The Centers for Medicare and Medicaid Services (CMS) released the Calendar Year (CY) 2019 Proposed Rule for the Medicare Physician Fee Schedule (MPFS) on July 12, 2018 (the Proposed Rule), and the CY 2019 proposed rule to update the Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System on July 25, 2018. As evidence of the shift to “site-neutral” payment policies, proposed reimbursement changes continue to place significant financial pressure on physicians and organizations that provide dialysis vascular access services in an office-based (POS-11) setting, while at the same time significantly decreasing the differences in reimbursement for providing such services in a Medicare-certified ASC.

Significant changes in reimbursement for dialysis vascular access center (VAC) services were first implemented in 2017 by CMS due to a new payment policy requiring services billed together more than 75% of the time to be bundled. As a result, in 2017, certain interventional CPT code bundles were implemented, which resulted in significant Medicare reimbursement cuts for a variety of commonly performed interventional services.

These dramatic reimbursement cuts made it financially difficult for many nephrology practices and VACs to continue providing cost-effective dialysis vascular access services in a POS-11 setting. Consequently a significant number of VACs closed in 2017 and 2018 forcing dialysis patients to seek access services in hospital outpatient departments where costs (in money and time) to both patients and the Medicare program are much higher. Dialysis patients and their nephrologists have expressed significant concern about this treatment trend, which has resulted in decreased availability of quality office-based care for this at-risk patient population. Industry stakeholders also believe that this trend is likely to significantly increase “downstream” costs to Medicare as patients seek treatment in hospital emergency departments for medical complications resulting from their inability to timely receive vascular access services.

Based upon the 2019 MPFS rates in the Proposed Rule, it appears that industry stakeholders’ concerns regarding reimbursement in a POS-11 setting have been addressed in a limited manner. CMS has proposed modest Medicare reimbursement increases for certain office-based VAC services in 2019 as demonstrated in the following table[1]:

The financial impact of the proposed 2019 MPFS rates presents a “mixed bag” of news. When compared against the 2018 MPFS reimbursement rates, with the exception of CPT codes 36903 (thrombectomy) and 36906 (thrombectomy with stent), CMS increased reimbursement for the crosswalk of dialysis vascular access codes, including to the industry’s most commonly billed CPT code (36902), which will experience a 4% reimbursement increase. According to Jan Dees, President of American Vascular Access, “depending upon a practice’s existing dialysis patient base, an OBL may have an opportunity to expand its service line to include procedures to treat patients with PAD and OVD, which continue to receive higher reimbursement in an OBL setting as compared to an ASC setting.”

However, against the backdrop of modest increases for certain OBL procedures, CMS also proposed dramatic reimbursement cuts for two of the most commonly performed dialysis vascular access services in an ASC beginning January 1, 2019 as shown in the following table[2]:

As one can see in the following table[3], the proposed 2019 reimbursement differential between dialysis vascular access care provided in a VAC or ASC has narrowed significant consistent with CMS’s long-term policy goal of establishing site-neutral payments for procedures:

CMS also announced that it is proposing to make permanent its office-based reimbursement policy for three CPT codes identified above (36901, 36902 and 36905), which means that services corresponding to those codes would be reimbursed at office-based rates even if they are performed in an ASC setting. In response to these developments, a trade group representing a variety of medical specialty societies, physicians, and non-hospital outpatient centers that provide vascular access services to individuals with advanced chronic kidney disease and End-Stage Renal Disease (ESRD), has actively engaged with CMS and congressional leaders to advise the agency and legislators of the adverse consequences of CMS’s reimbursement policy and changes.

Comments to the proposed MPFS and ASCS are due on September 10, 2018, and September 24, 2018, respectively, and the final 2019 reimbursement rates are expected to be released in November.