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 Table 6.1Prevalent Medicare fee-for-service patient counts and spending for patients aged 65 and older, by diabetes, heart failure, and/or CKD, 2015
 Table 6.2Prevalent Medicare Advantage and managed care spending for beneficiaries aged 65 and older, by diabetes, heart failure, and/or CKD, 2015
 Table 6.3Prevalent Medicare fee-for-service patient counts and spending for patients younger than age 65, by diabetes, heart failure, and/or CKD, 2015
 Table 6.4Table 6.4 Prevalent Medicare Advantage and managed care fee-for-service spending for beneficiaries younger than age 65, by diabetes, heart failure, and/or CKD, 2015
 Figure 6.1Overall Medicare Parts A, B, and D fee-for-service spending for patients aged 65 and older, by CKD, diabetes, and heart failure, 2014 & 2015
 Figure 6.2Overall per person per year spending, by CKD stage, 2012-2015
 Table 6.5Per person per year Medicare Parts A, B, and D fee-for-service spending for all CKD patients aged 65 and older, by CKD stage, age, sex, and race, 2014 & 2015
 Table 6.6Per person per year Medicare Advantage and managed care spending for all CKD beneficiaries aged 65 and older, by CKD stage, age, sex, and race, 2015
 Table AICD-9-CM codes for Chronic Kidney Disease (CKD) stages
 Table 6.7Per person per year Medicare Parts A, B, and D fee-for-service spending for CKD patients with DM, aged 65 and older, by CKD stage, age, sex, and race, 2014 & 2015
 Table 6.8Per person per year Medicare Advantage and managed care spending for CKD patients with DM, aged 65 and older, by CKD stage, age, sex, and race, 2015
 Table 6.9Per person per year Medicare Parts A, B, and D fee-for-service spending for CKD patients with heart failure, aged 65 and older, by CKD stage, age, sex, and race, 2014 & 2015
 Table 6.10Per person per year Medicare Advantage and managed care spending for CKD patients with heart failure, aged 65 and older, by CKD stage, age, sex, race, and year, 2015
 Figure 6.3Overall Medicare Parts A, B and D fee-for-service spending for general Medicare population aged 65 and older and for those with CKD, 1996-2015
 Figure 6.3Overall Medicare Parts A, B and D fee-for-service spending for general Medicare population aged 65 and older and for those with CKD, 1996-2015
 Figure 6.4Trends in total Medicare Parts A, B, and D fee-for-service spending for CKD patients aged 65 and older, by claim type, 2004-2015
 Figure 6.5Total Medicare fee-for-service inpatient spending for CKD patients aged 65 and older, by cause of hospitalization, 2004-2015
 Figure 6.6Per person per year Medicare, Medicare Advantage and managed care spending for the CKD patients aged 65 and older, by diabetes, and heart failure, 2006-2015
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Chapter 6: Healthcare Expenditures for Persons with CKD

  • In this 2017 Annual Data Report (ADR), we introduce information from the Optum Clinformatics™ DataMart for persons with Medicare Advantage and commercial managed care coverage. This will provide a more comprehensive examination of the financial costs necessary to provide care to beneficiaries with CKD.
  • Medicare spending for all beneficiaries who had chronic kidney disease (CKD; 11% of total) exceeded $64 billion in 2015 (Tables 6.1 and 6.3). When adding an extra $34 billion of end-stage renal disease (ESRD) costs (Volume 2, Chapter 9, Healthcare Expenditures for Persons with ESRD, Figure 9.2), total Medicare spending on both CKD and ESRD was over $98 billion.
  • In 2015, Medicare spending for beneficiaries with CKD aged 65 and older exceeded $55 billion, representing 20% of all Medicare spending in this age group (Figure 6.1).
  • Medicare spending for beneficiaries with CKD who were younger than age 65 (6% of total) exceeded $8 billion in 2015, representing 14% of total spending in this age group (Table 6.3).
  • Growth in total CKD spending has primarily been driven by an increase in the number of identified cases, particularly those in the earlier stages (CKD 1-3).
  • Over half of the 2015 Medicare spending for beneficiaries aged 65 and older was for those who had diagnoses of CKD, diabetes mellitus (DM), or heart failure (HF; Figure 6.1).
  • Over 70% of total Medicare spending for beneficiaries with CKD who were aged 65 and older was incurred by the 60% of these patients who also had DM, HF, or both (Table 6.1).
  • Spending per patient-year was more than twice as high for those with all three chronic conditions of CKD, DM, and HF ($39,395) than for beneficiaries with only CKD ($15,930; Table 6.1).
  • Per-person per-year spending for Medicare Advantage enrollees and those in the Optum Clinformatics™ managed care was slightly lower, at 93% and 99% of the expenditures for fee-for-service Medicare (Table 6.6).
  • For beneficiaries under age 65 who qualified for Medicare based on a disability rather than age, spending was somewhat higher in the Medicare Advantage program, both when averaged across all beneficiaries (12% higher) and among all those with CKD (6% higher; Table 6.3).
  • In the fee-for-service Medicare CKD population, Black/African American beneficiaries continued to exhibit higher spending in all disease categories as compared to Whites and those of other races. However, Blacks with Medicare Advantage may have lower spending than do patients of other races.
  • The analysis of expenses for beneficiaries with CKD indicates avenues for potential savings, and the effect of cost-containment efforts in this population. Reduction in expenditures could be achieved through the prevention of disease progression to later stages of CKD, and prevention of the development of concurrent chronic conditions such as DM and HF.

Introduction

Persons with CKD often have extensive healthcare needs and frequently face co-existing illnesses. This chapter assesses the overarching financial cost of caring for persons with CKD through comparison of expenditures in three payment systems. As in previous Annual Data Reports (ADR), the Medicare 5% sample was used to determine spending for Medicare fee-for-service (FFS) beneficiaries. In this chapter, we present recent patterns and longer-term trends in both total claims-based spending and spending by CKD status, patient characteristics such as age, sex, and race, and DM and HF status.

In this 2017 ADR, we add comparable information from the Optum Clinformatics™ DataMart for persons enrolled in Medicare Advantage and through a large commercial managed care organization. Growth in the percent of Medicare beneficiaries enrolled in managed care increased from 13% in 2004 to 31% in 2015 (Kaiser, 2017); 16.8 million individuals were enrolled in an Medicare Advantage plan in March 2015. Addition of this data makes our assessment of CKD spending significantly more comprehensive, particularly for the CKD population aged 65 and older. Similarly, the addition of commercial insurance data allows more complete assessment of CKD spending, particularly for those younger than age 65, as commercial insurance was the largest source of payment for this group.

While our analyses provide a sound and valid estimate of the costs of CKD to healthcare systems, when interpreting spending levels and trends in these claims data the impact of potential under-identification should be kept in mind. Unlike ESRD, where determination is straightforward due to the need for renal replacement services, CKD can be under-identified. There may be valid under-recognition that occurs when patients who have impaired renal function have not yet been tested. Claims-based under-identification can also occur when patients who have been tested and identified clinically do not have a CKD diagnosis listed on an insurance claim. Such under-identification makes the determination of the full economic impact of CKD on a healthcare system challenging.

Under-recognition of CKD can affect estimates of CKD-related expenditures in several ways. Identification of persons with CKD using ICD-9-CM and ICD-10-CM (International Classification of Diseases, 9th and 10th Revision, Clinical Modification) diagnosis codes will result in an underestimate total CKD expenditures, as early in the disease process formal diagnoses of CKD are not commonly documented or may not even have been identified clinically. Assuming that under-identification occurs most often in the earliest and least costly patient cases, spending estimates per patient-year (PPY) calculated solely from the claims-based diagnoses of CKD are likely to be biased upwards. To the extent that under-identification is not constant over time, interpretation of trend data for both total and PPY expenditures should be made in this context.

In addition, it is not possible to attribute healthcare expenditures solely to kidney disease with any accuracy; the costs of CKD are influenced by it’s interactive nature and associations with other chronic conditions such as DM and hypertension (HTN), and with cardiovascular diseases (CVD) such as coronary artery disease, cerebrovascular disease, peripheral arterial disease, and HF. In order to understand better the complexity of how these conditions contribute to costs, we often present and compare results for patients with varying combinations of CKD, DM, and HF.

Similar issues of CKD under-identification are also discussed in this 2017 ADR, Volume 1, Chapters 1 (CKD in the General Population), 2 (Identification and Care of Patients with CKD), and 3 (Morbidity and Mortality in Patients with CKD).

Methods

This chapter uses data from three primary sources including beneficiaries of general Medicare, those enrolled in Medicare Advantage plans, and a cohort of individuals enrolled in a commercial managed care plan.

The Medicare 5% sample provides information on FFS beneficiaries aged 66 and older. Roughly 98% of Americans aged 65 and older qualify for Medicare, and as a result, analysis of Medicare data is representative of beneficiaries age 65 and older.

Medicare prescription drug coverage through Part D plans is also included in this chapter. Note that beneficiaries have many options to purchase prescription drugs, so the claims filled through the Part D plan may not represent all medications prescribed to Medicare beneficiaries.

In addition to reporting on the population aged 65 and older, beginning in 2014 we have added information on beneficiaries younger than 65 who generally were Medicare-eligible due to disability. The data from the Optum Clinformatics™ DataMart is presented for those both younger than 65 and 65 and older.

The Optum Clinformatics™ DataMart includes a cohort of individuals with commercial managed care plans. Optum Clinformatics™ data provides paid medical and prescription claims and enrollment information for national participants in the commercial managed care plans of a large U.S. health insurance company. The data was purchased from OptumInsight, and participants are enrolled in both a medical and a prescription plan.

The methodology we employed to calculate costs related to CKD (excluding ESRD) utilizes ICD-9-CM and ICD-10-CM diagnosis codes to define the point prevalent CKD cohort. We included only those beneficiaries classified as having CKD on January 1 of each given year, to avoid possible association with acute kidney injury (AKI). How to best integrate the costs of AKI patients into CKD calculations is a continuing area for research, due to the potential for transition from AKI to CKD.

In this chapter, we defined costs as insurance expenditures rather than true economic costs, using claims from Medicare Parts A, B, and D as based on the 5% Medicare sample for calendar years 1996-2015 and from 100% of the Optum Clinformatics™ dataset for calendar years 2006-2015. To account for differences in pricing across health plans and provider contracts, Optum Clinformatics™ applies standard pricing algorithms to claims data. These algorithms were designed to create standard prices that reflect allowed payments across all provider services.

Details of this data are described in the Data Sources section of the CKD Analytical Methods chapter. See the CKD Analytical Methods section of the CKD Analytical Methods chapter for an explanation of the analytical methods used to generate the study cohorts, figures, and tables in this chapter. Microsoft Excel and PowerPoint files containing the data and graphics for these figures and tables are available to download from the USRDS website.

Spending for CKD and Related Chronic Comorbidities

Beneficiaries Age 65 and Older

Fee-For-Service Medicare

Examining FFS Medicare spending reinforces CKD’s reputation as a cost multiplier. Beneficiaries with recognized CKD represent 11% of the point prevalent aged Medicare population, yet accounted for 21% of total expenditures (Table 6.1).

We examined 2015 costs in relation to beneficiaries’ CKD stage, age, sex, race, and concurrent disease, focusing on DM and HF. These conditions, in addition to CKD, represent some of the costliest chronic disease populations for Medicare. For example, HF affects 9% of beneficiaries in the FFS Medicare population, but accounts for 20% of expenditures. Thirty-five percent of overall expenditures were directed toward the 24% of beneficiaries with DM.

In those aged 65 and older, per-person per-year (PPPY) costs were 97% higher for patients with CKD only, versus those with no CKD, DM, or HF ($15,930 vs $8,074). Costs for those with CKD and DM were 54% higher than for those with DM only. Similarly, expenditures for those with CKD and HF were 45% higher than for those with HF alone. For beneficiaries with CKD, HF, and DM, costs were 44% higher than for those with only HF and DM. Overall, people with diagnoses of CKD, DM, and/or HF accounted for one-third of the Medicare aged 65 and older population, but over half of total programmatic costs.

Table 6.1 Prevalent Medicare fee-for-service patient counts and spending for patients aged 65 and older, by diabetes, heart failure, and/or CKD, 2015

Medicare Advantage and Commercial Managed Care Coverage

CKD was also a cost multiplier for individuals 65 and older who were beneficiaries of Medicare Advantage or commercial managed care plans. The Medicare Advantage population was similar to FFS Medicare, with 10% having CKD and those with CKD accounting for 18% of spending. The managed care population had a lower prevalence of CKD (6%), but those with CKD also accounted for an outsize (12%) proportion of spending.

Per-person per-year spending in these populations was somewhat lower than that for FFS Medicare. In this data set, Optum Clinformatics™ Medicare Advantage spending was 93% of those receiving FFS Medicare, with managed care beneficiaries at 99%. Such differences can arise from plan effects (e.g., care management activities of Medicare Advantage plans) or patient selection (e.g., those over 65 with commercial coverage are often still employed, so may be younger and healthier than the typical Medicare FFS beneficiary). Spending for those with CKD only was about 80.3% ($15,630 vs $8,670) and 90.1% ($17,615 vs $9,267) higher than for those with no CKD, DM, or HF in the Medicare Advantage and managed care populations respectively.

Table 6.2 Prevalent Medicare Advantage and managed care spending for beneficiaries aged 65 and older, by diabetes, heart failure, and/or CKD, 2015

Beneficiaries Younger than Age 65

Fee-For-Service Medicare

For the FFS Medicare population under age 65 only 6% had CKD, but those individuals accounted for 14% of spending. One-fourth had one or more of CKD, DM, and/or HF, accounting for 43% of spending for this group (Table 6.3). Much of these expenditures, however, were for those who had DM, at 21% of the population and 35% of spending.

Table 6.3 Prevalent Medicare fee-for-service patient counts and spending for patients younger than age 65, by diabetes, heart failure, and/or CKD, 2015

Medicare Advantage and commercial Managed Care coverage

The under age 65 Medicare Advantage population was similar to the FFS Medicare population. Thirty percent of the Medicare Advantage beneficiaries had one or more of CKD, DM, and/or HF, accounting for 44% of spending for this group (Table 6.4). At only 6%, the managed care population under age 65 was much less likely to have CKD, DM, or HF (Table 6.4).

For those under age 65 who qualified for Medicare based on a disability rather than age, spending was somewhat higher for beneficiaries in the Medicare Advantage program, both when averaged across all beneficiaries (42% higher) and among all with CKD (24% higher; Tables 6.3 and 6.4). Consistent with our other findings, average spending for those with CKD was considerably lower in the managed care population than in the Medicare FFS and Medicare Advantage populations.

Table 6.4 Table 6.4 Prevalent Medicare Advantage and managed care fee-for-service spending for beneficiaries younger than age 65, by diabetes, heart failure, and/or CKD, 2015

Spending for CKD by Stage and Patient Characteristics

Among the FFS Medicare population aged 65 and older, between 2014 and 2015 total spending for Parts A, B, and D rose by $7 billion, to $262 billion. Total spending for CKD patients rose by $2.8 billion, to $55.8 billion (Figure 6.1). Therefore, spending growth among CKD patients accounted for over one third of the increase in Medicare expenditures during this year.

Further, Medicare expenditures were higher for beneficiaries with CKD than for beneficiaries with ESRD ($55.8 billion vs. $33.9 billion; see Volume 2, Chapter 9, Healthcare Expenditures for Persons with ESRD). Expenditures for beneficiaries with CKD now represent 21.3% of all Medicare Parts A, B, and D non-ESRD spending.

Expenditures increased for all covered groups, but the highest growth rates occurred in those with only CKD and CKD with comorbid DM. The spending increase appears to be driven by a rise in the proportion of beneficiaries with recognized CKD (see Table 6.7 and Volume 1, Chapter 2, Identification and Care of Patients with CKD, Figure 2.2).

Figure 6.1 Overall Medicare Parts A, B, and D fee-for-service spending for patients aged 65 and older, by CKD, diabetes, and heart failure, 2014 & 2015

All CKD patients 65 and older required increased care as they progressed to later stages of disease (Figures 6.2.a-c; see Table A for CKD definitions). In the FFS Medicare population, PPPY expenditures in 2015 ranged from $19,074 for those in Stages 1-2, to $29,151 for those in Stages 4-5. In the Medicare Advantage population, expenditures increased from $16,691 in Stages 1-2 to $31,277 in Stages 4-5. The managed care population was similar, with expenditures of $18,026 in Stages 1-2 to $32,585 in Stages 4-5.

Group trends in PPPY spending from 2012-2015 were mixed (Figures 6.2.a-c). FFS Medicare saw PPPY expenditures increase 1.8% overall for individuals with any CKD, but the increase was most dramatic for those in Stages 4-5, rising by 6.2%. However, PPPY spending dropped 13% over this period for Medicare Advantage beneficiaries with CKD. Spending for managed care beneficiaries moved without clear patterns, but it should be noted that the Optum Clinformatics™ population of managed care enrollees with CKD was relatively small (N=14,011 in 2015). Overall PPPY spending was slightly higher in 2015 than in 2012, but spending on beneficiaries in Stages 1-2 decreased by 6% while expenditures on beneficiaries in Stages 4-5 increased by 10%.

Figure 6.2 Overall per person per year spending, by CKD stage, 2012-2015

Table A ICD-9-CM codes for Chronic Kidney Disease (CKD) stages

Table 6.5 presents PPPY Medicare FFS spending for Parts A, B, and D services, for beneficiaries with CKD (but not ESRD), by stage of CKD. In 2015, PPPY costs reached $22,228 for FFS Medicare CKD patients aged 65 and older, a slight increase from 2014 ($21,942). This increased spending was observed in CKD Stages 3 and 4-5, while the costs in Stages 1-2 decreased slightly from 2014 to 2015. During this period, the distribution of identified patient years also shifted towards the less severe and less costly stages. In 2015, costs for beneficiaries with Stages 4-5 CKD ($29,151) were 52.8% greater than for beneficiaries with Stages 1-2 CKD ($19,074). Although the number of beneficiaries with unknown/unspecified CKD stage decreased slightly, this still accounted for one-third of all cases of CKD. The PPPY costs for those unknown/unspecified were similar to the overall CKD population.

Spending for Black beneficiaries with CKD exceeded that for Whites by 9.1%, a decrease over the 14.9% disparity observed in 2014. Per capita spending for Whites increased slightly while per capita spending for Blacks decreased slightly.

Table 6.5 Per person per year Medicare Parts A, B, and D fee-for-service spending for all CKD patients aged 65 and older, by CKD stage, age, sex, and race, 2014 & 2015

Table 6.6 presents overall PPPY spending for Medicare Advantage and managed care beneficiaries with CKD (but not ESRD) by stage of CKD (see Table A for definitions). In contrast to the FFS Medicare population, for these patients spending generally decreased with age and was lower for Blacks than Whites, by 26% for those covered by Medicare Advantage and 35% in the managed care population.

Table 6.6 Per person per year Medicare Advantage and managed care spending for all CKD beneficiaries aged 65 and older, by CKD stage, age, sex, and race, 2015

Tables 6.7 and 6.8 present PPPY spending for beneficiaries with both CKD and DM. These tables show similar results as in the overall CKC population. Among the 2015 FFS Medicare beneficiaries with these two conditions, PPPY spending for Blacks was $27,016—7.9% greater than the $25,033 incurred for Whites. Yet, spending by Medicare Advantage was 29% lower for Blacks than Whites and 39% lower for the managed care population.

Table 6.7 Per person per year Medicare Parts A, B, and D fee-for-service spending for CKD patients with DM, aged 65 and older, by CKD stage, age, sex, and race, 2014 & 2015

Table 6.8 Per person per year Medicare Advantage and managed care spending for CKD patients with DM, aged 65 and older, by CKD stage, age, sex, and race, 2015

Tables 6.9 and 6.10 present PPPY spending for beneficiaries with CKD and concurrent HF. The presence of HF greatly increased the costs of care for persons with CKD. Persons with both CKD and HF cost 61% more ($35,826) than the average CKD patient ($22,228). These results were consistent with those seen in the previous tables. In 2015, FFS Medicare PPPY expenditures for Black beneficiaries with both conditions reached $39,417—12.0% higher than the $35,188 PPPY for their White counterparts. In contrast to FFS Medicare, Black Medicare Advantage beneficiaries required 21% less spending than did their White counterparts, and Black managed care beneficiaries 27% less.

Table 6.9 Per person per year Medicare Parts A, B, and D fee-for-service spending for CKD patients with heart failure, aged 65 and older, by CKD stage, age, sex, and race, 2014 & 2015

Table 6.10 Per person per year Medicare Advantage and managed care spending for CKD patients with heart failure, aged 65 and older, by CKD stage, age, sex, race, and year, 2015

Over time FFS Medicare beneficiaries aged 65 and older with recognized CKD have accounted for an increasing share of Medicare expenditures, expanding from 5.8% in 2000 to 14.1% in 2008, and 21.3% in 2015. Much of this growth was due to the increased ascertainment of CKD as shown in Volume 1, Chapter 2, Identification and Care of Patients with CKD, Figure 2.2. Persons aged 65 and older with CKD accounted for 2.1%, 8.8%, and 12.3% of the FFS Medicare population in 2000, 2008, and 2015.

Figure 6.3 presents total expenditures on Part A, B, and D services for Medicare FFS beneficiaries with CKD, DM, and HF. In 2015, expenditures for CKD patients reached $55.8 billion, accounting for 21.2% of the total spending for all FFS Medicare beneficiaries. Care of beneficiaries with CKD and concurrent DM required $30.4 billion in 2015, or 33.4% of the total FFS Medicare spending on DM. Spending on HF in the FFS Medicare population was $53.3 billion in 2015. Of this, $23.7 billion (44.4%) was spent on the CKD patient population with HF.

Figure 6.3 Overall Medicare Parts A, B and D fee-for-service spending for general Medicare population aged 65 and older and for those with CKD, 1996-2015

Most spending for CKD patients was incurred for inpatient and outpatient care, physician/supplier services, and care in skilled nursing facilities. The proportion of total FFS Medicare expenditures required to provide inpatient care was 33% in 2015, while outpatient costs were predictably lower at 11%. Physician/supplier service costs amounted to 23% in 2015, while those for skilled nursing facility care reached 10% (Figure 6.4). In the Medicare non-CKD population, these expenditure percentages were 29% to provide inpatient care, 15% for outpatient, 28% for Physician/supplier services, and 8% those for skilled nursing facility care (not shown).

Figure 6.4 Trends in total Medicare Parts A, B, and D fee-for-service spending for CKD patients aged 65 and older, by claim type, 2004-2015

Hospitalization costs accounted for a large proportion of spending for CKD. Of the 2015 inpatient hospitalization spending for those with CKD, 22% resulted from admissions to treat infections, and 26% from cardiovascular conditions, with the remaining 52% resulting from all other causes (Figure 6.5).

Figure 6.5 Total Medicare fee-for-service inpatient spending for CKD patients aged 65 and older, by cause of hospitalization, 2004-2015

Figure 6.6 illustrates PPPY costs for CKD patients aged 65 and older by the presence of DM and HF. In 2015, PPPY costs for CKD patients varied greatly by the presence of these comorbidities. CKD patients without DM and HF required $15,930 PPPY from FFS Medicare. Those with DM in addition to CKD averaged $19,109 PPPY, and beneficiaries with both CKD and HF cost $31,401. Expenditures for those with all three conditions reached $39,395 PPPY in 2015 for FFS Medicare. Spending was also higher as comorbidities increased in the Medicare Advantage and managed care populations.

Figure 6.6 Per person per year Medicare, Medicare Advantage and managed care spending for the CKD patients aged 65 and older, by diabetes, and heart failure, 2006-2015

References

Centers for Medicare and Medicaid Services (CMS). Medicare & Medicaid Statistical Supplement: 2013 Edition. https://www.cms.gov/Research-Statistics-Data- and-Systems/Statistics-Trends-and- Reports/MedicareMedicaidStatSupp/2013.html. Accessed July 12, 2017.

The Henry J. Kaiser Family Foundation. Medicare Advantage. http://kff.org/medicare/fact-sheet/medicare- advantage. Accessed July 12, 2017.