CMS Proposes Single Payment for ESRD Services
The Centers for Medicare & Medicaid Services (CMS) proposed Sept. 15 a new prospective payment system (PPS) for facilities and providers that furnish renal dialysis services to Medicare beneficiaries who have end-stage renal disease (ESRD).
The proposed ESRD PPS would replace the current basic case-mix adjusted composite payment system and methodologies for the reimbursement of separately billable outpatient ESRD services with a single payment system. The proposed rule establishes a base bundled payment rate of $198.64 for all services related to a dialysis session, including services in the current composite rate and items that are billed separately.
This does not include physician’s services. It does, however, include all drugs and biologicals (excluding vaccines) furnished to individuals by any administration method for the treatment of ESRD formerly payable under Medicare Part B or D. Diagnostic laboratory tests would also be included in the bundled payment, as well as supplies (syringes, tubing, and blood products), training, and more.
The proposed base rate was derived from 2007 claims data for both composite rate and separately billable services and updated to reflect projected 2011 prices. It would be adjusted for case mix factors such as the patient’s age, gender, body size, and time on dialysis. A special case-mix adjustment would apply to pediatric patients. Additional adjustments to the payment rate would be made for specific conditions, or co-morbidities that have a significant impact on a course of treatment.
The base rate would also be adjusted to reflect geographic differences in labor costs. Additionally, CMS is proposing to provide an adjustment for low-volume facilities, as well as an outlier policy that would make an adjustment for particularly expensive cases.
Section 153(a)(1) of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) requires the composite payment rates be increased by 1.0 percent effective for services furnished on or after Jan. 1, 2009 and before Jan. 1, 2010, and subsequently increased by 1.0 percent for services furnished on or after Jan. 1, 2010.
CMS also states in the proposed rule that a 1.0 percent increase to the composite rate is expected to be published in the 2010 Physician Fee Schedule (PFS) final rule.
Quality Incentive Program
The ESRD PPS proposed rule outlines a conceptual model describing various components of an ESRD quality incentive program (QIP) that CMS is considering in a future proposed rule with the exception of one. The ESRD PPS proposed rule initially adopts three measures, two of which assess anemia management and one which assesses hemodialysis adequacy.
Failure to report on these quality measures would result in up to 2 percent payment reductions to providers for renal dialysis services furnished on or after Jan. 1, 2012.
Schedule of Events
CMS expects to publish the final rule in 2010. The new payment system would apply to dialysis services furnished to Medicare beneficiaries on or after Jan. 1, 2011. ESRD facilites may make a one-time election before Jan. 1, 2011 to be paid under the ESRD PPS and not go through the four-year transition period, which ends Jan. 1, 2014.
CMS is accepting public comments on the proposed rule through Nov. 16. CMS will host a Town Hall meeting on the proposed ESRD PPS on Oct. 23, 9 a.m. to 12 p.m. EDT at CMS headquarters in Baltimore, Md. To attend, register online by 5 p.m. on Oct. 2. For more information on the meeting, see the display copy of the notice.