Medicare End Stage Renal Disease Prospective Payment System CY 2021 Proposed Rule
On July 6, CMS issued a proposed rule (CMS-1732-P) that proposes to update 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 proposes updates to the Acute Kidney Injury (AKI) dialysis payment rate for renal dialysis services furnished by ESRD facilities to individuals with AKI and proposes 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.
For CY 2021, CMS has proposed additional payment 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. Also included is a proposed new mandatory payment model, the ESRD Treatment Choices (ETC) model, which would provide new incentives to encourage home dialysis.
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 proposed CY 2021 ESRD PPS base rate is $255.59, an increase of $16.26 to the current base rate of $239.33. This proposed amount reflects the application of the proposed wage index budget-neutrality adjustment factor (.998652), the proposed addition to the base rate of $12.06 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 (1.8 percent), equaling $255.59 (($239.33 x .998652) + $12.06) x 1.018 = $255.59).
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.
Comments to CMS regarding the ESRD PPS proposed rule must refer to file code CMS-1732-P and must be received no later than September 4, 2020. Electronic and mail submissions are acceptable. To review this document in its entirety, click on the link: Medicare ESRD PPS CY 2021 Proposed Rule.
