Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
Clinical Performance Measures 
for Dialysis Facilities 
Lessons Learned by the Major Dialysis Corporations 
and Implications for Medicare 
Supplemental Report # 2 
JANET REHNQUIST 
INSPECTOR GENERAL 
JANUARY 2002 
OEI-01-99-00054  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, is to 
protect the integrity of the Department of Health and Human Services programs as well as the 
health and welfare of beneficiaries served by them.  This statutory mission is carried out through a 
nationwide program of audits, investigations, inspections, sanctions, and fraud alerts.  The 
Inspector General informs the Secretary of program and management problems and recommends 
legislative, regulatory, and operational approaches to correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 
Inspector General.  It conducts short-term management and program evaluations (called 
inspections) that focus on issues of concern to the Department, the Congress, and the public.  The 
inspection reports provide findings and recommendations on the efficiency, vulnerability, and 
effectiveness of departmental programs. 
OEI's Boston office prepared this report under the direction of Mark R. Yessian Ph.D., Regional 
Inspector General and Joyce M. Greenleaf, M.B.A., Assistant Regional Inspector General. 
Principal OEI staff included: 
BOSTON  HEADQUARTERS 
Aimee K. Golbitz, Lead Analyst  Bambi D. Straw, Program Specialist 
Norman J. Han, Program Analyst 
To obtain copies of this report, please call the Boston Regional Office at 617-565-1050. 
Reports are also available on the World Wide Web at our home page address: 
http://oig.hhs.gov/oei/  E X E C U T I V E   S U M M A R Y  
PURPOSE 
To present lessons learned by the five largest dialysis corporations in using clinical 
performance measures to hold facilities accountable for the quality of care and to address 
the implications they have for the Centers for Medicare & Medicaid Services, formerly the 
Health Care Financing Administration. 
BACKGROUND 
In our June 2000 report, External Quality Review of Dialysis: A Call for Greater 
Accountability, we urged the Centers for Medicare & Medicaid Services (CMS) to use 
facility-specific clinical performance measures as a key part of its oversight of dialysis 
facilities.  Clinical performance measures are quantitative indicators, typically expressed as 
a percentage, that reflect the quality of care patients received.  CMS concurred with the 
directions we suggested and presented a detailed action plan to strengthen its use of 
clinical performance measures.  Since then it has been active in carrying out this plan. 
In this follow-up inquiry, we examine the practices of the five largest dialysis corporations 
in using clinical performance measures to hold their own facilities accountable for the 
quality of care.  We regard such an inquiry as important because:  (1) these corporations 
account for about 70 percent of all dialysis patients in the United States, the vast majority 
of whom are Medicare beneficiaries, and represent over 2,000 facilities, (2) they have a 
substantial body of experience in using performance measures, and (3) they have gained 
know-how that can be helpful to CMS and others. 
This report is the second of two supplemental reports focusing on clinical performance 
measures for dialysis facilities.  The main report is entitled, Building on the Experiences of 
the Dialysis Corporations.  The first supplemental report, Practices of the Major Dialysis 
Corporations, describes the processes the corporations have to collect and use 
performance measures.  All three reports are based on our review of corporate documents, 
interviews with corporate medical directors, and visits to a number of the corporations 
dialysis facilities.  We sought to describe their processes and we did not evaluate the 
overall effectiveness of their systems.  We did not audit or validate the performance data 
the corporations collect from their facilities.  The corporations voluntarily participated in 
this review and the data presented was self-reported by the corporations. 
LESSONS LEARNED BY THE CORPORATIONS 
In our first report in this series, we described how the corporations collect, review, 
analyze, and disseminate facility-specific clinical performance measures.  We found that 
each collects over a dozen measures and generates timely, facility-specific performance 
i
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  reports.  In this report, we present the lessons that the five major dialysis corporations told 
us that they have learned over the years in using these measures.  The first two lessons 
address the foundation for accountability that must be established in order for the 
measures to have impact.  The remaining lessons address the particulars of establishing 
and using the measures. 
Establishing a Foundation for Accountability 
T Look to medical directors to exert sustained leadership. 
T Secure the commitment of attending physicians. 
Implementing Clinical Performance Measures 
T Collect a broad set of measures. 
T Revisit the relevance of the measures regularly. 
T Establish minimum performance standards. 
T Develop performance goals. 
T Apply strict definitions to performance measures. 
T Check the accuracy of performance data regularly. 
T Minimize the data reporting burden. 
T Present performance data in ways that facilitate comparative assessment. 
T Provide timely feedback of performance data to facilities. 
T Stress quality improvement projects at the facility level. 
T	 Use performance data as a guide to possible performance problems, not as definitive 
indicators. 
T Intervene with facilities having performance problems in ways likely to motivate change. 
RECOMMENDATIONS 
CMS has played an important leadership role in developing national clinical performance 
measures to assess the quality of care of dialysis patients and, like the corporations, has 
ii
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  its own system in place to collect facility-specific performance measures.  The major

dialysis corporations also have been proceeding on a similar track and have gained

considerable know-how in how to make the most effective use of facility-specific

performance measures.  The lessons that the corporations have learned in collecting and

using clinical performance measures reinforce the directions that CMS is taking to further

develop its system to collect and use facility-specific performance measures.

Below we draw on the lessons the corporations have learned that we conclude have

implications for CMS.  Our intent is to help CMS further tap into the potential of

performance measures as a means of improving health care outcomes for dialysis patients.

Conditions for Coverage.  CMS should revise the Conditions for Coverage, Medicares

regulations for dialysis facilities, so that they:

<  Require facility medical directors to exert leadership in quality improvement.

<  Require dialysis facilities to conduct their own quality improvement projects.

Attending Physicians.  CMS should examine ways to foster the commitment of attending

physicians to performance measures. 

<  Conduct educational forums that address the value of measurements to patient care. 

<  Examine the possibility of physician-specific report cards.

<  Focus greater attention on the responsibilities of attending physicians.

Intervention Strategies.  CMS, with its oversight agents, the End-Stage Renal Disease

Networks and the State Survey Agencies, should develop more effective intervention

strategies for facilities experiencing performance problems.  For this to happen, CMS

should:

<  Foster greater collaboration between the Networks and the States that incorporates 
the respective strengths of the two. 
<  Address the confidentiality and liability concerns that impede such integrated efforts. 
Dialysis Corporations.  CMS should work with the corporations to share experiences 
and minimize burdens on dialysis facilities.  At the core, the two have similar concerns 
about improving care.  More sharing of experiences could be helpful to both parties, and, 
most importantly, to patients. 
COMMENTS 
We received written comments on the draft report from the CMS, the Forum of End-
Stage Renal Disease Networks, Renal Physicians Association, National Renal 
Administrators Association, and the five corporate dialysis providers that were the focus 
iii
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  of our inquiry.  Their comments were strongly supportive of the lessons we presented and 
of the thrust of the recommendations we made to CMS.  We include the full text of the 
comments in appendix C.  On the basis of the comments, we made a number of 
clarifications and technical changes.  Among the respondents, our recommendations 
addressing medical director leadership and the commitment of attending physicians 
generated the most attention.  Below, we briefly summarize the comments and our 
responses to them. 
Medical Director Leadership.  CMS supported our recommendation that the Medicare 
Conditions for Coverage be revised to require medical directors to exert leadership in 
quality improvement.  The dialysis corporations and the other commenters also 
underscored the importance of such leadership, but to varying degrees raised concerns 
about how it might be defined in the Medicare Conditions.  They urged that leadership 
expectations be in accord with the real world in dialysis facilities.  Their comments 
reinforce the importance of CMS clearly establishing the medical directors authority and 
responsibility to provide leadership if it expects performance measures to be instrumental 
in improving care in dialysis facilities.  At the same time, the comments suggest the value 
of collaboration between the corporations and CMS in further defining the  leadership role 
of medical directors. 
CMS and other respondents supported our recommendation that medical directors be 
given authority to conduct or initiate peer review of attending physicians.  But they were 
clearly wary of our recommendation that when patients are put at risk because of 
substandard medical care, the medical director should report the physician to an 
authoritative body, such as the facilitys governing board, the End-Stage Renal Disease 
Network, or the State medical board.  We suggest that this is a vital patient protection 
responsibility that must be part of the purview of the medical director and that CMS 
should address it as part of its efforts to foster quality dialysis care. 
Securing the Commitment of Attending Physicians to Performance Measures.  This 
is a vital matter having a significant bearing on the successful use of performance 
measures.  CMS expressed its readiness to consider the measures we called for.  Other 
respondents were supportive of convening educational forums.  But some raised concerns 
with the use of physician-specific reports (which are already being used by at least one 
End-Stage Renal Disease Network and by two dialysis corporations) and with the 
establishment of more explicit Federal standards or requirements concerning the 
performance of attending physicians.  We recognize that these are difficult issues, but 
suggest that they warrant careful examination as means of more fully engaging attending 
physicians in quality improvement efforts. 
iv
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  T A B L E   O F   C O N T E N T S  
EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  i

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

LESSONS LEARNED BY THE CORPORATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Look to Medical Directors to Exert Sustained Leadership  . . . . . . . . . . . . . . . . . . . . . . . 6

Secure the Commitment of Attending Physicians  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Collect a Broad Set of Measures  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Revisit the Relevance of the Measures Regularly  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Establish Minimum Performance Standards  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Develop Performance Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Apply Strict Definitions to Performance Measures  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Check the Accuracy of Performance Data Regularly . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9

Minimize the Data Reporting Burden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Present Performance Data in Ways That Facilitate Comparative Assessment  . . . . . . . .  10

Provide Timely Feedback of Performance Data to Dialysis Facilities . . . . . . . . . . . . . . .  10

Stress Quality Improvement Projects at the Facility Level . . . . . . . . . . . . . . . . . . . . . . .  10

Use Performance Data as a Guide  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Intervene with Facilities  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

RECOMMENDATIONS FOR CMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12

Revise the Conditions for Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Foster the Commitment of Attending Physicians . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14

Develop More Effective Intervention Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Work with the Dialysis Corporations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

COMMENTS ON THE DRAFT REPORTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18

APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21

Appendix A: Glossary  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Appendix B: Federal Sources of Performance Measures . . . . . . . . . . . . . . . . . . . . . . . . 22

Appendix C: Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Appendix D: Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

v
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  I N T R O D U C T I O N  
PURPOSE 
To present lessons learned by the five largest dialysis corporations in using clinical 
performance measures to hold facilities accountable for the quality of care and to address 
the implications they have for the Centers for Medicare & Medicaid Services, formerly the 
Health Care Financing Administration. 
BACKGROUND 
In 1972, Medicare began covering individuals with end-stage renal disease, or permanent 
kidney failure, making it the only entitlement criteria for Medicare based solely on a 
disease category.  Patients receiving hemodialysis, the most common method of treatment, 
typically receive treatment in outpatient dialysis facilities three times a week.1  About 
3,500 dialysis facilities provide ongoing, life-sustaining dialysis treatments to about 
240,000 patients around the country.2 
Our Prior Inquiry 
In June 2000 we released a report examining the Centers for Medicare & Medicaid 
Services (CMS), formerly the Health Care Financing Administration, oversight of dialysis 
facilities as carried out by the End-Stage Renal Disease Networks and the State Survey 
Agencies (External Quality Review of Dialysis: A Call for Greater Accountability, OEI-
01-99-00050).3,4  In that report we gave attention to the fact that performance measures 
can be an important tool to encourage facilities to improve the quality of care and to help 
ensure that they meet minimum standards.  But we also found that CMS rarely uses such 
measures to hold individual facilities accountable. 
In our recommendations, we urged CMS to collect and use facility-specific performance 
data as a key element of its external review system.  Clinical performance measures are 
quantitative indicators, typically expressed as a percentage, that reflect the quality of care 
patients received.  For example, the percentage of patients at a facility that achieved an 
adequate dose of dialysis as measured by a urea reduction ratio of $65 percent, is an 
indicator.  (See appendix A for a glossary of terms.) 
We urged CMS to identify a new core set of performance measures to collect regularly on 
all patients from all facilities.  We recommended that it make these measures available to: 
<  facilities to support internal quality improvement activities, 
<  Networks to support regional quality improvement activities and to identify 
outliers for further review, 
1
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  <  State survey agencies to help guide and inform the Medicare survey process, and 
<  the public to foster public accountability. 
CMS Actions 
CMS concurred with the directions we set forth and presented a detailed action plan that 
incorporated numerous efforts it had underway and would be initiating.  It is drafting new 
Conditions for Coverage, Medicare regulations, for dialysis facilities, which it expects to 
release in draft in the coming months.  In doing so, it plans to consider our 
recommendations to strengthen the role of the medical director, to require facilities to 
electronically report on a core set of performance measures, and to require facilities to 
conduct their own quality improvement activities. 
CMS has also committed to strengthening its existing efforts to collect facility-specific 
data on all Medicare beneficiaries as soon as it is able to put into place its new information 
system, Vital Information System for Improvement of Outcomes in Nephrology.5  This 
new information system will allow facilities to electronically report data directly to CMS. 
The system will also help ensure accurate reporting through computer software that will 
contain automatic data edits that will notify the user when data that is illogical is entered. 
CMS has already implemented the Standard Information Management System for the End-
Stage Renal Disease Networks, which connects all the Networks together and directly 
with CMS.  CMS is also revising three administrative data forms that it collects from 
facilities that contain data used to calculate performance measures.  Eventually these 
forms will be submitted to CMS electronically by the facilities. 
Since 1995, CMS, via the End-Stage Renal Disease Networks, has distributed Unit-
Specific Reports that provide comparative, facility-specific data, which includes mortality 
and hospitalization rates.  Facility-specific urea reduction ratio and hematocrit levels were 
added to the reports after 1998.  In January 2001, CMS publicly released comparative 
facility-specific reports that contained three performance measures: urea reduction ratio, 
hematocrit, and mortality.  The reports are available on the Internet.6  In July 2001, CMS 
distributed to State survey agencies, facility-specific reports that also contain key 
performance measures.  State survey agencies use these reports to assist in selecting 
facilities for review and to focus Medicare certification surveys.  Currently the majority of 
the data in these reports comes from Medicare billing and administrative data and the data 
are over 2 years old.  As the CMS implements its Vital Information System for 
Improvement of Outcomes in Nephrology it is expected that the data for these reports will 
be more timely (see appendix B for more detailed information about Federal sources of 
performance data). 
Finally, CMS revised its process to review and approve each of the Networks annual 
quality improvement projects.  The new process is intended to reduce variation in the 
quality of projects and help Networks design more sophisticated projects.  The new 
2
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  process also gives Networks more guidance on what topic areas they should focus on for 
their quality improvement projects. 
Dialysis Corporations Use of Clinical Performance Measures 
In this follow-up inquiry we focus on the experiences of large, corporate dialysis providers 
in using clinical performance measures as a way of holding their own facilities accountable 
for the quality of care provided.  This is a significant domain of external quality oversight 
that we did not address in our June 2000 report and that has been largely ignored in the 
public sphere. 
We regard it as important to learn more about the experiences of these providers for three 
major reasons.  First, as the dialysis industry has consolidated in recent years, these 
corporations have become a major force in the dialysis field.  The five largest 
corporations, which we focus on in this report, now account for about 70 percent of all 
dialysis patients in the United States, the vast majority of whom are Medicare 
beneficiaries.7  They account for over 2,000 of the nations 3,500 dialysis facilities.8 
Second, they have a substantial body of experience in using performance measures to 
monitor the quality of care at their own facilities.  And, third, they have gained know-how 
that may be useful to Federal efforts. 
Methodology 
We limited our inquiry to the five largest providers: Fresenius Medical Care North 
America, Gambro Healthcare, Davita (formerly Total Renal Care), Renal Care Group, and 
Dialysis Clinic, Inc.  In selecting the top five, we do not seek to imply that they are 
necessarily the best in using performance measures, nor to suggest that other corporations 
or independently owned facilities are not also experienced in using such measures.  Each 
of the five corporations participated in our study voluntarily and made available to us 
information concerning its practices.  The information we present is current as of June 
2001.  The information contained in this report was self-reported by the dialysis 
corporations. 
At the outset, we considered including in our review measures that relate to clinical 
performance, patient satisfaction, and adverse events.  Each is important to national policy 
and in each case the corporations have relevant experience.  However, for this inquiry, we 
decided to limit our focus to clinical performance measures in order to allow for greater 
detail.  Clinical performance measures are the measures that the corporations have the 
most experience with, receive most of their attention, and bear most immediately on CMS 
oversight. 
Our data-gathering methods included two focus groups with the medical directors of the 
five corporations, further interviews with each of the corporate medical directors and 
3
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  other corporate officials, visits to several corporations dialysis facilities, and reviews of 
pertinent documents of the corporations. 
It is important to underscore that our inquiry is not an evaluation of the corporations 
practices.  They have been carrying out these practices at their own initiative, not in 
response to any Federal requirements.  We did not seek to assess how well they are using 
performance measures, nor did we obtain sufficient information to make such an 
assessment.  We did not audit or validate the performance data the corporations collect 
from their facilities.  We did seek to gain a clear understanding of their current practices. 
We also interviewed key stakeholders.  The stakeholders included the Renal Physicians 
Association, the Forum of End-Stage Renal Disease Networks, and the National Renal 
Administrators Association. 
This Report and its Companion Report 
This report is the second of two supplemental reports that we are issuing based on the 
main report entitled, Clinical Performance Measures for Dialysis Facilities: Building on 
the Experiences of the Dialysis Corporations (OEI-01-99-00052).  This supplemental 
report begins with two basic lessons associated with establishing a foundation for 
accountability within the dialysis facilities.  It then to 12 lessons that concern the 
implementation of clinical performance measures.  The report concludes with 
recommendations to CMS as it moves forward to strengthen its own facility-specific data 
collection. 
The first supplemental report, Clinical Performance Measures for Dialysis Facilities: 
Practices of the Major Dialysis Corporations (OEI-01-99-00053), describes the 
corporate practices concerning the use of facility-specific performance measures.  We 
address specifics concerning data collection, validation, analysis, dissemination, and 
corporate practices for fostering improvements and intervening with poor performers. 
We conducted this study in accordance with the Quality Standards for Inspections issued 
by the Presidents Council on Integrity and Efficiency. 
4
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  L E S S O N S   L E A R N E D  B Y  T H E  
C O R P O R A T I O N S  
Below we present key lessons the dialysis corporations told us they have learned in using 
clinical performance measures to hold facilities accountable for the care they provide.  The 
first two address the foundation for accountability that must be established in order for the 
measures to have impact.  The remaining lessons are more operational and cover the 
particulars of establishing and using clinical performance measures. 
Establishing a Foundation for Accountability 
Performance measures do not 
automatically contribute to improved  The Role of the Facility Medical Directors and 
dialysis care.  For their potential to be  Attending Physicians 
realized, it is essential that they be used 
Medical Directors. The Medicare Conditions for 
at the local level by individual dialysis 
Coverage require each facility to have a physician 
facilities.  The facilities governing 
who serves as a medical director who is responsible 
boards, clinical and technical staff, and  for planning, organizing, conducting, and directing 
administrators must view the measures  the professional [end-stage renal disease] services. 
as helpful instruments to improve the  Corporations contract with local physicians to serve 
in this capacity. For facilities that are not part of a 
overall processes of the facility. 
corporate chain, the facility owner and medical 
director can be the same person. In addition to their 
While it is important to gain the  medical director duties, these physician directors 
commitment of all those who are  have their own patients that can make up the 
associated with the dialysis facilities, it  majority of patients at a facility. It is not uncommon 
for a medical director to also be an attending 
is especially important to ensure that 
physician at another facility regardless of the 
the two parties that have the most 
ownership. 
influence over the processes of dialysis 
treatmentthe facility medical 
Attending Physicians.  Dialysis facilities allow 
directors and the attending physicians  local physicians to send their patients to them for 
integrate the measures into their  treatment. Attending physicians may send patients 
decision-making process (see text box).  to several facilities that may be owned by several 
different corporations or entities. The physicians are 
In the sections that follow, we 
not contractors or employees of the facility or the 
elaborate on what the corporations 
corporation, and their privileges can be revoked if 
have learned in this regard. 
they do not adhere to the facilitys policies. 
5
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  Lesson 1.  Look to medical directors to exert sustained leadership. 
The dialysis corporations underscore that if performance measurements are, in fact, to 
stimulate improved care, it is essential that facility medical directors provide leadership. 
They look to their medical directors to exert this leadership in two key ways.  One is to 
lead by example.  The medical directors must show that they are willing to use 
performance data to improve their own practices, for their own patients.  Since the 
medical directors can account for a majority of a facilitys patients, such leadership by 
example is of no small consequence. 
The other dimension of medical director leadership is that of ensuring sustained attention 
in the facility to the improvement opportunities that performance measures can offer.  The 
corporations have come to expect the medical directors to serve as the primary on-site 
agents to implement the corporate initiatives concerning the collection and use of 
measures, to help nurses and attending physicians recognize the value of using the 
measures, to determine how measures can foster continuous quality improvement efforts, 
and, where necessary, to intervene with individual physicians or nurses whose 
performance may be adversely effecting the facilitys overall performance. 
The medical directors contracts spell out their leadership responsibilities.  These contracts 
include the responsibilities required by the Medicare regulations as well as any  additional 
responsibilities required by the corporation.9  Among the contracts that we reviewed, we 
saw specifications that medical directors review their facilities performance measures 
monthly, attend regular training or meetings concerning quality improvement, and address 
attending physicians not performing adequately.  Two of the corporations even include in 
their contracts a provision indicating that a portion of the medical directors salary is 
contingent on how well their facilities fared on various performance measures. 
To further the leadership of their medical directors, the corporations also convene forums 
of various kinds at which medical directors receive training about the use of performance 
measures and the dynamics of quality improvement efforts.  These sessions tend to focus 
on how such efforts can be instrumental in improving the processes of care.  The 
corporations also conduct other kinds of outreach to help medical directors.  For instance, 
one holds quarterly conference calls in which medical directors and other facility staff are 
encouraged to participate.  The corporate leaders we met with believed that these efforts 
are helpful in engaging the medical directors. 
The corporate officials disagreed about how fully they are able to hold facility medical 
directors accountable for exerting leadership.  Some stated that they had all the authority 
they needed through their contracts with facility medical directors.  For them, it was 
simply having the will to enforce their contracts.  Others drew attention to the limited 
leverage that the medical directors themselves have over the attending physicians who, 
unlike medical directors, do not have contractual obligations to the facility or the 
corporation and who often have patients at various facilities.10  The Medicare Conditions 
6
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  for Coverage do not make explicit that medical directors have the authority to take action 
concerning patients attended to by other physicians.11  However, in CMS comments to 
this report it stated, that medical director may take independent action (which can 
encompass a number of options) in the absence of explicit statutory or regulatory 
authority.12  Moreover, in competitive marketplaces, medical directors and attending 
physicians, if unhappy with a facility, can encourage their patients to move with them to 
another dialysis facility. 
Lesson 2.  Secure the commitment of attending physicians. 
For their own patients, the attending physicians determine the amount of dialysis, prescribe 
medications, and monitor the ongoing effects of dialysis treatment.  In performing these 
roles, the attending physicians have a considerable influence on the quality of care 
provided at dialysis facilities and can influence how well particular facilities fare when 
performance measures are aggregated. 
Yet, corporate representatives indicate that these attending physicians, when they are not 
the medical director, are not necessarily drawn to facility-based performance measures. 
With their patients in a number of different facilities, they may find any one facilitys 
measurements to be of little consequence to their own clinical performance.  And, finally, 
as busy professionals, they may find that they have little time to devote to improvement 
efforts, for which they receive no additional compensation. 
Still the corporations have devised ways to encourage attending physicians to participate 
in facility efforts to improve the quality of care being provided.  One approach they use is 
to establish clear standards that attending physicians must meet in order to send their 
patients to the facility.  Typically these standards are set forth in the facility bylaws.  At 
least one of the corporations has reinforced its standards by requiring all attending 
physicians to sign an agreement stipulating their roles and responsibilities.  Another 
approach is to provide opportunities for physicians to attend seminars or conferences 
addressing performance measures and/or quality improvement.  Finally, to foster a 
stronger sense of individual physician accountability, two corporations provide physician-
specific performance reports so that physicians can see data that are more relevant to their 
own practice. 
Implementing Clinical Performance Measures 
The corporations have been collecting and using facility-specific performance measures for 
many years.  They have gained a considerable appreciation for the complexities of the 
tasks involved.  They have made and continue to make changes in their policies and 
procedures.  We offer what they regard as major lessons learned. 
7
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  Lesson 3.  Collect a broad set of measures. 
Even with all the research on dialysis treatment in the last 25 years, there still is a lack of 
complete understanding of what affects mortality on dialysis patients.  Dialysis treatment is 
a complex process.  Treatment is also complicated by the fact that many patients suffer 
from other serious chronic conditions, such as hypertension and diabetes.  Therefore, it is 
critical that facilities monitor many different measures in order to obtain a better picture of 
the care patients receive. 
Lesson 4.  Revisit the relevance of the measures regularly. 
The measures the corporations collect have changed over time in order to keep pace with 
scientific advances.  The corporations stated that if the measures were outdated (i.e., not 
clinically relevant), then physicians, nurses, and other renal professionals would be 
unwilling to invest their time in collecting and reviewing them. 
The vast majority of revisions have been adding new measures and refining definitions as 
opposed to eliminating measures.  With new research coming out all the time and as 
researchers learn more about the process of dialysis treatment, new parameters are 
identified that influence mortality.  In order to accomplish this task, the corporations rely 
on staff at the central level who monitor the latest research and can react quickly to revise 
the measures. 
Lesson 5.  Establish minimum performance standards. 
Corporate officials emphasized that setting clear expectations for facility performance is 
key to ensuring a minimum level of care across all facilities.  The corporations recognize 
that some variation will always exist in dialysis care.  However, the corporate leaders 
agreed that there is a floor below which care is unacceptable. 
Minimum standards are often expressed as a percentage of patients meeting a certain 
target value rather than the average value for all patients at the facility for a given 
measure.  Percentages more clearly indicate the number of patients not receiving adequate 
treatment.  If 80 percent of patients are meeting the target value, then 20 percent of 
patients are not.  The facility is then able to focus on that 20 percent.  With averages it can 
be unclear how many patients are above and below the target and what the variance is 
among patients. 
Lesson 6.  Develop performance goals. 
Corporate leaders emphasized the need for all facilities, even the top performers, to 
continually improve their performance.  In order to prevent facilities from striving just to 
meet the minimum standards, three of the corporations have established goals for each 
performance measure.  The goals are intended to be challenging enough to motivate all 
8
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  facilities to improve.  One corporate official stated that without goals, the minimums 
become the goals and the race to the bottom begins. 
Lesson 7.  Apply strict definitions to performance measures. 
Standard definitions and processes need to be in place prior to collecting the data.  Many 
of the clinical performance measures are collected as part of regular treatment, but they 
are not necessarily standardized.  In order for the data to be used as part of an aggregate 
analysis, all the data need to be collected and analyzed in the same manner.  For example, 
to obtain the urea reduction ratio a blood sample needs to be drawn from the patient. 
Depending on when and how the blood is drawn, the result will differ.  In order to bring 
attention to this issue, one corporation requires all its staff members to wear a clip-on 
badge similar to an identification badge.  The badge spells out the process for collecting 
blood samples for the urea reduction ratio. 
Other measures that corporate leaders have been especially careful to define the type of 
calculations to perform are hospitalization and mortality rates.  For example, some 
corporations exclude patients with certain terminal diseases in calculating mortality rates 
and some do not.  With hospitalization, some count the length of stay and some just count 
the number of times admitted.  All the corporations indicated that it was important to 
make clear exactly what the measure represents so that all facilities can be collecting the 
same type of data. 
Lesson 8.  Check the accuracy of performance data regularly. 
All the corporations indicated that this process is time consuming and often tedious.  But 
without it, they were concerned that the integrity of the data could be compromised. 
Facilities first and foremost are in the business of providing patient care; they are not 
focused on statistics or data entry.  Therefore, it is important to have a system in place to 
monitor the data. 
The review process serves two main functions: it helps ensure the accuracy of the data and 
it helps to foster the integrity of the entire performance measure program among 
physicians and facility staff.  If care givers perceive that the data lacks integrity, they will 
likely ignore any reports generated from the data. 
Some of the corporations thought that, without review, some facilities might try to 
manipulate the data to make their performance appear to be better than it actually is. 
Other corporations disagreed.  However, all the corporations agreed that a review process 
helps foster confidence in the data. 
Lesson 9.  Minimize the data reporting burden. 
Staff time, as in any health care setting, is in short supply.  Nurses and technicians are busy 
caring for patients and have little time left over for other activities, especially for 
9
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  quality improvement activities that sometimes can be perceived as more paperwork.  It is 
often the nurses and technicians who are left to deal with quality improvement tasks such 
as entering the data and submitting forms.  To help reduce the workload, some of the 
corporations have integrated their electronic data systems for quality management with 
their data systems for patient management that nurses and doctors rely upon to provide 
day-to-day patient care.  These types of integrated systems eliminate the need for double 
data entry. 
Lesson 10.  Present the performance data in ways that facilitate comparative 
assessment. 
Corporate performance reports compare a facility to its own past performance and to its 
peers at the regional or national levels.  Corporate officials told us that comparisons are a 
big motivator for improvement.  They show at-a-glance where one facility stands among 
its peers.  The facility can then begin to explore how the care they provide differs from 
their peers. 
Lesson 11.  Provide timely feedback of performance data to dialysis facilities. 
If the data are 2 years old, or even a year old, physicians may tend to view them as 
something that shows a long-term trend that is irrelevant to the care they are providing 
today.  According to corporate leaders, the more recent the data, the more likely 
physicians and staff will take them seriously as a reflection of the care they are providing 
now and if necessary make changes in their practices. 
They also believed that the performance measures can have greater impact if physicians 
are looking at them as part of their care-giving process, not as a task that they save until 
the end of the day after they have seen all their patients.  Thus, the data need to be readily 
accessible through patient charts or on computer terminals within the facilities. 
Lesson 12.  Stress quality improvement projects at the facility level. 
The corporations expect individual dialysis facilities to take the lead in conducting quality 
improvement projects.  They look to the facilities to identify problems and to develop and 
implement their own quality improvement projects.  Facilities are in the best position to 
identify areas in need of improvement.  Furthermore, improvements can only occur if the 
individuals providing the care make changes in their processes. 
The corporations view themselves as assisting their facilities in improvement activities 
rather than conducting the projects themselves.  Thus, they provide extensive training, 
technical assistance, and materials to help facilities conduct their own projects.  On 
occasion, corporations will conduct corporate-wide projects, but most often the emphasis 
is placed on facility-based projects. 
10
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  Lesson 13.  Use performance data as a guide to possible performance problems, 
not as definitive indicators. 
Corporations use performance measures cautiously, as signals of possible problems.  It is 
important that measures are used with other types of information.  Prior to intervening, 
the corporations seek to verify the concern.  They may examine the results of recent 
patient satisfaction surveys, complaints, results of any State surveys, adverse event 
reports, and the current demographics of the patient population.  Some corporations wait 
until a definite pattern appears over several months before they will intervene.  Corporate 
representatives emphasized that performance measures used in isolation can lead to false 
conclusions on both sides.  A facility that fails to meet performance minimums may in fact 
be providing high quality care.  Similarly, a facility exceeding performance goals may be 
providing inadequate care. 
One representative told us about a time that he called a facility medical director to express 
concern about the facilitys high mortality rate.  It quickly became apparent the high 
mortality rate was explained by a patient population that included a large number of 
patients suffering from AIDs.  The corporation did not adjust its data for AIDs and other 
terminal illnesses.  The issue of patient comorbidity can be particularly complex as many 
measures are not adequately risk-adjusted.  Another corporate official told us that he was 
surprised when he received a State survey report from one of his facilities that outlined 
several serious deficiencies.  The facility was performing well on each of its performance 
measures.  From these events and others, the corporations have learned not to rush to 
judgement based on the measures alone. 
Lesson 14.  Intervene with facilities having performance problems in ways likely 
to motivate change. 
When the corporations have determined that a cause for concern exists at a facility, they 
will intervene using graded approaches.  The corporations tend to begin their interventions 
with targeted training for the facility.  Often facilities struggle because they simply do not 
know how to interpret their data and develop a corrective action plan.  Often the training 
occurs on site so that the corporate officials can also review first-hand the practices of the 
facility.  Many of the corporate officials believed that training would not only help the 
facility fix its current problem, but also help the facility address any problems in the future. 
If training fails, the next level of response is peer review.  Corporate officials indicated to 
us that physicians and nurses are more receptive to advice from their regional peers than 
from a person in an executive position.  According to the corporate representatives, these 
approaches are highly successful.  It was rare that they had to resort to punitive actions 
such as firing facility staff, terminating contracts with facility medical directors, or 
revoking attending physician privileges. 
11
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  R E C O M M E N D A T I O N S  
CMS has played an important leadership role in developing national clinical indicators to 
assess the quality of care of dialysis patients.  Its efforts, through the Clinical Performance 
Measures Project, have drawn attention to the potential of clinical performance measures 
in the dialysis field.  The data show that between 1994 and 1999 the percentage of patients 
with adequate dialysis treatment, defined as a urea reduction ratio $65 percent, has 
increased from 43 to 80 percent.  The percentage of patients receiving adequate anemia 
management, defined as hemoglobin $ 11 gm/dL, has also increased from 43 to 68 percent 
between 1997 and 1999.13  CMS has also collected facility-specific data on performance 
measures mainly through billing and administrative forms and recently has taken steps to 
strengthen its systems to collect and disseminate facility-specific data (see appendix B and 
page 2). 
The major dialysis corporations, as we have shown, also have been active in using facility-
specific performance measures as tools of quality improvement.  The lessons that they 
have learned in collecting and using clinical performance measures reinforce the directions 
that CMS is taking towards enhancing its current facility-specific reporting mechanisms. 
CMS is developing a new core data set, a mechanism to help ensure accurate reporting, a 
mechanism to provide ongoing evaluations of the measures, and a process to disseminate 
comparative data in a more timely fashion. 
In this final section, we draw on the lessons learned by the dialysis corporations to identify 
the implications that we conclude they have for CMS.  As CMS seeks, in the years ahead, 
to further tap into the potential of performance measures as a means of improving health 
care outcomes for dialysis patients, it will need to address these recommendations. 
In presenting these recommendations, we offer two important caveats.  One is that we do 
not intend to imply that the facilities that are part of the major dialysis corporations are the 
best or in any way deserve preferential treatment.  As CMS continues to exert leadership 
in using clinical performance measures as tools for quality improvement, it must be 
attuned to their application in a full range of dialysis facilities, whether or not they are part 
of a corporate chain.  Secondly, we recognize that performance measures are only part of 
the solution to improving care.  The Medicare Payment Advisory Commission, and others, 
have noted that the current payment system for dialysis services is fragmented.  This 
system inhibits the systematic, coordinated steps that dialysis facilities must take if they are 
to make effective use of performance measures to improve the quality of care.  To 
continue to make substantial improvements, the fragmented nature of the payment system 
may need to be addressed so that it creates incentives to provide high quality care.14 
12
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  Revise the Medicare Conditions for Coverage for dialysis facilities. 
CMS is now in the process of drafting revisions to the Medicare Conditions for Coverage, 
regulations that all dialysis facilities receiving Medicare payments must adhere to.  In our 
June 2000 report, we emphasized that it was important to revise the Conditions so that 
they serve as a more effective foundation for accountability.  We cited six specific changes 
that, at a minimum, should be part of the revision.15  Our review of the lessons learned by 
the dialysis corporations adds compelling support for two of the changes we called for. 
We address them below. 
Require facility medical directors to exert leadership in quality improvement. 
The corporations have learned that if performance measures are to be used effectively at 
the facility level, someone at the facility must take the lead to ensure that the nurses, 
attending physicians, and the technicians are all attuned to quality improvements.  The 
medical director, who typically serves as a member of the facilitys governing body, is in 
the best position to fulfill this leadership role.  Without medical directors being fully 
committed to and engaged with quality improvement activities, important opportunities 
for enhancing patient care are likely to be missed. 
Recognition of the significance of medical director leadership is not limited to the major 
dialysis corporations.  The Renal Physicians Association has issued a position paper on the 
responsibilities of the medical director that calls for them to ensure that all attending 
physicians comply with Federal requirements.16  One of the End-Stage Renal Disease 
Networks, the TransPacific Renal Network, has adopted a set of standards for facility 
leadership that are modeled on those of the Joint Commission on Accreditation of 
Healthcare Organizations and cite the medical director as the final authority within the 
facility.17  And the Texas Department of Health, with input from the End-Stage Renal 
Disease Networks medical board and the renal community, issued a set of standards that 
among other things calls for medical directors to attend monthly quality improvement 
meetings.18 
The current Medicare Conditions do not explicitly require the medical director to take the 
lead in quality improvement.  It is time for them to catch up with developments such as 
those noted above and to state explicitly that the medical director must play a leadership 
role in using performance measurements to stimulate quality improvements.  While the 
Conditions need not spell out that role in great detail, they should make it clear that the 
medical director is expected, on an ongoing basis, to lead quality improvement efforts. 
CMS should also address in the Conditions what medical directors are expected to do 
when a quality problem is attributable to an attending physician who is not performing 
adequately.  CMS should make clear that medical directors have the authority to conduct 
and/or initiate peer review and to address performance problems through directed 
education efforts.  And, for more serious situations where patients have been put at risk 
13
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  because of poor care medical care, CMS should make clear the medical directors 
responsibility to report the physician to an authoritative body, such as the facilitys 
governing board, End-Stage Renal Disease Network, and/or the State Medical Board. 
Require dialysis facilities to conduct their own quality improvement projects. 
To varying degrees, the corporations conduct regional or national quality improvement 
efforts.  But each of them places the primary focus at the facility level.  They look to their 
facilities to use performance measurement as a mechanism of constructive change.  They 
look to the facilities to compare their performance scores over time and with other 
facilities and to ask: how can we do better?  The main role for the regional or central 
corporate offices is to support such facility-based efforts. 
CMS can give added impetus to such facility-based efforts by enacting a Medicare 
requirement that facilities undertake quality improvement efforts.19  The requirement need 
not stipulate the type of efforts, but should call upon the facilities to draw on performance 
measures, as well as, other sources of information to improve the quality of care provided. 
This expectation should apply even for facilities that have comparatively high performance 
scores.  All facilities, it seems reasonable to assume, can do better. 
Such a mandate need not preclude national or regional quality improvement projects but 
the corporate experience suggests that they should be of lesser significance than those that 
are facility-specific.  It is essential here to recognize that improvement efforts are an add-
on to ongoing care responsibilities and that it can be difficult to garner sufficient attention 
to them.  This is particularly true in the many facilities coping with staff shortages and high 
turnover rates.  To the extent that CMS and/or the Networks call for facilities to 
participate in national or regional efforts, the facilities readiness and capability to generate 
their own intrinsic efforts may be lessened.  This is an important policy consideration that 
warrants attention. 
Examine ways to foster the commitment of attending physicians to 
performance measures. 
This is a complicated issue, but our review of the corporate experiences suggests that 
without addressing it, the potential of performance measurement will not be fully tapped. 
Attending physicians are the ones who determine the course of treatment, prescribe 
medications, and monitor the overall health of the dialysis patient.  For a facility to achieve 
sustained progress in its performance improvement efforts, these physicians must become 
active participants in such efforts.  They must see themselves not just as a patients 
physician, but as a part of the facilitys team responsible for the patients care.  And, just 
as the facility must be held accountable for the quality of the care provided, so too must 
the individual physician. 
14
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  The key question is how can CMS best foster such accountability and commitment by the 
attending physician?  Our review suggests three directions.  One is for CMS and/or the 
Networks to provide educational forums for nephrologists that clearly convey the value of 
performance measures and their relevance to everyday care of the patient.  Both CMS and 
the corporations have undertaken such efforts.  Perhaps they could collaborate on what 
approaches work best and warrant more attention in the future. 
A second direction is to consider generating physician-specific report cards.  One 
Network, as we noted in a prior report, has been doing this since 1997.20  Three times a 
year it generates a Physician Activity Sheet that compares the performance of individual 
physicians to their peers at the facility, State, and Network level and to clinical guidelines 
on several performance measures collected by the Network.  Similarly, two of the dialysis 
corporations we contacted provide physician-specific report cards so that physicians can 
see how their performance compares with their peers.  It strikes us that such efforts to 
drive down the data to the physician level can be an important way to draw attending 
physicians more fully into improvement efforts and to hold them more fully accountable 
for their performance. 
A third direction is for CMS to more fully address the expectations of attending physicians 
to contribute to and be responsive to quality improvement efforts and, more generally, to 
provide care to their patients.  It could be instructive to review the extent and kind of 
expectations now set forth by facilities and what effects they seem to have concerning 
performance improvement.  For example, several of the corporations provide standards 
that all attending physicians must meet in their facility bylaws.  No such standards now 
exist at the Federal level.  CMS may want to consider revising the Conditions for 
Coverage to require facilities to have a credentialing process in place for all attending 
physicians similar to the Medicare standards in place for hospitals.21 
Develop more effective intervention strategies for dialysis facilities. 
CMS relies on two separate organizations to oversee dialysis facilities: the End-Stage 
Renal Disease Networks and the State Survey Agencies.  Each has its own expertise and 
authorities.  The Networks have clinical expertise as they are comprised of local renal 
physicians and nurses, and the States have regulatory authority to enforce Medicare 
regulations. 
Networks, equipped with facility-specific data from CMS, can use the data to guide the 
types of regional quality improvement projects they conduct each year.  They should also 
use the data to help focus training and technical assistance with the facilities in need of 
improvements.  Similarly, Networks should use the data to identify the top performers in 
order to understand why they are successful and disseminate best practices.  Finally, 
Networks can use the data to help conduct more targeted peer review and to identify 
facilities that need to develop formal plans for corrective actions. 
15
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  States can use the facility-specific data they receive from CMS to help identify facilities to 
survey and to ask targeted questions once on site.  We recognize that there is concern 
with the States taking the measures too literally and jumping to false conclusions. 
However, it seems reasonable that States should have performance data available to them, 
as one tool among many, that they can use to help inform the survey process.22 
Furthermore, CMS may want to consider expanding the enforcement options available for 
facilities that fail to comply with the Conditions for Coverage.  Currently, CMS has very 
few options, short of terminating the facility from the Medicare program, to sanction 
dialysis facilities.  CMS affords a wide range of enforcement options for other health care 
facilities.  For example, under certain circumstances CMS can deny Medicare payments to 
all new admissions for nursing homes with deficiencies.23  CMS may want to consider a 
similar option for dialysis facilities. 
Even though both these entities complement one another and at times overlap, we found 
in our June 2000 report that the States and the Networks rarely communicate.  This 
breakdown can lead to ineffective interventions.24  In order for the States and the 
Networks to be more effective in using performance measures and intervening based on 
them, CMS needs to find ways that they can work together in a coordinated fashion. 
One Network and State already collaborate extensively.25  However this model has not 
been replicated around the country.  The two major barriers to greater collaboration are 
liability for Network staff and volunteer members when they conduct work outside their 
CMS contracts and privacy protection laws that prevent Networks from freely sharing 
data with other entities.  CMS will need to address these issues first, in order for more 
collaboration to take place between the Networks and the States. 
Work with the corporations to share experiences and minimize burden 
on dialysis facilities. 
Traditionally, CMS and its agents, the States and the Networks, have not had much 
interaction with the dialysis corporations.  Its focus has been on the licensed facilities, not 
the parent corporations.  Yet, the parent corporations, like CMS, are also engaged in the 
external quality oversight of dialysis facilities.  From different vantage points, the two have 
many of the same concerns.  Our review suggests that it could be beneficial for both 
parties, and most importantly for the patients, for more collaboration and sharing to take 
place. 
CMS has taken some efforts to foster collaboration.  At a recent CMS-sponsored 
conference for the End-Stage Renal Disease Networks, a presentation entitled 
Accountability Panel: Corporate Dialysis QI [Quality Improvement] Representatives 
was held that gave Network and corporate representatives the opportunity to discuss their 
activities.26  Out of this session several practical solutions arose to foster more 
16
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  communication, such as sharing names of regional corporate contact persons and 
providing the corporations with a list of all Network quality improvement projects.  CMS 
has also indicated that its new information system for dialysis facilities, the Vital 
Information System for Improvement of Outcomes in Nephrology, will contain software 
that will allow facilities to abstract data from their existing databases to submit to CMS. 
This is especially helpful for facilities owned by dialysis corporations that have their own 
data systems already in place to collect data.  The new software will eliminate the need for 
these facilities to enter the data twice.  In our interviews, corporate officials also indicated 
that they were open to the possibility of sharing facility-specific data with CMS.  In 
addition, CMS has held several stakeholder meetings to solicit input from the larger renal 
community that included corporate representatives. 
We encourage CMS to continue to broaden its interactions with the dialysis corporations 
especially by encouraging more of the type of dialogue described above at the recent 
CMS-sponsored conference.  It may want to consider sponsoring more meetings that 
include dialysis corporations, Network representatives, government officials, and State 
surveyors.  The meetings could focus on practical solutions to foster greater collaboration 
among all these parties.  Another concrete step that CMS should take is to share all its 
facility-specific data reports directly with the relevant corporations. 
17
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  C O M M E N T S  
We received written comments on the draft report from CMS, Forum of End-Stage Renal 
Disease Networks (Forum), Renal Physicians Association, National Renal Administrators 
Association, and the five corporate dialysis providers that were the focus of our inquiry: 
Renal Care Group, Fresenius Medical Care, Davita, Gambro Healthcare, and Dialysis 
Clinic, Inc.  Their comments were strongly supportive of the lessons we presented and of 
the thrust of the recommendations we made.  We include the full text of the comments in 
appendix C.  On the basis of the comments, we made a number of clarifications and 
technical changes.  Below we summarize and respond to some of the points made 
concerning key issues in our reports. 
Medical Director Leadership 
CMS expressed support for our recommendation that the Medicare Conditions be revised 
to require facility medical directors to exert leadership in quality improvement.  It 
indicated that it will consider how the Conditions might express such a requirement. 
Other respondents also expressed support, but some raised concerns about how leadership 
might be defined and how it might relate to real world situations.  We recognize the 
dangers of defining leadership in too detailed a fashion.  But our inquiry and the responses 
we received to the draft reports reinforce the importance of firmly establishing the medical 
directors leadership responsibility and authority concerning quality improvement activities 
in a facility.  CMS should seek feedback from key stakeholders on how this leadership role 
can best be expressed in the revised Medicare Conditions. 
CMS and others supported our recommendation that medical directors be given explicit 
authority to initiate or conduct peer review of attending physicians who are found to be 
performing inadequately and to address performance problems through directed education 
efforts.  However, in the case of situations where patients have been put at risk because of 
poor medical care, CMS and others expressed reservations about our recommendation 
that CMS should make clear the medical directors responsibility to report the physician to 
an authoritative body, such as the facilitys governing board, the End-Stage Renal Disease 
Network, and/or the State Medical Board. 
We are disappointed by the lack of support for this recommendation.  We clarify here that 
we are referring to serious situations where the poor performance of a physician has 
clearly put a patient or patients at risk.  Physicians, as part of their own State licensure, are 
already obligated to make such referrals to State medical boards.  CMS, in its contract 
with the Networks, calls upon them to refer such cases to the Medicare Peer Review 
Organization, the State medical board, or the Office of Inspector General.27  It would 
seem to follow for CMS to reinforce this reporting responsibility for medical directors in 
its Medicare Conditions. 
18
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  Quality Improvement Projects 
Our recommendation here drew attention to the value of facility-specific quality 
improvement projects, without necessarily precluding national or regional projects.  The 
CMS indicated that it will consider including a requirement for such facility-specific 
projects in the revised Medicare Conditions.  One of the corporate providers reinforced 
the point that sound quality improvement projects can be initiated centrally (by a 
corporation or by CMS) as well as by a facility itself.  Another provider expressed concern 
that by adding quality improvement projects to a State survey agencys checklist could 
undercut the intent by emphasizing process over results.  It suggested that such projects 
only be required as part of a corrective action plan relating to substandard clinical 
outcomes. 
We recognize there is value in both centrally-driven and facility-driven quality 
improvement projects.  We also recognize the danger that a Medicare requirement for 
facility specific projects (as exists for example for hospitals) could emphasize process at 
the expense of substance and could, if enforced too rigidly, be a burden for smaller 
facilities.  We would urge that CMS reflect an awareness of these dangers in the 
Conditions and in its enforcement of them.  However, we continue to believe that the 
quality improvement projects have relevance for all facilities, not just those showing 
substandard clinical outcomes.  The latter approach would tend to characterize such 
projects as part of a compliance regime more than an improvement vehicle relevant to all 
facilities. 
Securing the Commitment of Attending Physicians to Performance Measures 
The importance of achieving the commitment of attending physicians and the difficulties 
experienced in obtaining it were recurrent themes that surfaced during our inquiry.  We 
addressed the issue in our recommendations section by calling for CMS to pursue three 
directions.  The first was to provide educational forums for nephrologists that convey the 
value of performance measures and their relevance to the everyday care of the patient. 
CMS and others who commented on this recommendation indicated support for such 
forums. 
The second direction we called for was to generate physician-specific report cards, as is 
already being done by at least one End-Stage Renal Disease Network and two of the 
dialysis corporations we reviewed.  CMS indicated that its information system can not 
provide physician-specific data at this time, but that it will consider this recommendation 
as it further develops its system.  Other respondents were more clearly concerned about 
this direction, noting concerns about methodological, legal, financial and other problems. 
We recognize the difficulties that can be associated with such reports cards.  But there is 
real-world experience that can be drawn upon in developing and using them.  And, within 
the context that measures are indicators, not outright indicators of good or bad 
performance, it would seem that physician-specific reports can play a valuable role in 
ensuring attending physicians become more fully engaged in improvement efforts. 
19
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  Finally, the third direction we noted is the most sensitive of the three.  Here we suggested 
not only a credentialing process for attending physicians but a consideration of more 
explicit standards for the care provided by attending physicians.  With the Medicare 
payment to attending physicians, what standards of care are they expected to provide? 
CMS indicated it would consider our credentialing suggestion.  Others expressed concern. 
Our aim here is to foster attention to the expectations that CMS ought to have of 
attending physicians and to how these expectations might be expressed and enforced.  We 
believe this is an important area warranting further attention by CMS, the medical 
community, and others. 
Intervention Strategies 
CMS supported our recommendation that it examine ways in which the Networks and 
State survey agencies can work together more effectively in overseeing dialysis facilities. 
Others also expressed support.  With respect to our suggestion that CMS consider 
expanding the enforcement options available to it, CMS noted it statutory limitations and 
that it is currently developing generic alternative sanctions for all types of providers.  The 
need for having a broader array of sanction options is one that has come up previously in 
our review of the dialysis facilities and that we believe warrants further attention by CMS. 
20
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054      APPENDIX C 
Comments 
In this appendix, we present the full comments of all parties that responded to our draft 
report.  In order, the comments are from the following parties: 
<  Centers for Medicare & Medicaid 
<  Davita 
<  Dialysis Clinic Inc. 
<  Fresenius Medical Care North America 
<  Gambro Healthcare 
<  Renal Care Group 
<  Forum of the End-Stage Renal Disease Networks 
<  Renal Physicians Association 
<  National Renal Administrators Association 
25
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
26
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
27
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
28
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
29
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
30
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
31
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
32
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
33
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
34
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
35
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
36
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
37
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
38
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
39
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
40
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
41
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
42
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
43
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
44
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
45
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
46
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
47
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
48
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
49
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
50
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
51
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
52
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054  APPENDIX C 
53
Dialysis: Lessons Learned and Implications for Medicare   OEI-01-99-00054