CMS finalizes updates to dialysis payments for 2021
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CMS has released the final rule updating Medicare payment policies and rates under the Prospective Payment System for renal dialysis services for 2021.
The update also covers payment for treatment of AKI provided by dialysis facilities and finalizes changes to the End-Stage Renal Disease Quality Incentive Program (QIP).
Key updates of the Prospective Payment System (PPS) for Medicare-approved dialysis clinics, according to a press release from CMS, include:
- A $13.80 increase in the base rate, bringing the payment to $253.13 per dialysis treatment. The payment reflects the application of the updated wage index budget-neutrality adjustment factor (.999485), an addition to the base rate of $9.93 to cover drug add-on payments for calcimimetics and a productivity-adjusted market basket increase, according to the release. Calcimimetics had previously been covered separately by CMS outside the bundled payment.
- An add-on payment the PPS offers to facilities that use new technology for patients on home dialysis. CMS had previously approved a similar payment for in-center dialysis care.
The intent of the ESRD PPS Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) “is to facilitate beneficiary access to certain qualifying, new and innovative renal dialysis equipment and supplies by providing an add-on payment adjustment to support ESRD facilities in the uptake of new and innovative equipment and supplies under the ESRD PPS,” the press release stated.
As with other renal dialysis equipment and supplies potentially eligible for the TPNIES, CMS would evaluate the application to determine whether the home dialysis machine “represents an advance that substantially improves, relative to renal dialysis services previously available, the diagnosis or treatment of Medicare beneficiaries, and meets other requirements ...” the release stated.
Under the final rule, Medicare expects to pay $10.3 billion to approximately 7,400 ESRD facilities for renal dialysis services, according to the release. The bundled payment under the ESRD PPS includes all renal dialysis services furnished for outpatient dialysis, including drugs and biological products (with the exception of oral-only ESRD drugs until 2025) and other renal dialysis items and services that were payable separately 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 facility-level adjustments for ESRD facilities that have a low patient volume, for facilities in rural areas, and for the wage index, according to the release.
The ESRD PPS also provides a training add-on payment adjustment for home and self-dialysis modalities. For high-cost patients, an ESRD facility may be eligible for outlier payments.
CMS projects that the updates for CY 2021 will increase the total payments to all ESRD facilities by 2% compared with CY 2020. For hospital-based ESRD facilities, CMS projects a decrease in total payments of 0.2%, whereas for freestanding facilities the projected increase in total payments is 2%.
Reference:
- CMS. ESRD PPS transitional add-on payment adjustment for new and innovative equipment and supplies (TPNIES). Available at: www.cms.gov/medicare/esrd-pps/esrd-pps-transitional-add-payment-adjustment-new-and-innovative-equipment-and-supplies-tpnies. Accessed Nov. 5, 2020.
Perspective
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Maria Regnier, MSN, RN, CNN
The National Renal Administrators Association (NRAA) gained a significant win in the final rule regarding the low-volume payment adjustment. Some facilities that would normally meet eligibility criteria for the low-volume payment adjustment (LVPA) will be eligible for CY 2021, 2022 and 2023 even if their volume exceeds the threshold. The NRAA expressed concerns to CMS that some facilities may be treating more patients than normal due to circumstances created by the pandemic, which could put them at risk for losing the LVPA.
We are particularly concerned about the financial impact of the PPS base rate adjustment for inclusion of calcimimetics on the independent and small dialysis facilities. CMS proposed $12.06 per treatment, which was reduced to $9.93 in the final rule. CMS stated that the average wholesale price of generic medications was factored into the change. For many small and independent facilities that don’t receive volume pricing, the cost of calcimimetics will far exceed this low addition to the base rate. The NRAA supports the CMS decision to change the utilization data to the latter part of 2018 and 2019, that was changed in the final rule.
The NRAA supported the CMS proposal to include the eligibility of innovative home dialysis equipment for a single patient for TPNIES payment. This concept aligns with the administration’s efforts to increase the number of patients on home dialysis. However, the proposed methodology for payment (65% of treatment cost less the amount attributable for the home equipment) may be inadequate and adversely impact small and rural providers’ ability to acquire this new and innovative equipment.
CMS will continue to withhold a projected 1 percent of ESRD PPS spending for outlier payments. CMS further increased the outlier threshold for adult patients to reflect the fact that calcimimetics will be eligible for outlier payments beginning Jan. 1, 2021. The NRAA expressed concern with this increase in particular, stating that the policy would effectively limit most outlier payments primarily to patients using expensive IV calcimimetics. The NRAA was also concerned with the fact that the 1 percent outlier withhold has never reached its target and encouraged CMS to work with the renal community to reach an alternative method to account for outlier patients. In response to concerns raised by the NRAA and others, CMS finalized the outlier policy as proposed and said it will consider alternatives to the existing outlier policy in the future.
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