.

ESRD beneficiaries have disproportionately higher medical costs than the average MA plan member. A March 2021 Health Care Policy and Law article cited an average monthly spend of all healthcare services by patients with ESRD of $14,399 vs $435 for people without ESRD.  Further, while ESRD beneficiaries only represent 0.65% of MA enrollees today, they make up approximately 5% of all MA spend.

Considering the rate at which ESRD enrollment in MA plans is expected to increase and the average cost of care per member, MA organizations will be faced with a growing cost burden that will require specialized attention.

Medical management will become increasingly complex.

ESRD beneficiaries typically have multiple comorbid conditions, which result in higher healthcare costs and more complex patient care. According to Wakely, the average ESRD medical loss ratio is about 112% (compared to the average non-ESRD/non-Hospice MLR of 86.6%). This suggests that the current ESRD payment model fails to cover claim expenses, and complexity of care is an important factor in the gap. As ESRD enrollment continues to increase, MA organizations will need to consider specialized complex care programs for ESRD in order to continue to meet their MLR targets.

MA Organizations Should Follow Three Steps to Prepare for the Increased Financial Risk from ESRD Enrollment.

Savvy MA leaders will understand the scope and magnitude of changes driven by the 21st Century Cures Act and take proactive steps to manage them. Below, we outline three key steps MA leaders can take to prepare.

Forecast how ESRD membership will change as a result of the 21st Century Cures Act.

MA organization leaders should have a deep understanding of the 21st Century Cures Act and work with their actuarial teams to incorporate appropriate measures into their economic modeling. To start, MA plans need to understand their universe of Medicare beneficiaries within their service area and estimate what percentage of those beneficiaries are likely to enroll in their plans.

ESRD MA Enrollment Forecasting Tool

The 21st Century Cures Act is having significant implications for MA organizations, especially when it comes to financial risk from ESRD beneficiaries. To help MA leaders navigate these changes, Strive created an ESRD MA Enrollment Forecasting Tool to determine the number of Medicare fee-for-service ESRD patients in a plan’s service area. Use the tool to forecast the number of ESRD beneficiaries who could potentially join your plan and predict timing of expected membership growth based on your market share and number of beneficiaries likely to switch from Medicare fee–for–service to MA.

Engage in value-based contracts with local kidney care providers to manage ESRD risk.

ESRD is complex and often treated by a mix of primary care physicians, nephrologists, and several other specialists (depending on the profile of comorbidities). Because of this complexity, it is important for MA plans to partner and integrate with care providers who directly manage their ESRD beneficiaries.

Value-based contracts help payors align their incentives with the provider community. They offer key benefits:

• Risk sharing between the payor and provider
• Increased patient engagement with high quality providers in their network
• Alignment among the provider community around key quality performance metrics for ESRD care

Partner with an organization that specializes in value-based care for kidney disease.

Partnering with a specialized organization may seem like a heavy upfront investment.  But with the right partnership, MA and PCP organizations can realize significant returns through cost savings and improved patient care. For medical groups with financial risk, primary care physicians often manage ESRD beneficiaries with four or more comorbidities. Both the patients and physicians can benefit from additional specialized support for ESRD. A specialized provider may provide predictive analytics, care management expertise, and high-quality care resources that might not otherwise be available.

Strive Helps MA Organizations Navigate ESRD Member Quality and Costs.

Strive Health partners with leading MA plans and medical groups to offer kidney disease care services that improve member health outcomes and generate savings on total cost of care. To learn more about specialized planning and management of your CKD and ESRD patient populations, connect with us here.

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