Healio Special Report: Health Care and Politics

Healio Special Report: Health Care and Politics

July 30, 2019
3 min read

CMS offers dialysis providers a $5 increase in composite rate, bonus for using new technology

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CMS is offering $5 more per dialysis treatment and a bonus to providers if they use newer technology in their clinics in a proposed rule for the Prospective Payment System released on July 29.

The agency also included changes in that rule, which would be effective in January 2020, to the Quality Incentive Program (QIP), a set of quality measures used by CMS to monitor the performance of clinics. In a separate rule, CMS released the Medicare Physician Fee Schedule, which sets the guidelines for physician payment for Medicare patients, including those with ESKD. Both proposals have 60-day comment periods; feedback for the Prospective Payment System (PPS) rule is due September 27 and can be sent via regulations.gov.

The proposed rule for dialysis facilities comes under the PPS, a bundled payment that includes all renal dialysis services furnished for outpatient dialysis including drugs and biological products (with the exception of oral-only ESRD drugs until 2025). The payment rate, which also applies for patients treated with acute kidney injury, is case-mix adjusted for a number of factors relating to patient characteristics. The ESKD PPS provides a training add-on payment adjustment for home and self-dialysis modalities and, for high-cost patients, an ESRD facility may be eligible for outlier payments. The ESRD PPS also provides for a transitional drug add-on payment adjustment (TDAPA).

Composite rate goes up

In the proposed rule, CMS is setting the base rate for 2020 at $240.27, an increase of $5, or 2%, over the current base rate of $235.27. Last year, CMS increased the composite rate by 1.6%. The new rate would also apply to patients with AKI treated in an outpatient clinic.

The agency is also proposing changes to its TDAPA that will reduce the payment for calcimimetics, which are drugs used to treat secondary hyperparathyroidism. CMS would reduce the basis of payment for the TDAPA from the average sales price (ASP) plus 6% methodology to 100% of ASP.

“We believe that in paying the TDAPA for these products since 2018, we have provided sufficient time for ESRD facilities to address any administrative complexities and overhead costs that may have arisen with regard to furnishing the calcimimetics,” CMS said in the proposed rule in explaining the payment cut. “We also believe we need to take into account the financial burden that increased payments place on beneficiaries and Medicare expenditures.”

CMS would no longer apply the TDAPA for a new renal dialysis drug or biological product if it does not receive a full calendar quarter of ASP data by a certain date. “We would no longer apply the TDAPA for a new renal dialysis drug or biological product beginning no later than 2 calendar quarters after we determine a full quarter of ASP data is not available,” the agency said.

New add-on for technology

As part of its support for innovation championed by the KidneyX competition, CMS is proposing to provide a transitional add-on payment adjustment for new and innovative equipment and supplies (TPNIES) under the ESRD PPS.

“Specifically, under our proposal, the equipment or supply must represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries,” CMS said in the proposed rule. Providers would receive a payment adjustment for renal dialysis equipment and supplies (with the exception of capital-related assets) that are: new, meaning they are granted marketing authorization by FDA on or after Jan. 1, 2020, and innovative, meaning they meet substantial clinical improvement criteria.

“... We are proposing that the payment for TPNIES would be based on 65[%] of the price established by the Medicare Administrative Contractors (MACs), using the information from the invoice and other relevant sources of information,” CMS noted. Dialysis facilities would receive the payment adjustment for 2 calendar years, after which the equipment or supply would qualify as an outlier service and no change to the ESRD PPS base rate would be made.

CMS would also discontinue use of the Erythropoiesis-stimulating Agent (ESA) Monitoring Policy (EMP).

“CMS no longer believes the EMP is necessary because ESAs are now bundled into the per treatment payment amount and overutilization and the incentive for overutilization has been eliminated from the ESRD PPS,” according to the agency.

Under the proposed PPS, Medicare expects to pay close to $11.1 billion to approximately 7,000 ESRD facilities for the costs associated with furnishing renal dialysis services — about a 1.7% increase over 2019, CMS said.

Changes to the QIP

CMS is proposing only minor changes to the QIP for performance year 2020. Updates to the scoring methodology for the National Healthcare Safety Network Dialysis Event reporting measure would allow new facilities and facilities that are eligible to report data on the measure for fewer than 12 months to receive a score. CMS would also convert the clinical measure that tracks blood transfusions among patients back to a reporting measure while addressing questions raised by the renal community regarding the measure’s validity.

“We are also proposing to make updates to our regulation text so that it better informs the public of the program’s requirements,” CMS wrote.