The Kidney Care Partners, which represents much of the dialysis industry, filed a 77-page formal response with the Centers for Medicare & Medicaid Services outlining its concerns over the proposed cuts and changes to the End-Stage Renal Disease bundled payment system. 
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Kidney Care Partners is now urging health care policymakers to consider a new Moran analysis of 2011 government cost data, which they say shows zero or negative Medicare margins for 78% of dialysis facilities nationwide if the proposed cut is finalized.  
 “The 2011 cost report data show that the economics of this sector remain extremely fragile.  A cut of the magnitude proposed puts beneficiaries at risk and places facilities in an untenable position of having to make difficult choices about reducing staff, services, and even closing facilities, " the letter reads. "Therefore, we strongly urge the agency to exercise all of its authority under the statute to protect beneficiary access to care and temper the proposed payment reduction…” 

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“Dialysis providers are already struggling to absorb and adjust to the Medicare cuts made to the program in recent years,” said Ron Kuerbitz, chairman of Kidney Care Partners and CEO of Fresenius Medical Care North America. “As this new analysis of government data clearly show, Medicare barely covers the cost of providing dialysis to ESRD patients, even before the impact of sequestration-related cuts. The current proposal would dramatically underfund this crucial therapy for Medicare beneficiaries on dialysis. To protect the well-being of our patients, CMS must carefully weigh the merits of the data and moderate its approach to this rule.”

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Specifically, the letter recommended the following:

  •  Before considering a payment rate reduction, CMS should use its existing authority to address long-standing, unresolved problems with the base rate that have resulted in significant dollars being removed from the payment system inappropriately.
  • When calculating the payment reduction, CMS should account for the 2% utilization reduction already built into the payment system, as well as the historic cross-subsidization of the composite rate services by separately billed drugs that the PPS bundle eliminated by creating a single payment rate.  The effort to unbundle the drugs for purposes of the payment reduction requires the cross-subsidization to be considered once again.
  • Before finalizing the overall payment rate, make sure that the rate covers the cost of providing care, as determined by the agency’s own cost report data.

Download the KCP letter here.