A proposed $9 cut in the Medicare monthly bundled payment rate for dialysis clinics would be nullified by payment adjustments in other areas and give providers a .02% increase in 2016, according to documents released on June 26.

The Centers for Medicare & Medicaid Services released its proposed rule for the 2016 End-Stage Renal Disease Prospective Payment System as well as for the ESRD Quality Incentive Program through 2019. The renal community has until Aug. 25 to respond to both proposed rules.

Changes to ESRD bundle
The proposed dialysis payment bundle base rate for calendar year 2016 is $230.20, a $9 decrease from the 2015 base rate. The cut reflects several adjustments:

  • The renal community’s ongoing repayment for money that CMS placed in the payment bundle in 2011 to cover IV dialysis drugs for patients. The agency later realized that the payment was too high because it reflected costs to providers for drugs at a time when higher IV drug prescriptions were being used. The payment back to CMS—originally proposed as a 12% for all providers—has been reduced by Congress, but it means any payment increases for dialysis clinics will have to draw from this payment make-good.
  • No change in the application of the wage index budget-neutrality adjustment factor (1.000332), and a refinement budget-neutrality adjustment factor (0.959703),
  • CMS says these adjustments mean that the total projected PPS payments in CY 2016 are equal to what the payments would have been in CY 2016 had the agency not implemented the refinement.

Is a new recipe needed for the case-mix adjusters? 

  • CMS also tackled a review of the case mix adjusters that facilities have used since 2011 to get reimbursed for patients with specific medical conditions. The adjusters were supposed to add additional payments to the base composite rate for dialysis providers.  CMS is proposing to revise the adjustments by changing the adjustment payment amounts based on its updated regression analysis using CYs 2012 and 2013 ESRD claims and cost report data and proposing to remove two comorbidity payment adjustments (bacterial pneumonia and monoclonal gammopathy). “Because we conducted an updated regression analysis to enable us to analyze and revise the case mix payment adjustments, we are also proposing revisions to the other ESRD PPS payment adjustments and a new adjustment based on that regression analysis. In particular, we are proposing new patient and facility-level adjustment factors. We are also proposing to add an adjustment for rural ESRD facilities. Finally, we are proposing to revise the geographic proximity eligibility criterion for the low-volume payment adjustment (LVPA) and to remove grandfathering from the criteria for the adjustment,” CMS wrote.
  • The outlier policy—used by CMS to help pay for sicker dialysis patients —will be updated for adult and pediatric dialysis patients using more current 2014 claims data. Based on the use of more current data, the fixed-dollar loss amount for pediatric beneficiaries would decrease from $54.35 to $49.99 and the Medicare Allowable Payments amount would decrease from $43.57 to $37.82, as compared to CY 2015 values. For adult beneficiaries, the fixed-dollar loss amount would decrease from $86.19 to $85.66 and the MAP amount would decrease from $51.29 to $48.15.

“The 1% target for outlier payments was not achieved in CY 2014. We believe using CY 2014 claims data to update the outlier MAP and fixed dollar loss amounts for CY 2016 will increase payments for ESRD beneficiaries requiring higher resource utilization in accordance with a 1% outlier percentage,” CMS wrote.

Part of the newly proposed rule also includes a drug designation process to help CMS determine when 1) a product would no longer be considered an oral-only drug and 2) ways to include new injectable and intravenous renal dialysis service drugs and biologicals in the bundled payment under the ESRD PPS.