November 25, 2013
On Friday, Nov. 22, 2013, the Centers for Medicare and Medicaid Services (CMS) issued a final rule (“Final Rule”) regarding the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for renal dialysis services furnished to beneficiaries on or after Jan. 1, 2014, and also regarding the ESRD Quality Incentive Program (QIP).
The Final Rule sets a base reimbursement rate of $239.02 per dialysis treatment for renal dialysis services provided in calendar year (CY) 2014. The current per-treatment base rate is $240.36. The revision to the CY 2014 base rate reflects (a) a bundled market basket increase of 3.2 percent, reduced by an estimated multifactor productivity adjustment of 0.4 percent; (b) the application of a wage index budget neutrality factor and a home dialysis training add-on budget neutrality factor; and (c) the application of a portion of a mandated reduction in reimbursement under the ESRD PPS to account for a decrease in the utilization of ESRD-related drugs and biologicals.
Section 632(a) of the American Taxpayer Relief Act of 2012 (ATRA) requires the Secretary of the U.S. Department of Health and Human Services to make reductions to the ESRD PPS base rate to reflect the Secretary’s estimate of the change in the utilization of ESRD-related drugs and biologicals, by comparing per-patient utilization data from 2007 with such data from 2012. CMS determined that the total adjustment will result in an overall 12 percent reduction in Medicare payments over a period of three to four years. In the Final Rule, CMS explains that it adopted an approach to apportioning the drug utilization adjustment in CY 2014 and CY 2015 in a manner that results in an “offset to payment rate updates and other impacts that would otherwise cause a change in average payments to ESRD facilities, thereby creating an overall impact of zero percent for ESRD facilities from the previous year’s payments.” For CY 2016, CMS will evaluate whether to apply the balance of the adjustment over one or two years, after it conducts an analysis of case-mix adjustments required by Section 632(c) of ATRA and the inclusion of oral-only ESRD-related drugs and biologicals required by Section 632(b) of ATRA.
In addition to revising the CY 2014 ESRD PPS base rate, CMS’s Final Rule also:
The Final Rule will be published in the Federal Register on Dec. 2, 2013. A display copy of the Final Rule is available here.