Table 2.

Economic Model a De Novo Home of a Home-First Health System Owned Dialysis Program

	Year 1	Year 2	Year 3	Year 4	Year 5	Total
Total reimbursement	$2,484,370	$2,547,586	$2,813,022	$2,951,802	$3,099,476	$13,896,256
Total Medicare	$1,016,156	$1,079,372	$1,104,486	$1,197,401	$1,211,772
Total commercial	$826,105	$826,105	$944,120	$944,120	$1,062,135
Total Medicare Advantage	$642,109	$642,109	$764,416	$810,281	$825,569
Total costs	$1,551,550	$1,817,734	$1,946,838	$2,023,222	$2,170,260	$9,509,604
Total annual staffing	$327,500	$372,500	$390,750	$416,500	$412,500
Total equipment	$288,770	$302,140	$328,770	$355,510	$368,770
Total service	–	$164,900	$172,550	$186,150	$201,450
Total supplies	$935,280	$978,194	$1,054,768	$1,065,062	$1,187,540
Total operating income	$932,820	$729,852	$857,842	$836,204	$921,566	$4,278,284

Assuming the average health system has 50 dialysis patients needing maintenance dialysis and a primary payer mix of 20% commercial at 2.5 times the Medicare rate, 50% Original Medicare, and 30% MA at 1.14 times the Medicare rate, we estimate a health system’s dialysis treatment reimbursement could be $13.9 million for over 5 years. This includes CRA TPNIES payments in years 1-2 assuming a capital equipment MAC determined price of $42,500 depreciated over 5 years. Analyzing Medicare 2018 dialysis facility cost report data as a baseline and adjusting for assumptions such as the reduced space required for home therapies, investment in training clinicians to support patients, and investment in new capital equipment at a cost of $42,500 depreciated over 5 years, we estimate $9.5 million in total health system treatment costs for this same population over 5 years, leading to a potential net operating income of $4.3 million for clinics with a home-first approach to dialysis. CRA TPNIES, Capital Related Assets Transitional Add-on Payment for New and Innovative Equipment and Supplies; MA, Medicare Advantage; MAC, Medicare Administrative Contractor.