New Findings from Washington University Yields New Data on Managed Care (The Fiscal Impact of the Medicare Secondary Payer Act for ESRD): Managed Care

2026 APR 02 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Investigators publish new report on Managed Care. According to news reporting originating in St. Louis, Missouri, by NewsRx journalists, research stated, “The Medicare Secondary Payer Act modestly reduced federal dialysis spending when accounting for the effect on forgone tax revenue. The policy saved money only when private prices were <3.05 times Medicare rates.”

The news reporters obtained a quote from the research from Washington University, “Medicare assuming primary payer status for all dialysis care would have saved the government $1 billion annually. The Medicare Secondary Payer Act (MSPA) requires that employer group health plans serve as the primary payer for individuals with ESRD for 30 months, with Medicare serving as the secondary payer. After 30 months, Medicare becomes the primary payer. The net fiscal consequences of this policy for the federal government are unknown. We estimated the net federal fiscal effect of the MSPA for patients receiving dialysis and identified the private-to-Medicare spending ratio ( R ) at which the policy breaks even, accounting for the forgone tax revenue associated with tax-deductible private health care spending. We conducted an economic evaluation using published data on spending and utilization for ESRD, private-to-Medicare spending ratios for dialysis, dialysis chain financials, and federal tax parameters. Primary outcomes were expressed per privately insured dialysis patient-year, with a national aggregate calculated from incident ESRD counts. At current tax rates, the break-even spending ratio was R<3.05. Using central price ratio estimates of R =2.99, the MSPA reduced federal outlays by $2217 per privately insured dialysis patient-year, or $75 million annually, relative to Medicare being the primary payer for dialysis patients without a coordination period. Ignoring the effect of the MSPA on tax revenue overstated the estimated savings from the MSPA by 4500%. Altering the MSPA so Medicare became the primary payer for dialysis treatments while retaining the coordination period for other services for dialysis patients would have increased federal savings to $29,981 per privately insured dialysis patient-year or $1 billion annually.”

According to the news reporters, the research concluded: “Under current prices and tax rates, the MSPA modestly reduced federal spending, while counterfactual policy changes would result in larger savings.”

This research has been peer-reviewed.

For more information on this research see: The Fiscal Impact of the Medicare Secondary Payer Act for ESRD. Journal of the American Society of Nephrology, 2026. Journal of the American Society of Nephrology can be contacted at: Amer Soc Nephrology, 1401 H Street NW, Suite 900, Washington, Dc 20005, United States.

Our news correspondents report that additional information may be obtained by contacting Ryan C. McDevitt, Washington University Olin School of Business and School of Public Health, St. Louis, Missouri.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1681/asn.0000001028. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

The publisher of the Journal of the American Society of Nephrology can be contacted at: Amer Soc Nephrology, 1401 H Street NW, Suite 900, Washington, Dc 20005, United States.

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