Office of Inspector General to Focus Enforcement on Three Areas of End-Stage Renal Disease Care

October 24, 2012

The Office of the Inspector General (OIG) recently released its Work Plan for the fiscal year 2013 (Work Plan), in which the OIG summarizes new and ongoing reviews and activities that it plans to pursue with respect to the Department of Health and Human Services programs and operations during 2013 and beyond.

The OIG has decided to focus its attention on three main areas of end-stage renal disease (ESRD) care:

  1. Medicare Oversight of Dialysis Facilities. The OIG will assess Medicare’s oversight of facilities that provide outpatient maintenance dialysis services to Medicare beneficiaries with ESRD. Particularly, the OIG will focus on the oversight function’s performance and the complaint processes of dialysis facilities.
  2. Bundled Prospective Payment System for Renal Dialysis Services. The OIG will review Medicare pricing and utilization related to renal dialysis services under the new bundled ESRD prospective payment system (PPS), which began in 2011. The ESRD PPS has replaced the basic case-mix adjustment composite payment system and the methodologies for reimbursement of separately billable outpatient ESRD services.
  3. Payments for ESRD Drugs Under the Bundled Rate System. The OIG will review payments for ESRD drugs under the new bundled rate system. The OIG will compare facilities’ acquisition cost for certain drugs to inflation-adjusted cost estimates and determine how costs for the drugs have changed since the last OIG review. CMS has based the bundled price updates of ESRD care on wage and price proxy data from the Bureau of Labor Statistics, but previous OIG reviews found the Bureau did not accurately measure the changes in facilities’ acquisition costs for ESRD drugs.