On November 6, 2015, CMS published its final rule to update the Medicare end-stage renal disease (ESRD) prospective payment system (PPS) for calendar year (CY) 2016. CMS estimates that the rule will increase overall Medicare payments to ESRD facilities by $10 million (0.2%) compared to CY 2015 payments, although the final CY 2016 ESRD PPS base rate of $230.39 is a reduction from the CY 2015 base rate of $239.43.

Among other things, the final rule: modifies case mix adjustments; revises low-volume payment adjustment eligibility criteria; updates outlier Medicare Allowable Payment and fixed dollar loss amounts; and updates the ESRD Quality Incentive Program (QIP) for payment years 2017 through 2019. Furthermore, in conformance with the Protecting Access to Medicare Act of 2014 (PAMA), the final rule establishes a “drug designation process” for: (1) determining when a product would no longer be considered an oral-only drug; and (2) including new injectable and intravenous products into the bundled payment under the ESRD PPS (under current statutory provisions, payment for oral-only ESRD drugs cannot be made under the ESRD PPS prior to January 1, 2025).