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CMS Releases ESRD Bundling Final Rule

Rule Makes Changes Sought by RPA 

On July 26 the Centers for Medicare and Medicaid Services (CMS) released the final rule for the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS)—commonly referred to as the bundling rule.  This long awaited regulation makes changes that have been over a decade in the making, and was finally mandated by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).

CMS originally acted on their legislative mandate in September 2009 with the release of the proposed ESRD bundling rule.  Numerous controversial proposals were outlined in the proposed rule, such as the inclusion of oral drugs and their equivalents in the revised bundle, a provision that called for all laboratory tests ordered by the patient’s monthly capitated payment (MCP) physician to be included in the bundle, and the elimination of separate reimbursement for home dialysis training.  While CMS’ underlying rationale for such a broad bundle was not unreasonable (in essence, the purpose of a broad ESRD bundle is to include all services provided to ESRD patients), in practice many of the proposals seemed to be unworkable to physicians, other providers and other stakeholders in the ESRD arena.  Since the release of the proposed rule, these issues were the subject of considerable advocacy efforts on the part of the kidney care community, with broad (but not universal) support among renal groups.   

To the Agency’s credit, the final rule makes numerous changes sought by RPA and most of the kidney care provider community.  Most significantly, on CMS’ controversial proposal to include all oral drugs and their equivalents in the bundle, the Agency decided to delay implementation of this proposal until January 1, 2014, stating that:

We are revising the implementation date for oral-only ESRD drugs and biologicals to be January 1, 2014. We believe that the transition period will give us sufficient time to address the data/pricing issues identified above, and to evaluate and correct any potential concerns that may emerge as a result of the inclusion of the oral drugs and biologicals with other forms of administration in the payment bundle effective January 1, 2011.    

This revision is almost perfectly aligned with RPA’s position on the inclusion of oral drugs and equivalents in the bundle.  RPA has always maintained that bundling itself was merely a tool that if implemented correctly could be of great benefit to dialysis patients and providers.  This rationale applied directly to oral drugs and equivalents, as RPA stated in our comments on the proposed rule that if appropriate safeguards were in place, it would be acceptable to include these drugs in the ESRD bundle.  However, our comments stated that we did not believe that those safeguards were in place and thus for now oral drugs should be excluded until further evaluation could be performed, and this is where CMS landed.    

The Agency also heard RPA and others on the problems that would be likely to occur if all laboratory tests ordered by the patient’s MCP physician were to be included in the composite rate bundle.  RPA’s comments on the proposed rule noted our belief that this was not only an unnecessary change but was also likely to cause substantial disruptions in care delivery for those patients whose nephrologist serves as their primary care provider, and would create a disincentive for nephrologists to provide primary care services altogether. 

In the comment and response section, the final rule notes:

Laboratory tests unrelated to the treatment of ESRD are not included in the payment bundle. Laboratory tests ordered by a dialysis patient’s MCP nephrologist, or other practitioner for reasons unrelated to ESRD will be excluded from the ESRD PPS and will continue to be reimbursed separately.

[The accompanying chart displays the list of ESRD Related Laboratory Tests included in the bundle as outlined in the rule.]

The final rule also restores reimbursement for some of the costs associated with home dialysis training, in the form of an add-on payment.  This represents a significant victory for the home dialysis community of patients and providers, as this change, along with the provision making payment for home therapies equivalent to the reimbursement rate for in-center dialysis should provide a greater incentive. Once again, this policy revision is reflective of RPA input on the proposed rule, as we urged CMS to avoid any changes that would create any disincentives for patients to be dialyzed at home. Following is the language describing how the home dialysis training add-on payment will be determined:

The amount for the training add-on adjustment we are finalizing under the ESRD PPS will be $33.44 per treatment. This amount would be added to the ESRD PPS payment amount or ESRD PPS portion of the blended payment amount for those ESRD facilities in the ESRD PPS transition. Specifically, this amount will be added to the ESRD PPS payment rate or ESRD PPS portion of the blended payment amount for those ESRD facilities in the ESRD PPS transition, each time a training treatment is provided by the Medicare certified training ESRD facility.
As the training add-on adjustment is directly related to nursing salaries and nursing salaries differ greatly based on geographic location, we will adjust the $33.44 training add-on by the geographic area wage index applicable to the ESRD facility so that the training add-on adjustment reflects local nursing wages. Using the proposed wage index values issued in the CY 2011 PFS proposed rule, the training add-on amounts after application of the wage index would range from $20.03 to $45.84.

Other issues of significance to the nephrology community include:

  • On payment for services provided to pediatric patients, the final rule indicates that the composite rate payment for pediatric patients will exceed the comparable payment amount for adult patients by 10.5%.  This represents an increase over the level outlined in the proposed rule but appears to fall far short of current reimbursement levels, and does not appear to be equivalent to the costs of providing services to pediatric patients.  At press time, this provision of the final rule is undergoing further review and analysis. 
  • Payment for physician services was maintained separately from the composite rate payment, with CMS noting that “Numerous commenters supported our decision in the proposed rule to exclude physician services from the ESRD PPS payment bundle. We received no comments endorsing the inclusion of these services in the bundle”, and that “any changes with regard to the payment for physicians’ services related to renal dialysis would be addressed in future rulemaking.”  RPA will maintain its strong advocacy position against such a change in future years.
  • The changes outlined in the final rule result in a base payment of $229.63.
  • CMS maintains the transition payment ‘adjustment’ (i.e., reduction) of 3.1% resulting from the use of a transition period to the new bundled payment system.  This reduction is in addition to the 2% reduction in the composite rate already in place to account for quality performance measures in the rule.  CMS proceeded with the reduction based on transition over the objections of RPA and others in the kidney care community.
  • With regard to case-mix, CMS declined to utilize gender and race/ethnicity as case mix adjusters, despite comments from RPA and other organizations advocating for such a change. The case-mix adjustors to be included are:
    • Body Surface Area
    • Body Mass Index
    • Time since onset of dialysis, < 4 months
    • Pericarditis
    • Bacterial Pneumonia (acute)
    • Gastrointestinal Tract Bleeding with Hemorrhage (acute)
    • Hemolytic Anemia with Sickle Cell Anemia (chronic)
    • Myelodysplastic Syndrome (chronic)
    • Monoclonal Gammopathy (chronic)
    • RPA advocated for CMS to include a more robust discussion of its plans to account for the implementation of ICD-10 diagnosis codes in light of the October 1, 2013 implementation date of ICD-10.  The final rule provides minimal discussion of ICD-10.

While the dust will continue to settle regarding the impact of the final rule implementing a revised ESRD composite rate payment bundle, on most of the high profile issues raised by the kidney care community, CMS accepted the input of the community and made some changes as appropriate.  As further analysis of the bundling rule is performed, RPA will keep its membership appraised. The complete final rule can be viewed at:
http://www.ofr.gov/OFRUpload/OFRData/2010-18466_PI.pdf.

923 CPT/ HCPCS Short Description 85044 Manual reticulocyte count 85045 Automated reticulocyte count 85046 Reticyte/hgb concentrate 85048 Automated leukocyte count 86704 Hep b core antibody, total 86705 Hep b core antibody, igm 86706 Hep b surface antibody 87040¹ Blood culture for bacteria 87070¹ Culture, bacteria, other 87071¹ Culture bacteria aerobic othr 87073¹ Culture bacteria anaerobic 87075¹ Cultr bacteria, except blood 87076¹ Culture anaerobe ident, each 87077¹ Culture aerobic identify 87081¹ Culture screen only 87340 Hepatitis b surface ag, eia G0306 CBC/diff wbc w/o platelet G0307 CBC without platelet ¹ Only ESRD-related when testing is related to the dialysis access site

ESRD-Related Laboratory Tests Included in the Bundle

CPT/ HCPCS Short Description

82040 Assay of serum albumin
82108 Assay of aluminum
82306 Vitamin d, 25 hydroxy
82310 Assay of calcium
82330 Assay of calcium, Ionized
82374 Assay, blood carbon dioxide
82379 Assay of carnitine
82435 Assay of blood chloride
82565 Assay of creatinine
82570 Assay of urine creatinine
82575 Creatinine clearance test
82607 Vitamin B-12
82652 Vit d 1, 25-dihydroxy
82668 Assay of erythropoietin
82728 Assay of ferritin
82746 Blood folic acid serum
83540 Assay of iron
83550 Iron binding test
83735 Assay of magnesium
83970 Assay of parathormone
84075 Assay alkaline phosphatase
84100 Assay of phosphorus
84132 Assay of serum potassium
84134 Assay of prealbumin
84155 Assay of protein, serum
84295 Assay of serum sodium
84466 Assay of transferrin
84520 Assay of urea nitrogen
84540 Assay of urine/urea-n
84545 Urea-N clearance test
85014 Hematocrit
85018 Hemoglobin
85025 Complete (cbc), automated (HgB, Hct, RBC, WBC, and Platelet count) and automated differential WBC count.
85027 Complete (cbc), automated (HgB, Hct, RBC, WBC, and Platelet count)
85041 Automated rbc count
85044 Manual reticulocyte count
85045 Automated reticulocyte count
85046 Reticyte/hgb concentrate
85048 Automated leukocyte count
86704 Hep b core antibody, total
86705 Hep b core antibody, igm
86706 Hep b surface antibody
87040¹ Blood culture for bacteria
87070¹ Culture, bacteria, other
87071¹ Culture bacteria aerobic othr
87073¹ Culture bacteria anaerobic
87075¹ Cultr bacteria, except blood
87076¹ Culture anaerobe ident, each
87077¹ Culture aerobic identify
87081¹ Culture screen only
87340 Hepatitis b surface ag, eia
G0306 CBC/diff wbc w/o platelet
G0307 CBC without platelet

¹ Only ESRD-related when testing is related to the dialysis access site