CMS has proposed a new prospective payment system (PPS) for facilities that provide dialysis services to Medicare beneficiaries who have end-stage renal disease (ESRD). The proposed PPS would (1) provide single bundled payments to dialysis facilities, (2) improve care by establishing performance standards for dialysis facilities, (3) contain the rapid growth in spending. Pursuant to the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) (PubLNo 110-275), the new PPS must trim 2.0 percent of the estimated payments that would have been made in 2011 under the previous payment scheme. The PPS will be effective January 1, 2011, and would provide for a four-year transition (phase-in) period under which facilities would receive a blend of payments under the prior case-mix adjusted composite payment system and the new ESRD PPS.
Base rate
The proposed PPS would replace the current basic case-mix adjusted composite payment system and methodologies for the reimbursement of separately billable outpatient services, and would combine payments for composite rate and separately billable services into a single base rate of $198.64 developed from 2007 claims data. The proposed PPS would issue a single payment for renal dialysis services, which would provide for, among other things, drugs and biologicals furnished to individuals for treatment of ESRD, and diagnostic laboratory tests. The base bundled payment rate would be adjusted for, among other things: (1) case mix factors, such as age, gender, body size and time on dialysis; (2) specific conditions, or co-morbidities that have a significant impact on a course of treatment; and (3) geographic differences in labor costs. Pediatric patients and facilities treating a low volume of ESRD patients would also be accounted for in the base rate adjustment. Accordingly, the PPS would target payments more appropriately and pay higher rates to those facilities with the most costly patients.
Quality incentive program
The proposed PPS would also provide for a quality incentive program (QIP) that would result in payment reductions to providers and dialysis facilities that do not meet or exceed a total performance score with respect to performance standards. The payment reductions would be up to 2.0 percent of the payments otherwise made to providers and facilities, and would apply to renal dialysis services furnished on or after January 1, 2012. The payment reductions would apply with respect to the year involved and would not be taken into account when computing future payment rates. Examples of quality measures would include measures on anemia management and dialysis adequacy. Data needed to calculate these measures would be collected from Medicare claims submitted by ESRD providers and facilities on a patient-specific basis.
The Proposed rule will be published as a pamphlet after its publication in the Federal Register on September 29.
CCH Chicago Bureau, Sept. 16, 2009.
For more information on this and related topics, consult the CCH® Medicare and Medicaid Guide.
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