For Part 2 of this article, click here

The year 2012 was a relatively smooth, regulation-free period for the dialysis community. Changes in current regulations were in mid-review; dialysis providers had settled in with the ESRD payment bundle, entering its second year. (What we did see was the beginning of a new chapter in ESA use. More on that later.) Part of that calmness can be attributable to an election year; there was no Medicare legislation to contest in the halls of Congress.

But much of that calmness will change in 2013 and health care providers will once again have to visit Capitol Hill to renegotiate their fees. The final "fiscal cliff" legislation takes a bite out of numerous health care payment pots, including the ESRD Program. "Happy New Year! Perhaps not as happy as we had hoped with the legislation that passed this week, but we will carry on," said Katrina Russell, president of the National Renal Administrators Association in their Friday edition of the newsletter Renal Watch.

Of course, we might have anticipated this approach. If you read author Robert Blaser's column in our upcoming February 2012 issue of NN&I, months before the "fiscal cliff" final negotiations began, you might have seen the legislative handwriting on the wall. In predicting that Congress would not be able to develop a permanent solution to the archaic Medicare physician payment formula, known as the Sustainable Growth Rate, Blaser wrote: "…Congress may choose to find the funding to pay for the SGR fix by reducing payments to what CMS refers to as post-acute settings, and dialysis facilities fall into this bucket and thus 2012 reimbursement would be reduced." Blaser was off slightly: 2012 and 2013 dialysis payments remain intact. But watch out for what's in store for 2014.

Here is part one of a review of the important issues on the political and policy front from this past year. If I missed something, let me know about it.

Finding leadership at CMS
The year 2012 began––and ended––without a permanent administrator for the Centers for Medicare & Medicaid Services. The Obama Administration had taken some procedural short cuts with Congress to appoint Continous Quality Improvement expert Donald Berwick, MD, to run the agency in July 2010. But in early December 2011, Berwick stepped down from his post in anticipation of being denied an extension of his term by the U.S. Senate. The White House nominated Marilyn Tavenner, then principal deputy administrator for the Medicare program, to fill the post as acting administrator.  Much has happened under Tavenner's tenure over the last 12 months, including some new demonstration projects, creation of health care reform policies, and developing regulations for the accountable care organization model. The renal community is awaiting word from Medicare's Innovation Center for the blessing on a renal-specific ACO.

Medicaid payments hit hard
Dialysis providers treating Medicaid patients saw less in their pocket last year as states cut back on payments to help balance budgets. Our "State of the States" column details how 12 states were struggling with their bottom line, including Nevada, which sliced 15% from its Medicaid payments.

'Wonder drug' goes under the knife
"Follow the money" is an old axiom heard often in business; people make choices based on the monetary value that choice will bring. Even months before the new Prospective Payment System for dialysis services was launched by CMS in January 2010 to bundle treatments, lab tests, and dialysis-related drugs, providers were putting their use of Epogen under the microscope.  NN&I reported that such scrutiny culminated in a 15% drop in Epogen use from August 2010 to August 2011. We suspect CMS officials, weary of seeing Medicare payments for Epogen go through the roof for the last 10 years, let out a quiet cheer.

Died: John McDonald, first president of the United Network for Organ Sharing, which manages the organ donation and distribution network to transplant centers.

Part two will be posted on Thursday, Jan. 10.