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CMS Proposes 9.4 Percent Cut to ESRD Payments

July 12, 2013—The Centers for Medicare and Medicaid Services (CMS) July 1 released a proposed rule that contains changes to the calendar year (CY) 2014 end stage renal disease (ESRD) prospective payment system (PPS) and the ESRD quality incentive program (QIP).  CMS will implement final changes to the ESRD payment system Jan. 1, 2014, and proposed requirements for the ESRD QIP would affect the 2016 payment year.  Additionally, the proposed rule contains changes related to durable medical equipment.  Comments on the proposed rule are due Aug. 30.

Under the proposed rule, payments to all ESRD facilities would decrease by 9.4 percent.  This decrease reflects an inflationary update of 2.9 percent, minus a 0.4 percent multifactor productivity adjustment required by the health reform law, and a reduction required by the American Taxpayer Relief Act (ATRA) of 2012.  Section 632(a) of the ATRA requires the 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 data from 2012.  Applying these adjustments results in a proposed base payment of $216.95 per dialysis session, down from $240.36 in CY 2013.  CMS solicits comments on the potential for a transition or phase-in period of the reduction amount over more than one year, because of concerns about beneficiary access to care.

This proposed rule also represents the final year of a four-year phase-in to the ESRD PPS.  All payments will now be based on 100 percent of the ESRD PPS payment amount, and facilities will no longer have the option to be paid in part under the previous composite payment system. 

For the ESRD Quality Incentive Program (QIP), CMS proposes a total of 14 measures for payment year (PY) 2016, five of which are new. The new measures include three clinical (patient-informed consent for anemia treatment, hypercalcemia, and bloodstream infection in hemodialysis outpatients) and two reporting (pediatric iron therapy and comorbidity). The performance standards, total performance score and payment reduction methodologies are similar to those finalized for the PY 2015 QIP. CMS proposes to continue weighting the clinical measures at 75 percent and the reporting measures at 25 percent of the total performance score (TPS), which is used to determine whether a facility receives a payment reduction.


Scott Wetzel, M.P.P.
Lead, Quality Reporting
Telephone: 202-828-0495



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