July 12, 2018
2 min read

CMS proposes a prospective payment system base rate increase for calendar year 2019

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Dialysis facilities would receive a $3.45 increase per treatment starting January under a proposed update to Medicare payment policies and rates released on July 11.

The increase is part of a package of payment policy updates that also includes durable medical equipment, prosthetics, and orthotics and supplies and “reflect a broader administration-wide strategy to relieve regulatory burdens for providers, support the patient-doctor relationship in health care, and promote transparency, flexibility and innovation in the delivery of care,” CMS said in a press release. The kidney community has until Sept. 10, 2018 to respond to the proposed rule.

The Medicare bundled payment under the ESRD Prospective Payment System (PPS) includes all renal dialysis services furnished for outpatient maintenance dialysis, including drugs and biologicals (except for oral-only ESRD drugs until 2025) and other renal dialysis items and services, such as laboratory tests, that were formerly separately payable under the previous payment methodologies. The bundled payment rate is case-mix adjusted for several factors relating to patient characteristics, and there are also facility-level adjustments for ESRD facilities that have a low patient volume, for facilities in rural areas, and for the wage index. For high-cost patients, an ESRD facility may be eligible for outlier payments.

For calendar year (CY) 2019, CMS is proposing to increase the base treatment rate to $235.82, an increase of $3.45 to the current base rate of $232.37. The rate reflects a reduced market basket increase as required by section 1881(b)(14)(F)(i)(I) of the Act (1.5%) and application of the wage index budget-neutrality adjustment factor (0.999833). For 2019, CMS is also proposing to rebase the market basket to reflect newer cost data CMS has collected from dialysis providers. The main impact from the proposed rebasing of the market basket would be an increase in the labor-related share from 50.673% (originated based on data used in the 2012-based market basket) to 52.3% (using data on labor costs for the 2016-based market basket).

“From 2012 to 2016 the data indicate a relative increase in compensation costs and a relative decrease in all other costs, particularly drug costs,” CMS said in the release. The proposed rule also includes an update to the outlier services fixed-dollar loss (FDL) amounts for adult and pediatric patients and Medicare Allowable Payment (MAP) amounts for adult patients. Based on the use of more current data, the FDL amount for pediatric beneficiaries would increase from $47.79 to $47.88 and the MAP amount would decrease from $37.31 to $35.62 as compared to CY 2018 values. For adult beneficiaries, the FDL amount would decrease from $77.54 to $69.73 and the MAP amount would decrease from $42.41 to $40.25. Outlier payments represented approximately 0.8% of total payments.


CMS is also proposing to revise the drug designation process to allow all new dialysis-related drugs and biologicals as of January 1, regardless of whether they fit into an existing functional category, to be eligible for the transitional drug add-on payment adjustment. The agency says this would “provide beneficiaries with more choices, promote innovation, and lower prices through competition.”

CMS projects that the updates for CY 2019 will increase the total payments to all ESRD facilities by 1.7% compared with CY 2018. For more information on responding to the proposed rule, go to www.federalregister.gov/documents/2018/07/19/2018-14986/medicare-program-end-stage-renal-disease-prospective-payment-system-payment-for-renal-dialysis.