VA DIALYSIS PILOT

Documentation of 

Plans for Concluding 

the Pilot Needed to 

Improve 

Transparency and 

Accountability

Report to the Ranking Member, 

Committee on Veterans’ Affairs, 

United States Senate

September 2014

GAO-14-646

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-14-646, a report to the 

Ranking Member, Committee on Veterans’ 

Affairs, United States Senate

September 2014

VA DIALYSIS PILOT

Documentation of Plans for Concluding the Pilot 

Needed to Improve Transparency and Accountability

Why GAO Did This Study

Veterans with end-stage renal 

disease—a condition of permanent 

kidney failure—are one of the most 

resource-intensive patient populations 

served by the VA and are generally 

prescribed a life-saving medical 

procedure called dialysis. In 2009, VA 

began developing a pilot program at 

four VAMCs to provide dialysis to 

veterans in VA-operated, free-standing 

dialysis clinics largely in an effort to 

stem rising costs for providing such 

care in the private sector through the 

Non-VA Medical Care Program. In May 

2012, GAO issued a report identifying 

several weaknesses in VA’s execution 

of the planning and early 

implementation phases of the Dialysis 

Pilot.

GAO was asked to continue its 

evaluation of the Dialysis Pilot. GAO 

examined the extent to which VA 

documented plans for concluding the 

Dialysis Pilot and the status of data on 

the quality of care and treatment costs 

for the four pilot locations.

GAO reviewed relevant documents 

from VA and the evaluation contractor 

selected by VA to perform an 

independent analysis of the pilot 

locations. GAO also spoke with VA 

officials responsible for managing the 

Dialysis Pilot, representatives from all 

four pilot locations, and evaluation 

contractor officials responsible for 

reviewing the performance of the four 

pilot locations.

What GAO Recommends

GAO recommends that VA document 

its plans for concluding the Dialysis 

Pilot. VA concurred with GAO’s 

recommendation but did not clearly 

delineate its plans for pilot conclusion.

What GAO Found

Five years into the Dialysis Pilot, the Department of Veterans Affairs (VA) Central 

Office still has not set a timetable for completing the pilot or documented how it 

will determine the success of the pilot locations. GAO previously identified best 

practices that state that a project timeline is critical for managing and measuring 

an entity’s performance on projects and that choosing and documenting wellregarded criteria that are used to make comparisons can lead to strong, 

defensible conclusions. Initially, VA planned to conclude the Dialysis Pilot after 

the pilot locations were all open for 5 years. However, in March 2014, VA officials 

told GAO they are no longer operating under this timeline but instead plan to 

conclude the pilot once the pilot locations achieve (1) the creation of a model for 

a VA-operated, free-standing dialysis clinic that can be replicated by other VA 

medical centers (VAMC) and (2) the confirmation of the time necessary for a pilot 

location to reach a “breakeven point.” VA considers that a pilot location has 

achieved a breakeven point when it repays its start-up funding and the VAMC 

realizes a cost savings because its treatment cost for dialysis at the pilot location 

is lower than purchasing care from non-VA dialysis providers. However, VA has 

not formally documented these pilot location achievements as criteria for 

concluding the Dialysis Pilot. By not doing so, the transparency of VA’s 

management decisions on pilot location outcomes is compromised and the 

Department lacks accountability for ensuring the success of the Dialysis Pilot.

The Dialysis Pilot has been under evaluation for 2 years by VA and the 

contractor it selected to conduct an independent analysis of pilot location quality 

of care and treatment costs. However, neither has concluded its evaluation. 

Specifically, VA noted that the delayed openings and initial operational issues of 

two pilot locations—Philadelphia, Pennsylvania, and Cleveland, Ohio—led to 

limited data availability, and it recommended another 12 months of data be 

collected on these two pilot locations before drawing conclusions.

Data Available from the Department of Veterans Affairs (VA) and Evaluation Contractor on 

Quality of Care and Treatment Costs for Dialysis Pilot Locations, Calendar Years 2012 and 

2013

Pilot locations

Calendar 

year Review type Evaluator

Raleigh, 

NC

Fayetteville, 

NC

Philadelphia, 

PA

Cleveland, 

OH

2012 Quality of care VA ● ● ○ ○

Contractor ● ● ○ ○

Treatment cost VA ● ● ○ ○

Contractor ● ● ○ ○

2013 Quality of care VA ● ● ● ●

Contractor ● ● ● ○

Treatment cost VA ● ● ● ●

Contractor    

Legend: ● = Data were included in reviews. ○ = Data were not included in reviews.  = Reviews 

were not available at the time of GAO’s analysis.

View GAO Source: GAO analysis of VA and evaluation contractor data. | GAO-14-646. -14-646. For more information, 

contact Randall B. Williamson at (202) 512-

7114 or williamsonr@gao.gov.
Page i GAO-14-646 VA Dialysis Pilot

Letter 1 

Background 4

VA Has Not Documented Criteria or Plans for Concluding the 

Dialysis Pilot 8

Current Data on Quality of Care and Treatment Costs Are Limited 

Due to Ongoing Evaluations 10

Conclusions 11

Recommendation 12

Agency Comments and Our Evaluation 12

Appendix I Results of Clinical Quality Review by the Department of Veterans 

Affairs 14

Appendix II Results of Patient Satisfaction Review by the Department of Veterans 

Affairs 17

Appendix III Results of Access to Care Review by the Department of Veterans 

Affairs 19

Appendix IV Results of Clinical Quality Review by the Evaluation Contractor 20

Appendix V Results of Treatment Cost Reviews by the Department of Veterans 

Affairs and the Evaluation Contractor 24

Appendix VI Comments from the Department of Veterans Affairs 26

Appendix VII GAO Contact and Staff Acknowledgments 28

Contents
Page ii GAO-14-646 VA Dialysis Pilot

Tables

Table 1: Data Available from the Department of Veterans Affairs 

(VA) and Evaluation Contractor on Quality of Care and 

Treatment Costs for Dialysis Pilot Locations, Calendar 

Years 2012 and 2013 10

Table 2: Department of Veterans Affairs’ (VA) Results of Centers 

for Medicare & Medicaid Services (CMS) Clinical Quality 

Measures for Dialysis Pilot Locations, Calendar Years 

2012 and 2013 15

Table 3: Department of Veterans Affairs’ (VA) Results of Patient 

Satisfaction Surveys for the Raleigh, North Carolina, 

Dialysis Pilot Location, June 2011 through September 

2013 17

Table 4: Department of Veterans Affairs’ (VA) Results of Patient 

Satisfaction Surveys for the Fayetteville, North Carolina, 

Dialysis Pilot Location, June 2011 through September 

2013 18

Table 5: Department of Veterans Affairs’ (VA) Results of Veterans’ 

Access to Care Review for the Raleigh and Fayetteville, 

North Carolina, Dialysis Pilot Locations, Calendar Year 

2012 19

Table 6: Department of Veterans Affairs’ (VA) Results of Veterans’ 

Access to Care Review for the Dialysis Pilot Locations, 

Calendar Year 2013 19

Table 7: Evaluation Contractor’s 2013 Dialysis Facility Report 

Clinical Quality Measures for the Raleigh and Fayetteville 

Department of Veterans Affairs (VA) Dialysis Pilot 

Locations Compared to North Carolina and U.S. 

Averages, Calendar Years 2009 to 2012 21

Table 8: Evaluation Contractor’s 2013 Dialysis Facility Report 

Clinical Quality Measures for the Philadelphia Department 

of Veterans Affairs (VA) Dialysis Pilot Location Compared 

to Pennsylvania and U.S. Averages, Calendar Years 2009 

to 2012 22

Table 9: Average Cost Per Treatment for Department of Veterans 

Affairs (VA) Dialysis Pilot Locations and Non-VA Dialysis 

Providers as Calculated by VA and the Evaluation 

Contractor, Calendar Years 2012 and 2013 24
Page iii GAO-14-646 VA Dialysis Pilot

Abbreviations

CMS Centers for Medicare & Medicaid Services

DFR Dialysis Facility Report

ESRD end-stage renal disease

VA Department of Veterans Affairs

VAMC Veterans Affairs medical center

VHA Veterans Health Administration

VISN Veterans Integrated Service Network

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Page 1 GAO-14-646 VA Dialysis Pilot

441 G St. N.W.

Washington, DC 20548

September 2, 2014

The Honorable Richard Burr

Ranking Member

Committee on Veterans’ Affairs

United States Senate

Dear Mr. Burr:

Veterans diagnosed with end-stage renal disease (ESRD)—a condition of 

permanent kidney failure—are one of the most resource-intensive patient 

populations served by the Department of Veterans Affairs (VA) Veterans 

Health Administration (VHA).1 Veterans with ESRD are generally 

prescribed dialysis, which is a life-saving medical procedure that removes 

excess fluids and toxins from the bloodstream.2

 

1

VHA oversees VA’s health care system. The VA health care system includes 151 VA 

medical centers (VAMC) organized into 21 Veterans Integrated Service Networks (VISN). 

Each of VA’s 21 VISNs is responsible for managing and overseeing VAMCs within a 

defined geographic area.

Dialysis treatments are 

time intensive. Specifically, veterans receiving dialysis treatments 

typically must receive three outpatient treatments per week with each 

treatment lasting about four hours. Veterans usually remain on dialysis for 

the rest of their lives unless they receive a kidney transplant. Due to VA’s 

limited dialysis capacity in its own facilities, VA most commonly provides 

dialysis to veterans by referring them to non-VA dialysis providers in their 

local communities through the Non-VA Medical Care Program (non-VA 

2

In this report, we use the term dialysis to describe hemodialysis—the most common form 

of dialysis treatment provided in the United States. VA provides dialysis as part of the 

medical benefits package—a full range of hospital and outpatient services, prescription 

drugs, and noninstitutional long-term care services—to all veterans enrolled in its health 

care system. See 38 C.F.R. § 17.38.
 

Page 2 GAO-14-646 VA Dialysis Pilot

medical care).3 In fiscal year 2013, VA referred about 14,000 veterans to 

non-VA dialysis providers at a cost of about $425 million.4

In 2009, VA began developing a pilot program at several VA medical 

centers (VAMC) to provide dialysis to veterans in VA-operated dialysis 

clinics in response to several issues—including an increasing number of 

veterans needing dialysis, rising costs of providing dialysis through nonVA medical care, and unsuccessful efforts to lower these costs.5 The 

resulting Dialysis Pilot was approved by the Secretary of VA in 

September 2010. Ultimately, VA believes the Dialysis Pilot will lead to the 

development of a business model with a mission of providing more 

veterans’ dialysis treatments in VA facilities and less through non-VA 

medical care. Through this pilot, VA established four VA-operated dialysis 

clinics located near sponsoring VAMCs in Durham and Fayetteville, North 

Carolina; Cleveland, Ohio; and Philadelphia, Pennsylvania.6

 

3

The Non-VA Medical Care Program—previously known as the Fee Basis Care 

Program—includes dialysis services and provides care to eligible veterans outside of VA 

when VA medical facilities are not feasibly available. VAMCs have criteria to determine 

whether non-VA medical care may be used. If a veteran is eligible for certain medical 

care, the VAMC should provide it as the first option. If the VAMC cannot provide the 

services—due to a lack of available specialists, long wait times, or extraordinary distances 

from the veteran’s home—it may consider providing care through the Non-VA Medical 

Care Program in the veteran’s community.

The Raleigh 

and Fayetteville pilot locations opened in June 2011, the Philadelphia 

4

Veterans may elect to have their dialysis treatments through VA or Medicare but cannot 

receive dialysis benefits from both simultaneously. Medicare covers dialysis treatments for 

most individuals with ESRD regardless of age. Medicare coverage generally begins on the 

fourth month after they start dialysis. Medicare reimburses dialysis providers 80 percent of 

a specified rate and beneficiaries or private health insurance companies are responsible 

for the remaining 20 percent. Veterans who elect to have their dialysis treatments paid for 

by Medicare are responsible for paying the remaining 20 percent of their treatment costs 

because VA is not authorized to pay these out-of-pocket expenses incurred by veterans 

covered by Medicare. Veterans who elect to have their dialysis treatments provided 

through VA—either in VAMCs or through the Non-VA Medical Care Program—may not 

incur any out-of-pocket expenses.

5

VA-operated dialysis clinics are freestanding clinics that are typically located in 

convenient areas and vary in the number of patients served. The VHA Dialysis Steering 

Committee and its Dialysis Center Activation Subcommittee are responsible for 

overseeing the Dialysis Pilot. The VHA Dialysis Steering Committee includes VA clinicians 

and officials who assess and assist in the management of the delivery of dialysis services 

for veterans enrolled at VA. The VHA Dialysis Center Activation Subcommittee was 

created to implement the Dialysis Pilot.

6

The dialysis clinic for the Durham VAMC is located in Raleigh, North Carolina.
 

Page 3 GAO-14-646 VA Dialysis Pilot

pilot location opened in October 2012, and the Cleveland pilot location 

opened in July 2013.

In May 2012, we issued a report on VA’s Dialysis Pilot that identified 

several weaknesses in VA’s execution of the planning and early 

implementation phases of the pilot.7 Specifically, we found VA did not 

appropriately document its pilot location selection process, produce 

consistent and comparable cost estimates for pilot locations, provide clear 

and timely written guidance on how to repay start-up funding to VA 

Central Office, and provide guidance on how to calculate cost savings 

generated by the pilot locations.8

To examine the extent to which VA has documented plans for concluding 

the Dialysis Pilot, we interviewed VA Central Office officials and VAMC 

officials responsible for managing pilot locations regarding VA’s plans for 

the completion of the Dialysis Pilot and reviewed relevant VA 

documentation. These documents included a VA business analysis for 

the Dialysis Pilot and VA’s contract with a leading university research 

Due to continuing congressional 

concern about issues raised in our prior report, you asked us to continue 

our evaluation of VA’s Dialysis Pilot. In this report, we examine (1) the

extent to which VA has documented plans for concluding the Dialysis 

Pilot and (2) the status of data on the quality of care and treatment costs 

for the four pilot locations.

 

7

GAO, VA Dialysis Pilot: Increased Attention to Planning, Implementation, and 

Performance Measurement Needed to Help Achieve Goals, GAO-12-584 (Washington, 

D.C.: May 23, 2012).

8

Through the Dialysis Pilot, sponsoring VAMCs for the pilot locations were each provided 

about $2.5 million in start-up funding to establish a VA-operated free-standing dialysis 

clinic and were to finish repaying this start-up funding to VA Central Office in fiscal year 

2014. According to VA Office of Finance officials, each pilot location was provided 

$2.5 million from VHA’s fiscal year 2010 Medical Services appropriation with the 

requirement that the pilot site would repay this amount in two scheduled payments of 

$1.25 million occurring in fiscal years 2012 and 2014. The pilot sites made the scheduled 

2012 and 2014 payments using available balances from their respective fiscal years (2012 

and 2014). VA added back the same amount to the VHA Medical Services appropriation 

account for the same respective fiscal year.
 

Page 4 GAO-14-646 VA Dialysis Pilot

center (evaluation contractor) to review the Dialysis Pilot locations’ quality 

of care and treatment costs.9

To examine the status of data on the quality of care and treatment costs 

for the four pilot locations, we interviewed VA Central Office officials and 

officials from the evaluation contractor regarding the status and initial 

findings of their evaluations. We analyzed documents that VA and the 

evaluation contractor produced regarding the quality of care—including 

clinical quality, patient satisfaction, and access to care—and treatment 

costs at the pilot locations compared with non-VA dialysis providers.

We conducted this performance audit from January 2014 to July 2014 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

VA set four goals for the Dialysis Pilot: (1) improve the quality of dialysis 

care veterans receive, (2) increase veterans’ access to dialysis care, 

(3) provide additional dialysis research opportunities, and (4) achieve cost 

savings for VA-funded dialysis treatments.

VA is performing an internal evaluation of the performance of the four 

pilot locations by assessing the quality of care—including clinical quality, 

patient satisfaction, and access to care—and treatment costs at each pilot 

location. Results of this evaluation are reported in an annual performance 

review produced by VA each calendar year. To date, VA has completed 

reviews for calendar years 2012 and 2013.

 

9

The contractor selected by VA to evaluate the Dialysis Pilot is a leading university 

research center that carries out a wide variety of epidemiological, clinical, medical 

outcomes, public policy, and economic research relating to ESRD, chronic kidney disease, 

and organ transplantation. Its projects are funded by multiple government and private 

sources, including the Centers for Medicare & Medicaid Services, Centers for Disease 

Control and Prevention, National Institutes of Health, National Institute of Diabetes and 

Digestive and Kidney Diseases, National Institute of Allergy and Infectious Diseases, 

Renal Research Institute, VA, and the American Society of Transplant Surgeons.

Background

VA Dialysis Pilot 

Evaluation
 

Page 5 GAO-14-646 VA Dialysis Pilot

• Clinical quality: To evaluate the clinical quality at the pilot locations, 

VA selected 11 clinical quality measures that were derived from 

measures and associated performance standards established by the 

Centers for Medicare & Medicaid Services (CMS)—the federal entity 

with primary responsibility for evaluating the quality of dialysis care in 

the United States—and endorsed by the National Quality Forum, a 

leader in evaluating clinical performance measurement for a variety of 

chronic clinical conditions.10

• Patient satisfaction: To evaluate veterans’ satisfaction with the 

quality of care provided at the pilot locations, VA analyzed the CMS 

standard dialysis facility survey—the In-Center Hemodialysis 

Consumer Assessment of Healthcare Providers and Systems—for the 

veterans treated at pilot locations.11

• Access to care: To evaluate veterans’ access to the pilot locations, 

VA is measuring the percentage of veterans whose actual travel 

distances are no more than 30 miles from their residence to the pilot 

location where they receive care.12

• Treatment cost: To evaluate the cost of care, VA is comparing the 

pilot locations’ average cost per treatment and the average cost per 

treatment for non-VA dialysis providers in each pilot location’s 

 

10The measures selected to assess the clinical quality of VA pilot locations are: (1) the 

proportion of dialysis patients that received the minimum recommended amount of 

dialysis; (2) the percentage of months in which blood phosphorous levels were measured 

for at least 97 percent of the patients—blood phosphorous levels are an indicator of 

potential bone disease; (3) the percentage of months in which blood calcium levels were 

measured for at least 97 percent of the patients—blood calcium levels are an indicator of 

potential bone disease; (4) the proportion of patients whose blood calcium levels were, on 

average, above the recommended levels; (5) the percentage of months in which 

hemoglobin levels were measured for at least 99 percent of the patients—hemoglobin 

levels are an indicator of anemia; (6) the proportion of patients whose hemoglobin levels 

were above the recommended levels; (7) the proportion of patients whose iron levels were 

measured at least once every three months—iron levels are an indicator of anemia; 

(8) the proportion of patients that received dialysis via a catheter, which is associated with 

poorer patient outcomes; (9) the proportion of patients that received dialysis via an arterial 

venous fistula, which is associated with the most favorable health outcomes; (10) the 

proportion of patients with blood infections; and (11) the proportion of patients who 

received influenza immunizations.

11CMS requires that all dialysis facilities treating 30 or more patients in the United States 

administer this survey to all patients treated within their facilities.

12The 30 mile access measure is based upon the recommendation of VA clinicians.
 

Page 6 GAO-14-646 VA Dialysis Pilot

Veterans Integrated Service Network (VISN).13 To calculate each pilot 

location’s average cost per treatment, VA divided each pilot location’s 

total health care costs by its total number of treatments.14 To calculate 

non-VA dialysis providers’ average cost per treatment, VA created a 

composite figure using the average per treatment contract rate from 

the two largest non-VA dialysis providers located in each pilot 

location’s VISN, a per treatment VA claims processing fee, a per 

treatment VA physician cost for nephrology oversight, and a per 

treatment VA financial administrative cost.15

In September 2012, VA awarded a 3-year contract to an evaluation 

contractor to provide an independent evaluation of its Dialysis Pilot—

including a comparison of the clinical quality provided by the four pilot 

locations with non-VA dialysis providers and a dialysis per treatment cost 

comparison between the pilot locations and the Non-VA Medical Care 

Program.16

• Clinical quality: To evaluate the clinical quality of care provided by 

the pilot locations, the evaluation contractor is assessing the results of 

several measures—such as mortality, hospitalization, and infection 

rates—for the pilot locations and comparing them to relevant state 

 

13These data are extracted from VA’s Managerial Cost Accounting Office’s adjusted cost 

reports. The Managerial Cost Accounting Office manages VA’s designated cost 

accounting system. Adjusted cost reports include start-up costs for the pilot locations 

which are amortized over a 10-year period.

14VA uses data from its own Managerial Cost Accounting Office to assess pilot location 

costs and categorized these costs according to CMS cost reporting requirements. CMS 

requires dialysis facilities to follow a certain methodology when completing the CMS 

Independent Renal Dialysis Facility Cost Report (CMS Form 265-11) each calendar year. 

This methodology requires facilities to report capital-related costs on buildings and 

fixtures, operation and maintenance costs, housekeeping costs, machine capital-related or

rental and maintenance costs, salaries and benefits for direct patient care, supply costs, 

laboratory costs, administrative and general costs, drug costs, medical record costs, and 

nephrologist costs. A nephrologist is a medical doctor who specializes in kidney care and 

treating diseases of the kidneys. 

15Nephrology is the branch of medicine that deals with diseases of the kidneys.

16This contract includes a mandatory first year of work, referred to as a base year, and 

gives VA the option of continuing the contract for two additional years, referred to as 

option years. VA and the evaluation contractor are currently in the first option year of this 

contract and VA officials reported they expect to exercise the second option year for fiscal 

year 2015.

Dialysis Pilot Evaluation 

Contractor Review
 

Page 7 GAO-14-646 VA Dialysis Pilot

and national results. These results are presented for each pilot 

location in quarterly quality reviews and an annual dialysis facility 

report (DFR), a standard report produced by the evaluation contractor 

for CMS for each of the more than 6,000 private sector dialysis 

facilities nationwide.

• Treatment cost: To evaluate the treatment costs for each pilot 

location, the evaluation contractor is comparing the pilot locations’ 

average cost per treatment to that of private sector dialysis providers, 

including certain contracted non-VA dialysis providers.17 Results are 

presented for each pilot location in quarterly cost reviews.18 The 

evaluation contractor used a similar methodology as VA to determine 

each pilot location’s average cost per treatment.19 To determine the 

non-VA dialysis provider average cost per treatment in calendar year 

2012, the evaluation contractor created a composite figure that 

included (1) the contract per treatment average price for the three 

non-VA dialysis providers with the largest market share in the VISN 

responsible for the Raleigh and Fayetteville pilot locations, (2) VA’s 

per treatment travel-related costs, and (3) VA’s per treatment medical 

oversight costs.20

 

17The data used for the analysis of pilot locations’ costs conducted by the evaluation 

contractor are provided by VA’s Managerial Cost Accounting Office.

18The evaluation contractor is also providing VA with an annual dialysis facility cost review 

for the four pilot locations; however, these do not include a cost comparison with non-VA 

dialysis providers.

19In calendar year 2012, the evaluation contractor did not include administrative overhead 

costs for VISN and VA Central Office staff because the evaluation contractor had not yet 

determined how to accurately incorporate them. The evaluation contractor recommended 

that VA revise its methodology for calculating pilot locations’ costs to include these 

overhead costs. The evaluation contractor also included veteran travel-related and 

medical oversight costs to ensure that the methodology used to calculate the average cost 

per treatment for the pilot locations and non-VA dialysis providers more closely aligned.

20A non-VA dialysis provider’s market share was determined by the percentage of dialysis 

facilities it owned out of the total number of dialysis facilities located in that VISN’s 

geographic area.
 

Page 8 GAO-14-646 VA Dialysis Pilot

Even though it is 5 years into the Dialysis Pilot, VA Central Office has not 

yet set a timetable for completing the pilot or documented how it will 

determine the success of the four pilot locations. We have previously 

outlined best practices for project scheduling that specify project timelines 

are critical for managing and measuring an agency’s performance on 

projects and that it is necessary for the agency to have a document that 

details the rationale used in developing a project timeline.21 In addition, 

we have outlined best practices for designing evaluations that state that 

choosing and documenting well-regarded criteria that are used to make 

comparisons can lead to strong, defensible conclusions.22

According to VA’s business analysis of the Dialysis Pilot conducted prior 

to opening the pilot locations, VA planned to conclude the Dialysis Pilot 

5 years after the pilot locations opened and assumed all four pilot 

locations would begin operations at generally the same time.23 Due to 

delays in opening the pilot locations, the completion of this 5-year period 

would be in fiscal year 2018—5 years after the opening of the fourth pilot 

location.24

 

21GAO, GAO Schedule Assessment Guide: Best Practices for Project Schedules, 

However, in March 2014, VA officials told us they are no longer 

operating under the 5-year timeline outlined in this plan, although they 

have not updated the timeline included in the Dialysis Pilot business 

analysis. VA officials told us that instead of ending the Dialysis Pilot 

based on the timeline outlined in VA’s business analysis, they believe the 

Dialysis Pilot will be successful and should conclude once the pilot 

locations have achieved the following:

GAO-12-120G (Washington, D.C.: May 30, 2012).

22GAO, Designing Evaluations: 2012 Revision, GAO-12-208G (Washington, D.C.: Jan. 31, 

2012).

23In March 2010, VA completed a business analysis that demonstrated the rationale for 

conducting the Dialysis Pilot. This document communicates the results of VA’s analysis of 

internal and external options for providing outpatient dialysis treatments to veterans. The 

implementation timeline in this document establishes a 5-year timeline for implementing 

the Dialysis Pilot beginning in April 2010 and concluding in fiscal year 2015 with the 

evaluation of the fifth year of pilot location operations. 

24VA’s business analysis estimated that all four pilot locations would open in October 

2010; however, the opening of the pilot locations was delayed. The first two pilot locations, 

Raleigh and Fayetteville, opened in June 2011, the Philadelphia pilot location opened in 

October 2012, and the Cleveland pilot location opened in July 2013. 

VA Has Not 

Documented Criteria 

or Plans for 

Concluding the 

Dialysis Pilot
 

Page 9 GAO-14-646 VA Dialysis Pilot

• Creation of a replicable model. According to VA officials, the first 

achievement that indicates success is the creation of a model for a 

VA-operated, free-standing dialysis clinic that can be replicated by 

other VAMCs. Such a model would include clear documentation of the 

necessary staff, equipment, time, and resources required to establish 

a new clinic and serve as a guide to other VAMCs seeking to 

establish similar clinics. VA officials did not specify a timeline for the 

creation of this model; however, they did state that they believe the 

pilot locations have already achieved this milestone.

• Pilot location breakeven points. VA officials stated that the second 

achievement that indicates success is the confirmation of the time 

necessary for a pilot location to reach its breakeven point—which VA 

has defined as the point when a pilot location achieves cost savings in 

the Non-VA Medical Care Program for dialysis services for its 

sponsoring VAMC and repays its start-up funding to VA Central 

Office. Through the Dialysis Pilot, sponsoring VAMCs for the pilot 

locations were each provided about $2.5 million in start-up funding to 

establish a VA-operated, free-standing dialysis clinic and were to 

finish repaying this start-up funding to VA Central Office in fiscal year 

2014. According to VA Central Office officials, all four pilot locations 

have repaid their start-up funding as of the beginning of fiscal year 

2014 and two pilot locations—Raleigh and Fayetteville—have 

demonstrated that their cost per treatment is lower than comparable 

per treatment costs of non-VA dialysis providers in their areas. 

Achieving this breakeven point indicates that the pilot locations are no 

longer incurring additional costs for VA and are fulfilling VA’s goal of 

providing dialysis treatments to veterans at a lower cost than similar 

care provided through non-VA dialysis providers.

While VA officials indicated they could conclude the Dialysis Pilot once 

the pilot locations had created a replicable model and realized their 

breakeven points, VA has not formally communicated these 

achievements in writing as criteria for concluding the pilot. Moreover, 

these criteria were not included in the performance work statement for the 

evaluation contractor, and according to a VA official, have not been 

formally recorded in any official document. By not clearly communicating 

these milestones as criteria for concluding the Dialysis Pilot, the 

transparency of VA’s management decisions on pilot location outcomes is 

compromised and the Department lacks accountability for ensuring the 

success of the Dialysis Pilot.
 

Page 10 GAO-14-646 VA Dialysis Pilot

VA and the evaluation contractor have been evaluating the Dialysis Pilot 

for 2 years; however, neither has concluded its evaluation of the Dialysis 

Pilot and data on two of the pilot locations—Philadelphia and Cleveland—

is limited due to their delayed opening. Table 1 shows the data available 

for each pilot location as of June 2014.

Table 1: Data Available from the Department of Veterans Affairs (VA) and Evaluation Contractor on Quality of Care and 

Treatment Costs for Dialysis Pilot Locations, Calendar Years 2012 and 2013

Pilot locations

Calendar year Review type Evaluator Raleigh, NC Fayetteville, NC Philadelphia, PA Cleveland, OH

2012 Quality of care VA ● ● ○ ○

Contractor ● ● ○ ○

Treatment cost VA ● ● ○ ○

Contractor ● ● ○ ○

2013 Quality of care VA ● ● ● ●

Contractor ● ● ● ○

Treatment cost VA ● ● ● ●

Contractor    

Source: GAO analysis of VA and evaluation contractor data. | GAO-14-646

Legend: ● = Data were included in reviews. ○ = Data were not included in reviews.  =Reviews 

were not available at the time of our analysis.

Note: The VA review includes information on quality of care—including clinical quality, patient 

satisfaction, and access to care—and treatment costs at pilot locations compared to non-VA dialysis 

providers. VA contracted with a leading university research center to evaluate the Dialysis Pilot. This 

evaluation contractor’s review includes information on clinical quality provided by the pilot locations 

and private sector free-standing dialysis providers and a comparison of the treatment costs for 

dialysis care through the pilot locations and the Non-VA Medical Care Program. The evaluation 

contractor’s quality of care data included in this table are from the Dialysis Facility Reports, which are 

standard reports produced by the evaluation contractor for the Centers for Medicare & Medicaid 

Services for each of the more than 6,000 private sector dialysis facilities nationwide.

To date, VA has produced two annual performance reviews on quality of 

care and treatment costs for the Dialysis Pilot—the first for calendar year 

2012 and the second for calendar year 2013—that include the results of 

pilot locations’ clinical quality, patient satisfaction, access to care, and 

treatment cost performance. The VA calendar year 2012 annual 

performance review included results for the Raleigh and Fayetteville pilot 

locations only. VA included results for all four pilot locations in its calendar 

year 2013 annual performance review; however, this review does not 

include a full year of data for the Cleveland pilot location and VA noted 

operational challenges that affected the data for the Philadelphia pilot 

Current Data on 

Quality of Care and 

Treatment Costs Are 

Limited Due to

Ongoing Evaluations
 

Page 11 GAO-14-646 VA Dialysis Pilot

location. VA noted several contributing factors to the limited data 

available on the Cleveland and Philadelphia pilot locations, including the 

following:

• The Cleveland pilot location experienced issues with laboratory data 

in veterans’ VA medical records that limited the results on one of the 

clinical quality measures in 2013.

• For both the Cleveland and Philadelphia pilot locations, VA reported 

that the dialysis machines did not operate properly, which resulted in 

a lower than expected number of veterans being treated at the 

Philadelphia pilot location between January and June 2013 and 

delayed the opening of the Cleveland pilot location until July 2013.

As a result, VA recommended that another full 12 months of data from the 

Philadelphia and Cleveland pilot locations be analyzed before making 

conclusive comparisons of the treatment costs of these pilot locations 

with non-VA dialysis providers. In addition, the evaluation contractor has 

reviewed the Dialysis Pilot for 2 years and has one year remaining on its 

contract. At the time of our analysis, the evaluation contractor had 

completed 2 years of evaluations on the quality of care provided by the 

four pilot locations and 1 year of treatment cost evaluations for two of the 

pilot locations. For information on VA’s clinical quality review of pilot 

locations, see appendix I; VA’s patient satisfaction review for pilot 

locations, see appendix II; VA’s access to care review for pilot locations, 

see appendix III; the evaluation contractor’s clinical quality review of pilot 

locations, see appendix IV; and VA’s and the evaluation contractor’s 

reviews of pilot location average cost per treatment, see appendix V.

VA has not documented its plan for the conclusion of the Dialysis Pilot, 

despite beginning pilot development 5 years ago. Without a formally 

established project timeline, VA cannot effectively monitor performance 

against specified timeframes, validate and defend the timeline of the 

Dialysis Pilot to VA decisionmakers and other stakeholders, or ultimately 

hold VA decisionmakers accountable for future resource investment 

decisions. In addition, the transparency of the Dialysis Pilot is jeopardized 

by VA not clearly documenting the achievements stated by VA officials—

the creation of a replicable model for additional VA-operated freestanding dialysis clinics and demonstrating a breakeven point—as criteria 

for concluding the Dialysis Pilot.

Conclusions
 

Page 12 GAO-14-646 VA Dialysis Pilot

To improve the transparency and accountability of the Dialysis Pilot, we 

recommend that the Secretary of Veterans Affairs direct the Under 

Secretary for Health to document plans for concluding the Dialysis Pilot, 

including establishing an end date or documenting criteria for deciding 

what constitutes the successful completion of the pilot.

VA provided written comments on a draft of this report, which we have 

reprinted in appendix VI. In its comments, VA generally agreed with our 

conclusions and concurred with our recommendation to improve the 

transparency and accountability of the Dialysis Pilot. VA also stated that 

in July 2015—2 years after the Cleveland pilot location became 

operational—it plans to review the outcomes from the four pilot locations 

and make recommendations for the Dialysis Pilot. VA did not provide any 

technical comments.

In its general comments, VA noted that the criteria for deciding what 

constitutes the successful completion of its Dialysis Pilot is included in the 

department’s document entitled, “Evaluation Plan: VA Free-Standing 

Dialysis Centers,” which VA enclosed with its comments. While this 

document describes the measures VA is using to evaluate the pilot, it 

does not delineate the amount of data or length of review that is needed 

in order to conclude the pilot. In addition, VA did not clearly state when 

recommendations will be made and whether the pilot will end at that time. 

We continue to believe that VA should clearly document its plan for 

concluding the Dialysis Pilot by clearly specifying an end date for the pilot 

or specific outcomes that must be met.

We are sending copies of this report to the Secretary of Veterans Affairs, 

appropriate congressional committees, and other interested parties. In 

addition, the report is available at no charge on the GAO website at 

http://www.gao.gov. 

Recommendation

Agency Comments

and Our Evaluation
 

Page 13 GAO-14-646 VA Dialysis Pilot

If you or your staff have any questions about this report, please contact 

me at (202) 512-7114 or williamsonr@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made major contributions to 

this report are listed in appendix VII.

Sincerely yours,

Randall B. Williamson

Director, Health Care
Appendix I: Results of Clinical Quality Review 

by the Department of Veterans Affairs

Page 14 GAO-14-646 VA Dialysis Pilot

This appendix provides information on the Department of Veterans 

Affairs’ (VA) results from its review of Dialysis Pilot location clinical 

quality. To assess clinical quality, VA selected and evaluated Dialysis 

Pilot locations using 11 performance measures established by the 

Centers for Medicare & Medicaid Services (CMS). For calendar years 

2012 and 2013, CMS defined the lowest achievement threshold for facility 

performance as the 15th percentile, the average performance standard as 

the 50th percentile, and the highest benchmark as the 90th percentile. 

Specifically, table 2 provides results of VA’s review of clinical quality at 

the four Dialysis Pilot locations—Raleigh and Fayetteville, North Carolina; 

Philadelphia, Pennsylvania; and Cleveland, Ohio.

Appendix I: Results of Clinical Quality 

Review by the Department of Veterans 

Affairs
Appendix I: Results of Clinical Quality Review 

by the Department of Veterans Affairs

Page 15 GAO-14-646 VA Dialysis Pilot

Table 2: Department of Veterans Affairs’ (VA) Results of Centers for Medicare & Medicaid Services (CMS) Clinical Quality 

Measures for Dialysis Pilot Locations, Calendar Years 2012 and 2013

Dialysis pilot location

Raleigh, 

NC

Fayetteville, 

NC

Philadelphia, 

PAa Cleveland, 

OHb

CMS-established 

performance 

standards [lowestaverage-highest]c

Clinical quality 

measures

Higher 

quality of 

care 

indicator 2012 2013 2012 2013 2013 2013 2012 2013

Dialysis adequacy

Minimum delivered 

hemodialysis dosed  99.0 99.0 97.5 95.0 96.0 81.0 94-97-100 86-93-97

Bone and mineral metabolism

Measurement of 

phosphorous 

concentratione

 99.6 100 100 100 100 97.0 N/A N/A

Measurement of 

calcium concentrationf  100 100 100 100 100 97.0 N/A N/A

Proportion of patients 

with hypercalcemiag  0.0 0.0 0.0 0.0 0.0 2.0 N/A N/A

Anemia management

Proportion of patients 

who exceed hemoglobin 

targeth

 0.0 0.0 0.0 1.0 0.0 2.0 10-4-0 5-1-0 

Monthly measurement 

of hemoglobin 

concentrationi

 100 100 100 100 100 99.0 N/A N/A

Proportion of patients 

whose iron levels were 

assessedj

 100 100 100 100 100 98.0 N/A N/A

Vascular access type

Proportion of patients 

with cathetersk  3.2 5.0 3.6 6.0 11.0 6.0 24-14-5 22-13-5 

Proportion of patients 

with arterial venous 

fistulal

 49.4 58.0 68.4 72.0 53.0 76.0 46-58-74 47-60-75

Infection and immunization

Proportion of patients 

with bloodstream 

infectionsm

 1.2 0.7 0.7 0.4 0.0 0.8 N/A N/A
Appendix I: Results of Clinical Quality Review 

by the Department of Veterans Affairs

Page 16 GAO-14-646 VA Dialysis Pilot

Dialysis pilot location

Raleigh, 

NC

Fayetteville, 

NC

Philadelphia, 

PAa Cleveland, 

OHb

CMS-established 

performance 

standards [lowestaverage-highest]c

Clinical quality 

measures

Higher 

quality of 

care 

indicator 2012 2013 2012 2013 2013 2013 2012 2013

Proportion of patients 

receiving influenza 

immunizationn

 100 100 100 97.0 100 100 N/A N/A

Source: VA. | GAO-14-646

Legend:  = higher percentage indicates higher quality of care;  = lower percentage indicates higher 

quality of care; N/A = no CMS-established performance standard available for this calendar year.

Note: Measures in this table are either current or former CMS End-Stage Renal Disease (ESRD) 

Quality Incentive Program measures. The measures are also currently or were previously endorsed 

by the National Quality Forum.

a

VA did not assess clinical performance of the Philadelphia pilot location in 2012 because it opened in 

October 2012.

b

VA did not assess clinical performance of the Cleveland pilot location in 2012 because it opened in 

July 2013.

c

In 2009, CMS established the ESRD Quality Incentive Program as a way to promote high-quality 

services in outpatient dialysis facilities treating patients with ESRD. While the principles guiding the 

ESRD Quality Incentive Program remain the same over time, the program’s specific quality measures 

and standards change from year to year. For calendar years 2012 and 2013, CMS defined the lowest 

achievement threshold for facility performance as the 15th percentile, the average performance 

standard as the 50th percentile, and the highest benchmark as the 90th percentile.

d

This measure calculates the proportion of dialysis patients that received the minimum recommended 

amount of dialysis.

e

This measure calculates the percentage of months in which the blood phosphorous levels—an 

indicator of potential bone disease—were measured for at least 97 percent of patients.

f

This measure calculates the percentage of months in which the blood calcium levels—an indicator of 

potential bone disease—were measured for at least 97 percent of patients.

g

This measure calculates the proportion of patients whose blood calcium levels—an indicator of 

potential bone disease—were on average above the recommended levels.

h

This measure calculates the proportion of patients whose hemoglobin levels were above the 

recommended levels.

i

This measure calculates the percentage of months in which the hemoglobin levels were measured for 

at least 99 percent of patients.

j

This measure calculates the proportion of patients whose iron levels were measured at least once 

every three months.

k

This measure calculates the proportion of patients that received dialysis via a catheter for 90 days or 

longer, which is associated with poorer patient outcomes.

l

This measure calculates the proportion of patients that received dialysis via an arterial venous fistula, 

which is associated with the most favorable health outcomes.

mThis measure calculates the proportion of patients with blood infections.

n

This measure calculates the proportion of patients who received influenza immunizations.
Appendix II: Results of Patient Satisfaction 

Review by the Department of Veterans Affairs

Page 17 GAO-14-646 VA Dialysis Pilot

This appendix provides results from the Department of Veterans Affairs’ 

(VA) review of patient satisfaction at its two more established Dialysis 

Pilot locations—Raleigh and Fayetteville, North Carolina. VA did not 

analyze patient satisfaction for the newer pilot locations—Philadelphia, 

Pennsylvania, and Cleveland, Ohio—because these pilot locations were 

either not open or not operating at full capacity during the periods of VA’s 

analysis.

• Table 3 provides results for VA’s review of the Raleigh, North 

Carolina, Dialysis Pilot location’s patient satisfaction.

• Table 4 provides results for VA’s review of the Fayetteville, North 

Carolina, Dialysis Pilot location’s patient satisfaction.

Table 3: Department of Veterans Affairs’ (VA) Results of Patient Satisfaction Surveys for the Raleigh, North Carolina, Dialysis 

Pilot Location, June 2011 through September 2013

June 2011 to October 2012b October 2012 to September 2013c

Measurea

Patient satisfaction 

scores for Raleigh 

pilot locationd

Patient satisfaction 

scores for non-VA 

dialysis providerse

Patient satisfaction 

scores for Raleigh 

pilot location

Patient satisfaction 

scores for non-VA 

dialysis providerse

Nephrologists’ communication and caring 3.85 3.62 3.69 3.08

Quality of dialysis center care and operations 3.63 3.52 3.59 3.16

Providing information to patients 0.79 0.81 0.77 0.72

Rating of nephrologists 2.83 2.77 2.79 2.50

Rating of dialysis center staff 2.67 2.69 2.79 2.50

Rating of dialysis center 2.64 2.62 2.68 3.00

Number of completed surveys 12 30 28 2 

Source: VA. | GAO-14-646

a

The score range for the providing information to patients measure is between 0 and 1, with 1 being 

the best possible score. The score range for all other measures is between 1 and 4, with 4 being the 

best possible score.

b

According to VA, patient satisfaction scores for this period did not include any adjustments for patient 

characteristics due to small sample sizes.

c

According to VA, patient satisfaction scores for this period did not include any adjustments for patient 

characteristics and should be interpreted with caution because sample sizes were too small to make 

significant comparisons. VA did not test for statistical significance for any measure during this time 

period.

d

The differences between the patient satisfaction scores for the Raleigh pilot location and veterans’ 

previous non-VA dialysis providers were not statistically significant for any of the six measures.

e

The non-VA patient satisfaction scores reflect how veterans rated the previous non-VA dialysis 

provider prior to joining the pilot location.

Appendix II: Results of Patient Satisfaction 

Review by the Department of Veterans 

Affairs
Appendix II: Results of Patient Satisfaction 

Review by the Department of Veterans Affairs

Page 18 GAO-14-646 VA Dialysis Pilot

Table 4: Department of Veterans Affairs’ (VA) Results of Patient Satisfaction Surveys for the Fayetteville, North Carolina, 

Dialysis Pilot Location, June 2011 through September 2013

June 2011 to October 2012b October 2012 to September 2013c

Measurea

Patient satisfaction 

scores for 

Fayetteville pilot 

location

Patient satisfaction 

scores for non-VA 

dialysis providerd

Patient satisfaction 

scores for 

Fayetteville pilot 

location

Patient satisfaction 

scores for non-VA 

dialysis providerd

Nephrologists’ communication and caring 3.62e 3.27e 3.59 NR

Quality of dialysis center care and operations 3.43 3.31 3.38 NR

Providing information to patients 0.70 0.74 0.78 NR

Rating of nephrologists 2.83e 2.52e 2.82 NR

Rating of dialysis center staff 2.63 2.42 2.82 NR

Rating of dialysis center 2.67 2.52 2.80 NR

Number of completed surveys 24 38 15 1 

Source: VA. | GAO-14-646

Legend: NR = Survey response was not recorded to protect the anonymity of the one veteran who 

completed it.

a

The score range for the providing information to patients measure is between 0 and 1, with 1 being 

the best possible score. The score range for all other measures is between 1 and 4, with 4 being the 

best possible score.

b

According to VA, patient satisfaction scores for this period did not include any adjustments for patient 

characteristics due to small sample sizes.

c

According to VA, patient satisfaction scores for this period did not include any adjustments for patient 

characteristics and should be interpreted with caution because sample sizes were too small to make 

significant comparisons. VA did not test for statistical significance for any measure during this time 

period.

d

The non-VA patient satisfaction scores reflect how veterans rated the previous non-VA dialysis 

provider prior to joining the pilot location.

e

VA’s analysis found that the difference between the Fayetteville pilot location and non-VA dialysis 

provider scores were statistically significant.
Appendix III: Results of Access to Care Review 

by the Department of Veterans Affairs

Page 19 GAO-14-646 VA Dialysis Pilot

This appendix provides results from the Department of Veterans Affairs’ 

(VA) review of veterans’ access to care at its two more established 

Dialysis Pilot locations—Raleigh and Fayetteville, North Carolina. In 

calendar year 2012, VA did not analyze veterans’ access to care for the 

newer pilot locations—Philadelphia, Pennsylvania, and Cleveland, Ohio—

because these pilot locations were either not open or not operating at full 

capacity during the periods of VA’s analysis.

• Table 5 provides results for VA’s review of veterans’ access to care at 

the Raleigh and Fayetteville pilot locations for calendar year 2012.

• Table 6 provides results for VA’s review of veterans’ access to care at 

all four pilot locations for calendar year 2013.

Table 5: Department of Veterans Affairs’ (VA) Results of Veterans’ Access to Care Review for the Raleigh and Fayetteville, 

North Carolina, Dialysis Pilot Locations, Calendar Year 2012

Pilot location

Performance measure Raleigh, NC Fayetteville, NC VA performance standard

Average travel distances for veterans to pilot location 17.7 miles 7.5 miles 30 miles

Source: VA. | GAO-14-646

Table 6: Department of Veterans Affairs’ (VA) Results of Veterans’ Access to Care Review for the Dialysis Pilot Locations, 

Calendar Year 2013

Pilot location

Performance measure Raleigh, NC Fayetteville, NC Philadelphia, PA Cleveland, OH

VA performance 

standard

Percentage of veterans who traveled 

30 miles or less from their residence to 

the pilot location where they received 

care 87 98 100 100 100

Source: VA. | GAO-14-646

Appendix III: Results of Access to Care 

Review by the Department of Veterans 

Affairs
Appendix IV: Results of Clinical Quality Review 

by the Evaluation Contractor

Page 20 GAO-14-646 VA Dialysis Pilot

This appendix provides results from the evaluation contractor’s review of 

clinical quality for three of the Department of Veterans Affairs’ (VA) 

Dialysis Pilot locations in Raleigh and Fayetteville, North Carolina, and 

Philadelphia, Pennsylvania. VA contracted with a leading university 

research center to evaluate the Dialysis Pilot. The evaluation contractor’s 

review of the Philadelphia Dialysis Pilot location was limited due to 

operational difficulties at the pilot location in calendar year 2012. The 

evaluation contractor did not complete a review of the Cleveland, Ohio, 

Dialysis Pilot location due to insufficient data resulting from the delayed 

opening of this pilot location.

• Table 7 provides results for the evaluation contractor’s review of the 

Raleigh and Fayetteville, North Carolina, Dialysis Pilot locations’ 

clinical quality.

• Table 8 provides results for the evaluation contractor’s review of the 

Philadelphia, Pennsylvania, Dialysis Pilot location’s clinical quality.

Appendix IV: Results of Clinical Quality 

Review by the Evaluation Contractor
Appendix IV: Results of Clinical Quality Review 

by the Evaluation Contractor

Page 21 GAO-14-646 VA Dialysis Pilot

Table 7: Evaluation Contractor’s 2013 Dialysis Facility Report Clinical Quality Measures for the Raleigh and Fayetteville 

Department of Veterans Affairs (VA) Dialysis Pilot Locations Compared to North Carolina and U.S. Averages, Calendar Years 

2009 to 2012

Dialysis pilot location

Clinical quality measure Raleigh Fayetteville

North 

Carolina U.S.

Standardized mortality ratioa 0.24b 0.83c 1.02 1.00

Standardized hospitalization ratio for daysd 0.52c 1.16b 0.87 1.00

Standardized hospitalization ratio for admissionsd 0.47c 0.54c 0.91 1.00

Standardized hospitalization ratio for emergency department visitsd 0.75c 0.85c 1.04 1.00

Hospitalized with septicemiae 12.50% 12.60% 10.20% 10.60%

Transplant waitlistf 19.40%c 11.40%b 20.10% 24.30%

Influenza vaccinationg 93.60% 85.20% 75.50% 69.70%

Urea reduction ratio >65%h 95.80% 89.80% 98.40% 98.40%

Arterial venous fistulai 54.10% 76.00% 63.20% 65.30%

Catheterj 3.50% 13.50% 6.40% 7.60%

Average hemoglobink 10.10g/dL 10.50g/dL 10.60 g/dL 10.60 g/dL

Source: Evaluation contractor. | GAO-14-646

Legend: g/dL = grams per deciliter.

Notes: VA contracted with a leading university research center to evaluate the Dialysis Pilot. This 

table includes results from the Dialysis Facility Reports (DFR) produced by the evaluation contractor 

for the Raleigh and Fayetteville pilot locations in calendar year 2013. DFRs are standard reports 

produced by the evaluation contractor for CMS for each of the more than 6,000 private sector dialysis 

facilities nationwide. These DFRs include information on several clinical quality measures. Each 

clinical quality measure included in the DFRs is analyzed for a unique reporting period—the most 

common of which was from when the pilot location opened through calendar year 2012. The DFRs 

only specify whether the difference between the results of VA pilot location and non-VA providers is 

statistically significant for some of the quality of care measures.

a

The standardized mortality ratio compares the observed death rate in the facility to the death rate 

that was expected based on national death rates during that year for patients with the same 

characteristics as those in the facility. The standardized mortality ratio accounts for factors such as 

patient age, race, ethnicity, sex, and duration of end-stage renal disease. For this measure, a lower 

result indicates higher quality of care.

b

According to the DFR produced by the evaluation contractor, the difference between this figure and 

the national figure was statistically significant.

c

According to the DFR produced by the evaluation contractor, the difference between this figure and 

the national figure was not statistically significant.

d

This measure compares the facility’s observed number of days hospitalized, hospital admissions, or 

emergency department visits to the expected number, based on national averages. For this measure, 

a lower result indicates higher quality of care.

e

This measure represents the percentage of dialysis patients whose hospitalization diagnoses 

included septicemia—a serious, life-threatening infection. For this measure, a lower percentage 

indicates higher quality of care.

f

The percentage of all dialysis patients under age 70 that were being treated on December 31 in a 

facility that were on the transplant waitlist.

g

The percentage of dialysis patients being treated on December 31 that received the influenza 

vaccination. For this measure, a higher percentage indicates higher quality of care.
Appendix IV: Results of Clinical Quality Review 

by the Evaluation Contractor

Page 22 GAO-14-646 VA Dialysis Pilot

h

This measure represents the percentage of patients with a urea reduction ratio that was 65 percent 

or more. The urea reduction ratio is one measure of how effectively a dialysis treatment removed 

waste products from the body and is commonly expressed as a percentage. For this measure, a 

higher percentage indicates higher quality of care.

i

Arterial venous fistula is considered the best long-term access method for hemodialysis because it 

has a lower complication rate than other types of access. This measure calculates the percentage of 

patients that used an arterial venous fistula for their last treatment of the month. For this measure, a 

higher percentage indicates higher quality of care.

j

Catheters are alternative access methods for hemodialysis patients that are not ideal for permanent 

use because they increase the risk of infection. This measure reports the percentage of patients in 

which a catheter was used for their last treatment of the month, was the only means of vascular 

access, and was in place for at least 90 days prior to treatment. For this measure, a lower percentage 

indicates higher quality of care.

k

Anemia—a disease among people whose blood is low in red blood cells—is common in people with 

kidney disease. One of the common causes of anemia includes blood loss from hemodialysis and low 

levels of iron. Iron helps red blood cells make hemoglobin. Studies have shown that raising the 

hemoglobin above 12 g/dL in people who have kidney disease increases the risk of heart attack, 

heart failure, and stroke.

Table 8: Evaluation Contractor’s 2013 Dialysis Facility Report Clinical Quality 

Measures for the Philadelphia Department of Veterans Affairs (VA) Dialysis Pilot 

Location Compared to Pennsylvania and U.S. Averages, Calendar Years 2009 to 

2012

Clinical quality measure

Philadelphia 

pilot location Pennsylvania U.S.

Hospitalized with septicemiaa 0.00% 11.90% 10.60%

Influenza vaccinationb 66.70% 66.90% 69.70%

Urea reduction ratio >65%c 100% 98.70% 98.40%

Average hemoglobind 9.80g/dL 10.60g/dL 10.60g/dL

Source: Evaluation contractor. | GAO-14-646

Legend: g/dL = grams per deciliter.

Note: VA contracted with a leading university research center to evaluate the Dialysis Pilot. This table 

includes results from the Dialysis Facility Reports (DFR) produced by the evaluation contractor for the 

Philadelphia pilot location in calendar year 2013. DFRs are standard reports produced by the 

evaluation contractor for CMS for each of the more than 6,000 private sector dialysis facilities 

nationwide. These DFRs include information on several clinical quality measures. Each clinical quality 

measure included in the DFR is analyzed for a unique reporting period—the most common of which 

was from when the pilot location opened through calendar year 2012.

a

This measure represents the percentage of dialysis patients whose hospitalization diagnoses 

included septicemia—a serious, life-threatening infection. For this measure, a lower percentage 

indicates higher quality of care.

b

This measure represents the percentage of dialysis patients being treated on December 31 that 

received the influenza vaccination. For this measure, a higher percentage indicates higher quality of 

care.

c

This measure represents the percentage of patients with a urea reduction ratio that was 65 percent 

or more. The urea reduction ratio is one measure of how effectively a dialysis treatment removed 

waste products from the body and is commonly expressed as a percentage. For this measure, a 

higher percentage indicates higher quality of care.
Appendix IV: Results of Clinical Quality Review 

by the Evaluation Contractor

Page 23 GAO-14-646 VA Dialysis Pilot

d

Anemia—a disease among people whose blood is low in red blood cells—is common in people with 

kidney disease. One of the common causes of anemia includes blood loss from hemodialysis and low 

levels of iron. Iron helps red blood cells make hemoglobin. Studies have shown that raising the 

hemoglobin above 12 g/dL in people who have kidney disease increases the risk of heart attack, 

heart failure, and stroke. 
Appendix V: Results of Treatment Cost 

Reviews by the Department of Veterans Affairs 

and the Evaluation Contractor

Page 24 GAO-14-646 VA Dialysis Pilot

Table 9 provides results from the Department of Veterans Affairs’ (VA) 

and the evaluation contractor’s reviews of the average cost per treatment 

for Dialysis Pilot locations in Raleigh and Fayetteville, North Carolina, 

Philadelphia, Pennsylvania, and Cleveland, Ohio, and non-VA dialysis 

providers for calendar year 2012 and calendar year 2013. VA contracted 

with a leading university research center to evaluate the Dialysis Pilot.

Table 9: Average Cost Per Treatment for Department of Veterans Affairs (VA) Dialysis Pilot Locations and Non-VA Dialysis 

Providers as Calculated by VA and the Evaluation Contractor, Calendar Years 2012 and 2013

2012 2013

Data source Pilot location

Pilot location 

average cost 

per treatment

Non-VA dialysis 

provider average 

cost per treatment

Pilot location 

average cost 

per treatment

Non-VA dialysis 

provider average 

cost per treatment

VA Raleigh, NC $287a 318b 266c 350b,d

Fayetteville, NC 295a 318b 296c 350b,d

Philadelphia, PAe ∅ ∅ 766c,f 348b,d

Cleveland, OHg ∅ ∅ 636c,f 362b,d

Evaluation contractor Raleigh, NC 291h 324i N/A N/A

Fayetteville, NC 310h 324i N/A N/A

Philadelphia, PAe ∅ ∅ N/A N/A

Cleveland, OHg ∅ ∅ N/A N/A

Source: VA and evaluation contractor. | GAO-14-646

Legend: ∅ = No data existed because the pilot location was not open for all or a majority of 2012; 

N/A = No data were available at the time we issued our report.

Note: VA contracted with a leading university research center to evaluate the Dialysis Pilot. Both VA 

and the evaluation contractor calculated the average cost per treatment for each pilot location by 

dividing the pilot location’s total health care costs by the total number of treatments. Total health care 

costs included, at a minimum, the following costs from Centers for Medicare & Medicaid Services 

(CMS) standard dialysis facility reports: capital-related costs on buildings and fixtures, operation and 

maintenance costs, housekeeping costs, machine capital-related or rental and maintenance costs, 

salaries and benefits for direct patient care, supply costs, laboratory costs, administrative and general 

costs, drug costs, and medical record costs. Additional costs specific to certain figures are detailed 

below.

a

For calendar year 2012, VA excluded costs from services furnished to individual patients—known as 

physician professional services—from its nephrologist costs, as these costs are billed separately and 

therefore excluded from CMS’s facility cost methodology. Additionally, administrative overhead costs 

from Veterans Integrated Service Network (VISN) and VA Central Office staff were not included in 

calendar year 2012.

b

To calculate non-VA dialysis providers’ average cost per treatment, VA created a composite figure 

using the average per treatment contract rate from the two largest non-VA dialysis providers in each 

pilot location’s VISN, a per treatment VA local claims processing fee, a per treatment VA physician 

cost, and a per treatment VA financial administrative cost.

c

For calendar year 2013, VA included costs from services furnished to individual patients—known as 

physician professional services—in its nephrologist costs. VA also included in calendar year 2013 per 

treatment costs for VISN and VA Central Office overhead and travel benefits paid to veterans being 

treated at the pilot locations. These changes were made in order to more closely align VA’s 

calculations of pilot location and non-VA dialysis provider costs.

Appendix V: Results of Treatment Cost 

Reviews by the Department of Veterans 

Affairs and the Evaluation Contractor
Appendix V: Results of Treatment Cost 

Reviews by the Department of Veterans Affairs 

and the Evaluation Contractor

Page 25 GAO-14-646 VA Dialysis Pilot

d

This figure includes the per treatment cost for VA physician cost for nephrology oversight.

e

There were no data for the Philadelphia pilot location for calendar year 2012 because it did not open 

until October 2012.

f

According to VA, the average cost per treatment for dialysis at both the Philadelphia and Cleveland 

pilot locations was affected by these pilot locations not operating at or near full capacity for a portion 

of calendar year 2013.

g

There were no data for the Cleveland pilot location for calendar year 2012 because it did not open 

until July 2013.

h

This figure includes per treatment costs for nephrology oversight and travel benefits paid to veterans 

being treated at the pilot locations.

i

To determine the non-VA dialysis provider average cost per treatment in calendar year 2012, the 

evaluation contractor created a composite figure that included the weighted average of the contract 

per treatment prices for the three non-VA dialysis providers with the largest market share in the VISN 

where the pilots are located, the VA per treatment cost of travel benefits paid to veterans being 

treated at the pilot locations, and the VA per treatment nephrology oversight costs.
Appendix VI: Comments from the Department 

of Veterans Affairs

Page 26 GAO-14-646 VA Dialysis Pilot

Appendix VI: Comments from the 

Department of Veterans Affairs 
Appendix VI: Comments from the Department 

of Veterans Affairs

Page 27 GAO-14-646 VA Dialysis Pilot
Appendix VII: GAO Contact and Staff 

Acknowledgments

Page 28 GAO-14-646 VA Dialysis Pilot

Randall B. Williamson, (202) 512-7114 or williamsonr@gao.gov

In addition to the contact named above, Marcia A. Mann, Assistant 

Director; Cathleen Hamann; Katherine Nicole Laubacher; 

Said Sariolghalam; and Teresa Tam made key contributions to 

this report. Jacquelyn Hamilton provided legal support.

Appendix VII: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(291174)
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