Hospital-based end-stage renal disease facilities get 3.7% increase in proposed rule

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Total 2023 payments to all end-stage renal disease facilities would increase 3.1%, compared with 2022, under the End-Stage Renal Disease Prospective Payment System proposed rule that the Centers for Medicare and Medicaid Services issued Tuesday. 

Hospital-based ESRD facilities would see an increase of 3.7% in total payments, and for freestanding facilities, CMS projects an increase of 3.1%.

The proposed base rate for renal dialysis services is $264.09, an increase of $6.19 to the current base rate of $257.90. 

In 2023, Medicare expects to pay $8.2 billion to approximately 7,800 end-stage renal disease facilities for furnishing renal dialysis services. 
 
PROPOSED CAP ON DECREASES IN WAGE INDEX 

The wage index is applied to the labor-related share of the payment rate to account for differing wage levels in areas in which end-stage renal disease facilities are located.

Beginning in 2023, CMS is proposing to increase the wage index floor from 0.5 to 0.6. Additionally, CMS is proposing to apply a permanent 5% cap on decreases in the wage index. 

Specifically, CMS is proposing that an ESRD facility's wage index would not be less than 95% of its final wage index for 2022, and that for subsequent years, a facility's wage index would not be less than 95% of its wage index calculated in the prior calendar year.

ACUTE KIDNEY INJURY DIALYSIS

The Acute Kidney Injury (AKI) dialysis payment rate for renal dialysis services furnished by ESRD facilities for 2023 will equal the 2023 ESRD prospective payment system base rate and will apply the 2023 wage index, CMS said. The proposed 2023 payment rate is $264.09.

PROPOSED CHANGE TO DEFINITION OF ORAL-ONLY DRUG

CMS is proposing to include the word "functional" in the definition of oral-only drug, effective January 1, 2025. Under the proposed definition, an oral-only drug would be a drug or biological product with no injectable functional equivalent or other form of administration other than an oral form.

CMS said it wants to ensure its policies are appropriately supporting innovation for new drugs that are truly innovative and not simply variations of existing drugs.

BUNDLED PAYMENT

The ESRD PPS provides a bundled, per-treatment payment to ESRD facilities that includes all renal dialysis services furnished for outpatient maintenance dialysis, including drugs and biological products (with the exception of oral-only ESRD drugs until 2025). 

Additionally, the bundled payment includes all other renal dialysis items and services that were formerly payable separately under 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. 

When applicable, the bundled payment rate also includes a training add-on payment adjustment for home and self-dialysis modalities, an outlier payment for high-cost patients and add-on payment adjustments for certain drugs, equipment and supplies.

ESRD BUNDLED MARKET BASKET 

CMS is proposing to rebase and revise the end-stage renal disease bundled market basket to a 2020 base year using data from the Medicare Cost Report and other publicly available data. In addition, the agency is proposing to update the labor-related share. 

The proposed 2023 labor-related share is 55.2%, based on the 2020-based market basket weights.
 
PROPOSED UPDATES TO OUTLIER POLICY

CMS is proposing to update the outlier services fixed-dollar loss amounts for 2023, using 2021 claims data. Additionally, CMS is proposing refinements to its methodology for calculating the fixed-dollar loss amount for adults to more effectively target 1% of total ESRD payments. 

Based on the latest available data, the proposed fixed dollar loss amount for pediatric beneficiaries would decrease from $26.02 to $21.51, and the Medicare allowable payment amount would decrease from $27.15 to $25.62, as compared to 2022. 

For adult beneficiaries, the proposed fixed dollar loss amount would decrease from $75.39 to $40.75, and the Medicare allowable payment amount would decrease from $42.75 to $36.85.

For Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES) applications, three products are under consider for 2023: a monitoring system for peritoneal dialysis, a post-dialysis compression sleeve and a dialyzer. CMS is requesting public comment on whether the products meet the eligibility criteria. 

PROPOSED CHANGES TO ESRD QUALITY INCENTIVE PROGRAM 

Under the End-Stage Renal Disease Quality Incentive Program (ESRD QIP), CMS assesses the total performance of each facility on quality measures specified for a payment year, applies an appropriate payment reduction to each facility that does not meet a minimum total performance score and publicly reports the results.

CMS is proposing to continue to collect and publicly report all ESRD QIP measures while pausing the use of certain measures data for scoring and payment adjustment purposes because it has determined that circumstances caused by the COVID-19 pandemic have significantly affected the validity and reliability of the measures and resulting performance scores.  

This policy is intended to ensure that these programs do not penalize facilities based on circumstances caused by the public health emergency.

For specific measures and other updates, please visit the CMS fact sheet.

REQUEST FOR INFORMATION

CMS is requesting information on ways to align resource use with payment and to ensure that Medicare beneficiaries with ESRD have continued access to technologies that can improve health outcomes and quality of life. 

The proposed rule also includes requests for information regarding the following: 

1. A potential add-on payment adjustment for certain new renal dialysis drugs and biological products.
2. Health equity issues, with a focus on pediatric dialysis payment. 

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org