Dialysis Pay Would Drop $970 Million For CY 2014 Under CMS Proposed Rule

BNA’s Health Care Daily Report™ sets the standard for reliable, high-intensity coverage of breaking health care news, covering all major legal, policy, industry, and consumer developments in a...

By Nathaniel Weixel  


Payments to dialysis facilities under the end-stage renal disease prospective payment system (ESRD PPS) would decrease by $970 million in calendar year (CY) 2014 under a proposed rule released July 1 by the Centers for Medicare & Medicaid Services.

The proposal would affect renal dialysis services furnished to beneficiaries on or after Jan. 1, 2014. In addition, the rule proposes changes to the ESRD Quality Incentive Program (QIP) for Payment Year (PY) 2016.

The rule also addresses issues related to the coverage and payment of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).

The proposed rule (CMS-1526-P) will be published in the Federal Register July 8. Comments are due Aug. 30, CMS said.

According to CMS, the overall impact of the CY 2014 changes is projected to be a 9.4 percent decrease in payments. Hospital-based ESRD facilities would have an estimated 9.3 percent decrease in payments, CMS said.

The bundled payment under the ESRD PPS includes all renal dialysis services furnished for outpatient maintenance dialysis, including ESRD-related drugs and biologicals (with the exception of certain oral-only ESRD drugs until 2016) and other ESRD-related items and services that were formerly separately payable under the previous payment methodologies, CMS said.

Quality Program Changes

According to CMS, the ESRD quality incentive program (QIP) will continue to provide incentives for facilities to provide higher quality care to beneficiaries. The QIP adjusts payments to dialysis facilities based on their performance on quality measures.

“The reporting measures associated with the collection of information requirements are critical to better understanding the quality of care beneficiaries receive, particularly patients' experience of care,” CMS said in the proposal.

The ESRD rule proposed to update requirements for the ESRD QIP, including the measures and scoring methodologies that would affect payments to dialysis facilities in PY 2016, CMS said.

For the PY 2016 ESRD QIP, the rule proposed to establish calendar year 2014 as the performance period for all of the measures. It also proposed to establish performance standards for each measure and to adopt scoring and payment reduction methodologies that are similar to those finalized for the PY 2014 and PY 2015 ESRD QIP.

For PY 2016, CMS said it expects the total payment reductions to be approximately $26.4 million for the QIP.

DMEPOS Adjustment

The proposed rule also addressed issues related to the coverage and payment of DMEPOS, including:

• clarifying the definition of routinely purchased DME;

• clarifying the grandfathering provision related to the three-year Minimum Lifetime Requirement; and

• implementing budget neutral fee schedules for splints and casts and intraocular lens (IOLs) inserted in a physician's office.


To assist in determining when an item is durable and can be classified as DME, CMS said it finalized a rule adding a three-year Minimum Lifetime Requirement for new items classified as DME after Jan. 1, 2012.

The CY 2014 rule proposed clarifying that the grandfathering provision allows for continued coverage of equipment that has been covered under the Medicare benefit for many years to avoid disruption in the continuity of care for beneficiaries with a medical need for these items, CMS said.

ESRD Drug Utilization

According to CMS, Section 632(a) of the American Taxpayer Relief Act of 2012 requires the health and human services secretary 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.

This adjustment results in an overall 12 percent reduction in Medicare payments for CY 2014, CMS said. The proposed rule seeks comment on whether this change should be phased in over more than one year.