The Centers for Medicare & Medicaid Services released a proposed rule on July 1 to trim 12% off the composite rate in the ESRD bundle to make up for significant drops in the use of anemia drugs, and included some new measures for the ESRD Quality Incentive Program for calendar year 2014.

The cut would actually amount to 9.4%, because the agency would give the renal community a 2.6% increase based on the market basket analysis for 2014. If finalized later this year, the proposed changes to the Prospective Payment System for the ESRD Program would reduce the Medicare composite base rate from $240.36 per dialysis patient per treatment to $216.95 per treatment.

(Kidney Care Partners expresses alarm over proposed cuts to ESRD bundle)

CMS said it would listen to proposals on how to stretch the cut over a period of time to reduce the impact on dialysis providers. “While we propose to implement the full reduction in CY 2014, we note that we are also concerned that this one-time reduction to the ESRD PPS base rate could be a significant reduction to ESRD facilities for the year and potentially impact beneficiary access to care,” CMS wrote in the rule. “Therefore, we are soliciting comments on a potential transition or phase-in period of the 12% reduction and the number of years for such transition or phase-in period.”

The proposed cut has already drawn criticism from Kidney Care Partners and the Kidney Care Council as being too radical.

“Dialysis providers have been good partners with Medicare over several decades, including strong support for bundling payment and for creating the innovative prospective payment system and quality incentive program in place today,” said Kidney Care Council chairman Tom Weinberg. “We believe CMS proposes to cut too deeply into the ESRD program…”

CMS has been under pressure to cut the bundle rate after investigative reports from the federal Office of Inspector General and the Government Accountability Office criticized the agency for basing the drug payment for erythropoiesis-stimulating agency on 2007 cost reports for dialysis drugs vs. 2012 data. Studies have shown that dialysis clinics have dropped both the dose amount and the number of ESA doses since CMS bundled the payment for ESAs into the composite rate payment system in 2011. Congress also authorized CMS to make the cuts as part of the American Taxpayer Relief Act of 2012.

CMS is accepting comments on the proposed rule through Aug. 30.

Download a copy of the rule