On July 8, 2011, CMS published a proposed rule that would update the ESRD PPS for CY 2012. CMS projects that payment rates would increase by 1.8% under the proposed rule as a result of a 3% market basket increase that is reduced by 1.2% productivity adjustment (mandated by the ACA). The rule also would impact a variety of other ESRD payment policies, including outlier payments, the low-volume adjustment, drug add-on payments, and wage index values. The rule also would revise requirements for the ESRD quality incentive program (QIP), under which payments to dialysis facilities are tied to their performance on certain quality measures. CMS proposes to retire one of QIP performance measures for payment year (PY) 2013 – hemoglobin level less than 10g/dL – and equally weight the two remaining measures (hemoglobin levels greater than 12g/dL and hemodialysis adequacy, as measured by Urea Reduction Ratio levels of at least 65). For the PY 2014 payment determination, CMS is proposing to retain the anemia management measure (hemoglobin level greater than 12g/dL) and to adopt seven new measures that expand the types of dialysis services measured under the QIP. The rule also would revise the QIP scoring methodology, applicable to payments to dialysis facilities in PYs 2013 and 2014. In addition, the proposed rule would revise the ambulance fee schedule regulations and revise the Medicare definition of durable medical equipment (DME), as discussed below. CMS will accept comments on the proposed rule until August 30, 2011.