Medicare Payment and Reimbursement

CY2019 Medicare End-Stage Renal Disease (ESRD) Prospective Payment System Proposed Rule: HFMA Executive Summary

July 25, 2018 10:30 am

HFMA Executive Summary

On July 11, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule addressing the Medicare End-Stage Renal Disease Prospective Payment System (ESRD PPS), its Quality Incentive Program (QIP), other ESRD-related provisions and the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program. The proposed rule is published in the July 19, 2018, Federal Register. The public comment period closes on September 10, 2018. For more information on the proposal, download a full summary of the rule.

Along with routine updates for 2018 payment under the ESRD PPS, the proposed rule would change the drug designation process for purposes of the transitional drug add-on payment adjustment; revise the low-volume payment adjustment; update the acute kidney injury (AKI) payment rate; and make changes to the QIP measures, scoring methodology, reporting periods and validation. 

Bidding and pricing methodologies under the DMEPOS competitive bidding program would be changed by implementing lead item pricing and using maximum winning bids to establish single payment amounts. Three different temporary fee schedule adjustment methodologies would be established, depending on the area in which the items and services are furnished. CMS also proposes to create new payment classes for oxygen and oxygen equipment including a proposal to ensure budget neutrality; special payment rules for multi-function ventilators; and a proposal to include the Northern Mariana Islands in the national mail order competitive bidding program.

Payment Rate Increases
The proposed CY2019 ESRD PPS base rate, $235.82, reflects a 1.48 percent increase to the final CY2018 rate of $232.37. This increase comprises the application of a productivity-adjusted market basket increase of 1.5 percent (2.2 percent estimated ESRD market basket increase, reduced by a 0.7 percent multi-factor productivity adjustment), and a wage index budget neutrality adjustment of 0.999833. The proposed rate is calculated as follows: $232.37 X 1.015 X 0.999833 = $235.82. 

Outlier Policy
For 2019, CMS proposes no changes to the methodology used to compute the Medicare allowable payment per treatment for ESRD outlier services. However, these amounts would be updated using 2017 claims data. CMS seeks comment on whether it should expand outlier services to include composite rate drugs and supplies.

End stage renal disease (ESRD) Quality Incentive Program (QIP)
In previous rulemaking, CMS adopted ESRD QIP measures for payment years (PYs) through 2021. For PY 2021, CMS proposes to modify the criteria it considers for removing a measure from the ESRD QIP to align with the removal “factors” identified for other CMS quality reporting and pay-for-performance programs. Four measures would be removed from the program beginning with PY 2021. The measures and the rationale for their removal are summarized in the rule. CMS also discusses its proposed program requirements for PYs 2022 and 2024.

Request for Information on Promoting Electronic Interoperability
CMS seeks public comment on how best to accomplish the goal of fully interoperable health information technology and electronic health record systems for providers and suppliers, and how to advance the MyHealthEData initiative for patients. It is particularly interested in identifying fundamental barriers to interoperability and health information exchange, including those that prevent patients from being able to access and control their medical records.

Request for Information on Price Transparency: Improving Beneficiary Access to Provider and Supplier Charge Information
CMS discusses its concern that challenges continue to exist for patients due to insufficient price transparency. These challenges include surprise billing for out-of-network physicians and chargemaster data that are not helpful in estimating what a patient is likely to pay for a service. In order to promote greater price transparency for patients, CMS seeks comments from all providers and suppliers on ways it can help improve the accessibility and usability of current charge information.

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