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Focus on Regulation

Holiday Reading for the Dialysis Industry – CMS Proposed Rule on 2013 Dialysis Payment System

Just in time for the 4th of July holiday, CMS released its proposed rule addressing the End-Stage Renal Disease (ESRD) prospective payment system (PPS) for calendar year 2013.  Calendar year 2013 represents the third year of a transition period, in which some dialysis facilities are paid based on a combination of 75% of the ESRD PPS amounts and 25% of the composite rate system amounts.  All facilities will be fully transitioned to ESRD PPS in calendar year 2014.

Under the proposal for 2013, dialysis facilities would see an overall increase in payments of 3.1%.  The increase is based on the application of two statutory provisions – one that increases the payments based on changes to the ESRD market basket and one that decreases the payments based on a productivity adjustment – and certain other adjustments to the ESRD PPS (e.g., for outlier payments, related to the wage index). 

The proposed rule also contains some proposed changes to the ESRD Quality Incentive Program (QIP).  Under the QIP, a facility’s performance on certain measures in a prior “performance period” (which has been a calendar year) can affect its payment in a future payment year (PY).  For example, in order to avoid a reduction in payments for PY 2013, a dialysis facility had to achieve a specified performance score related to the measures in effect for the performance period of calendar year 2011.  CMS proposes to add 5 new measures to the QIP for payment year 2015 (for which the performance period will be calendar year 2013), bringing the program to 11 measures in all in the following areas:

  • Evaluation of anemia management (two measures, one of which is a new reporting measure);
  • Evaluation of dialysis adequacy (three measures, all of which are new);
  • Vascular access (two measures);
  • Bone mineral metabolism (two measures, including a new one for hypercalcemia);
  • Event reporting; and
  • Survey reporting.

CMS also proposes a change to an existing mineral metabolism measure that is in place for payment year 2014 to address concerns about facilities being able to make an attestation about monitoring serum calcium and serum phosphorus monthly.

Finally, the proposed rule addresses CMS’s implementation of a reduction in the percentage of allowable bad debt attributable to beneficiary deductible and coinsurance obligations.  Whereas dialysis facilities were able to include all such bad debts as allowable during fiscal year 2012, pursuant to The Middle Class Tax Extension and Job Creation Act of 2012, allowable debt for dialysis facilities will be 88% in fiscal year 2014, 76% in fiscal year 2014, and 65% in fiscal year 2015 and thereafter.