On Friday, Nov. 22, 2013, the Centers for Medicare and Medicaid
Services (CMS) issued a final rule ("Final Rule")
regarding the End-Stage Renal Disease (ESRD) Prospective Payment
System (PPS) for renal dialysis services furnished to beneficiaries
on or after Jan. 1, 2014, and also regarding the ESRD Quality
Incentive Program (QIP).
The Final Rule sets a base reimbursement rate of $239.02 per
dialysis treatment for renal dialysis services provided in calendar
year (CY) 2014. The current per-treatment base rate is $240.36. The
revision to the CY 2014 base rate reflects (a) a bundled market
basket increase of 3.2 percent, reduced by an estimated multifactor
productivity adjustment of 0.4 percent; (b) the application of a
wage index budget neutrality factor and a home dialysis training
add-on budget neutrality factor; and (c) the application of a
portion of a mandated reduction in reimbursement under the ESRD PPS
to account for a decrease in the utilization of ESRD-related drugs
Section 632(a) of the American Taxpayer Relief Act of 2012
(ATRA) requires the Secretary of the U.S. Department of Health and
Human Services to make reductions to the ESRD PPS base rate to
reflect the Secretary's estimate of the change in the
utilization of ESRD-related drugs and biologicals, by comparing
per-patient utilization data from 2007 with such data from 2012.
CMS determined that the total adjustment will result in an overall
12 percent reduction in Medicare payments over a period of three to
four years. In the Final Rule, CMS explains that it adopted an
approach to apportioning the drug utilization adjustment in CY 2014
and CY 2015 in a manner that results in an "offset to payment
rate updates and other impacts that would otherwise cause a change
in average payments to ESRD facilities, thereby creating an overall
impact of zero percent for ESRD facilities from the previous
year's payments." For CY 2016, CMS will evaluate whether
to apply the balance of the adjustment over one or two years, after
it conducts an analysis of case-mix adjustments required by Section
632(c) of ATRA and the inclusion of oral-only ESRD-related drugs
and biologicals required by Section 632(b) of ATRA.
In addition to revising the CY 2014 ESRD PPS base rate,
CMS's Final Rule also:
Updated the outlier policy for CY 2014 by revising the
fixed-dollar loss and Medicare Allowable Payment (MAP) amounts,
which are used in calculating a case's eligibility for outlier
payments. For pediatric patients, the fixed-dollar loss amount will
increase to $54.01 and the MAP amount will decrease to $40.49. For
adult patients, the fixed-dollar loss amount will decrease to
$98.67 and the MAP will decrease to $50.25. CMS believes that the
changes in the outlier policy will allow more cases to qualify for
Confirmed CMS's intentions to implement the 10th revision
of the ICD coding scheme, and provided a crosswalk from ICD-9-CM to
ICD-10-CM for codes that are subject to the comorbidity payment
Finalized an increase in the amount of self-dialysis and home
dialysis training add-on adjustment of 50 percent for both
peritoneal dialysis and home hemodialysis training treatments
furnished on or after Jan 1, 2014. CMS increased the nursing time
for each training treatment from 1 hour to 1.5 hours per training
treatment, resulting in an increase of $16.72 for each training
treatment and a total training treatment add-on of $50.16.
Set forth requirements for the ESRD QIP in payment year (PY)
2016 by continuing, and in some cases revising or expanding, a
number of the PY 2015 ESRD QIP measures and by adding two of the
five proposed new measures. Specifically, for PY 2016, CMS will
require reporting regarding the following two new clinical
measures: (1) the proportion of patients with hypercalcemia; and
(2) dialysis-related infections reported to the Centers for Disease
Control and Prevention's National Healthcare Safety Network by
ESRD facilities treating patients on an in-center basis. The Final
Rule establishes CY 2014 as the performance period for the PY 2016
The Final Rule will be published in the Federal Register on Dec.
2, 2013. A display copy of the Final Rule is available here.
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Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
On February 10, 2015, in United States v. Patel, the Seventh Circuit Court of Appeals ruled that a physician makes a "referral" within the meaning of the federal health care programs Anti-Kickback Statute (AKS).