On Nov. 9, 2012, the Centers for Medicare and Medicaid Services (CMS) published a final rule (Final Rule), 77 F.R. 67450, regarding the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS), the ESRD Quality Incentive Program (QIP) and bad debt reductions for all Medicare providers. In the Final Rule, CMS:

  • Establishes the ESRD PPS base rate for calendar year (CY) 2013 at $240.36, based upon the ESRD bundled market basket update of 2.9% less a multi-factor productivity adjustment of .6% and a wage index budget-neutrality factor of 1.000613. The 2.3% adjustment will also apply to the base composite rate for dialysis facilities that are reimbursed under the blended payment during the transition period. The composite base rate for CY 2013 will be $145.20.
  • Changes the outlier policy for CY 2013 by updating the fixed-dollar loss and Medicare Allowable Payment (MAP) amounts. For pediatric patients, the fixed-dollar loss amount will decrease to $47.32 and the MAP amount will decrease to $41.39. For adult patients, the fixed-dollar loss amount will decrease to $110.22 and the MAP to $59.42. The changes in the outlier policy will allow more cases to qualify for outlier payments.
  • Applies the transition neutrality adjustment methodology used in CY 2011, which yields a 0.1% transition budget neutrality adjustment for both the blended payments and the ESRD PPS payments for CY 2013.
  • Eliminates the restriction in the provision of daptomycin to allow ESRD facilities to receive separate payment for the drug by placing the AY modifier in a claim when furnished to treat a non-ESRD related condition.
  • Excludes alteplase and other thrombolytics from separate payment under the composite rate portion of the blended payment for those ESRD facilities that are receiving a blended payment under the ESRD PPS transition.
  • Sets forth requirements for the ESRD QIP in payment year (PY) 2015 by continuing, and in some cases, expanding a number of the PY 2014 ESRD QIP measures, adding four of the five proposed new measures and establishing performance standards for each measure. The Final Rule establishes CY 2013 as the performance period for the PY 2015 ESRD QIP. The Final Rule also establishes performance standards for each measure and adopts scoring and payment reduction methodologies similar to those adopted for the PY 2014 ESRD QIP. Under the Final Rule, the PY 2015 QIP will consist of the following measures:
    • Anemia Management. In addition to the PY 2014 measure of the rate of anemia in patients, the Final Rule adds an anemia reporting requirement in PY 2015. The anemia management measures consist of:
      • The rate of patients with a hemoglobin greater than 12 g/dL; and
      • An anemia-management reporting measure that requires a dialysis facility to report a hemoglobin or hematocrit value and, as applicable, an erythropoiesis-stimulating agent dosage for all applicable Medicare patients at least once per month via Medicare claims.
    • Dialysis Adequacy. CMS adopted Kt/V measures to replace the URR measure in place for PY 2014. The new dialysis adequacy measures consist of Kt/V values for adult hemodialysis and peritoneal patients as well as for pediatric hemodialysis patients. CMS noted that it is currently working with stakeholders to develop a peritoneal dialysis adequacy measure.
    • Vascular Access. The PY 2015 measure for vascular access remains the same as the PY 2014 measure. Dialysis facilities will report the percentage of patients receiving treatment through each of: (i) an arteriovenous fistula; and (ii) a catheter.
    • Bone Mineral Management. For PY 2015, CMS declined to adopt a proposed measure of hypercalcemia among dialysis patients. CMS expanded the mineral metabolism measure to require reporting of actual serum calcium and serum phosphorous values for applicable Medicare patients.
    • Patient Safety. The PY 2015 measure gauges whether a dialysis facility reports certain dialysis-related infections monthly to the Centers for Disease Control and Prevention’s National Healthcare Safety Network for a full 12 months of dialysis event data.
    • Patient Experience of Care. As with the PY 2014 measure, the PY 2015 measure gauges whether a dialysis facility utilizes the In-Center Hemodialysis Consumer Assessment of Healthcare Providers and Systems Survey Reporting through a third party.
  • Codifies the provisions of the Middle Class Tax Extension and Job Creation Act of 2012 (P.L. No. 112-96) that requires reductions in payment for bad debt for all Medicare providers, including dialysis facilities, beginning on Oct. 1, 2012. However, CMS also removed the cap on bad debt reimbursement to ESRD facilities for cost reporting periods beginning on or after Jan. 1, 2013. The cap had limited ESRD bad debt reimbursement to an ESRD facility’s unrecovered cost under the composite rate payment system. This move brings bad debt reimbursement for ESRD facilities into line with the bad debt reimbursement policies for all other types of eligible Medicare providers.