Congressional members question whether ESRD payment bundle may be hurting innovation
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Key takeaways:
- Some members of Congress are concerned that the Prospective Payment System is limiting innovation in kidney care.
- Dialysis providers are expecting a final rule soon on the dialysis payment rate for 2024.
Several members of Congress are questioning whether innovation in kidney care is being hampered by the Medicare bundled payment rate for end-stage kidney disease treatment.
“As co-chairs of the Congressional Kidney and Health Care Innovation Caucuses, we share your goal of improving care and expanding access to innovative drugs and devices for patients with kidney diseases,” U.S. Reps. Suzan DelBene, D-Wash., Larry Bucshon, MD, R-Ind., and Ami Bera, MD, D-Calif., wrote in a recent letter to CMS Administrator Chiquita Brooks-LaSure. “To that end, we are encouraged that the [CMS] calendar year 2024 end-stage renal disease (ESRD) prospective payment system rule includes new payments for innovative drugs.
Some members of Congress are concerned that the Prospective Payment System is limiting innovation in kidney care. Image: Abobe Stock.
“However, as you work to finalize the rule, we wish to highlight concerns from across the kidney stakeholder community — including patients, providers and innovators — that the proposal does not sufficiently reimburse for new, innovative products,” they wrote.
CMS released a proposed rule in June for dialysis services that would raise the bundled payment rate by 1.6% for 2024 and includes a transitional drug add-on payment adjustment (TDAPA) to the bundled payment rate for certain new renal dialysis drugs and biological products.
Add-on payment
In their letter to Brooks-LaSure, DelBene, Bucshon and Bera, who is the Congressional Health Care Innovation Caucus co-chair, wrote, “While we appreciate the importance of the current bundled payment system to promote high-quality and efficient care, we are skeptical that the proposed post-TDAPA add-on payments would, in many cases, sufficiently reimburse for new, innovative products,” they wrote. “For example, the proposed rule indicates that using available data for the current TDAPA product, CMS’ methodology would result in a [$0.09] increase to the base rate for all dialysis patient claims, regardless of whether they use the product or not.”
Impact on manufacturers
In the letter, DelBene, Bucshon and Bera wrote that the role of Medicare as a primary payer for kidney care and “how it pays for kidney drugs, devices and other medical products for ESRD patients” has diminished the interest among investors, researchers and companies to pursue development of new, cutting-edge treatments.
“As Congress and successive administrations have recognized through the bipartisan KidneyX initiative, there has not been sufficient innovation when it comes to treating individuals with kidney diseases,” the legislators wrote. “KidneyX seeks to stimulate and accelerate innovation in this area. If Medicare does not pay for innovation, it will undermine the long-term goals of improving care and reducing Medicare costs.”
In a separate letter to Brooks-LaSure, U.S. Reps. Mike Kelly, R-Pa., and Terri Sewell, D-Ala., wrote that establishing a forecast error adjustment in the final ESRD Prospective Payment System (PPS) for 2024 would help dialysis providers cover higher labor costs.
“Dialysis providers have been significantly impacted by the nation’s health care workforce shortage, which the pandemic further exacerbated,” Kelly and Sewell wrote. “These shortages show no signs of abating. Attracting and retaining the technically skilled staff necessary to deliver safe, high-quality care without disruption has resulted in dialysis providers experiencing higher labor costs.”
The legislators requested that CMS add a forecast error adjustment, similar to adjustments previously made for other prospective payment systems, to the PPS. “Although additional steps must be taken to improve the performance of the ESRD PPS payment adequacy, this immediate action is critical for Americans living with kidney failure,” Kelly and Sewell wrote.
John P. Butler, chair of the coalition Kidney Care Partners, said the support of Congressional leaders of the concerns of the kidney care community regarding inadequate payments for innovation was encouraging. “All across the spectrum of kidney care, from providers to patients to innovators, there is a call for CMS to make policy changes to improve our kidney care infrastructure,” Butler said in a press release. “Now we’re pleased to see members of Congress join our call for improvements to the rule.”
References:
DelBene S, Bucshon L, Bera A. Letter to the Honorable Chiquita Brooks-LaSure, Administrator, CMS, Oct. 2, 2023. https://kidneycarepartners.org/wp-content/uploads/2023/10/CY24-ESRD-Innovation-Letter-Final.pdf. Accessed Oct. 9, 2023.
Kelly M, Sewell T. Letter to the Honorable Chiquita Brooks-LaSure, Administrator, CMS. Sept. 29, 2023. https://kidneycarepartners.org/wp-content/uploads/2023/10/Member-Letter-ESRD-CY2024-Forecast-Error-Adjustment.pdf. Accessed Oct. 9, 2023.
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