Many Veterans enrolled in the VHA who require dialysis receive this service from non-VA dialysis providers. Historically reimbursement to non-VA dialysis providers was highly variable, with payments up to roughly 3-times the uniform Medicare reimbursement rate. In 2010 the VHA standardized and reduced dialysis reimbursements to about 130 percent of the Medicare fee schedule in order to curb rising Fee Basis expenditures for dialysis care. The VA further streamlined non-VA dialysis care payments in 2013 by issuing national dialysis contracts to ensure a more efficient process of identifying and reimbursing dialysis providers for Veterans. The new payment mechanism to non-VA dialysis providers was expected to reduce “fee dialysis” expenditures by 50%, but the realized cost savings may not materialize if the payment policy adversely impacts the quality of care provided to Veterans. There was little evidence to guide these efforts and now, more than ever, rigorous evaluation is needed to understand how these payment models for outsourced dialysis services changed the patterns of dialysis care delivery and to understand how policy changes may have altered the quality of dialysis services to Veterans. Now, more than ever, rigorous evaluation is needed to: (1) understand how these payment models for outsourced dialysis services affect the pattern of dialysis care delivery; (2) determine how changes in purchasing policy affected Veterans' access to care and the quality of their experience; and (3) provide insight about how the delivery of outsourced dialysis care for Veterans can be improved. This study will estimate the impact of these policy changes on Veterans and to determine whether a geographically contingent, value based model for purchasing dialysis services from non-VA vendors could improve the overall outcomes experienced by Veterans requiring dialysis. In order to address the Aims of our proposal, we bring together a multi-site, multi-disciplinary research team that is aptly suited to conduct this study. We employ a rich array of data sets from the VA, United States Renal Data System, and Medicare that span a decade of patient care (2006-2015). In order to unravel the causal effect of the policy on dialysis-related hospitalization and mortality, we estimate a difference-in- difference model that compares the average pre-post policy differences in the outcomes between Veterans that are undergoing dialysis in non-VA facilities (treatment group) and their counterparts that are undergoing dialysis in VA-owned facilities (control group). Findings from this study will provide much needed evidence to understand the extent to which VA's payment and purchasing policies for non-VA care have impacted the quality of dialysis care and Veterans' outcomes. Furthermore, results will inform future policies and practices for purchasing dialysis care as well as those governing implementation of the Veteran's Choice Act. By informing the future direction of VA strategy, this research seeks to improve the quality and accessibility of health care services while optimizing value and is consistent with VHA Blueprint for Excellence goals.

The number of Veterans with kidney failure has grown significantly over the past decade and VA is increasingly challenged to meet the dialysis needs for the growing population of Veterans requiring dialysis. As a result, VHA relies on a vast network of non-VA dialysis facilities to provide dialysis care to the Veterans via the Fee Basis Program. This reliance and the concomitant increase in costs resulted in a series of sweeping changes in VA payment models for Fee Basis dialysis. This proposal will examine whether these changes have affected Veterans' access to high quality dialysis care and the outcomes experienced. This research is responsive to HSR&D priorities of healthcare access and Veteran-centric research, care of patients with complex chronic conditions. Findings from this study will inform future strategies as VA seeks to improve the quality and accessibility of health care services while optimizing value, which is consistent with VHA Blueprint for Excellence goals of improving performance and increasing operational effectiveness.