***CMS PROPOSES POLICY CHANGE AND PAYMENT RATE INCREASE ***

For Immediate Release: Monday, July 02, 2012

Contact: CMS Office of Public Affairs
202-690-6145

CMS PROPOSES POLICY AND PAYMENT RATE CHANGES FOR END-STAGE RENAL DISEASE FACILITIES IN 2013

Proposals would also strengthen incentives to improve outcomes for patients with ESRD

The Centers for Medicare & Medicaid Services (CMS) today issued a proposed rule that would update
Medicare policies and payment rates for End-Stage Renal Disease (ESRD) facilities paid under the
ESRD Prospective Payment System (PPS) for calendar year (CY) 2013. The proposed rule would also
strengthen incentives for improved quality of care and better outcomes for patients through
improvements to the ESRD Quality Incentive Program (QIP). Performance scores on the QIP measures
during a proposed CY 2013 performance period would affect payments to dialysis facilities in CY
2015.

In addition to other updates, payment rates for outpatient maintenance dialysis treatments are
anticipated to increase by 2.5 percent in CY 2013. This reflects the ESRD bundled market basket
increase of 3.2 percent reduced by a productivity adjustment of 0.7 percent, as required by statute.
CMS estimates that Medicare payments to the 5,633 ESRD facilities in CY 2013 will total $8.7 billion.
When all policy changes are considered together, payments to ESRD facilities are expected to
increase by 3.1 percent in 2013.

“As we enter the third year of our four year transition to the new fully bundled payment system for
certain dialysis facilities, 90 percent of facilities are voluntarily receiving payments under the new
system,” said Jonathan Blum, CMS deputy administrator and director of the agency’s Center for
Medicare. “We believe that the policies and rate changes proposed today will continue to help
ensure that beneficiaries diagnosed with ESRD continue to get the care they need.”

The proposed rule would continue to focus on clinical measures and expand the scope of the
reporting measures included in the ESRD QIP to encompass a broader range of patient populations
who receive dialysis care and to address concerns about the quality of life experienced by patients
on dialysis. Specifically, CMS is proposing that ESRD facilities collect data for four reporting
measures to capture information about how well each facility:

· Manages patients’ anemia, a common side-effect of hemodialysis;
· Reports dialysis infection events to the Centers for Disease Control and Prevention’s (CDC)
National Healthcare Safety Network (NHSN);
· Monitors patients for abnormalities in phosphorous and calcium levels; and
· Surveys patients to learn about their experiences of care.

“The CMS proposals for the Quality Incentive Program aim to improve the quality of dialysis services
furnished to people diagnosed with End-Stage Renal Disease,” said Patrick Conway, M.D., CMS chief
medical officer and director of the agency’s Office of Clinical Standards and Quality. “The QIP
proposal results in 11 measures essential for patient-centered care including anemia management,
preventing bloodstream infections, dialysis access and adequacy, and patient experience.”

Both the ESRD PPS and the QIP were mandated by the Medicare Improvements for Patients and
Providers Act of 2008. The previous ESRD payment system consisted of a composite rate payment for
a defined set of services, including certain laboratory tests, drugs and other supplies, while separate
payments were made for any ESRD-related items or services furnished as part of the dialysis
treatment but for which no payment was made under the composite rate. The composite rate
payment was adjusted to reflect the ESRD facility’s geographic location and a limited number of
patient’s characteristics. The new bundled ESRD PPS is intended to improve efficiency and reduce
incentives to use more items and services than needed for appropriate care, while the QIP is
intended to promote continued improvement in the quality of care provided to Medicare
beneficiaries with ESRD.

This proposed rule would also codify provisions of The Middle Class Tax Extension and Job Creation
Act of 2012 that require reductions in bad debt reimbursement to all providers eligible to receive
bad debt reimbursement; these provisions are specifically prescribed by Congress and thus, are
generally self-implementing.

The proposed rule will appear in the July 11, 2012, Federal Register. CMS will accept comments on
the proposed rule until Aug. 31, 2012, and will respond to comments in the final ESRD PPS rule for CY
2013.

For more information, see:

http://www.ofr.gov/inspection.aspx?AspxAutoDetectCookieSupport=1

For more information about the ESRD PPS and QIP, please see:

https://www.cms.gov/Center/Special-Topic/End-Stage-Renal-Disease-ESRD-Center.html

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