Risk-adjustment system for the Medicare capitated ESRD program

Medicare is the principal payer for medical services for those in the U.S. population suffering from end-stage renal disease (ESRD). By law, beneficiaries diagnosed with ESRD may not subsequently enroll in Medicare Advantage (MA) plans, however, the potential benefits of managed care for this population have stimulated interest in changing the law and developing demonstration plans. We describe a new risk-adjustment system developed for Medicare to pay for ESRD beneficiaries in managed care plans. The model improves on current payment methodology by adjusting payments for treatment status and comorbidities.