June 15, 2023

Dialysis Cost for Group Health Plans

Employer-sponsored health plans pay 4-5 times more than Medicare. The questions you should be asking for your self-funded health plan.

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In 2021, the CDC estimated that 37 million Americans have chronic kidney disease (CKD). Alarmingly, 90% of those are unaware they have it, until they’ve suffered a stroke or heart attack or the condition has advanced to end stage kidney disease (ESKD). Those with ESKD are faced with two choices: kidney transplant or dialysis.

There are two types of dialysis. Hemodialysis (HD) is available both in-center and in-home. Peritoneal dialysis (PD) is strictly in-home. In-home options have been noted as having a greater success rate (1), although both settings and methods have pros and cons. The commonalities of these treatments, regardless of the type or setting, are indisputable:

  • they are necessary for a person with ESKD to stay alive, short of a kidney transplant,
  • they are costly,
  • patients will likely use 1 of 2 providers (DaVita or Fresenius), who control 80% of the market,
  • private/employer-sponsored insurance payments are 4 to 5 times more than Medicare(2)

Medicare reported over $30 billion in dialysis spend for 2020, based on $240 per treatment. By comparison, private and employer-sponsored insurance paid an average of $1,287. Self-funded health plans can expect to pay out roughly $300,000/ year for three years before Medicare becomes primary. The cost implications of dialysis treatments for self-funded plans can have a large, negative impact on a company’s healthcare spend and budgeting / forecasting. Complications would just further increase the cost.

In an effort to combat the significant financial impact of dialysis, self-funded businesses have needed alternative cost-containment options. This has led to the emergence of point solutions and third-party vendors that specialize in dialysis cost management. Although these options can reduce costs, their services typically come at a steep price (charging 25-30% of savings) for businesses with self-funded health plans. A price that typically washes out a large portion of potential savings and creates added stress / confusion for the patient seeking treatment.

Align your organization with a  health plan administrator that not only provides an effective dialysis management program, but can do so at a fair price while providing a seamless experience for patients. It’s important to know the answers to these questions when it comes to your own self-funded health plan.

  • How is dialysis covered?
  • Is a point solution or third-party vendor used for dialysis claims? If so, what is the cost for the vendor?
  • How is dialysis cost reduced and how does the program coordinate with Medicare?
  • What is the impact to the patient? Is there potential for balance-billing?
  1. https://www.kidney.org/atoz/content/choosing-dialysis-which-type-right-me#:~:text=There%20are%203%20main%20types,home%20hemodialysis%2C%20and%20peritoneal%20dialysis
  2. https://usrds-adr.niddk.nih.gov/2022/end-stage-renal-disease/9-healthcare-expenditures-for-persons-with-esrd)MIn