When two government reports told the Centers for Medicare & Medicaid Services that it was overpaying dialysis clinics for the use of anemia drugs––and Congress followed up with a mandate that the agency cut the composite rate to account for it––CMS did as it was told.

Not so fast.

The cut, part of the changes in the proposed rule for the 2014 Prospective Payment System that governs Medicare payments to dialysis providers, has released a firestorm of criticism, from legislators who ordered the cut in the first place, to threats from providers to shut down money-losing clinics.

“This is exceptionally frustrating given already dialysis providers lose money on Medicare patients and charge private patients significantly more in order to subsidize government patients," said DaVita CEO Kent Thiry during an investor call on the company’s second quarter profits. He added: “If they cut reimbursement there will be changes to patient access to care, there is no two ways around it … inevitably, some centers will close. And they will tend to be those centers that serve the most vulnerable patients.”

In a letter to the editor published in her hometown paper, The Herald Whig, Liberty, Ill. resident and patient advocate Lana Schmidt wrote, “The impending funding cuts of 9.4%…will severely impact, if not eliminate, the care I receive. The economics of the situation are clear: dialysis providers––like the ones I've come to know and trust here in Illinois––will be unable to continue current operations if Medicare doesn't cover the cost of my care. That will mean facilities may be rendered inoperable, making it more difficult for patients to fit dialysis treatments into daily life. Other dialysis options, such as nocturnal in-center dialysis, could be limited. There is also the frightening possibility that many could be turned away and forced to drive out of town for care.”

Time to comment

Public comments on both the proposed rule covering the Medicare PPS for dialysis facilities and the Quality Incentive Program for performance year 2014 are due by August 30. Go to www.regulations.gov to review the rule and make comments.



CMS’s action has also drawn the ire of over 200 members of Congress, who signed a letter saying the cut, while mandated, was too harsh. The letter, initiated by Representatives Diane Black, R-Tenn., John Lewis, D-Ga., John Shimkus, R-Ill., and Ben Ray Lujan, D-N.M., quickly gained momentum between both parties as Congress drew to a close for August Congressional recess.

"The new bundled payment system for dialysis has been a remarkable success in payment reform,” the letter said. “However, as written, the new proposed rule would have a devastating impact on Medicare beneficiaries who desperately depend on dialysis treatments just to stay alive.

If finalized later this year, the proposed changes to the PPS would reduce the Medicare composite base rate from $240.36 per dialysis patient per treatment to $216.95 per treatment.