The Centers for Medicare & Medicaid Services released the final rule yesterday for the ESRD payment bundle for dialysis facilities and the ESRD Quality Incentive Program for 2016. There were few changes from the proposed rule to the final rule, and despite a strong effort to encourage CMS to pay more for home hemodialysis training, the agency declined to take action.

Read also: CMS finalizes new QIP measures through 2017

The proposed rule for the bundle and the QIP was published in the Federal Register on July 1, with a comment period that ended on Aug. 25. CMS received  public comments on the two proposals from ESRD facilities, national renal groups, nephrologists and patient organizations, patients and care partners, manufacturers, health care systems, and nurses.

The bundled payment under the ESRD PPS includes all renal dialysis services furnished for outpatient maintenance dialysis, including drugs and biologicals (with the exceptionof oral-only ESRD drugs until 2025) and other renal dialysis items and services that were formerly separately payable under the previous payment methodologies.

The bundled payment rate is case-mix adjusted for a number of factors relating to patient characteristics. There are also additional adjustments for ESRD facilities that have low patient volume and for home dialysis training. For high-cost patients, an ESRD facility may be eligible for outlier payments.

Under the ESRD PPS for CY 2016, Medicare expects to pay approximately $9.0 billion to approximately 6,000 ESRD facilities for patient care.

 Changes to the ESRD payment bundle for 2016

  • Dialysis facilities will get a $9 cut in the composite rate payment to dialysis clinics, reducing the payment to $230.39. CMS says it will balance that cut with updated payments to case mix adjusters that are part of the bundle. The agency was required by law to re-examine the value of the adjusters by this year, which had not been reviewed since the bundle took effect in 2011. CMS is finalizing revisions to the adjustments by changing the adjustment payment amounts based on an updated regression analysis using CYs 2012 and 2013 ESRD claims and cost report data and removing two comorbidity payment adjustments (bacterial pneumonia and monoclonal gammopathy). CMS is also finalizing revisions to the low-volume payment adjustment and finalizing a new payment adjustment for rural ESRD facilities based on that regression analysis.
  • For CY 2016, CMS is not making any changes to the application of the wage index floor, and will continue to apply the current wage index floor (0.4000) to areas with wage index values below the floor.
  • CMS is updating the outlier services fixed dollar loss amounts for adult and pediatric patients and Medicare Allowable Payments (MAPs) for adult patients for CY 2016 using 2014 claims data. Based on the use of more current data, the fixed-dollar loss amount for pediatric beneficiaries increases from $54.35 to $62.19 and the MAP amount decreases from $43.57 to $39.20, as compared to CY 2015 values. For adult beneficiaries, the fixed-dollar loss amount increases from $86.19 to $86.97 and the MAP amount decreases from $51.29 to $50.81.
  • Despite the $9 cut, CMS projects that the updates for CY 2016 will increase the total payments to all ESRD facilities by 0.2% compared with CY 2015.  For both hospital-based and freestanding ESRD facilities, CMS projects an increase in total payments of 0.2%.
  • ESRD facilities that consistently furnish a low volume of treatments (< 4000 per year) receive a payment adjustment under the ESRD PPS. Eligibility for ESRD facilities that opened on January 1, 2011 and after are assessed by aggregating their treatments with other facilities that are within a 25 road mile radius and are under common ownership. In the new rule for 2016, CMS is revising the LVPA eligibility criteria by removing grandfathering from the criteria and revising the geographic proximity criterion from 25 road miles to 5 road miles. The agency says these changes will exclude facilities of common ownership that are located within 5 miles of one another, regardless of when these facilities opened.

Funds for home dialysis training

Even though CMS had not proposed or solicited comments on any changes to home training payments in the proposed rule, over 200 people wrote letters asking CMS to increase payment, particularly for home hemodialysis training. “Many commenters expressed concern about the adequacy of payment to ESRD facilities for training home and self-dialysis patients,” CMS noted in the final rule. “Specifically, commenters expressed concern that the combination of inadequate payment and increasing costs to provide education for home therapies, especially home hemodialysis (HHD), could prevent patients from choosing home dialysis. Commenters asked us to consider changes to the training add-on payment adjustment, explaining that nursing time and quality training are essential to ensure patients are successful in taking care of themselves at home.”

Under current policy, ESRD facilities can bill Medicare a maximum of 25 training sessions per patient for HHD training, giving ESRD facilities payment for 37.5 hours of training. That equals $1,881 for HHD through the home dialysis training add-on payment adjustment, in addition to the training costs that are included in the ESRD PPS bundled payment rate, CMS said.

“We believe this provides an adequate opportunity for training of ESRD beneficiaries…While we have heard from the commenters that we should increase the home dialysis training add-on payment adjustment so that more ESRD patients can receive the benefit of HHD, we have also heard from LDOs that the current training add-on is sufficient. In addition to these differing viewpoints, we’ve also received information in public comments that indicate a wide variance in training times and the duration of training sessions.

“While we have heard different things from stakeholders about whether or not the home dialysis training add-on payment adjustment is adequate, we are not in a position this year to address the commenters’ concerns. We are, however, committed to conducting further analysis of the home dialysis training add-on payment adjustment and will consider making appropriate changes to the adjustment in future rulemaking,” CMS said.

You can download the complete final rule on the 2016 ESRD payment bundle at