End Stage Renal Disease (ESRD) Prospective Payment System (PPS) CY 2021 Final Rule (CMS-1732-F)
On November 2, CMS issued a final rule that updates payment policies and rates under the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for renal dialysis services furnished to beneficiaries on or after January 1, 2021. This rule also provides updates to the Acute Kidney Injury (AKI) dialysis payment rate for renal dialysis services furnished by ESRD facilities to individuals with AKI and finalizes changes to the ESRD Quality Incentive Program (QIP).
Background
Under ESRD PPS for CY 2021, Medicare expects to pay $10.3 billion to approximately 7,400 ESRD facilities for renal dialysis services. Section 1881 of the Act requires the implementation of a bundled PPS for renal dialysis services provided to Medicare beneficiaries. A single per-treatment payment is made to an ERSD facility for all the renal dialysis services defined in section 1881 of the Act. The bundled payment rate is case-mix adjusted for factors relating to patient characteristics including age, body surface area, low body mass index, onset of dialysis, four comorbidity categories, and pediatric patient-level adjusters consisting of two age categories and two dialysis modalities.
There are three facility-level adjustments for low patient volume ESRD facilities, those in rural areas and for differences in area wage levels in the wage index. The ESRD PPS provides a training add-on payment adjustment for home and self-dialysis; transitional drug add-on payment adjustment (TDAPA); and transitional add-on payment adjustment for new and innovative equipment and supplies (TPNIES). For high cost patients, outlier payments may be applicable.
The Centers for Disease Control (CDC) categorized older adults and people who have serious underlying medical conditions such as diabetes and chronic kidney disease undergoing dialysis as higher risk for COVID-19 susceptibility and morbidity. Because of this, CMS stresses the importance of reducing the risk of infection through isolating patients from in-center exposure by encouraging home dialysis.
ESRD Treatment Choices (ETC) Payment Model
Beginning on January 1, 2021, The ESRD Treatment Choices (ETC) payment model will be implemented as a result of the CMS and Innovation Center (CMMI) final rule. This mandatory payment model will focus on “encouraging greater use of home dialysis and kidney transplants, in order to preserve or enhance the quality of care furnished to Medicare beneficiaries while reducing Medicare expenditures. The ETC Model adjusts Medicare payments on certain dialysis and dialysis-related claims for participating ESRD facilities and clinicians caring for beneficiaries with ESRD – or Managing Clinicians – based on their rates of home dialysis, transplant waitlisting, and living donor transplants.”
Expansion of TPNIES Eligibility
CMS has finalized TPNIES eligibility for new and innovative capital-related assets – home dialysis machines when used in a residence for a single ESRD patient. Further defined, “home dialysis machines” are hemodialysis machines and peritoneal dialysis cyclers in their entirety. FDA provides a separate marketing authorization for equipment intended for home use. CMS will evaluate dialysis machine applications to determine if they represent an advancement in dialysis treatment, and work with Medicare Administrative Contractors (MACs) to establish payment for these machines.
Base Rate Update
Under the ESRD PPS, a single per-treatment payment is made to an ESRD facility for all the renal dialysis services defined in section 1881 of the Act. The finalized CY 2021 ESRD PPS base rate is $253.13, an increase of $13.80 to the current base rate of $239.33. This proposed amount reflects the application of the updated wage index budget-neutrality adjustment factor (.999485), the addition to the base rate of $9.93 to include calcimimetics (pharmaceutical drug used to treat hyperparathyroidism and kidney disease), and a proposed productivity-adjusted market basket increase as required by the Act (1.6 percent), equaling $253.13 (($239.33 x .999485) + $9.93) x 1.016 = $253.13).
Wage Index Update
The wage index is updated annually based on the most current hospital wage data and the latest core-based statistical area (CBSA) delineations that account for varied wage levels in ESRD facility areas. The wage index is applied to the labor-related share of the payment rate and is budget neutral. The proposed labor-related share is 52.3 percent based on the CY 2019 ESRD PPS final rule. CMS did not receive any comments on this proposal, and therefore finalized the continued use of 52.3 percent for the labor-related share.
AKI Dialysis Payment Rate Update
CMS is updating the AKI dialysis payment rate to equate that of the CY 2021 ESRD PPS base rate and CY 2021 wage index. Therefore, the AKI dialysis payment rate for CY 2021 is $253.13. To review the final rule in its entirety, click the link:
