CY 2015 Payment and Policy Update for ESRD and DME
The Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule for calendar year (CY) 2015 covering payment policies and rates for end stage renal disease (ESRD) providers and durable medical equipment (DME) suppliers. A CMS fact sheet on the ESRD Prospective Payment System (PPS) and DME proposed rule is available by clicking here, and a separate fact sheet on the ESRD quality provisions is available by clicking here. The final rule in its entirety can be viewed by clicking here.
Comments on the final rule are due by 5:00 p.m. on Sept. 2, 2014 and should reference file code CMS-1614-P. Electronic submissions should be sent to http://www.regulations.gov. Once on this website, you will be prompted regarding additional steps. Please refer to the proposed rule for instructions on regular mail submissions.
ESRD Rates
CMS is proposing an overall increase in rates of 0.3 percent, with hospital based providers receiving a slightly higher increase of 0.5 percent as compared to the 0.3 percent for freestanding units. The net increase is the result of 1.6 percent market basket increase minus the multifactor productivity adjustment. Under the proposed rule CMS would apply a wage index budget neutrality factor of 1.001306 resulting in a national base price per dialysis session is $239.33.
Because of a decline in drug utilization, CMS calculates that the share of the payment related to drug costs has decreased. Therefore, CMS proposes to change the labor-related share significantly from 41.737 to 50.673 percent of payments, to be phased in over two years. CMS is also proposing an update to the base year from 2008 to 2012 which may also play a factor in the relative weight of the labor-related share.
According to CMS, Medicare pays approximately $8.5 billion a year to 5,996 ESRD facilities for the delivery of chronic maintenance dialysis services.
Wage Index
Also in the proposed rule, CMS is phasing in the change in definition of Core Based Statistical Areas (CBSAs) to correspond to the new Office of Management and Budget (OMB) guidelines. The two most critical pieces to keep in mind are that some providers may have changed from rural to urban or vice versa, and the transitional wage index will differ from what the index would have been without the proposed change. For member convenience, LeadingAge NY has summarized the impact of the proposed changes by New York counties; please click here for the Summary of Wage Index Changes. CMS proposes a phase in for next year that would base 50 percent of payments based on the CY 2014 delineations and 50 percent on the revised CBSA delineations. For CY 2016 payments would be based entirely on the CY 2015 delineations.
ESRD QIP
Under the ESRD Quality Incentive Program (QIP), CMS proposes a total of 11 measures for 2017. Ten of these measures will be continued from the CY 2016 QIP. CMS is proposing that the percentage of Medicare patients with a mean hemoglobin value greater than 12 g/dL be removed, while adding Standardized Readmission Ratio as a new clinical measure. This ratio assesses the rate of unplanned readmissions of ESRD patients to an acute care hospital within 30 days of a previous discharge. Further expansion of quality measures is also proposed for 2018. Under the ESRD QIP, facilities that do not achieve a minimum total performance score with respect to quality measures receive a reduction in their ESRD PPS payment rates.
Outlier Policy for High Cost Patients
For CY 2015, CMS proposes to use CY 2013 claims data to update the outlier services’ fixed-dollar loss (FDL) and Medicare Allowable Payment (MAP) amounts. For pediatric patients the FDL would increase from $54.01 to $56.30, and the MAP amount will increase from $37.29 to $40.05. For adult patients, CMS is proposing to update the FDL from $98.67 to $85.24 and increase the MAP amount from $51.97 to $52.61.
Low Volume Payment Adjustment
CMS is proposing measures to clarify the eligibility criteria for applying the low volume payment adjustment.
Durable Medical Equipment
The proposed CY 2015 DME provisions include:
- Measures to adjust the fee schedule amounts for DME providers in areas where competitive bidding has not yet been implemented.
- Adjust fee schedule amounts for states in different regions of the country based on competitive bidding pricing from competitions in these regions. The regional prices would be limited by a national ceiling (110% of the average of regional prices) and floor (90% of the average of regional prices)
- Use the national ceiling as an adjusted fee for states that are predominantly rural or sparsely populated (frontier states).
- Adjust fee schedule amounts for non-contiguous areas based on the average of competitive bidding pricing from these areas or the national ceiling, whichever is higher.
- Provide clarification on the specific exceptions when a device could be considered a prosthetic device and not subject to the hearing aid exclusion.
- Update of the regulation to reflect program guidance on what specialized training is needed to provide custom fitting services if providers are not certified orthotists.
- CMS would seek to permit the transfer of a contract to an entity that merges with or acquires a competitive bidding contract supplier if the new owner assumes all rights, obligations, and liabilities of the competitive bidding contract.
Contact: Patrick Cucinelli, pcucinelli@leadingageny.org, 518-867-8827