The Center for Disease Control and Prevention (CDC) reports that more than 15% of US adults have some level of chronic kidney disease (CKD). If not managed properly, CKD can progress to permanent kidney failure, otherwise known as End-Stage Renal Disease (ESRD). In essence, ESRD is a medical condition in which a person’s kidneys cease functioning on a permanent basis, leading to long-term dialysis or a kidney transplant to maintain life.
ESRD is a life-changing disease for employees and a catastrophic health plan expense for employers, so plan sponsors need their insurance carriers to help employees stay healthy in order to control costs. This can be achieved through a number of care management programs to raise awareness of how to control risk factors for, and prevent, CKD, as well as promote early detection through testing, and provide coordinated care to improve patient outcomes. Because ESRD plan participants may become entitled to Medicare, it is important for insurance carriers to properly design processes and cost containment controls linked to these care management programs to identify those that qualify for Medicare in order provide effective outreach and assistance with the enrollment process, and gather the information necessary to coordinate with Medicare. Too often, these cost containment controls are not designed properly or effectively, even at the largest insurance carriers.
How Coordination with Medicare Works – Centers for Medicare and Medicaid (CMS) Guidance
Medicare is, by law, the secondary payer to group health plans (GHPs), COBRA, or retirement plans for eligible individuals with ESRD for a coordination period of 30 months regardless of the number of employees and whether the coverage is based on current employment status. Medicare is secondary during the coordination period, even if the employer policy or plan contains a provision stating that its benefits are secondary to Medicare.
The GHP may not differentiate in the benefits it provides to individuals who have ESRD. Specifically, GHPs are prohibited from terminating coverage, imposing benefit limitations, or charging higher premiums based on the existence of the individual’s ESRD.
When Medicare Coverage Commences
When the beneficiary first enrolls in Medicare based on ESRD, Medicare coverage usually starts:
- In the fourth month of dialysis when the beneficiary receives treatment in a dialysis facility.
- In the first month of dialysis if:
- The beneficiary takes part in a home dialysis training program in a Medicare-approved training facility to learn how to do self-dialysis treatment at home.
- The beneficiary begins home dialysis training before the end of the third month of dialysis.
- The beneficiary expects to finish home dialysis training and give self-dialysis treatments.
- The month the beneficiary is admitted to a Medicare-approved hospital for kidney transplant or for health care services that are needed before the transplant if it takes place in the same month or within the two following months.
- Two months before the month of the transplant after the beneficiary is admitted to the hospital for that transplant or, for health care services that are needed before the transplant.
- Two months after pre-transplant testing if the transplant is delayed more than two months after the beneficiary is admitted to the hospital for that transplant or for health care services that are needed before the transplant.
When Medicare Coverage Ends
If the beneficiary has Medicare only because of ESRD, Medicare coverage will end when one of the following conditions are met:
- 12 months after the month the beneficiary stops dialysis treatments
- 36 months after the month the beneficiary had a kidney transplant
There is a separate 30-month coordination period each time the beneficiary enrolls in Medicare based on kidney failure. For example, if the beneficiary gets a kidney transplant that continues to work for 36 months, Medicare coverage will end. If after 36 months, the beneficiary enrolls in Medicare again because they re-start dialysis or get another transplant, the Medicare coverage will start right away. There will not be a three-month waiting period before Medicare begins to pay. However, there will be a new 30-month coordination period if the beneficiary has employer or union group health plan coverage.
What Plan Sponsors Need to Know
Given the significant cost of treating ESRD, if the insurance carrier lacks appropriate controls to (a) identify plan participants who qualify for Medicare, (b) provide assistance with the enrollment process, or (c) gather the information necessary to coordinate with Medicare, or these controls are not working as intended, plan sponsors are at significant risk of material financial loss. Given the risks associated with this complex process, we encourage plan sponsors to periodically evaluate its insurance carrier’s cost containment process to make sure it is designed properly and working as intended.