Penalties Under ESRD Incentive Program Did Not Improve Outpatient Dialysis Center Quality

A new analysis reveals penalties levied under a CMS program to improve the quality of care at dialysis centers did not lead to significant change.

Penalization under the End-Stage Renal Disease Quality Incentive Program (ESRD QIP), instituted by CMS in 2012, was not associated with improvement in the quality of outpatient dialysis centers, according to study results published Monday in Annals of Internal Medicine.

Because most previous research focused on characteristics of penalized centers, data on whether the program itself improved outpatient dialysis care is limited.

Throughout the United States, quality of care at outpatient dialysis centers varies widely, authors explained, as “patients experience clinically meaningful differences in dialysis adequacy (as measured by the urea reduction ratio), a 2-fold difference in care satisfaction, and a nearly 5-fold difference in the likelihood of referral for kidney transplantation.”

To help address disparities, CMS launched ESRD QIP as a mandatory pay-for-performance initiative. As part of the program, centers face up to a 2% reduction in annual Medicare reimbursement should their performance fall below certain thresholds mandated for a range of quality measures.

In an effort to determine whether the program accurately measures center quality or if differences are driven by underlying patient characteristics, researchers used publicly available Medicare data to assess quality improvements between 2015 and 2018. Specifically, the analysis was designed “around penalties levied in calendar year 2017 on the basis of dialysis center performance in calendar year 2015.”

Centers were notified of penalties in mid-2016, and the current analysis examined if penalization was associated with performance changes in 2017 (the year penalization came into effect) or 2018 (allowing for additional time to respond to penalization).

Along with CMS quality measure data, researchers included information on center chain affiliation or non-profit status.

Of the 5830 outpatient dialysis centers for whom complete data were available, 1109 (19%) received penalties in 2017 on the basis of 2015 performance. Of these, 931 (84%) were chain-affiliated while 986 (88.9%) had a for-profit business model.

The threshold for penalization was a total performance score—defined as a composite metric ranging from 0 to 100 based on clinical quality and adherence to reporting requirements—under 60.

Analyses revealed:

  • Penalized centers were located in zip codes with a higher average proportion of non-White residents (36.4% vs 31.2%; P < .001) and residents with lower median income ($49,290 vs $51,686; P < .001).
  • Penalization was not associated with improvement in total performance scores in 2017 (0.4 point [95% CI, –2.5 to 3.2 points]) or 2018 (0.3 point [95% CI, ­–2.8 to 3.4 points]).
  • This finding was consistent across dialysis centers with different characteristics including different business models, chain affiliation status, and number of dialysis stations.
  • There was no association between penalization and improvement in specific measures such as arteriovenous fistula utilization rates or anemia management reporting.

Results did show a greater proportion of non-penalized centers happened to be chain-affiliated, which may suggest larger chains with greater infrastructure are better equipped to manage the frequent changes in quality benchmarks and data reporting, researchers hypothesized.

Participation in ESRD QIP is mandatory. Thus, it is “impossible to otherwise compare outcomes against control centers not exposed to program penalties,” authors wrote. Findings of the current analysis also highlight potential issues with the program’s design, including:

  • As the program uses a broad list of measures that reflect a range of quality priorities, they may not permit centers to focus sufficient efforts to address each measure independently.
  • Because the measures do change frequently, it is possible for centers to receive penalties in a given year for their performance on measures no longer incentivized by the program.
  • The program issues annual penalties, assuming centers can implement effective changes on a yearly timescale.
  • The ESRD QIP may levy a disproportionate share of penalties on certain types of centers. Because many of these centers care for poor and otherwise underserved communities, they may exacerbate existing health care disparities.

The authors wrote that changes to address these issues and improve the ESRD QIP program could be introduced under the federal rule-making process.

As participation is mandatory, researchers were unable to account for the possibility that quality could be worse overall in its absence, marking a limitation to the study. In addition, a 2-year period may not be sufficient to capture centers’ improvements in quality related to penalties.

Overall, “These data suggest that CMS may consider changes to the program design as they continue to experiment with ways to improve the care of patients with ESRD,” authors concluded.


Sheetz KH, Gerhardinger L, Ryan AM, Waits SA. Changes in dialysis center quality associated with the end-stage renal disease quality incentive program. Ann Intern Med. Published online May 31, 2021. doi:10.7326/M20-6662

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