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RPA Comments on the 2013 ESRD Prospective Payment System Proposed Rule

Creation/Revision Date: August 30, 2013


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August 30, 2013 

Marilyn Tavenner, Administrator 
Centers for Medicare and Medicaid Services 
Department of Health and Human Services 
Hubert H. Humphrey Building 
200 Independence Avenue, SW 
Washington, DC 20201 

RE: CMS-1526-P; End-Stage Renal Disease Prospective Payment System, Quality Incentive Program, and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies 

Dear Administrator Tavenner: 

The Renal Physicians Association (RPA) is the professional organization of nephrologists whose goals are to ensure optimal care under the highest standards of medical practice for patients with renal disease and related disorders. RPA acts as the national representative for physicians engaged in the study and management of patients with renal disease. 

RPA is writing to provide comments on the proposed rule for the 2014 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS). We recognize that CMS is seeking to implement complex legislative mandates in the proposed rule, and as always RPA supports the Agency’s efforts to carry out its fiduciary mission in a prudent and responsible manner. However, we are deeply concerned that CMS’ interpretation and application of legislative intent is at best inconsistent, and results in a draconian reduction in dialysis facility reimbursement that almost certainly will compromise access to and quality of care for some percentage of the Medicare ESRD beneficiary population. RPA’s comments will address the following issues: 

• CMS’ Interpretation of Congressional Intent, and Impact on Payment Accuracy 
• Impact of Proposed Rule on ESRD Beneficiary Care 
• Use of a Phase-In or Transition for the Proposed Payment Reduction 
• Promotion of Home Dialysis Modalities 

CMS’ Interpretation of Congressional Intent, and Impact on Payment Accuracy 

RPA acknowledges that CMS has some obligation to implement legislatively mandated changes in regulation such as the provision in the American Taxpayer Relief Act (ATRA) that called for use of updated drug and biological utilization data. We further believe that implementation of regulatory revisions intended to ensure that the Medicare program reimburses providers accurately for the services provided to program beneficiaries is appropriate. However, we also believe that the interpretation and application of Congressional intent, and the principle of accurate reimbursement, should be pursued in a uniform and consistent manner. Unfortunately, the proposed rule for the 2014 ESRD PPS fails to uniformly and consistently interpret and apply the intent of the legislation. 

Our concern relates to the implementation of the relevant ATRA provision versus ongoing adherence to legislative mandates set forth in the Social Security Act. Specifically, we refer to the fact that while the Agency was able to promptly implement the ATRA provision calling for use of 2012 drug utilization data, the rule also states that CMS proposes: 

“to use the same methodology and the CY 2008-based ESRDB (end-stage renal disease bundle) market basket described in the CY 2011 ESRD PPS final rule to compute the CY 2014 ESRDB market basket increase factor.” 

Thus, while using 2012 drug utilization data for all of the other components of the ESRD market basket, CMS is using 2008 cost report data, despite the availability of the 2011 and 2012 cost report data. RPA believes that this clearly runs counter to the Social Security Act’s statutory requirement that CMS set ESRD payment rates “on a cost-related basis or other economical and equitable basis.” The lack of consistency in implementing legislative mandates in a uniformly timely manner compromises the accuracy of ESRD PPS payments and undermines the overall credibility of the PPS. 

RPA therefore urges CMS to either delay the implementation of the ATRA provisions or utilize the most recent cost report data available, to ensure that all data inputs to the ESRD PPS are of similar vintage. 

Impact of Proposed Rule on ESRD Beneficiary Care 

RPA strongly believes that a cut of the magnitude outlined in the PPS proposed rule is certain to discernibly compromise the care provided to Medicare’s ESRD beneficiary population. The likelihood that some dialysis facilities will within some relatively short period of time be forced to cease operations altogether is high, thus requiring dialysis patients who receive life-saving care in those centers to travel farther for their renal replacement therapy; this will be particularly true in underserved rural and inner-city areas. Those centers that do remain open will likely be compelled to reduce staff, offer fewer shifts, eliminate patient-centric services such as the availability of nocturnal dialysis, and will be unable to find other cost-efficiencies in a delivery of care setting that has historically operated on exceptionally thin margins, or pursue innovative care strategies. The authors of the proposed rule acknowledged the potential for this negative impact on beneficiary access to occur in writing: 

“We note that we are also concerned that this one-time reduction to the ESRD PPS base rate could be a significant reduction to ESRD facilities for the year and potentially impact beneficiary access to care.” 

Acknowledging the legislative mandate, it is RPA’s opinion that if in the proposed rule CMS itself is compelled to express concern over beneficiary access to care, the proposal in total is almost by definition problematic. Further, the proposed rule seems to be diametrically opposed to the goals of the CMS Triple Aim (improving the patient experience of care, improving population health, and reducing the per capita cost of health care). It is highly unlikely that that patient experience of care and population health would be enhanced in the face of these cuts, and RPA would posit that even with a huge reduction in the PPS rate, reducing the per capita cost of health care for ESRD beneficiaries under this proposal is not guaranteed. We believe that the dialysis facility is a cost-efficient setting of care for ESRD patients, and if a substantial number of dialysis patients are forced to obtain their care in sites-of-service that are exponentially more expensive than dialysis facilities (such as a hospital outpatient department), the per capita cost reductions will be less than might be expected. 

RPA urges CMS to revisit the potential impact of the proposed rule on ESRD beneficiary access to care, and whether the proposed rule is in alignment with the objectives of the Triple Aim. 

Use of a Transition or Phase-In for the Proposed Payment Reduction

In noting its concern about the impact of proposed rule on beneficiary access, CMS solicits comments on the use of a potential transition or phase-in for the proposed reimbursement reduction. RPA supports the comments of Kidney Care Partners (KCP), the Home Dialysis Alliance, and others that a transition or phase-in should not be viewed as a substitute for making critically important methodological revisions to the PPS designed to ensure that the payment rate will cover the current costs of providing dialysis care to ESRD beneficiaries. 

RPA recommends that CMS delay implementation of the changes related to drug utilization until the problems with the underlying PPS methodology can be resolved, and CMS is able to use uniformly timely data inputs and appropriate policy development mechanisms to reimburse dialysis facilities on a “cost-related basis or other economical and equitable basis” as noted in the Social Security Act. 

While RPA recognizes the realities of the annual rulemaking cycle for payment systems such as the PPS, we urge the Agency to offer the community more options for evaluation on issues such as these than just immediate implementation or a phase-in. This is particularly true in light of changes to the PPS that occurred in the recent past, or are slated for the near future. These include payment reductions resulting from the use of the PPS as an offset for other health policy priorities in recent year-end “must-do” legislative actions, the recent 2% cut due to sequestration, and the planned inclusion of oral-only drugs in the PPS bundle for 2016. Given this degree of past and future unpredictability affecting the ESRD PPS, we urge CMS to delay implementation of the ATRA drug utilization provisions 

RPA urges CMS to delay implementation of the changes related to drug utilization until problems with the underlying PPS methodology can be resolved, particularly in light of recent external policy changes disrupting the predictability of the ESRD PPS. 

Promotion of Home Dialysis Modalities 

In the proposed rule, CMS seeks comment on the costs associated with furnishing self or home dialysis training (with a specific focus on home hemodialysis—HHD—training), and on the use of a ‘‘holdback’’ payment methodology, under which a portion of the training payments would be withheld from the ESRD facility until the ESRD patient demonstrates that they have successfully transitioned to a home modality. RPA appreciates the Agency’s interest in home dialysis therapies. 

Under the aegis of KCP, research was performed on the cost of HHD training which revealed that the difference in cost between a typical dialysis treatment and one that included HHD training was in excess of $250.00, well above the training add-on adjustment of $33.44.[1]  RPA strongly urges CMS to establish a training rate that more accurately reflects the actual costs associated with providing these services, and to do so in a non-budget neutral manner that does not negatively impact PPS reimbursement otherwise. 

Further, RPA feels strongly that use of a “holdback” payment methodology pertaining to the transition to home dialysis is simply inappropriate and a profound disincentive for patients evaluating a transition to home dialysis. Both Congress (in legislative language) and CMS (by providing ‘immediate’ coverage for new ESRD beneficiaries beginning on home dialysis) have over the years indicated support for the promotion of home dialysis therapies; we believe use of a holdback mechanism is in direct contradiction of that support. 

RPA urges CMS to establish a home dialysis training rate that more accurately reflects the costs associated with these services, and to do so in a non-budget neutral manner. Additionally, RPA urges CMS to abandon the concept of utilizing a “holdback” payment methodology in home dialysis training. 

As always, RPA welcomes the opportunity to work collaboratively with CMS in its efforts to improve the quality of care provided to the nation’s kidney patients, and we stand ready as a resource to CMS in its future endeavors. Any questions or comments regarding this correspondence should be directed to RPA’s Director of Public Policy, Rob Blaser, at 301-468-3515, or by email at 

Thank you, 

Kossmann signature 2

Robert J. Kossmann, MD 

Renal Physicians Association

1700 Rockville Pike
Suite 220
Rockville, MD 20852

Phone: 301-468-3515
Fax: 301-468-3511

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