CMS proposes new prospective payment system for renal dialysis facilities9/15/2009
The Centers for Medicare & Medicaid Services today proposed a new prospective payment system (PPS) for facilities that provide dialysis services to Medicare beneficiaries who have end-stage renal disease.
According to CMS, the proposed PPS would provide a single bundled payment to dialysis facilities that would cover the items and services used in providing outpatient such services, including the dialysis treatment, prescription drugs, and clinical laboratory tests.
Under the proposed rule, CMS would establish a base bundled payment rate of $198.64 for all of the services related to a dialysis session, including the services in the current composite rate as well as items, including oral drugs that are billed separately. The proposed base rate was derived from 2007 claims data for both composite rate and separately billable services and updated to reflect projected 2011 prices. It would also be adjusted for case mix factors such as the patients age, gender, body size, and time on dialysis. A special case-mix adjustment would apply to pediatric patients. Additional adjustments to the payment rate would be made for specific conditions, or co-morbidities that have a significant impact on a course of treatment. By accounting for more characteristics of patients, the new PPS would target payments more appropriately, paying higher rates to those facilities with the most costly patients.
The base rate would also be adjusted to reflect geographic differences in labor costs. In addition, CMS is proposing to provide an adjustment for low-volume facilities, as well as an outlier policy that would make an adjustment for particularly expensive cases.
CMS will phase in the new bundled payment system over a four-year period. However, facilities will be given the opportunity to choose to be paid entirely under the new payment system beginning on January 1, 2011.
To arrive at a base rate, CMS is proposing to adjust the average payment per treatment using 2007 claims data adjusted to reflect 2011 projected prices. The rate will not include positive adjustments for case-mix and the wage index as those will be introduced into the payment formula at a later time. This standardized amount must then be reduced by 1% to fund the proposed outlier policy, and reduced by the percentage required by MIPPA to reflect 98% of the estimated payments that would have been made absent the statutory changes.
Proposed Standardized Amount: Based on 2007 claims data, total per treatment payments in CY 2011 are projected to be $261.58. To eliminate the overall positive effects of the proposed case-mix and geographic adjustments, CMS is proposing a 21.73% reduction, yielding a standardized amount of $204.74.
Proposed Outlier Adjustment: CMS is proposing to reduce the standardized amount by 1% for outlier payments for cases requiring unusually high amounts of drugs or other services that are separately payable under the current payment system. This reduction lowers the standardized amount of $204.74 to $202.69.
MIPPA Required 98% Adjustment: As required by MIPPA, CMS is also proposing to adjust the reduce the standardized amount by 2% to ensure that estimated total Medicare payments to ESRD facilities in CY 2011 are 98 percent of what they would have been under the existing system. This additional reduction yields a proposed base rate of $198.64.
Transition Budget Neutrality Adjustment: Also required by MIPPA, CMS is proposing that a transition budget neutrality adjustment factor (a 3% percent reduction) be applied to all payments during the four-year phase-in and would make payments under the transition the same as they would have been had there not been a transition. As part of this transition budget neutrality adjustment, during the transition, CMS is proposing to apply a $14 per treatment adjustment to the composite rate portion of the blended payment amount to reflect ESRD-related Part D drugs.
Patient-Level Adjustments: As authorized by MIPPA, CMS is proposing to adjust the base rate for case mix using a variety of factors which have been found to affect costs. Under the existing payment system, the composite rate is adjusted for age, body surface area (BSA), body mass index (BMI), and pediatric status. The proposed rule would add adjustments for patient sex (female patients) and certain co-morbidities, as well as a new patient adjustment that recognizes that patients have higher costs in their first four months of maintenance dialysis. In addition, special payment adjusters would apply for providers of pediatric services. CMS is specifically seeking comment about these and other patient characteristics that may affect costs of treatment and for which a payment adjustment may be appropriate.
Facility-Level Adjustments: MIPPA specifically requires CMS to adopt an adjustment for low-volume facilities and gives the HHS secretary discretion to adopt additional facility-level adjustments. Based on an analysis of ESRD data, CMS is proposing to define low-volume facilities as those facilities that: (1) furnished fewer than 3,000 treatments in each of the three years preceding the payment year; and (2) have not opened, closed, nor received a new provider number due to a change in ownership during the three years preceding the payment year. Other definitions may be added to include geographic restrictions. CMS is also proposing to continue to apply a wage index adjustment using the core-based statistical area (CBSA) definitions. The index would be based on the most current hospital wage data, prior to application of the rural floor and occupational mix adjustments, and geographic reclassifications.
Outlier Policy: MIPPA requires CMS to make adjustments for high cost patients, called outlier payments, to ESRD facilities that treat patients who use more than the predicted amount of services, including the amount of erythropoietin stimulating agents (ESAs) used to manage dialysis-related anemia. As noted previously, CMS is proposing to reduce the standardized amount for all dialysis treatments by 1.0 percent, to fund the proposed 1.0 percent policy under the new ESRD PPS. CMS is proposing a fixed loss dollar amount of $134.96 for adult and $174.31 for pediatric dialysis patients. Once the fixed dollar amount is met, CMS would pay 80 percent of the ESRD facilitys outlier service costs. CMS projects that approximately 5.3 percent of adult and 2.6 percent of pediatric patient months would qualify for outlier payments.
Annual Payment Rate Updates: As required by MIPPA, beginning in CY 2012 the ESRD PPS base rate will be updated annually by an ESRD market basket index minus one percentage point. The proposed rule includes a discussion of how the ESRD market basket would be calculated.
Beneficiary Coinsurance: CMS is proposing that the beneficiary coinsurance amount be 20% of the ESRD bundled payment amount, including applicable case-mix adjustments and outlier payments. CMS will accept comments on the proposed rule through November 2009, and will respond to them in a final rule to be issued in 2010. The new payment system would apply to renal dialysis services furnished to Medicare beneficiaries on or after January 1, 2011.
CMS will accept comments on the proposed rule through November 16, 2009, and will respond to them in a final rule to be issued in 2010. The new payment system would apply to dialysis services furnished to Medicare beneficiaries on or after January 1, 2011.
Quality incentive program provisions included in ESRD prospective payment proposed rule
The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) requires the Centers for Medicare & Medicaid Services to create a quality improvement program (QIP) that would help ensure that ESRD facilities furnish high quality care to their patients. The QIP would have payment consequences beginning for services furnished on or after January 1, 2012.
The new payment system would institute financial incentives that tie payment to improving dialysis quality and outcomes. CMS expects the new system would result in both better care and reduced cost for beneficiaries and the program. Facilities that do not meet or exceed minimum performance standards in a period determined by the HHS secretary will receive payment reductions of up to two percent for a specified year.
The law also requires CMS to select measures and develop performance standards for health care categories such as anemia management and dialysis adequacy. In choosing measures, MIPPA instructs CMS to consider the availability of data to calculate such measures. In addition, as part of this program, CMS must develop procedures for making the QIP information public, after giving providers and facilities an opportunity to review the information that is to be released.
The program will be the first time in which CMS would directly link payments to quality of care. In the past, CMS has used a pay-for-reporting framework for inpatient and outpatient hospital services, and physician services.
QIP proposals in the ESRD PPS proposed rule:
The ESRD PPS proposed rule proposes the following specific measures that will apply to the initial performance period of the QIP:
Hemodialysis Adequacy: Achieved urea reduction ratio (URR) of 65% or more.
Anemia Management: Controlled anemia, as shown in two measures:
1. The percentage of patients at a facility whose hemoglobin levels were less than 10 grams per deciliter (g/dL).
2. The percentage of patients at a facility whose hemoglobin levels were greater than 12 g/dL.
The proposed measures were chosen because dialysis facilities have used them since 2001. These measures are currently collected from Medicare dialysis facility claims so there is no need for separate reporting. Finally, CMS already has data on these measures, which it can use to develop and test models for the operation of the QIP.
Click here for more information on the bundled payment.
http://www.cms.hhs.gov/ESRDPayment/Click here for more information on submitting a comment.
http://www.nephronline.com/uploaded/reports/cms_comments.pdfhttp://www.nephronline.com/features.asp?F_ID=467
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