ESRD PPS Rates, Other Items Change for 2012

The Centers for Medicare & Medicaid Services (CMS) is implementing new rates for payment, changes to the outlier policy, and consolidated billing requirements. The extensive announcement, Change Request 7617, can be found on the CMS website.  Changes also include the payment and management of specific services.

The End Stage Renal Disease Prospective Payment System (ESRD PPS) is in its second year of a four-year transition budget neutral system. CMS published an interim final rule April 6, 2011 (76 FR 18930) entitled, “Changes in the End-Stage Renal Disease Prospective Payment System Transition Budget Neutrality Adjustment,” which revised the ESRD transition budget neutrality adjustment from a 3.1 percent reduction to 0 percent for renal dialysis services furnished April 1, 2011 through Dec. 31, 2011. For 2012, CMS will continue to apply a 0 percent reduction to both the blended payments made under the transition and payments made under the 100 percent ESRD PPS for renal dialysis services furnished Jan. 1, 2012 through Dec. 31, 2012.

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For 2012, CMS retains the Body Surface Area (BSA) Payment case-mix adjustment factor for adult patients. However, CMS is adjusting the national average used to the compute the BSA for the composite rate portion of the blended payment from 1.84 to 1.87. CMS says it will use the 1.87 national average for subsequent years, as well.

For 2012, CMS will make the following changes:

  1. The 2011 Part D per treatment add-on amount (that is, $0.49) will be added to the 2011 composite rate in order to update the Part D amount for 2012 ($138.53 + $0.49 = $139.02).
  2. The composite rate (with the addition of the 2011 Part D per treatment add-on amount of $0.49) will be updated by the ESRDB market basket minus a productivity adjustment, which results in an increase of 2.1 percent ($139.02 x 1.021 = $141.94). The unadjusted composite rate for 2012 is $141.94.
  3. The drug add-on percentage will be reduced from 14.7 to 14.3 as a result of the increase to the composite rate for 2012.
  4. The wage index adjustment will be updated to reflect the latest available wage data. The wage index is available on the CMS website.
  5. CMS is including alteplase and other thrombolytic drugs and biologicals used for access management purposes as part of the composite rate drugs. These drugs will not be paid separately under the composite rate portion of the ESRD blended payment amount for claims with dates of service on or after Jan. 1, 2012.
  6. The wage index floor will be reduced from 0.6000 to 0.5500; then, after applying a budget neutrality adjustment of 1.002830, the wage index floor will be 0.5520.
  7. CMS will use the latest national average (that is, 1.87) to calculate the body surface area (BSA) adjustment for 2012 and subsequent years. This indicates that the national average of 1.87 will be used for computing the BSA under the basic case-mix adjusted composite payment system portion of the blend during the transition and under the ESRD PPS.
  8. CMS will allow an antibiotic when used in the home to treat an infection of the catheter site or peritonitis associated with peritoneal dialysis to be separately billable under the composite rate portion of the ESRD blended payment amount for claims with dates of service on or after Jan. 1, 2012.

Outlier Rule and Payment Updates

Several changes are in store for the ESRD PPS outlier policy for 2012. Medicare regulations defines ESRD outlier services as those service that were or would have been considered separately paid under Medicare Part B, or would have been separately payable drugs under Medicare Part D prior to Jan. 1, 2011.

Because of the number of Part B drugs and biologicals that may be considered ESRD-related eligible outlier service drugs, effective Jan. 1, 2012, CMS is eliminating the issuance of a list of former separately billable Part B drugs and biologicals that would be eligible for outlier payments.

For 2012, CMS is making two modifications to the computation of the separately billable Medicare Allowable Payment (MAP) amounts used to calculate outlier payments.

  1. Subsequent to the publication of the 2011 ESRD PPS final rule, CMS’ clinical review of the 2007 ESRD claims used to develop the ESRD PPS revealed that ESRD facilities routinely used alteplase and other thrombolytic drugs for access management purposes. Drugs and biologicals that are used as a substitute for any composite rate drug or are used to accomplish the same effect, are covered under the composite rate. Because outlier payments are restricted under 42CFR413.237(a) to those items or services that were or would have been considered separately billable prior to Jan. 1, 2011, CMS has recalculated the average outlier services MAP amounts to exclude these composite rate drugs.
  2. Subsequent to the publication of the 2011 ESRD PPS final rule, CMS learned that testosterone and anabolic steroids may be used for anemia management. Because drugs used for anemia management in ESRD patients were or would have been considered separately billable under Medicare Part B, these drugs would be outlier eligible drugs under 42CFR413.237(a)(1). Consequently, CMS has recomputed the outlier service MAP amounts to include these drugs.

To compute the outlier payment for laboratory tests, the 50 percent rule is required for the tests that comprise the Automated Multi-Channel Chemistry (AMCC). The AMCC panel tests are identified in Pub. 100-02, chapter 11, section 30.2.2 and an explanation of the 50 percent rule can be found in Pub. 100-04, chapter 16, section 40.6. In the interest of administrative simplification, CMS is excluding the AMCC laboratory tests from the definition of eligible outlier services and from the computation of outlier payments. The 50 percent rule would continue to apply to AMCC laboratory tests for classification as either composite rate or separately billable for the purpose of computing the composite rate portion of the ESRD PPS blended payment for ESRD facilities that are receiving payments under the ESRD PPS transition.

Prior to the ESRD PPS, antibiotics when used at home by a patient to treat an infection of the catheter site or peritonitis associated with peritoneal dialysis were considered to be composite rate drugs and when used for facility inpatients they were considered to be separately payable. For 2011, antibiotics used by home patients were not eligible for outlier payment. CMS does not believe that it is appropriate to have this distinction between how antibiotics are classified as composite rate drugs versus drugs that are separately payable. CMS is allowing antibiotics when used in the home to treat an infection of the catheter site or peritonitis associated with peritoneal dialysis to be separately billable under the composite rate portion of the ESRD blended payment amount and eligible for outlier payment for claims with dates of service on or after Jan. 1, 2012.

For 2012, CMS will also make the following changes:

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  1. The ESRD PPS base rate will be updated by the ESRDB market basket minus a productivity adjustment which results in an increase of 2.1 percent ($229.63 x 1.021 = $234.45). The unadjusted ESRD PPS base rate for 2012 is $234.45.
  2. The wage index adjustment will be updated to reflect the latest available wage data.
  3. The wage index floor will be reduced from 0.6000 to 0.5500. There will be no application of a budget neutrality adjustment to the wage index floor for full ESRD PPS payments nor the ESRD PPS portion of the blended payment under the transition.
  4. The wage index budget neutrality adjustment factor will be applied to the ESRD PPS base rate subsequent to the application of the ESRDB market basket minus productivity adjustment ($234.45 x 1.001520 = $234.81).

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