Huge Medicaid Savings with Small Dialysis Changes



Kidneys perform crucial functions, and when they fail - known as end stage renal disease (ESRD) - the blood must be regularly cleansed of toxins and extra fluids by using an artificial kidney (hemodialysis), by introducing a cleansing solution into the abdomen (peritoneal dialysis), or by using a healthy donated kidney (kidney transplant). The majority of patients on dialysis use in-center therapies while only a small portion choose home treatments, including peritoneal dialysis (PD) or home hemodialysis. Estimates for the number of Americans living with chronic kidney disease, who are at increased risk for progression to ESRD, range from 20 million to over 40 million people with 400,000 ESRD patients on dialysis. According to the US Renal Data Systems, more than 100,000 people develop kidney failure each year.

Home Dialysis
Currently, only approximately 10% of dialysis patients utilize home dialysis options.(1) The Conditions for Coverage for dialysis issued by the Centers for Medicare & Medicaid Services (CMS) mandate that dialysis providers have the responsibility for educating patients about all treatment options, including home dialysis.(2) CMS also estimates potential annual cost savings of up to $295 million if an additional 5% of patients choose PD.(3) Beyond cost savings (see below), PD holds benefits for qualified patients including less dietary and fluid restrictions, increased flexibility since the treatments are administered by the patient in his/her home, and possibly improved health due to less potential for fluid overload, a major cause of high blood pressure and congestive heart failure in dialysis patients.(4)

Cost Benefits of PD for State Budgets
Patients diagnosed with ESRD are eligible for Medicare regardless of their age. In general, when a Medicaid patient is diagnosed with ESRD and must begin dialysis, he/she is required to wait 90 days after starting in-center hemodialysis to receive Medicare payments. During this coordination of benefits period, the State assumes the cost of all care, including not only dialysis treatments but any additional and costly hospital and surgical services, including potentially the placement of a dialysis access site. However, when a Medicaid patient begins PD, Medicare will reimburse all treatment costs retroactive to the first day of the month for any Medicare-eligible patient deemed suitable for and who initiates PD during the 90-day coordination window. It does not even take a large number of patients choosing PD for states to see substantial cost savings. 
Using Wisconsin as an example: 


WI Medicaid-Only Number Percentage
ESRD Patients - Prevalent 375 100%
In-Center HD Patients 345 91.96% 
Current PD Patients 30 8.04% 
Proposed New PD Patients 8 (in addition to existing pts) 10.00%

$22,000 x 8 new patients = $176,000 in total savings


WI Dual-Eligibles Number Percentage
ESRD Patients - Incident 289 100%
In-Center HD Patients 274 94.94%
Current PD Patients 15 5.06%
Proposed New PD Patients 14 (in addition to existing pts) 10.00%

$40,000 x 14 new patients = $560,000 in total savings


If Wisconsin increases the percentage of its Medicaid-covered dialysis patients utilizing PD to just 10%, in the first year the State could see Medicaid savings of $736,000.

Next Steps
Florida has already passed this initiative and several other states are evaluating adopting similar measures. If you are interested in learning how you can implement this initiative in your state, please contact Dialysis Patient Citizens at 866-877-4242.


1. Neumann, Mark E. "Some Bright Spots for Home Dialysis." Web log post. Nephrology News and Issues, 13 July 2012.
2. ESRD Program Interpretive Guidance: 42 CFR Part 494 Conditions for Coverage for ESRD Facilities. Baltimore, MD: Department of Health & Human Services, Center for Medicaid and State Operations/Survey & Certification Group, Ref: S&C-09-09, 2008
3. See 
§ 494.70, § 494.80, § 494.90, 20430 Federal Register/Vol. 73, No. 73/April 15, 2008
4. "National Kidney and Urologic Diseases Information Clearinghouse (NKUDIC)." Kidney Failure: Choosing a Treatment That's Right for You. Ed. William Owen, Jr. and Richard D. Schwartz. The National Institutes of Diabetes and Digestive and Kidney Diseases, Nov. 2007 <>.


Printable Copy: Small_Changes_Add_Up.pdf

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