2019 HSR&D/QUERI National Conference

4086 — Impact of National Contracts on VA Payment and Access to Outpatient Community Dialysis

Lead/Presenter: Virginia Wang,  COIN - Durham
All Authors: Wang V (Durham COIN, Duke University), Swaminathan S (Providence COIN, Brown University), Corneau EA (Providence COIN) Maciejewski ML (Durham COIN, Duke University) Trivedi A (Providence COIN, Brown University) O'Hare AM (Seattle COIN, University of Washington) Mor V (Providence COIN, Brown University)

VA has a high burden of end-stage renal disease (ESRD) prevalence and cost. VA's limited capacity to deliver dialysis treatment means that VA relies heavily on community providers, making chronic dialysis the single largest VA expenditure for outpatient community care. Before 2011, VA paid for non-VA dialysis on a local, ad hoc basis, with some payments greatly exceeding federal (e.g., Medicare) reimbursement rates. As a result, VA initiated policies to standardize payments to non-VA dialysis providers in 2011 and instituted national dialysis contracts to participating providers treating Veterans with ESRD in 2013. This study examined the effect of VA's standardized national contracts on VA costs and outcomes.

We used 2006-2016 data from VA, Medicare, and the US Renal Data System to identify VA-enrolled Veterans receiving dialysis either within the VA or via VA-financed community care from non-VA providers (hereafter non-VA). We ascertained changes in VA prices for non-VA dialysis treatments and associated ancillary services from VA-paid claims. We performed multivariable regressions to examine the effects of VA national contract pricing on (a) VA costs of non-VA community dialysis, (b) Veterans' access to non-VA dialysis care (e.g., number of participating non-VA dialysis providers), and (c) 1-year mortality, controlling for patient and VAMC-level characteristics.

The cohort was comprised of 130,261 Veterans receiving chronic dialysis in 2006-2016, 18.5% of whom received ?1 dialysis treatment from a participating non-VA provider. Before implementation of national contracts, prices per non-VA dialysis treatment varied widely ($60.59 to $1,574.55) across VAMCs and decreased thereafter ($73.40 to $663.37). The average number of participating non-VA dialysis providers for a local VAMC increased from 19 to 37. One-year mortality was 10.95% prior to national standardization and 11.0% afterwards. Implementation of national dialysis contracts was associated with a 40% reduction in average payments for non-VA dialysis (p < 0.001), with no changes in access (p = 0.86) or 1-year mortality (p = 0.15).

VA's use of standardized payment through national dialysis contracts resulted in a substantial increase in the value of outsourced VA dialysis care by reducing spending with no measurable impact on Veterans' access to care and mortality.

In the context VA's increasing reliance on greater community care, we found that a national contract mechanism served to improve the value of dialysis care, which may support national price setting to improve the value of other kinds of community care.