New CMS Rules Targets Dialysis Provider Private Health Plan Steering

A new Center for Medicare and Medicaid Services (CMS) Rule published on December 12 tries to deter  providers from encouraging Medicare and Medicaid eligible dialysis patients to enroll iprivate health insurance  offered through health insurance exchanges that provide higher reimbursement for providers than Medicare and Medicaid.

Issued in response to private health insurer complaints, the Rule requires dialysis centers that help patients pay private insurance premiums either directly or through charities to disclose information about what private plans versus Medicare and Medicaid pay. The Rule requires providers to inform patients that the private plans might not cover certain expenses that might be reimbursable by Medicare or Medicaid.

private insurers have complained that providers steering a patient’s to private coverage to increase reimbursement for the provider for the care is increasing costs and undermining the risk pools for the health insurance exchange plans created by the Patient Protection and Affordable Care Act (ACA). CMS also has sent letters (PDF) to all Medicare-enrolled dialysis facilities warning the facilities that CMS has “concerns” about provider enrollment activities that seek to maximize provider profits.

In addition to complaining to CMS about providers encouraging dialysis patients to enroll in private health plans that have higher reimbursement rates than Medicare or Medicaid pay, some private self insured plans reportedly have sent threatening demand letters to some dialysis providers, accusing the providers of violating the Medicare rules by incentivizing Medicare eligible patients pay some or all of the cost of that coverage.  

Private insurers and self insured plans generally express to cost concerns when Medicare or Medicaid eligible individuals remain enrolled in their programs. Dialysis patients with end-stage renal disease become eligible for Medicare at the time of diagnosis. The Medicare secondary payer rules prohibit group health plans or insurers from incentivizing or requiring Medicare eligible individuals that are the employee or employees spouse to enroll in Medicare or terminate coverage under the group health plan based on their. Under the Medicare secondary payer rules, coverage provided by self insured employeror union sponsored plans generally is considered primary coverage to Medicare and Medicaid. Consequently the group health plan or insurer generally will pay the majority of the cost of care in excess of the deductibles throughout the primary coverage period.  Not only does the private plan pay a greater percentage of the cost of coverage, many private plans provide a higher reimbursement rate than Medicare or Medicaid pay.  As a result private insurers are particularly aware and concerned about the cost of covering Medicare or Medicaid eligible patients under their group and individual health insurance plans.

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