NRAA-commissioned study examines accuracy of Medicare ESRD Prospective Payment System

Issue: February 2019

The National Renal Administrators Association has commissioned Dobson | DaVanzo & Associates to examine the accuracy of Medicare End-Stage Renal Disease Prospective Payment System rate setting as influenced by dialysis provider Medicare cost reports, according to a NRAA press release.

The study identified areas where costs are reported inconsistently, patterns of cost which may differentiate sections of the industry and potential flaws in the payment system rooted in cost report data. This was done with the aim of evaluating how Medicare cost reports data affect payment rates for dialysis services and proposed cost report instruction and content changes to CMS as warranted.

The report contained several key findings, including the potential for systematic comorbidity-reporting problems to lead to inadequate data in rate setting and thus payment adjustors not aligning well to costs. Additionally, the low-volume facility adjustments in the ESRD PPS may not accurately reflect costs or be adequate to support facilities with low treatment volume. Rural and low-volume adjustments in the ESRD PPS may not effectively target facilities in need. Hospital and home dialysis cost report items appear to be currently constructed in a way that result in somewhat unwieldy data.

“The data provides confirmation that NRAA’s ongoing work to analyze the impacts of the Medicare ESRD prospective payment system on the ability of independent, small- and medium-sized providers to deliver high-quality care is critical – particularly for those clinics that are in rural areas and treat a low volume of patients,” Marc Chow, NRAA executive director, said in the release. “NRAA is looking forward to our ongoing discussions with CMS to better ensure that Medicare makes payments to dialysis providers that are accurate and adequate for the care delivered.”

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