November 26, 2018
2 min read

CMS final rule for dialysis clinics includes rate increase, classifying drugs for payment bundle

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Julie Williams headshot
Julie Williams

Dialysis clinics will see a 1.6% increase in Medicare reimbursement for dialysis treatments starting Jan. 1.

The change in reimbursement, part of the Prospective Payment System (PPS) regulations that govern Medicare payment for dialysis providers, is included the final rule released earlier this month. Aside from the composite rate increase, which makes up the bulk of the additional reimbursement, the final rule covers updates on payment for ESRD drugs, payment for treating patients with acute kidney injury, and new performance measures for the quality incentive program (QIP).

The National Renal Administrators Association wrote in its analysis of the final rule that several changes to the PPS will help dialysis clinic managers, including:

a reduction in the burden of documentation to collect patient comorbidity information;

a change in the weight of the standardized transfusion ratio measure in the QIP total performance score from a proposed 22% weight to a finalized 10% weight;

an increase in the weight of the vascular access type measures to represent 12% – rather than the proposed 6% – of the QIP total performance score; and

the decision by CMS to adopt the standardized first kidney transplant waitlist ratio clinical measure for the QIP.

“... We had some big wins thanks to the NRAA’s advocacy efforts,” Julie Williams, BSA, recently elected association president, said in the NRAA’s weekly newsletter Renal Watch.

CMS had released the proposed rule on July 19 and obtained 156 responses from members of the renal community during an open, 2-month comment period.

With the change in payment for dialysis services, providers will now receive $235.27 per treatment. For patients treated in outpatient dialysis clinics with acute kidney injury, the payment rate per treatment will be the same. The agency estimates it will pay about $210 million more in 2019 to 7,099 dialysis facilities for ESRD services; $170 million of that amount is from the composite rate increase. The estimate assumes a 2% projected increase in Medicare-covered beneficiaries who go on dialysis in 2019.

Another important change in the final rule is expansion and other changes to the transitional drug add-on payment adjustment (TDAPA), which establishes payment for all new dialysis drugs beginning Jan. 1, 2020, before they fall into the ESRD PPS bundled payment.

CMS created the TDAPA to determine a payment method for a drug that is no longer an oral-only drug and when to include injectable and IV drugs into the payment bundle. Under the process, CMS has created categories of conditions that a new injectable or IV drug could treat. If a new drug falls into one of the categories, it is included in the payment bundle. If the new IV or injectable drug is used to treat or manage a condition for which there is not an ESRD PPS category, the new drug is assessed for eligibility for TDAPA, and a separate payment is set for outside the bundle. The rate for ESRD drugs outside the payment bundle now is average sales price (ASP) plus 6%, but that will change to ASP only when the expanded TDAPA launches in January 2020, CMS said in the final rule.


“The purpose of this expanded TDAPA is to help ESRD facilities incorporate these drugs and foster competition and innovation for ESRD drugs. At the end of the TDAPA period, we expect that the drug would achieve its foothold and would be able to compete with other drugs in the functional category,” according to CMS. CMS defines a renal dialysis drug eligible for TDAPA as “an injectable, intravenous, oral or other form or route of administration drug or biological product that is used to treat or manage a condition(s) associated with ESRD.”

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