80 FR 37807 - Medicare Program; End-Stage Renal Disease Prospective Payment System, and Quality Incentive Program
DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services
Federal Register Volume 80, Issue 126 (July 1, 2015)
Page Range
37807-37860
FR Document
2015-16074
This rule proposes to update and make revisions to the End- Stage Renal Disease (ESRD) prospective payment system (PPS) for calendar year (CY) 2016. The proposals in this rule are necessary to ensure that ESRD facilities receive accurate Medicare payment amounts for furnishing outpatient maintenance dialysis treatments during calendar year 2016. This rule also proposes to set forth requirements for the ESRD Quality Incentive Program (QIP) for CY 2016. In an effort to incentivize ongoing quality improvement among eligible providers, the ESRD QIP proposes to establish and revise requirements for quality reporting and measurement, including the inclusion of new quality measures for payment year (PY) 2019 and beyond and updates to programmatic policies for the PY 2017 and PY 2018 ESRD QIP.
Federal Register, Volume 80 Issue 126 (Wednesday, July 1, 2015)
[Federal Register Volume 80, Number 126 (Wednesday, July 1, 2015)]
[Proposed Rules]
[Pages 37807-37860]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-16074]
[[Page 37807]]
Vol. 80
Wednesday,
No. 126
July 1, 2015
Part III
Department of Health and Human Services
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Center for Medicare & Medicaid Services
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42 CFR Part 413
Medicare Program; End-Stage Renal Disease Prospective Payment System,
and Quality Incentive Program; Proposed Rules
Federal Register / Vol. 80 , No. 126 / Wednesday, July 1, 2015 /
Proposed Rules
[[Page 37808]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 413
[CMS-1628-P]
RIN 0938-AS48
Medicare Program; End-Stage Renal Disease Prospective Payment
System, and Quality Incentive Program
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
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SUMMARY: This rule proposes to update and make revisions to the End-
Stage Renal Disease (ESRD) prospective payment system (PPS) for
calendar year (CY) 2016. The proposals in this rule are necessary to
ensure that ESRD facilities receive accurate Medicare payment amounts
for furnishing outpatient maintenance dialysis treatments during
calendar year 2016. This rule also proposes to set forth requirements
for the ESRD Quality Incentive Program (QIP) for CY 2016. In an effort
to incentivize ongoing quality improvement among eligible providers,
the ESRD QIP proposes to establish and revise requirements for quality
reporting and measurement, including the inclusion of new quality
measures for payment year (PY) 2019 and beyond and updates to
programmatic policies for the PY 2017 and PY 2018 ESRD QIP.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, no later than 5 p.m. E.S.T. on August 25,
2015.
ADDRESSES: In commenting, please refer to file code CMS-1628-P. Because
of staff and resource limitations, we cannot accept comments by
facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one
of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to http://www.regulations.gov. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1628-P, P.O. Box 8010,
Baltimore, MD 21244-8010.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1628-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. Alternatively, you may deliver (by hand or
courier) your written comments ONLY to the following addresses prior to
the close of the comment period:
a. For delivery in Washington, DC--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, Room 445-G, Hubert
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201
(Because access to the interior of the Hubert H. Humphrey Building
is not readily available to persons without Federal government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, 7500 Security
Boulevard, Baltimore, MD 21244-1810.
If you intend to deliver your comments to the Baltimore address,
call telephone number (410) 786-9994 in advance to schedule your
arrival with one of our staff members.
Comments erroneously mailed to the addresses indicated as
appropriate for hand or courier delivery may be delayed and received
after the comment period.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Stephanie Frilling, (410) 786-4507,
for issues related to the ESRD PPS, refinement of the case-mix payment
adjustments, drug designation process, delay of payment for oral-only
drugs and biologicals, Part B payment for self-administered drugs, and
reporting of medical director fees on the cost report.
Michelle Cruse, (410) 786-7540, for issues related to the ESRD PPS,
refinement of the facility-level payment adjustments, and policy
clarifications.
Heidi Oumarou, (410) 786-7342, for issues related to the ESRD PPS
Market Basket Update.
Tamyra Garcia, (410) 786-0856, for issues related to the ESRD QIP.
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments
received before the close of the comment period are available for
viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We
post all comments received before the close of the comment period on
the following Web site as soon as possible after they have been
received: http://www.regulations.gov. Follow the search instructions on
that Web site to view public comments.
Comments received timely will also be available for public
inspection as they are received, generally beginning approximately 3
weeks after publication of a document, at the headquarters of the
Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30
a.m. to 4 p.m. To schedule an appointment to view public comments,
phone 1-800-743-3951.
Electronic Access
This Federal Register document is also available from the Federal
Register online database through Federal Digital System (FDsys), a
service of the U.S. Government Printing Office. This database can be
accessed via the internet at http://www.thefederalregister.org/fdsys/.
Addenda Are Only Available Through the Internet on the CMS Web site
In the past, a majority of the Addenda referred to throughout the
preamble of our proposed and final rules were available in the Federal
Register. However, the Addenda of the annual proposed and final rules
will no longer be available in the Federal Register. Instead, these
Addenda to the annual proposed and final rules will be available only
through the Internet on the CMS Web site. The Addenda to the End-Stage
Renal Disease (ESRD) Prospective Payment System (PPS) rules are
available at: http://www.cms.gov/ESRDPayment/PAY/list.asp. Readers who
experience any problems accessing any of the Addenda to the proposed
and final rules of the ESRD PPS that are posted on the CMS Web site
identified above should contact Michelle Cruse at 410-786-7540.
Table of Contents
To assist readers in referencing sections contained in this
preamble, we are providing a Table of Contents. Some of the issues
discussed in this preamble affect the payment policies, but do not
require changes to the regulations in the Code of Federal Regulations
(CFR).
I. Executive Summary
A. Purpose
1. End-Stage Renal Disease (ESRD) Prospective Payment System
(PPS)
[[Page 37809]]
2. End-Stage Renal Disease (ESRD) Quality Incentive Program
(QIP)
B. Summary of the Major provisions
1. ESRD PPS
2. ESRD QIP
C. Summary of Cost and Benefits
1. Impacts of the Proposed ESRD PPS
2. Impacts of the Proposed ESRD QIP
II. Calendar Year (CY) 2016 End-Stage Renal Disease (ESRD)
Prospective Payment System (PPS)
A. Background
1. Statutory Background
2. System for Payment of Renal Dialysis Services
3. Updates to the ESRD PPS
B. Provisions of the Proposed Rule
1. Analysis and Proposed Revision of the Payment Adjustments
under the ESRD PPS
a. Development and Implementation of the ESRD PPS Payment
Adjustments
b. Regression Model Used to Develop Payment Adjustment Factors
i. Regression Analysis
ii. Dependent Variables
(1) Average Cost per Treatment for Composite Rate Services
(2) Average Medicare Allowable Payment (MAP) for Previously
Separately Billable Services
iii. Independent Variables
iv. Control Variables
c. Analysis and Revision of the Payment Adjustments
i. Adult Case-Mix Payment Adjustments
(1) Patient Age
(2) Body Surface Area (BSA) and Body Mass Index (BMI)
(3) Onset of Dialysis
(4) Comorbidities
d. Proposed Refinement of Facility-Level Adjustments
i. Low-Volume Payment Adjustment
ii. CY 2016 Proposals for the Low-Volume Payment Adjustment
(LVPA)
(1) Background
(2) The United States Government Accountability Office Study on
the LVPA
(3) Addressing GAO's Recommendations
(4) Elimination of the Grandfathering Provision
(5) Geographic Proximity Mileage Criterion
iii. Geographic Payment Adjustment for ESRD Facilities Located
in Rural Areas
(1) Background
(2) Determining a Facility-Level Payment Adjustment for ESRD
Facilities Located in Rural Areas Beginning in CY 2016
(3) Further Investigation into Targeting High-Cost Rural ESRD
Facilities
e. Proposed Refinement of the Case-Mix Adjustments for Pediatric
Patients
f. Proposed Refinement Payment Multipliers
i. Proposed Adult Case-Mix and Facility-Level Payment
Adjustments
ii. Proposed Pediatric Case-Mix Payment Adjustments
2. Proposed CY 2016 ESRD PPS Update
a. ESRD Bundled Market Basket
i. Overview and Background
ii. Proposed Market Basket Update Increase Factor and Labor-
Related Share for ESRD Facilities for CY 2016
iii. Proposed Productivity Adjustment
iv. Calculation of the ESRDB Market Basket Update, Adjusted for
Multifactor Productivity for CY 2016
b. The Proposed CY 2016 ESRD PPS Wage Indices
i. Annual Update of the Wage Index
ii. Implementation of New Labor Market Delineations
c. CY 2016 Update to the Outlier Policy
i. CY 2016 Update to the Outlier Services MAP Amounts and Fixed-
Dollar Loss Amounts
ii. Outlier Policy Percentage
d. Annual Updates and Policy Changes to the CY 2016 ESRD PPS
i. ESRD PPS Base Rate
ii. Annual Payment Rate Update for CY 2016
3. Section 217(c) of PAMA and the ESRD PPS Drug Designation
Process
a. Stakeholder Comments from the CY 2015 ESRD PPS Proposed and
Final Rules
b. Background
c. Determination of When an Oral-Only Renal Dialysis Service
Drug is No Longer Oral-Only
d. Application of ESRD Drug and Biological Policies after
Implementation of the ESRD PPS
e. Implementation of a Transitional Drug Add-On Payment
Adjustment under the ESRD PPS
4. Delay of Payment for Oral-Only Renal Dialysis Services
5. Reporting Medical Director Fees on ESRD Facility Cost Reports
C. Clarifications Regarding the ESRD PPS
1. Laboratory Renal Dialysis Services
2. Renal Dialysis Service Drugs and Biologicals
a. 2014 Part D Call Letter Follow-up
b. Oral or Other Forms of Renal Dialysis Injectable Drugs and
Biologicals
c. Reporting of Composite Rate Drugs
III. End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP)
for Payment Year (PY) 2019
A. Background
B. Clarification of ESRD QIP Terminology: ``CMS Certification
Number (CCN) Open Date''
C. Meeting PAMA Requirements for Measures Related to Conditions
Treated with Oral-Only Drugs in the ESRD QIP
D. Sub-Regulatory Measure Maintenance in the ESRD QIP
E. Proposed Requirements for the PY 2017 ESRD QIP
1. Proposal to Modify the Small Facility Adjuster Calculation
for All Clinical Measures for the PY 2017 ESRD QIP and Future
Payment Years
2. Proposal to Reinstate Qualifying Patient Attestations for the
ICH CAHPS Clinical Measure
F. Proposed Requirements for the PY 2018 ESRD QIP
1. Estimated Performance Standards, Achievement Thresholds, and
Benchmarks for the Clinical Measures Finalized for the PY 2018 ESRD
QIP
2. Proposed Modification to Scoring Facility Performance on the
Pain Assessment and Follow-Up Reporting Measure
3. Proposed Payment Reductions for the PY 2018 ESRD QIP
4. Data Validation
G. Proposed Requirements for the PY 2019 ESRD QIP
1. Proposed Replacement of the Four Measures Currently in the
Dialysis Adequacy Clinical Measure Topic Beginning with the PY 2019
Program Year
2. Proposed Measures for the PY 2019 ESRD QIP
a. PY 2018 Measures Continuing for PY 2019 and Future Payment
Years
b. Proposed New Dialysis Adequacy Clinical Measure Beginning
with the PY 2019 ESRD QIP
c. Proposed New Reporting Measures Beginning with the PY 2019
ESRD QIP
i. Proposed Ultrafiltration Rate Reporting Measure
ii. Proposed Full-Season Influenza Vaccination Reporting Measure
3. Proposed Performance Period for the PY 2019 ESRD QIP
4. Proposed Performance Standards, Achievement Thresholds, and
Benchmarks for the PY 2019 ESRD QIP
a. Proposed Performance Standards, Achievement Thresholds, and
Benchmarks for the Clinical Measures in the PY 2019 ESRD QIP
b. Estimated Performance Standards, Achievement Thresholds, and
Benchmarks for the Clinical Measures Proposed for the PY 2019 ESRD
QIP
c. Proposed Performance Standards for the PY 2019 Reporting
Measures
5. Proposal for Scoring the PY 2019 ESRD QIP Measures
a. Scoring Facility Performance on Clinical Measures Based on
Achievement
b. Scoring Facility Performance on Clinical Measures Based on
Improvement
c. Scoring the ICH CAHPS Clinical Measure
d. Proposal for Calculating Facility Performance on Reporting
Measures
6. Weighting the Clinical Measure Domain and Total Performance
Score
i. Proposal for Weighting the Clinical Measure Domain for PY
2019
ii. Weighting the Total Performance Score
7. Proposed Minimum Data for Scoring Measures for the PY 2019
ESRD QIP
8. Proposed Payment Reductions for the PY 2019 ESRD QIP
H. Future Achievement Threshold Policy Under Consideration
I. Monitoring Access to Dialysis Facilities
IV. Advancing Health Information Exchange
V. Collection of Information Requirements
VI. Response to Comments
VII. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
2. Statement of Need
3. Overall Impact
B. Detailed Economic Analysis
1. CY 2016 End-Stage Renal Disease Prospective Payment System
a. Effects on ESRD Facilities
b. Effects on Other Providers
c. Effects on the Medicare Program
d. Effects on Medicare Beneficiaries
e. Alternatives Considered
[[Page 37810]]
1. CY 2016 End-Stage Renal Disease
2. CY End-Stage Renal Disease Quality Incentive Program
C. Accounting Statement
VIII. Regulatory Flexibility Act Analysis
IX. Unfunded Mandates Reform Act Analysis
X. Federalism Analysis
XI. Congressional Review Act
XII. Files Available to the Public via the Internet
Regulations Text
Acronyms
Because of the many terms to which we refer by acronym in this
proposed rule, we are listing the acronyms used and their corresponding
meanings in alphabetical order below:
ABLE The Achieving a Better Life Experience Act of 2014
AHRQ Agency for Healthcare Research and Quality
AMCC Automated Multi-Channel Chemistry
ANOVA Analysis of Variance
ARM Adjusted Ranking Metric
ASP Average Sales Price
ATRA The American Taxpayer Relief Act of 2012
BEA Bureau of Economic Analysis
BLS Bureau of Labor Statistics
BMI Body Mass Index
BSA Body Surface Area
BSI Bloodstream Infection
CB Consolidated Billing
CBSA Core based statistical area
CCN CMS Certification Number
CDC Centers for Disease Control and Prevention
CKD Chronic Kidney Disease
CLABSI Central Line Access Bloodstream Infections
CFR Code of Federal Regulations
CIP Core Indicators Project
CMS Centers for Medicare & Medicaid Services
CPM Clinical Performance Measure
CPT Current Procedural Terminology
CROWNWeb Consolidated Renal Operations in a Web-Enabled Network
CY Calendar Year
DFC Dialysis Facility Compare
DFR Dialysis Facility Report
ESA Erythropoiesis stimulating agent
ESRD End-Stage Renal Disease
ESRDB End-Stage Renal Disease bundled
ESRD PPS End-Stage Renal Disease Prospective Payment System
ESRD QIP End-Stage Renal Disease Quality Incentive Program
FDA Food and Drug Administration
HCP Healthcare Personnel
HD Hemodialysis
HHD Home Hemodialysis
HAIs Healthcare-Acquired Infections
HCPCS Healthcare Common Procedure Coding System
HCFA Health Care Financing Administration
HHS Department of Health and Human Services
ICD International Classification of Diseases
ICD-9-CM International Classification of Disease, 9th Revision,
Clinical Modification
ICD-10-CM International Classification of Disease, 10th Revision,
Clinical Modification
ICH CAHPS In-Center Hemodialysis Consumer Assessment of Healthcare
Providers and Systems
IGI IHS Global Insight
IIC Inflation-indexed charge
IPPS Inpatient Prospective Payment System
IUR Inter-unit reliability
KDIGO Kidney Disease: Improving Global Outcomes
KDOQI Kidney Disease Outcome Quality Initiative
Kt/V A measure of dialysis adequacy where K is dialyzer clearance, t
is dialysis time, and V is total body water volume
LDO Large Dialysis Organization
MAC Medicare Administrative Contractor
MAP Medicare Allowable Payment
MCP Monthly Capitation Payment
MIPPA Medicare Improvements for Patients and Providers Act of 2008
(Pub. L. 110-275)
MMA Medicare Prescription Drug, Improvement and Modernization Act of
2003
MMEA Medicare and Medicaid Extenders Act of 2010 Pub. L. 111-309
MFP Multifactor Productivity
NHSN National Healthcare Safety Network
NQF National Quality Forum
NQS National Quality Strategy
MFP Multifactor Productivity
MIPPA Medicare Improvements for Patients and Providers Act of 2008
MLR Minimum Lifetime Requirement
MSA Metropolitan statistical areas
NAMES National Association of Medical Equipment Suppliers
NHSN National Healthcare Safety Network
NQF National Quality Forum
NQS National Quality Strategy
OBRA Omnibus Budget Reconciliation Act
OMB Office of Management and Budget
PAMA Protecting Access to Medicare Act of 2014
PC Product category
PD Peritoneal Dialysis
PEN Parenteral and Enteral nutrition
PFS Physician Fee Schedule
PPI Producer Price Index
PPS Prospective Payment System
PSR Performance Score Report
PY Payment Year
QIP Quality Incentive Program
RCE Reasonable Compensation Equivalent
REMIS Renal Management Information System
RFA Regulatory Flexibility Act
SBA Small Business Administration
SFA Small Facility Adjuster
SIMS Standard Information Management System
SRR Standardized Readmission Ratio
SSA Social Security Administration
STrR Standardized Transfusion Ratio
The Act Social Security Act
The Affordable Care Act The Patient Protection and Affordable Care
Act
The Secretary Secretary of the Department of Health and Human
Services
TPS Total Performance Score
URR Urea reduction ratio
VAT Vascular Access Type
VBP Value Based Purchasing
I. Executive Summary
A. Purpose
1. End-Stage Renal Disease (ESRD) Prospective Payment System (PPS)
On January 1, 2011, we implemented the ESRD PPS, a case-mix
adjusted bundled prospective payment system for renal dialysis services
furnished by ESRD facilities. This rule proposes to update and make
revisions to the End-Stage Renal Disease (ESRD) prospective payment
system (PPS) for calendar year (CY) 2016. Section 1881(b)(14) of the
Social Security Act (the Act), as added by section 153(b) of the
Medicare Improvements for Patients and Providers Act of 2008 (MIPPA)
(Pub. L. 110-275), and section 1881(b)(14)(F) of the Act, as added by
section 153(b) of MIPPA and amended by section 3401(h) of the
Affordable Care Act Public Law 111-148), established that beginning CY
2012, and each subsequent year, the Secretary shall annually increase
payment amounts by an ESRD market basket increase factor, reduced by
the productivity adjustment described in section 1886(b)(3)(B)(xi)(II)
of the Act.
Section 632 of the American Taxpayer Relief Act of 2012 (ATRA)
(Pub. L No. 112-240) included several provisions that apply to the ESRD
PPS. Section 632(a) of ATRA added section 1881(b)(14)(I) to the Act,
which required the Secretary of the Department of Health and Human
Services (the Secretary), by comparing per patient utilization data
from 2007 with such data from 2011, to reduce the single payment amount
to reflect the Secretary's utilization of ESRD-related drugs and
biologicals. We finalized the amount of the drug utilization adjustment
pursuant to this section in the CY 2014 ESRD PPS final rule with a 3-
to 4-year transition (78 FR 72161 through 72170). Section 632(b) of
ATRA prohibited the Secretary from paying for oral-only ESRD-related
drugs and biologicals under the ESRD PPS before January 1, 2016.
Section 632(c) of ATRA requires the Secretary, by no later than January
1, 2016, to analyze the case mix payment adjustments under section
1881(b)(14)(D)(i) of the Act and make appropriate revisions to those
adjustments.
On April 1, 2014, the Congress enacted the Protecting Access to
Medicare Act of 2014 (PAMA) (Pub. L. 113-93). Section 217 of PAMA
includes several provisions that apply to the ESRD PPS. Specifically,
sections 217(b)(1) and (2) of PAMA amend sections 1881(b)(14)(F) and
(I) of the Act. We interpreted the amendments to sections
1881(b)(14)(F) and (I) as
[[Page 37811]]
replacing the drug utilization adjustment that was finalized in the CY
2014 ESRD PPS final rule with specific provisions that dictate the
market basket update for CY 2015 (0.0 percent) and how it will be
reduced in CYs 2016 through 2018. Section 217(a)(1) of PAMA amended
section 632(b)(1) of ATRA to provide that the Secretary may not pay for
oral-only drugs and biologicals used for the treatment of ESRD under
the ESRD PPS prior to January 1, 2024. Section 217(c) of PAMA provides
that, as part of the CY 2016 ESRD PPS rulemaking, the Secretary shall
establish a process for (1) determining when a product is no longer an
oral-only drug; and (2) including new injectable and intravenous
products into the ESRD PPS bundled payment.
On December 19, 2014, the President signed the Stephen Beck, Jr.,
Achieving a Better Life Experience Act of 2014 (ABLE) (Pub. L. 113-
295). Section 204 of ABLE amended section 632(b)(1) of ATRA, as amended
by section 217(a)(1) of PAMA, to provide that payment for oral-only
renal dialysis services cannot be made under the ESRD PPS bundled
payment prior to January 1, 2025.
2. End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP)
This rule also proposes to set forth requirements for the ESRD QIP,
including for payment years (PYs) 2017, 2018, and 2019. The program is
authorized under section 1881(h) of the Social Security Act (the Act).
The ESRD QIP is the most recent step in fostering improved patient
outcomes by establishing incentives for dialysis facilities to meet or
exceed performance standards established by CMS.
B. Summary of the Major Provisions
1. ESRD PPS
ESRD PPS refinement: In accordance with section 632(c) of
ATRA, we analyzed the case mix payment adjustments under the ESRD PPS
using more recent data. We are proposing to revise the adjustments by
changing the adjustment payment amounts based on our updated regression
analysis using CYs 2012 and 2013 ESRD claims and cost report data and
proposing to remove two comorbidity payment adjustments (bacterial
pneumonia and monoclonal gammopathy). Because we conducted an updated
regression analysis to enable us to analyze and revise the case-mix
payment adjustments, we are also proposing revisions to the other ESRD
PPS payment adjustments and a new adjustment based on that regression
analysis. In particular, we are proposing new patient and facility-
level adjustment factors. We are also proposing to add an adjustment
for rural ESRD facilities. Finally, we are proposing to revise the
geographic proximity eligibility criterion for the low-volume payment
adjustment (LVPA) and to remove grandfathering from the criteria for
the adjustment.
Drug designation process: In accordance with section
217(c) of PAMA, we are proposing a drug designation process for
determining when: (1) a product would no longer be considered an oral-
only drug and (2) including new injectable and intravenous renal
dialysis service drugs and biologicals in the bundled payment under the
ESRD PPS.
Update to the ESRD PPS base rate for CY 2016: The proposed
CY 2016 ESRD PPS base rate is $230.20. This amount reflects a reduced
market basket increase as required by section 1881(b)(14)(F)(i)(I)
(0.15 percent), application of the wage index budget-neutrality
adjustment factor (1.000332), and a refinement budget-neutrality
adjustment factor (0.959703), so that total projected PPS payments in
CY 2016 are equal to what the payments would have been in CY 2016 had
we not implemented the refinement. The proposed CY 2016 ESRD PPS base
rate is $230.20 ($239.43 x 1.0015 x 1.000332 x 0.959703 = $230.20).
Annual update to the wage index and wage index floor: We
adjust wage indices on an annual basis using the most current hospital
wage data and the latest core-based statistical area (CBSA)
delineations to account for differing wage levels in areas in which
ESRD facilities are located. For CY 2016, we are not proposing any
changes to the application of the wage index floor and we propose to
continue to apply the current wage index floor (0.400) to areas with
wage index values below the floor.
Update to the outlier policy: Consistent with our proposal
to annually update the outlier policy using the most current data, we
are proposing to update the outlier services fixed dollar loss amounts
for adult and pediatric patients and Medicare Allowable Payments (MAPs)
for adult patients for CY 2016 using 2014 claims data. Based on the use
of more current data, the fixed-dollar loss amount for pediatric
beneficiaries would decrease from $54.35 to $49.99 and the MAP amount
would decrease from $43.57 to $37.82, as compared to CY 2015 values.
For adult beneficiaries, the fixed-dollar loss amount would decrease
from $86.19 to $85.66 and the MAP amount would decrease from $51.29 to
$48.15. The 1 percent target for outlier payments was not achieved in
CY 2014. We believe using CY 2014 claims data to update the outlier MAP
and fixed dollar loss amounts for CY 2016 will increase payments for
ESRD beneficiaries requiring higher resource utilization in accordance
with a 1 percent outlier percentage.
2. ESRD QIP
This rule proposes to set forth requirements for the ESRD QIP,
including for payment years (PYs) 2017, 2018 and 2019.
PY 2019 Measure Set: For PY 2019 and future payment years,
we are proposing to remove four clinical measures--(1) Hemodialysis
Adequacy: Minimum delivered hemodialysis dose; (2) Peritoneal Dialysis
Adequacy: Delivered dose above minimum; (3) Pediatric Hemodialysis
Adequacy: minimum spKt/V; and (4) Pediatric Peritoneal Dialysis
Adequacy--on the grounds that a more broadly applicable measure for the
topic has become available. We are proposing to replace these measures
with a single comprehensive Dialysis Adequacy clinical measure.
Additionally, we are proposing to adopt two new reporting measures: (1)
The Ultrafiltration Rate reporting measure and (2) the Full-Season
Influenza Vaccination reporting measure.
Reinstating the In-Center Hemodialysis Consumer Assessment
of Healthcare Providers (ICH CAHPS) Attestation: Beginning with PY
2017, we are proposing to reinstate the ICH CAHPS attestation in
Consolidated Renal Operations in a Web-Enabled Network (CROWNWeb)
previously adopted in the CY 2014 ESRD PPS final rule (78 FR 72220
through 72222) using the eligibility criteria finalized in the CY 2015
ESRD PPS final rule (79 FR 66169). This would allow facilities to
attest in CROWNWeb that they did not treat enough eligible patients
during the eligibility period to receive a score on the ICH CAHPS
measure and thereby avoid receiving a score for this measure.
Revising the Small Facility Adjuster: Beginning with the
PY 2017 ESRD QIP, we are proposing to revise the Small Facility
Adjuster (SFA). We have developed an equation for determining the SFA
that does not rely upon a pooled within-facility standard error, but
nonetheless preserves the intent of the adjuster to include as many
facilities in the ESRD QIP as possible while ensuring that the measure
scores are reliable.
[[Page 37812]]
C. Summary of Costs and Benefits
In section VII of this proposed rule, we set forth a detailed
analysis of the impacts that the proposed changes would have on
affected entities and beneficiaries. The impacts include the following:
1. Impacts of the Proposed ESRD PPS
The impact chart in section VII.B.1.a of this proposed rule
displays the estimated change in payments to ESRD facilities in CY 2016
compared to estimated payments in CY 2015. The overall impact of the CY
2016 changes is projected to be a 0.3 percent increase in payments.
Hospital-based ESRD facilities have an estimated 0.5 percent increase
in payments compared with freestanding facilities with an estimated 0.2
percent increase.
We estimate that the aggregate ESRD PPS expenditures would increase
by approximately $20 million from CY 2015 to CY 2016. This reflects a
$10 million increase from the payment rate update and a $10 million
increase due to the updates to the outlier threshold amounts. As a
result of the projected 0.3 percent overall payment increase, we
estimate that there will be an increase in beneficiary co-insurance
payments of 0.3 percent in CY 2016, which translates to approximately
$10 million.
2. Impacts of the Proposed ESRD QIP
The overall economic impact of the ESRD QIP is an estimated $11.8
million in PY 2018 and $14.6 million in PY 2019. In PY 2018, we expect
the costs associated with the collection of information requirements
for the data validation studies to be approximately $21 thousand for
all ESRD facilities, totaling an overall impact of approximately $11.8
million as a result of the PY 2018 ESRD QIP.\1\ In PY 2019, we expect
the total payment reductions to be approximately $3.8 million, and the
costs associated with the collection of information requirements for
the proposed Ultrafiltration Rate and Full-Season Influenza Vaccination
reporting measures to be approximately $10.7 million for all ESRD
facilities.
---------------------------------------------------------------------------
\1\ We note that the aggregate impact of the PY 2018 ESRD QIP
was included in the CY 2015 ESRD PPS final rule (79 FR 66256 through
66258). The previously finalized aggregate impact of $11.8 million
reflects the PY 2018 estimated payment reductions and the collection
of information requirements for the NHSN Healthcare Personnel
Influenza Vaccination reporting measure.
---------------------------------------------------------------------------
The ESRD QIP will continue to incentivize facilities to provide
high-quality care to beneficiaries.
II. Calendar Year (CY) 2016 End-Stage Renal Disease (ESRD) Prospective
Payment System (PPS)
A. Background
1. Statutory Background
On January 1, 2011, we implemented the End-stage renal disease
(ESRD) Prospective Payment System (PPS), a case-mix adjusted bundled
PPS for renal dialysis services furnished by ESRD) facilities based on
the requirements of section 1881(b)(14) of the Social Security Act (the
Act), as added by section 153(b) of the Medicare Improvements for
Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110-275). Section
1881(b)(14)(F) of the Act, as added by section 153(b) of MIPPA and
amended by section 3401(h) of the Patient Protection and Affordable
Care Act (the Affordable Care Act) (Pub. L. 111-148), established that
beginning calendar year (CY) 2012, and each subsequent year, the
Secretary of the Department of Health and Human Services (the
Secretary) shall annually increase payment amounts by an ESRD market
basket increase factor, reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act.
Section 632 of the American Taxpayer Relief Act of 2012 (ATRA)
(Pub. L. 112-240) included several provisions that apply to the ESRD
PPS. Section 632(a) of ATRA added section 1881(b)(14)(I) to the Act,
which required the Secretary, by comparing per patient utilization data
from 2007 with such data from 2012, to reduce the single payment for
renal dialysis services furnished on or after January 1, 2014 to
reflect the Secretary's estimate of the change in the utilization of
ESRD-related drugs and biologicals (excluding oral-only ESRD-related
drugs). Consistent with this requirement, in the CY 2014 ESRD PPS final
rule we finalized $29.93 as the total drug utilization reduction and
finalized a policy to implement the amount over a 3- to 4-year
transition period (78 FR 72161 through 72170).
Section 632(b) of ATRA prohibited the Secretary from paying for
oral-only ESRD-related drugs and biologicals under the ESRD PPS prior
to January 1, 2016. And section 632(c) of ATRA requires the Secretary,
by no later than January 1, 2016, to analyze the case-mix payment
adjustments under section 1881(b)(14)(D)(i) of the Act and make
appropriate revisions to those adjustments.
On April 1, 2014, the Congress enacted the Protecting Access to
Medicare Act of 2014 (PAMA) (Pub. L. 113-93). Section 217 of PAMA
included several provisions that apply to the ESRD PPS. Specifically,
sections 217(b)(1) and (2) of PAMA amended sections 1881(b)(14)(F) and
(I) of the Act and replaced the drug utilization adjustment that was
finalized in the CY 2014 ESRD PPS final rule (78 FR 72161 through
72170) with specific provisions that dictated the market basket update
for CY 2015 (0.0 percent) and how the market basket should be reduced
in CYs 2016 through CY 2018.
Section 217(a)(1) of PAMA amended section 632(b)(1) of ATRA to
provide that the Secretary may not pay for oral-only ESRD-related drugs
under the ESRD PPS prior to January 1, 2024. Section 217(a)(2) further
amended section 632(b)(1) of ATRA by requiring that in establishing
payment for oral-only drugs under the ESRD PPS, we must use data from
the most recent year available. Section 217(c) of PAMA provided that as
part of the CY 2016 ESRD PPS rulemaking, the Secretary shall establish
a process for (1) determining when a product is no longer an oral-only
drug; and (2) including new injectable and intravenous products into
the ESRD PPS bundled payment.
Finally, section 212 of PAMA provided that the Secretary may not
adopt the International Classification of Disease 10th Revision,
Clinical Modification (ICD-10-CM) code sets prior to October 1, 2015.
HHS published a final rule on August 4, 2014 that adopted October 1,
2015 as the new ICD-10-CM compliance date, and required the use of
International Classification of Disease, 9th Revision, Clinical
Modification (ICD-9-CM) through September 30, 2015 (79 FR 45128).
On December 19, 2014, the President signed the Stephen Beck, Jr.,
Achieving a Better Life Experience Act of 2014 (ABLE) (Pub. L. 113-
295). Section 204 of ABLE amended section 632(b)(1) of ATRA, as amended
by section 217(a)(1) of PAMA, to provide that payment for oral-only
renal dialysis services cannot be made under the ESRD PPS bundled
payment prior to January 1, 2025.
2. System for Payment of Renal Dialysis Services
Under the ESRD PPS, a single, per-treatment payment is made to an
ESRD facility for all of the renal dialysis services defined in section
1881(b)(14)(B) of the Act and furnished to individuals for the
treatment of ESRD in the ESRD facility or in a patient's home. We have
codified our definitions of renal dialysis services at 42 CFR 413.171
and our other payment policies are included in regulations at 42 CFR
[[Page 37813]]
subpart H. The ESRD PPS base rate is adjusted for characteristics of
both adult and pediatric patients and account for patient case-mix
variability. The adult case-mix adjusters include five categories of
age, body surface area (BSA), low body mass index (BMI), onset of
dialysis, six co-morbidity categories, and pediatric patient-level
adjusters consisting of two age categories and dialysis modalities (42
CFR 413.235(a) and(b)).
In addition, the ESRD PPS provides for two facility-level
adjustments. The first payment adjustment accounts for ESRD facilities
furnishing a low volume of dialysis treatments (42 CFR 413.232). The
second adjustment reflects differences in area wage levels developed
from Core Based Statistical Areas (CBSAs) (42 CFR 413.231).
The ESRD PPS allows for a training add-on payment adjustment for
home dialysis modalities (42 CFR 413.235(c). Lastly, the ESRD PPS
provides additional payment for high cost outliers due to unusual
variations in the type or amount of medically necessary care when
applicable (42 CFR 413.237).
3. Updates to the ESRD PPS
Updates and policy changes to the ESRD PPS are proposed and
finalized annually in the Federal Register. The CY 2011 ESRD PPS final
rule was published on August 12, 2010 in the Federal Register (75 FR
49030 through 49214). That rule implemented the ESRD PPS beginning on
January 1, 2011 in accordance with section 1881(b)(14) of the Act, as
added by section 153(b) of MIPPA, over a 4-year transition period.
Since the implementation of the ESRD PPS we have published annual rules
to make routine updates, policy changes, and clarifications.
On November 6, 2014, we published in the Federal Register a final
rule (79 FR 66120 through 66265) titled, ``End-Stage Renal Disease
Prospective Payment System, Quality Incentive Program, and Durable
Medical Equipment, Prosthetics, Orthotics, and Supplies'' (hereinafter
referred to as the CY 2015 ESRD PPS final rule). In that final rule, we
made a number of routine updates to the ESRD PPS for CY 2015, completed
a rebasing and revision of the ESRD bundled market basket, implemented
a 2-year transition for the revised labor-related share and a 2-year
transition of the new Core-Based Statistical Area (CBSA) delineations,
and made policy changes and clarifications. Specifically, in that rule,
we finalized the following:
Update to the ESRD PPS base rate for CY 2015. An ESRD PPS
base rate of $239.43 per treatment for renal dialysis services. This
amount reflected a 0.0 percent update to the payment rate as required
by section 1881(b)(14)(F)(i) of the Act, as amended by section
217(b)(2) of PAMA, and the application of the wage index budget-
neutrality adjustment factor of 1.001729.
Rebasing and revision of the end-stage renal disease
bundled market basket. For CY 2015, we rebased and revised the end-
stage renal disease bundled (ESRDB) market basket, which entailed an
update to the base year of the ESRDB market basket from 2008 to 2012.
The base year update resulted in a shift in relative costs from
prescription drugs to compensation. Additionally, we changed the price
measure for pharmaceuticals from a more general index Producer Price
Index (PPI) Pharmaceuticals for Human Use, Prescription) to a blend of
two indices, (78 percent PPI Biological Products, Human Use and 22
percent PPI Vitamin, Nutrient, and Hematinic Preparations). The
revision also refined the price measure used for compensation costs to
better reflect the occupational mix in the ESRD setting. As a result of
the update to the cost weights from 2008 to 2012, the labor-related
share increased by about 9 percent.
Labor-Related Share. As a result of the ESRDB market
basket rebasing and revision, described above, the CY 2015 labor-
related share was finalized at 50.673 percent. This change to the
labor-related share had a significant impact on payments for certain
ESRD facilities located in low wage areas. Therefore, we implemented
the labor-related share of 50.673 with a 2-year transition for all
facilities. The labor-related share for CY 2015 was 46.205.
Outlier Policy. For CY 2015, we used CY 2013 claims data
to update the outlier services' fixed-dollar loss and Medicare
Allowable Payment (MAP) amounts. As a result, we updated the fixed-
dollar loss amount for pediatric patients from $54.01 to $54.35, and
increased the MAP amount from $40.49 to $43.57. For adult patients, we
updated the fixed-dollar loss amount from $98.67 to $86.19 and
increased the MAP amount from $50.25 to $51.29.
Wage Index. We adjusted wage indices using the most
current hospital wage data available for the areas in which ESRD
facilities are located. For CY 2015, we implemented the new core-based
statistical area (CBSA) delineations, as described in the February 28,
2013 OMB Bulletin No. 13-01, for all ESRD facilities with a 2-year
transition (79 FR 66136 through 66142). In addition, we continued our
policy for the gradual phase-out of the wage index floor and reduced
the wage index floor value to 0.40, as finalized in our CY 2014 ESRD
PPS final rule (78 FR 72173 through 72174).
Timing of the Implementation of ICD-10. Section 212 of
PAMA provides that the Secretary may not adopt ICD-10-CM prior to
October 1, 2015. HHS published a final rule on August 4, 2014 that
adopted October 1, 2015 as the new ICD-10-CM compliance date, and
required the use of International Classification of Disease, 9th
Revision, Clinical Modification (ICD-9-CM) through September 30, 2015
(79 FR 45128). We finalized a policy that the ESRD PPS will continue to
use ICD-9-CM through September 30, 2015, and will require the use of
ICD-10-CM beginning October 1, 2015 for purposes of reporting the co-
morbidity payment adjustments. For CY 2015, we corrected several
typographical errors and omissions in the ICD-9-CM to ICD-10-CM
crosswalk tables that may be viewed in the CY 2015 ESRD PPS final rule
at 79 FR 66155 through 66159.
Low-Volume Payment Adjustment. We clarified the
eligibility criteria for the low-volume payment adjustment (LVPA) and
amended the supporting regulations in the Code of Federal Regulations
(CFR).
Payment for Oral-only Drugs under the ESRD PPS. Section
217(a)(1) of PAMA amended section 632(b)(1) of ATRA to provide that the
Secretary may not implement the policy under section 42 CFR
413.174(f)(6) (relating to oral-only ESRD-related drugs in the ESRD
prospective payment system), prior to January 1, 2024. Accordingly, we
amended the dates in 42 CFR 413.174(f)(6) and 42 CFR 413.237(a)(1)(iv)
from January 1, 2016 to January 1, 2024.
B. Provisions of the Proposed Rule
1. Analysis and Proposed Revision of the Payment Adjustments under the
ESRD PPS
a. Development and Implementation of the ESRD PPS Payment Adjustments
Section 153(b) of MIPPA amended section 1881(b) of the Act to
require the Secretary to implement the ESRD PPS effective January 1,
2011. Section 1881(b)(14)(D)(i) requires the ESRD PPS to include a
payment adjustment based on case mix that may take into account patient
weight, body mass index (BMI), comorbidities, length of time on
dialysis, age race, ethnicity, and other appropriate factors. Section
1881(b)(14)(D)(ii) through (iv) provide that the ESRD PPS must also
include an outlier payment adjustment and a low volume payment
adjustment, and may include such other payment
[[Page 37814]]
adjustments as the Secretary determines appropriate.
In response to the MIPPA amendments to section 1881(b), we
published our proposed ESRD PPS design and implementation strategy in
the Federal Register on September 29, 2009 (74 FR 49922). We received
over 1400 comments from dialysis facilities, Medicare beneficiaries,
physician groups, and other stakeholders in response to our proposals.
In consideration of these comments we finalized the case mix and
facility-level adjustments for the ESRD PPS in our CY 2011 ESRD PPS
final rule (75 FR 49030). For a complete discussion of public comments
and our finalized payment policies for the ESRD PPS, we refer the
reader to the CY 2011 ESRD PPS final rule (75 FR 49030 through 49214).
b. Regression Model Used To Develop Payment Adjustment Factors
i. Regression Analysis
In the CY 2011 ESRD PPS final rule (75 FR 49083), we discuss the
two-equation methodology used to develop the adjustment factors that
would be applied to the base rate to calculate each patient's case-mix
adjusted payment per treatment. The two-equation approach used to
develop the ESRD PPS included a facility-based regression model for
services historically paid for under the composite rate as indicated in
ESRD facility cost reports, and a patient-month-level regression model
for services historically billed separately. The models used for the
2011 final rule were based on 3 years of data (CY 2006 through 2008).
Section 632(c) of the American Taxpayer Relief Act of 2012 (ATRA)
(Pub. L. 11-240) requires the Secretary, by not later than January 1,
2016, to conduct an analysis of the case mix payment adjustments being
used under section 1881(b)(14)(D)(i) of the Act and to make appropriate
revisions to such case mix payment adjustments. While section 632(c) of
ATRA only requires us to analyze and make appropriate revisions to the
case-mix payment adjustments, we believe that because we are performing
a regression analysis that updates all of the payment multipliers with
updated data we should also update the low-volume payment adjustment.
Also, as discussed in section II.B.1.d.iii, we analyzed rural areas as
a payment variable in our regression analysis and are proposing to
implement a new adjustment for this facility characteristic.
For purposes of analyzing and proposing revisions to the payment
adjusters included in this proposed rule, we have updated the two-
equation methodology using CY 2012 and 2013 Medicare cost report and
claims data. These are the latest available cost reports and claims
given the time necessary for the preparation of this proposed rule. The
decision to use those 2 years for this proposed rule is because 2011
was the first year under the new bundled payment system. In addition,
the FDA ``black box'' warning for Erythropoiesis-Stimulating Agents
(ESA) was issued during 2011. These two factors may have been
associated with changing practice patterns since 2011. Updating the
regression analysis using the most recent claims and cost report data
allows the proposed case-mix adjustment model to reflect practice
patterns that have prevailed under the incentives of the expanded
bundled payment system.
In this rule we propose to reduce the number of comorbidities to
which payment adjusters apply and add an adjustment for rural
facilities. Our rationale for proposing to eliminate two of the
comorbidities for which we will make payment adjustments is discussed
in section II.B.1.c.i.4 of this proposed rule. The measures of resource
use, specified as the dependent variables for developing the payment
model in each of the two equations, are also explained below.
ii. Dependent Variables
(1) Average Cost per Treatment for Composite Rate Services
For purposes of this proposed rule, we measured resource use,
including time on a dialysis machine for the maintenance dialysis
services included in the current bundle of composite rate services,
using only ESRD facility data obtained from the Medicare cost reports
for independent ESRD facilities and hospital-based ESRD facilities. The
average composite rate cost per treatment for each ESRD facility was
calculated by dividing the total reported allowable costs for composite
rate services for cost reporting periods ending in CYs 2012 and 2013
(Worksheet B, column 13A, lines 8-17 on CMS-265-11; Worksheet I-2,
column 11, lines 2-11 on CMS-2552-10) by the total number of dialysis
treatments (Worksheet C, column 1, lines 8-17 on CMS 265-11; Worksheet
I-4, column 1, lines 1-10 on CMS-2552-10). CAPD and CCPD patient weeks
were multiplied by 3 to obtain the number of HD-equivalent treatments.
We note that our computation of the total composite rate costs included
in this per treatment calculation includes costs incurred for training
expenses, as well as all costs incurred by ESRD facilities for home
dialysis patients.
The resulting cost per treatment was adjusted to eliminate the
effects of varying wage levels among the areas in which ESRD facilities
are located using the ESRD PPS CY 2015 wage indices and the new CBSA
delineations which were discussed in the CY 2015 ESRD PPS final rule,
as well as the estimated labor-related share of costs from the
composite rate market basket. This was done so that the relationship of
the studied variables on dialysis facility costs would not be
confounded by differences in wage levels.
The proportion of composite rate costs determined to be labor-
related (53.711 percent of each ESRD facility's composite rate cost per
treatment) was divided by the ESRD wage index to control for area wage
differences. No floor or ceiling was imposed on the wage index values
used to deflate the composite rate costs per treatment in order to give
the full effect to the removal of actual differences in area wage
levels from the data. We applied a natural log transformation to the
wage-deflated composite rate costs per treatment to better satisfy the
statistical assumptions of the regression model, and to be consistent
with existing methods of adjusting for case-mix, in which a
multiplicative payment adjuster is applied for each case-mix variable.
As with other health care cost data, the cost distribution for
resource/dialyzing composite rate services was skewed (due to a
relatively small fraction of observations accounting for a
disproportionate fraction of costs). Cost per treatment values which
were determined to be unusually high or low in accordance with
predetermined statistical criteria were excluded from further analysis.
(For an explanation of the statistical outer fence methodology used to
identify unusually high and low composite rate costs per treatment, see
pages 45 through 48 of the Secretary's February 2008 Report to Congress
(RTC), A Design for a Bundled End Stage Renal Disease Prospective
Payment System. This document is available on the CMS Web site at the
following link: http://www.cms.gov/Medicare/End-Stage-Renal-Disease/ESRDGeneralInformation/downloads/ESRDReportToCongress.pdf.
(2) Average Medicare Allowable Payment (MAP) for Previously Separately
Billable Services
For purposes of this proposed rule, resource use for separately
billable items and services used for the treatment of ESRD was measured
at the
[[Page 37815]]
patient-level using the utilization data on the Medicare claims by
quarter for CYs 2012 and 2013 and average sales prices plus 6 percent
of the drug or biological, if applicable, for each quarter. This time
period corresponded to the most recent 2 years of Medicare cost report
data that were available to measure resource use for composite rate
services, such as time dialyzing. Measures of resource use included the
following separately billable services: injectable drugs billed by ESRD
facilities, including ESAs; laboratory services provided to ESRD
patients, billed by freestanding laboratory suppliers and ordered by
physicians who receive monthly capitation payments for treating ESRD
patients, or billed by ESRD facilities; and other services billed by
ESRD facilities.
iii. Independent Variables
Two types of independent or predictor variables were included in
the composite rate and separately billable regression equations--case-
mix payment variables and control variables. Case-mix payment variables
were included as factors that may be used to adjust payments in either
the composite rate or in the separately billable equation. Control
variables, which generally represent characteristics of ESRD facilities
such as size, type of ownership, facility type (whether hospital-based
or independent), were specifically included to obtain more accurate
estimates of the payment impact of the potential payment variables in
each equation. In the absence of using control variables in each
regression equation, the relationship between the payment variables and
measures of resource use may be biased because of correlations between
facility and patient characteristics.
iv. Control Variables
Several control variables were included in the regression analysis.
They were--(1) renal dialysis facility type (hospital-based versus
independent facility); (2) facility size (4,000 dialysis treatments or
fewer, but not eligible for the low volume payment adjustment, 4,000 to
4,999, 5,000 to 9999, and 10,000 or more dialysis treatments); (3) type
of ownership (independent, large dialysis organization, regional chain,
unknown); (4) calendar year (2012 and 2013); and (5) home dialysis
training treatments, in which the proportion of training treatments
furnished by each dialysis facility is specified. The use of training
treatments as a control was done in order to remove any confounding
cost effects of training on other independent variables included in the
payment model, particularly the onset of dialysis within 4-months
variable.
c. Analysis and Revision of the Payment Adjustments
As required by section 632(c) of ATRA, we have analyzed and are
proposing revisions to the following case mix payment adjustments. As
explained above, because we are conducting a regression analysis of all
of the costs associated with furnishing renal dialysis services, we are
also proposing revisions to the facility-level adjustment for low-
volume facilities.
i. Adult Case-Mix Payment Adjustments
(1) Patient Age
Section 1881(b)(14)(D)(i) of the Act requires that the ESRD PPS
include a payment adjustment based on case mix that may take into
account a patient's age. In the CY 2011 ESRD PPS final rule (75 FR
49088), we noted that the basic case-mix adjusted composite payment
system in effect from CYs 2005 through 2010 included payment
adjustments for age based on five age groups. Our analysis for the CY
2011 ESRD PPS final rule demonstrated a significant relationship
between composite rate and separately billable costs and patient age,
with a U-shaped relationship between age and cost where the youngest
and oldest age groups showed the highest costs. As a result of this
analysis, we established five age groups and identified the payment
multipliers through regression analysis. We established age group 60 to
69 as the reference group (the group with the lowest cost per
treatment) and the payment multipliers reflect the increase in facility
costs for each age group compared to the reference age group. We
proposed and finalized payment adjustment multipliers for five age
groups; ages 18 to 44, 45 to 59, 60 to 69, 70 to 79, and 80 and older.
We also finalized pediatric payment adjustments for age, which are
discussed in section II.B.1.e of this proposed rule.
Commenters and stakeholders were largely supportive of a case-mix
adjustment for age when the ESRD PPS was implemented. We noted in our
CY 2011 ESRD PPS final rule (75 FR 49088) that several commenters
stated that age is an objective and easily collected variable,
demonstrably related to cost, and that continuing to collect age data
would not be burdensome or require systems changes. In addition, a few
commenters requested that CMS consider an additional adjustment for
patient frailty and/or advanced age (75 FR 49089). In the CY 2011 ESRD
PPS final rule, we responded to these comments by noting that we
included an age adjustment for patients 80 years of age or older, but
that advanced age and frailty did not result in the identification of
additional age groups for the application of case-mix adjustments based
on age. In addition, we noted that the analysis did not identify a
separate variable for patient frailty, as this would be very difficult
to quantify.
The analysis we conducted to determine whether to revise the case
mix payment variable of patient age demonstrates the same U-shaped
relationship between facility costs and patient age as the analysis we
conducted when the ESRD PPS was implemented, however, the reference
group has changed to age group 70 to 79, and we note significantly
higher costs for older patients. We believe that the regression
analysis we performed on CY 2012 through 2013 Medicare cost reports and
claims has appropriately recognized increased facility costs when
caring for patients 80 years old or older, and that this adjustment
accounts for increased frailty in the aged. The CY 2016 proposed
payment multipliers presented below in Table 1 and in Table 4 in
section II.B.1.f.i of this proposed rule are reflective of the
regression analysis based upon CY 2012-2013 Medicare cost reports and
claims data.
Table 1--CY 2016 Proposed Payment Multipliers for Age
------------------------------------------------------------------------
Current Proposed
Age payment payment
multipliers multipliers
------------------------------------------------------------------------
18-44................................... 1.171 1.257
45-59................................... 1.013 1.068
60-69................................... 1.000 1.070
70-79................................... 1.011 1.000
80+..................................... 1.016 1.109
------------------------------------------------------------------------
(2) Body Surface Area (BSA) and Body Mass Index (BMI)
Section 1881(b)(14)(D)(i) of the Act requires that the ESRD PPS
include a payment adjustment based on case mix that may take into
account patient weight, body mass index (BMI), and other appropriate
factors. Through the use of claims data, we evaluated the patient
characteristics of height and weight and established two measurements
for body size when the ESRD PPS was implemented: body surface area
(BSA) and BMI. In our analysis for the CY 2011 ESRD PPS final rule, we
found that the BSA of larger patients and low BMI (<18.5 kg/m\2\) for
malnourished patients were
[[Page 37816]]
independent variables in the regression analysis that predicted
variations in payments for renal dialysis services and as such we
finalized two separate payment adjustments for body size in our CY 2011
ESRD PPS final rule (75 FR 49089 through 49090).
Commenters were supportive of BSA and BMI payment adjustments,
noting that body size was a payment adjustment under the composite rate
payment system, and that ESRD facilities would be able to capture this
information on the claim form without any additional burden. A few
commenters expressed concern regarding pre- versus post-dialysis
weight. In response to these comments we clarified that a patient's
weight should be taken after the last dialysis treatment of the month,
as directed in the Medicare Claims Processing Manual, Pub. 100-04,
Chapter 8, Section 50.3.
For this proposed rule, we analyzed both BSA and low BMI (<18.5kg/
m\2\) individually as part of the regression analysis and found that
both body size measures are strong predictors of variation in payments
for ESRD patients.
Body Surface Area (BSA)
Since CY 2005, Medicare payment for renal dialysis services has
included a payment adjustment for BSA. The current payment adjustment
under the ESRD PPS is l.020, which implies a 2.0 percent elevated cost
for every 0.l m\2\ increase in BSA compared to the national average BSA
of ESRD patients. The increased costs suggest that there are longer
treatment times and additional resources for larger patients. Including
the BSA variable improved the model's ability to predict ESRD facility
costs compared to using BMI or weight alone.
In the CY 2011 ESRD PPS proposed rule (74 FR 49951), we discussed
how we adopted the DuBois and DuBois formula to establish an ESRD
patient's BSA because this formula was the most widely known and
accepted. That is, a patient's BSA equals their Weight \0.425\ * Height
\0.725\* 0.007184, where weight is in kilograms and height is in
centimeters. (DuBois D. and DuBois, EF. ``A Formula to Estimate the
Approximate Surface Area if Height and Weight be Known'': Arch. Int.
Med. 1916 17:863-71.) Once the patient's BSA is determined, the payment
methodology compares the patient's BSA with the national average BSA of
ESRD beneficiaries and computes the patient-level payment adjustment
using the average cost increase for changes in BSA (per 0.1m\2\).
In developing the BSA payment adjustment under the ESRD PPS, we
explored several options for setting the reference values for the BSA
(74 FR 49951). We examined the distributions for both the midpoint of
the BSA and the count of dialysis patients by age, body surface and low
BMI. Based on that analysis, in our CY 2012 ESRD PPS final rule (76 FR
70244) we set the reference point at a BSA of 1.87 which is the
Medicare ESRD patient national average BSA. Setting the reference point
at the average BSA reflects the relationship of a specific patient's
BSA to the average BSA of all ESRD patients. As a result, some payment
adjusters would be greater than 1.0 and some would be less than 1.0. In
this way, we were able to minimize the magnitude of the budget
neutrality offset to the ESRD PPS base rate. (For more information on
this discussion, we refer readers to the CY 2005 Physician Fee Schedule
final rule (69 FR 66239, 66328 through 66329) and the CY 2011 ESRD PPS
proposed rule (74 FR 49951)). The BSA factor is defined as an exponent
equal to the value of the patient's BSA minus the reference BSA of 1.87
divided by 0.1.
In the CY 2012 ESRD PPS final rule (76 FR 70245) and the CY 2013
ESRD PPS proposed rule (77 FR 40957), we stated our intent to review
claims data from CY 2012 and every 5 years thereafter to determine if
any adjustment to the national average BSA of Medicare ESRD
beneficiaries is required. Although the CY 2012 claims showed an
increase in the national average BSA, we did not implement an update in
the CY 2013 ESRD PPS rule. Rather, in light of the requirement in
section 632(c) of ATRA that we analyze and make appropriate revisions
to the ESRD PPS case mix adjustments for CY 2016, we decided to
incorporate the new national average BSA into the overall refinement of
our payment adjustments that we are making as a result of that
requirement.
In accordance with our commitment to update the Medicare national
average BSA and because of the statutory requirement to analyze and
make appropriate revisions to the case-mix payment adjustments for CY
2016, we are proposing to update the BSA Medicare national average from
1.87m\2\ to 1.90 m\2\ for CY 2016 to reflect the new Medicare ESRD
national average BSA. The average is based on an analysis of the
patient height and weight information reported on ESRD facility claims
in CY 2013. We note that this average is an increase of 1.6 percent
over the Medicare ESRD national average BSA of 1.87m\2\ used to compute
the payment adjustment when the ESRD PPS was implemented in CY 2011.
Based upon the regression analysis for CY 2016 using the DuBois and
DuBois formula for computing a patient's BSA and the updated Medicare
national average BSA of 1.90m\2\, we propose that the BSA payment
adjustment would be 1.032 and the BSA payment adjustment would be based
on the following formula:
1.032((Patient\'\s BSA- 1.90)/0.1).
Low-Body Mass Index (BMI)
The basic case-mix adjusted composite payment system in effect from
CYs 2005 through 2010 and the current ESRD PPS include a payment
adjustment for low BMI. In order to be consistent with other Department
of Health and Human Services components (that is, Centers for Disease
Control and Prevention and National Institutes for Health), we defined
low BMI as less than 18.5 kg/m\2\. The regression indicated that
patients who are underweight consume more resources than other
patients. The current payment adjustment for low BMI under the ESRD PPS
is 1.025.
Based on the regression analysis conducted for this proposed rule,
we continue to find low BMI to be a strong predictor of cost variation
among ESRD patients. The payment adjustment would be 1.017 as indicated
in Table 4 in section II.B.1.f.i of this proposed rule, reflective of
the regression analysis based upon CY 2012-2013 Medicare cost report
and claims data.
(3) Onset of Dialysis
Section 1881(b)(14)(D)(i) of the Act required the ESRD PPS to
include a payment adjustment based on case-mix that may take into
account a patient's length of time on dialysis. For the CY 2011 ESRD
PPS final rule (75 FR 499090), we analyzed the length of time
beneficiaries have been receiving dialysis and found that patients who
are in their first 4 months of dialysis have higher costs and noted
that there was a drop in the separately billable payment amounts after
the first 4 months of dialysis. Based upon this analysis, we proposed
and finalized the definition of onset of dialysis as beginning on the
first date of reported dialysis on CMS Form 2728 through the first 4
months a patient is receiving dialysis. We finalized a 1.510 onset of
dialysis payment adjustment for both home and in-facility patients (75
FR 49092). In addition, we acknowledged that there may be patients
whose first 4 months of dialysis occur when they are in the
coordination of benefits period and not yet eligible for the Medicare
ESRD
[[Page 37817]]
benefit. We explained that in these circumstances, no onset of dialysis
adjustment would be made (75 FR 49090).
Most commenters supported inclusion of an onset of dialysis
patient-level adjustment and noted that the higher costs for new
patients are due to the stabilization of the health status of the
patient and dialysis training. Because the Medicare onset of dialysis
payment adjustment reflects the costs associated with all of the renal
dialysis services furnished to a Medicare beneficiary in the first 4
months of dialysis, additional payment adjustments are not made for
comorbidities or training during the months in which the onset of
dialysis payment adjustment is made. We discussed and finalized this
payment adjustment in the CY 2011 ESRD PPS final rule (75 FR 49092
through 49094)
Based on the regression analysis conducted for this proposed rule,
we find that the onset of dialysis continues to be a strong predictor
of cost variation among ESRD patients. The updated payment adjustment
would be 1.327 as indicated in Table 4 in section II.B.1.f.i of this
proposed rule.
(4) Comorbidities
Section 1881(b)(14)(D)(i) of the Act requires that the ESRD PPS
include a payment adjustment based on case-mix that may take into
account patient comorbidities. In our CY 2011 ESRD PPS proposed and
final rules (74 FR 49952 through 49961 and 75 FR 49094 through 49108,
respectively), we described the proposed and finalized comorbidity
payment adjustors under the ESRD PPS. Our analysis found that certain
comorbidity categories are predictors of variation in costs for ESRD
patients and, as such, we proposed the following comorbidity categories
as payment adjustors: cardiac arrest; pericarditis; alcohol or drug
dependence; positive HIV status or AIDS; gastrointestinal tract
bleeding; cancer (excluding non-melanoma skin cancer); septicemia/
shock; bacterial pneumonia and other pneumonias/opportunistic
infections; monoclonal gammopathy; myelodysplastic syndrome; hereditary
hemolytic or sickle cell anemias; and hepatitis B (74 FR 49954).
While all of the proposed comorbidity categories demonstrated a
statistically significant relationship for additional cost in the
payment model, the various issues and concerns raised in the public
comments regarding the proposed categories caused us to do further
evaluations. Specifically, we created exclusion criteria that assisted
in deciding which categories would be recognized for the payment
adjustment. As discussed in the CY 2011 ESRD PPS final rule (75 FR
49095) we further evaluated the comorbidity categories with regard to--
(1) inability to create accurate clinical definitions; (2) potential
for adverse incentives regarding care; and (3) potential for ESRD
facilities to directly influence the prevalence of the comorbidity
either by altering dialysis care, diagnostic testing patterns, or
liberalizing the diagnostic criteria. As a result of this evaluation,
we finalized 6 comorbid patient conditions eligible for additional
payment under the ESRD PPS (75 FR 49099 through 49100): pericarditis,
bacterial pneumonia, gastrointestinal tract bleeding with hemorrhage,
hereditary hemolytic or sickle cell anemias, myelodysplastic syndrome,
and monoclonal gammopathy.
Many stakeholders have criticized the comorbidity payment
adjustments available under the ESRD PPS. Through industry public
comments and stakeholder meetings we have become aware of the
documentation burden placed upon facilities in their effort to obtain
discharge information from hospitals or other providers or diagnostic
information from physicians and other practitioners necessary to
substantiate the comorbidity on the facility claim form. Public
comments have suggested that we remove all comorbidity payment
adjustments from the payment system and return any allocated monies to
the base rate. Other commenters have indicated that patient privacy
laws have also limited the ability of facilities to obtain the
diagnosis documentation necessary in order to append the appropriate
International Classification of Diseases code on the claim form.
Acute Comorbidity Categories
There are three acute comorbidity categories (pericarditis,
bacterial pneumonia, and gastrointestinal tract bleeding with
hemorrhage) finalized in the CY 2011 ESRD PPS final rule (75 FR 49100)
due to predicted short term increased facility costs when furnishing
dialysis services. Specifically, the costs were identified with
increased utilization of ESAs and other services. The payment
adjustments are applied to the ESRD PPS base rate for 4 months
following an appropriate diagnosis reported on the facility monthly
claim. In the CY 2011 ESRD PPS final rule we finalized payment
variables as indicated in Table 2 below, effective January 1, 2011.
Table 2--Acute Comorbidity Categories Recognized for a Payment
Adjustment Under the ESRD PPS
------------------------------------------------------------------------
Current Proposed
Acute comorbidity category payment payment
multiplier multiplier
------------------------------------------------------------------------
Pericarditis.................................. 1.114 1.040
Bacterial Pneumonia........................... 1.135 ...........
Gastrointestinal Tract Bleeding w/Hemorrhage.. 1.183 1.082
------------------------------------------------------------------------
Analysis of CYs 2012 and 2013 claims data for the regression
analysis continues to demonstrate significant facility resources when
furnishing dialysis services to ESRD patients with these acute
comorbidities. However, in accordance with section 632(c) of ATRA and
in response to stakeholders' public comments and requests for the
elimination of all of the comorbid payment adjustments, we have
compared the frequency of how often these conditions were indicated on
the facility monthly bill type with how often a corroborating claim in
another Medicare setting is identified in a 4-month look back period.
Of the three acute comorbidity categories, we were unable to
corroborate the diagnoses of bacterial pneumonia on ESRD facility
claims with the presence of a diagnosis on claims from another Medicare
setting because of significant under-reporting of bacterial pneumonia
in these settings.
In order for the bacterial pneumonia comorbid payment adjustment to
apply, we require three specific sources of documentation: An X-ray, a
sputum culture, and a provider assessment. Since 2011, facilities have
expressed concern regarding these documentation requirements.
Specifically, facilities cite a `documentation burden' in that they are
unable to obtain hospital or other discharge information for the
patients in their care, and are therefore unable to submit the
diagnosis on the claim form necessary to receive a payment adjustment.
In addition, stakeholders have indicated that our requirements are out
of step with treatment protocols where many physicians and Medicare
providers will diagnose bacterial pneumonia simply by patient
assessment and would not consider the X-ray or the sputum culture
necessary to their diagnosis.
Because in the opinion of stakeholders the ESRD PPS comorbidity
payment adjustments often go unpaid, facilities have encouraged CMS to
eliminate these adjustments through the authority granted in section
632(c) of
[[Page 37818]]
ATRA. However, we find that all of the acute comorbid payment adjustors
continue to be strong predictors of cost variation among ESRD patients
based on the regression analysis conducted for this proposed rule.
Accordingly, we continue to believe it is appropriate to apply a
comorbidity payment adjustment for the acute comorbidities of
pericarditis and gastrointestinal tract bleeding with hemorrhage. In
consideration of stakeholder concerns about the burden associated with
meeting the documentation requirements for bacterial pneumonia,
however, we are proposing to eliminate the case-mix payment adjustment
for the comorbidity category of bacterial pneumonia beginning in CY
2016. We find that the condition is underreported on facility claims
and that we are unable to confirm a positive diagnosis without the
additional burden of an X-ray or sputum culture.
Based upon the regression analysis of CY 2012 through 2013 Medicare
claims and cost report data, where comorbidities are measured only on
72x claims, the updated payment adjustment for pericarditis would be
1.040 and the adjustment for gastrointestinal tract bleeding with
hemorrhage would be 1.082 as indicated in Table 4 in section II.B.1.f.i
of this proposed rule.
Chronic Comorbidity Categories
There are three chronic comorbidity categories (hereditary
hemolytic and sickle cell anemias, myelodysplastic syndrome, and
monoclonal gammopathy), which were finalized as payment adjustors in
the CY 2011 ESRD PPS final rule (75 FR 49100) due to a demonstrated
prediction of increased facility costs when furnishing dialysis
services. In addition, these conditions have demonstrated a persistent
effect on costs over time; that is, once the condition is diagnosed for
a patient, the condition is likely to persist. For this reason, the
payment adjustments are paid continuously when an appropriate diagnosis
code is reported on the facility's monthly claim. In the CY 2011 ESRD
PPS final rule, we finalized payment variables as indicated in Table 3
below for chronic comorbidities, effective January 1, 2011.
Table 3--Chronic Comorbidity Categories Recognized for a Payment
Adjustment Under the ESRD PPS
------------------------------------------------------------------------
Current Proposed
Chronic comorbidity category payment payment
multiplier multiplier
------------------------------------------------------------------------
Hereditary Hemolytic or Sickle Cell 1.072 1.192
Anemias................................
Myelodysplastic Syndrome................ 1.099 1.095
Monoclonal Gammopathy................... 1.024 --
------------------------------------------------------------------------
Analysis of CY 2012 through 2013 claims and cost report data for
the purposes of regression analysis has continued to demonstrate that
significant facility resources are used when furnishing dialysis
services to ESRD patients with these chronic comorbidities. However, in
accordance with section 632(c) of ATRA and in response to stakeholders'
public comments and requests for the elimination of all of the comorbid
payment adjustments, we compared the frequency of how often these
conditions were reported on the facility monthly bill type with how
often a corroborating claim is reported in another Medicare setting in
a 12-month look back period. This analysis demonstrated significant
differences in the reporting of monoclonal gammopathy by ESRD
facilities and in other treatment settings.
In order for the monoclonal gammopathy comorbid payment adjustment
to apply, Medicare requires a positive serum test and a bone marrow
biopsy test. We believe that billing inconsistency may result from poor
compliance with these payment policy guidelines. We believe that some
facilities may report the diagnosis based upon only the positive serum
test, and forgo the bone marrow biopsy, while other facilities may view
the bone marrow biopsy as excessive for what is often an asymptomatic
condition and therefore forgo the payment adjustment all together.
CMS has historically required the bone marrow biopsy for
confirmation of a diagnosis of monoclonal gammopathy because often it
is a laboratory-defined disorder, where the disease has no symptoms but
where the patient is identified to be at considerable risk for the
development of multiple myeloma. Because many ESRD patients suffer from
anemic conditions due to their dialysis, they can test false positive
for monoclonal gammopathy. We considered modifying our documentation
policies for requiring the bone marrow biopsy when making the payment
adjustment. However, we are concerned that we will be unable to confirm
the diagnosis without a bone marrow test.
Based on the regression analysis conducted for this proposed rule,
using CY 2013 ESRD PPS claims and cost report data, we find that all of
the chronic comorbid payment adjustors continue to be strong predictors
of cost variation among ESRD patients and accordingly, we will continue
to make a payment adjustment for the chronic comorbid conditions of
hereditary hemolytic and sickle cell anemias and myelodysplastic
syndrome. However, in consideration of stakeholders concerns about the
excessive burden of meeting the documentation requirements for
monoclonal gammopathy, we are proposing to eliminate the case mix
payment adjustment for the comorbid condition of monoclonal gammopathy
beginning in CY 2016. We no longer believe that it is appropriate to
require the patient to submit to an invasive and painful procedure in
order to make a payment adjustment to their ESRD facility. Based upon
the regression analysis of CY 2012 through 2013 ESRD facility claims
and cost report data, the updated payment adjustment for hereditary
hemolytic and sickle cell anemias would be 1.192 and for
myelodysplastic syndrome the payment adjustment would be 1.095 as
indicated in Table 4 in section II.B.1.f.i of this proposed rule. These
adjustment amounts reflect the regression analysis based upon CY 2012
and 2013 Medicare claims data.
d. Proposed Refinement of Facility-Level Adjustments
i. Low-Volume Payment Adjustment
Section 1881(b)(14)(D)(iii) of the Act requires a payment
adjustment that reflects the extent to which costs incurred by low-
volume facilities (as defined by the Secretary) in furnishing renal
dialysis services exceed the costs incurred by other facilities in
furnishing such services, and for payment for renal dialysis services
furnished on or after January 1, 2011, and before January 1, 2014, such
payment adjustment shall not be less than 10 percent. As required by
this provision, the ESRD PPS provides a facility-level payment
adjustment to ESRD facilities that meet the definition of a low-volume
facility.
[[Page 37819]]
A background discussion on the low-volume payment adjustment (LVPA) and
a proposal regarding the LVPA eligibility criteria is provided below.
The current amount of the LVPA is 18.9 percent. In the CY 2011 ESRD
PPS final rule (75 FR 49125), we indicated that this increase to the
base rate is an appropriate adjustment that will encourage small
facilities to continue to provide access to care. With regard to the
magnitude of the payment adjustment for low-volume facilities, we
stated that it is more appropriate to use the regression-driven
adjustment rather than the 10 percent minimum adjustment mentioned in
the statute because it is based on empirical evidence and allows us to
implement a payment adjustment that is a more accurate depiction of
higher costs.
For this proposed rule, we analyzed those ESRD facilities that met
the definition of a low-volume facility as specified in 42 CFR
413.232(b) as part of the regression analysis. We found that the cost
per treatment for these facilities is still high compared to other
facilities. With regard to the magnitude of the payment adjustment for
low-volume facilities, we continue to believe that it is appropriate to
use the regression-driven adjustment because it is based on empirical
evidence and allows us to implement a payment adjustment that is a more
accurate depiction of higher costs. The regression analysis indicates a
payment multiplier of 1.239 percent as indicated in Table 4 in section
II.B.1.f.i of this proposed rule. Accordingly, we propose a new LVPA
adjustment factor of 23.9 percent for CY 2016 and future years.
ii. CY 2016 Proposals for the Low-Volume Payment Adjustment (LVPA)
(1) Background
As required by section 1881(b)(14)(D)(iii) of the Act, the ESRD PPS
provides a facility-level payment adjustment of 18.9 percent to ESRD
facilities that meet the definition of a low-volume facility. Under 42
CFR 413.232(b), a low-volume facility is an ESRD facility that, based
on the documentation submitted pursuant to 42 CFR 413.232(h): (1)
Furnished less than 4,000 treatments in each of the 3 cost reporting
years (based on as-filed or final settled 12-consecutive month cost
reports, whichever is most recent) preceding the payment year; and (2)
Has not opened, closed, or received a new provider number due to a
change in ownership in the 3 cost reporting years (based on as-filed or
final settled 12-consecutive month cost reports, whichever is most
recent) preceding the payment year. Under 42 CFR 413.232(c), for
purposes of determining the number of treatments furnished by the ESRD
facility, the number of treatments considered furnished by the ESRD
facility equals the aggregate number of treatments furnished by the
ESRD facility and the number of treatments furnished by other ESRD
facilities that are both under common ownership and 25 road miles or
less from the ESRD facility in question. Our regulation at 42 CFR
413.232(d) exempts facilities that were in existence and Medicare-
certified prior to January 1, 2011 from the 25-mile geographic
proximity criterion, thereby grandfathering them into the LVPA.
For purposes of determining eligibility for the LVPA,
``treatments'' means total hemodialysis (HD) equivalent treatments
(Medicare and non-Medicare). For peritoneal dialysis (PD) patients, one
week of PD is considered equivalent to 3 HD treatments. In the CY 2012
ESRD PPS final rule (76 FR 70236), we clarified that we base
eligibility on the three years preceding the payment year and those
years are based on cost reporting periods. We further clarified that
the ESRD facility's cost reports for the periods ending in the three
years preceding the payment year must report costs for 12-consecutive
months (76 FR 70237).
In the CY 2015 ESRD PPS final rule (79 FR 66152 through 66153), we
clarified that hospital-based ESRD facilities' eligibility for the LVPA
should be determined at an individual facility level and their total
treatment counts should not be aggregated with other ESRD facilities
that are affiliated with the hospital unless the affiliated facilities
are commonly owned and within 25 miles. Therefore, the MAC can consider
other supporting data in addition to the total treatments reported in
each of the 12-consecutive month cost reports, such as the individual
facility's total treatment counts, to verify the number of treatments
that were furnished by the individual hospital-based facility that is
seeking the adjustment.
In the CY 2015 ESRD PPS final rule (79 FR 66153), with regards to
the cost reporting periods used for eligibility, we clarified that when
there is a change of ownership that does not result in a new Medicare
Provider Transaction Access Number but creates two non-standard cost
reporting periods (that is, periods that are shorter or longer than 12
months) the MAC is either to add the two non-standard cost reporting
periods together where combined they would equal 12-consecutive months
or prorate the data when they would exceed 12-consecutive months to
determine the total treatments furnished for a full cost reporting
period as if there had not been a CHOW.
In order to receive the LVPA under the ESRD PPS, an ESRD facility
must submit a written attestation statement to its MAC confirming that
it meets all of the requirements specified at 42 CFR 413.232 and
qualifies as a low-volume ESRD facility. In the CY 2012 ESRD PPS final
rule (76 FR 70236), we finalized a yearly November 1 deadline for
attestation submission and we revised the regulation at Sec.
413.232(f) to reflect this date. We noted that this timeframe provides
60 days for a MAC to verify that an ESRD facility meets the LVPA
eligibility criteria. In the CY 2015 ESRD PPS final rule (79 FR 66153
through 66154), we amended Sec. 413.232(f) to accommodate the timing
of the policy clarifications finalized for that rule. Specifically, we
extended the deadline for the CY 2015 LVPA attestations until December
31, 2014 to allow ESRD facilities time to assess their eligibility
based on the policy clarifications for prior years under the ESRD PPS
and apply for the LVPA for CY 2015. Further information regarding the
administration of the LVPA is provided in the Medicare Benefit Policy
Manual, CMS Pub. 100-02, Chapter 11, section 60.B.1.
(2) The United States Government Accountability Office Study on the
LVPA
In the CY 2015 ESRD PPS final rule (79 FR 66151 through 66152), we
discussed the study that the United States Government Accountability
Office (the GAO) completed on the LVPA. We also provided a summary of
the GAO's main findings and recommendations. We stated that the GAO
found that many of the facilities eligible for the LVPA were located
near other facilities, indicating that they may not have been necessary
to ensure sufficient access to dialysis care. They also identified
certain facilities with relatively low volume that were not eligible
for the LVPA, but had above-average costs and appeared to be necessary
for ensuring access to care. Lastly, the GAO stated the design of the
LVPA provides facilities with an adverse incentive to restrict their
service provision to avoid reaching the 4,000 treatment threshold.
In the conclusion of their study, the GAO provided the Congress
with the following recommendations: 1) To more effectively target
facilities necessary for ensuring access to care, the Administrator of
CMS should consider
[[Page 37820]]
restricting the LVPA to low-volume facilities that are isolated; 2) To
reduce the incentive for facilities to restrict their service provision
to avoid reaching the LVPA treatment threshold, the Administrator of
CMS should consider revisions such as changing the LVPA to a tiered
adjustment; 3) To ensure that future LVPA payments are made only to
eligible facilities and to rectify past overpayments, the Administrator
of CMS should take the following four actions: (i) Require Medicare
contractors to promptly recoup 2011 LVPA payments that were made in
error; (ii) investigate any errors that contributed to eligible
facilities not consistently receiving the 2011 LVPA and ensure that
such errors are corrected; (iii) take steps to ensure that CMS
regulations and guidance regarding the LVPA are clear, timely, and
effectively disseminated to both dialysis facilities and Medicare
contractors; and (iv) improve the timeliness and efficacy of CMS's
monitoring regarding the extent to which Medicare contractors are
determining LVPA eligibility correctly and promptly re-determining
eligibility when all necessary data become available.
As we explained in the CY 2015 ESRD PPS final rule (79 FR 66152),
we concurred with the need to ensure that the LVPA is targeted
effectively at low-volume high-cost facilities in areas where
beneficiaries may lack dialysis care options. We also agreed to take
action to ensure appropriate payment is made in the following ways: 1)
evaluating our policy guidance and contractor instructions to ensure
appropriate application of the LVPA; 2) using multiple methods of
communication to MACs and ESRD facilities to deliver clear and timely
guidance; and 3) improving our monitoring of MACs and considering
measures that can provide specific expectations.
(3) Addressing GAO's Recommendations
As discussed above, in the CY 2015 ESRD PPS final rule (79 FR
66152), we made two clarifications of the LVPA eligibility criteria
that were responsive to stakeholder concerns and GAO's concern that the
LVPA should effectively target low-volume, high-cost facilities.
However, we explained that we did not make changes to the adjustment
factor or significant changes to the eligibility criteria because of
the interaction of the LVPA with other payment adjustments under the
ESRD PPS. Instead, we stated that in accordance with section 632(c) of
ATRA, for CY 2016 we would assess facility-level adjustments and
address necessary LVPA policy changes when we would use updated data in
a regression analysis similar to the analysis that is discussed in the
CY 2011 ESRD PPS final rule (75 FR 49083).
For CY 2016, because we are refining the ESRD PPS as discussed in
section II.B.1.a of this proposed rule, we reviewed the LVPA
eligibility criteria and are proposing changes that we believe address
the GAO recommendation to effectively target the LVPA to ESRD
facilities necessary for ensuring access to care.
(4) Elimination of the Grandfathering Provision
In the CY 2011 ESRD PPS final rule (75 FR 49118 through 49119), we
expressed concern about potential misuse of the LVPA. Specifically, our
concern was that the LVPA could incentivize dialysis companies to
establish small ESRD facilities in close geographic proximity to other
ESRD facilities in order to obtain the LVPA, thereby leading to
unnecessary inefficiencies. To address this concern, we finalized that
for the purposes of determining the number of treatments under the
definition of a low-volume facility, the number of treatments
considered furnished by the ESRD facility would be equal to the
aggregate number of treatments furnished by the ESRD facility and other
ESRD facilities that are both: (i) Under common ownership with; and
(ii) 25 road miles or less from the ESRD facility in question. However,
we finalized the grandfathering of those commonly owned ESRD facilities
that were certified for Medicare participation on or before December
31, 2010, thereby exempting them from the geographic proximity
restriction.
We established the grandfathering policy in 2011 in an effort to
support low-volume facilities and avoid disruptions in access to
essential renal dialysis services while the ESRD PPS was being
implemented. However, now that the ESRD PPS transition is over and
facilities have adjusted to the ESRD PPS payments and incentives, we
believe it is appropriate to eliminate the grandfathering provision.
Because we are doing a refinement of the payment adjustments under the
ESRD PPS for CY 2016, the timing is appropriate for eliminating the
grandfathering policy so that this change can be assessed along with
other proposed changes to the ESRD PPS resulting from the regression
analysis.
We are proposing that for the purposes of determining the number of
treatments under the definition of a low-volume facility, beginning in
CY 2016, the number of treatments considered furnished by any ESRD
facility regardless of when it came into existence and was Medicare
certified would be equal to the aggregate number of treatments actually
furnished by the ESRD facility and the number of treatments furnished
by other ESRD facilities that are both: (i) Under common ownership
with; and (ii) 5 road miles or less from the ESRD facility in question.
The proposed 5 road mile geographic proximity mileage criterion is
discussed below. We propose to amend the regulation text by removing
paragraph (d) in 42 CFR 413.232 to reflect that the geographic
proximity provision described in paragraph (c) and discussed below is
applicable to any ESRD facility that is Medicare certified to furnish
outpatient maintenance dialysis. We are soliciting comment on the
proposed change to remove the grandfathering provision by deleting
paragraph (d) from our regulation at 42 CFR 413.232.
(5) Geographic Proximity Mileage Criterion
In GAO's report, they stated that the LVPA did not effectively
target low-volume facilities that had high costs and appeared necessary
for ensuring access to care. The GAO stated that nearly 30 percent of
LVPA-eligible facilities were located within 1 mile of another facility
in 2011, and about 54 percent were within 5 miles, which indicated to
them that these facilities might not have been necessary for ensuring
access to care. Furthermore, the GAO indicated that in many cases, the
LVPA-eligible facilities were located near high-volume facilities. The
GAO explained in the report that providers that furnish a low volume of
services may incur higher costs of care because they cannot achieve the
economies of scale that are possible for larger providers. They also
stated that low-volume providers in areas where other care options are
limited may warrant higher payments because, if Medicare's payment
methods did not account for these providers' higher cost of care,
beneficiary access to care could be reduced if these providers were
unable to continue operating. They further explained that in contrast,
low-volume providers that are in close proximity to other providers may
not warrant an adjustment because beneficiaries have other care options
nearby.
We agree with the GAO's assertion that it may not be appropriate to
provide additional payment to an ESRD facility that is located in close
proximity to another ESRD facility when the facilities
[[Page 37821]]
are commonly owned. The purpose of the LVPA is to recognize high cost,
low-volume facilities that are unable to achieve the economies of scale
that are possible for larger providers such as large dialysis
organizations (LDO) and medium dialysis organizations (MDO). In
addition, we note that under the current LVPA eligibility criteria,
approximately half of low-volume facilities are LDO and MDO facilities
that have the support of their parent companies in controlling their
cost of care.
We analyzed the ESRD facilities receiving payment under Medicare
for furnishing renal dialysis services in CY 2013 for purposes of
simulating different eligibility scenarios for the LVPA. The CY 2013
claims and cost report data is the best data available. The CY 2014
cost reports will not be available until later this year. We simulated
the MAC's verification process in order to determine LVPA eligibility.
Our analysis considered the treatment counts on cost reporting periods
ending in 2010 through 2012, the corresponding CY 2013 LVPA eligibility
criteria defined at 42 CFR 413.232, and the location of low-volume
facilities to assess the impact of various potential geographic
proximity criteria. Because we used the CY 2013 claims and
attestations, our analysis may not match the facilities currently
receiving the LVPA because we are unable to analyze 2014 cost reports
of LVPA facilities at this time. However, this analysis allowed us to
test various geographic proximity mileage amounts to determine whether
facilities eligible for the LVPA in 2013 would continue to be eligible
for the LVPA as well as allowing us to determine the existence of any
other ESRD facilities in those areas.
Initially, we applied the low-volume eligibility criteria (without
grandfathering) and the current 25 road mile criterion and categorized
facilities by urban/rural location, type of ownership, and other
factors, and determined that out of the total of 434 low-volume
facilities, 38 percent of LVPA facilities would lose low-volume status,
including 19 percent in rural areas. For those determined to meet the
LVPA criteria, we also assessed the extent to which there were other
ESRD facilities (in the same chain or other chain), located within 5
road miles and 10 road miles from the LVPA facilities. Based on our
concern that too many rural and independent facilities would lose low-
volume status based on the 25 road mile geographic proximity criterion,
we then analyzed 1 road mile, 5 road miles, 10 road miles, 15 road
miles, and 20 road miles in order to determine a mileage criterion that
protected rural facilities and supporting access to renal dialysis
services in rural areas. We believe that ESRD facilities located in
rural areas are necessary for access to care and we would not want to
limit LVPA eligibility for rural providers.
Based on this analysis, we are proposing to reduce the geographic
proximity criterion from 25 road miles to 5 road miles because our
analysis showed that no rural facilities would lose LVPA eligibility
due to the proposed 5 road mile geographic proximity criterion. This
policy would discourage ESRD facilities from inefficiently operating
two ESRD facilities within close proximity of each other. This policy
would also allow ESRD facilities that are commonly owned to be
considered individually when they are more than 5 miles from another
facility that is under common ownership. We propose to amend the
regulation text by revising paragraph (c)(2) in 42 CFR 413.232 to
reflect the change in the mileage for the geographic proximity
provision. We are soliciting comment on the proposed change to 42 CFR
413.232(c)(2). We note that our analysis indicated that approximately
30 facilities that are part of LDOs and MDOs would lose the LVPA due to
the 5 mile proximity change and the elimination of grandfathering which
caused many facilities to exceed 4000 treatments. For this reason, we
are considering whether a transition would be appropriate and are
requesting public comments.
iii. Geographic Payment Adjustment for ESRD Facilities Located in Rural
Areas
(1) Background
Section 1881(b)(14)(D)(iv)(III) of the Act provides that the ESRD
PPS may include such payment adjustments as the Secretary determines
appropriate, such as a payment adjustment for ESRD facilities located
in rural areas. Accordingly, in the CY 2011 ESRD PPS proposed rule we
analyzed rural status as part of the regression analysis used to
develop the payment adjustments under the ESRD PPS. In the CY 2011 ESRD
PPS proposed rule (74 FR 49978), we discuss our analysis of rural
status as part of the regression analysis and explained that to
decrease distortion among independent variables, rural facilities were
considered control variables rather than payment variables. We
indicated that based on our impact analysis, rural facilities would be
adequately reimbursed under the proposed ESRD PPS. Therefore, we did
not propose a facility-level adjustment based on rural location and we
invited public comments on our proposal.
In the CY 2011 ESRD PPS final rule (75 FR 49125 through 49126), we
addressed commenters' concerns regarding not having a facility-level
adjustment based on rural location. Some of the commenters provided an
explanation of the unique situations that exist for rural areas and the
associated costs. Specifically, the commenters identified several
factors that contribute to higher costs including higher recruitment
costs to secure qualified staff; a limited ability to offset costs
through economies of scale; and decreased negotiating power in
contractual arrangements for medications, laboratory services, and
equipment maintenance. The commenters were concerned about a negative
impact on beneficiary access to care that may result from insufficient
payment to cover these costs. In addition, the commenters further noted
that rural ESRD facilities have lower revenues because they serve a
smaller volume of patients of which a larger proportion are indigent
and lack insurance, and a smaller proportion have higher paying private
insurance.
In response to the comments discussed above, we indicated that
according to our impact analysis for the CY 2011 ESRD PPS final rule,
rural facilities, as a group, were projected to receive less of a
reduction in payments as a result of implementation of the ESRD PPS
than urban facilities and many other subgroups of ESRD facilities and,
therefore, we did not implement a facility-level payment adjustment
that is based on rural location. However, we stated our intention to
monitor how rural ESRD facilities fared under the ESRD PPS and consider
other options if access to renal dialysis services in rural areas is
compromised under the ESRD PPS.
(2) Determining a Facility-Level Payment Adjustment for ESRD Facilities
Located in Rural Areas Beginning in CY 2016
Since implementing the ESRD PPS, we have heard from industry
stakeholders that rural areas continue to have the unique difficulties
described above when furnishing renal dialysis services that cause low
to negative Medicare margins. Because we are committed to promoting
beneficiary access to renal dialysis services, especially in rural
areas, we analyzed rural location as a payment variable in the
regression analysis conducted for this proposed rule.
[[Page 37822]]
Including rural areas as a payment variable in the regression
analysis showed that this facility characteristic was a significant
predictor of higher costs among ESRD facilities. Accordingly, we
propose a payment multiplier of 1.008 as indicated in Table 4 in
section II.B.1.f.i of this proposed rule. This adjustment would be
applied to the ESRD PPS base rate for all ESRD facilities that are
located in a rural area. In the CY 2011 ESRD PPS final rule (75 FR
49126), we finalized the definition of rural areas in 42 CFR
413.231(b)(2) as any area outside an urban area. We define urban area
in 42 CFR 413.231(b)(1) as a Metropolitan Statistical Area or a
Metropolitan division (in the case where Metropolitan Statistical Area
is divided into Metropolitan Divisions). We propose to add a new Sec.
413.233 to provide that the base rate will be adjusted for facilities
that are located in rural areas, as defined in Sec. 413.231(b)(2). The
rural facility adjustment would also apply in situations where a
facility is eligible to receive the low-volume payment adjustment. In
other words, a facility could be eligible to receive both the rural and
low-volume payment adjustments. Low-volume and rural areas are two
independent variables in the regression analysis. We believe that the
low-volume variable measures costs facilities incur as a result of
furnishing a small number of treatments whereas the rural area variable
measures the costs associated with locality. The regression analysis
indicated that being in a rural area--regardless of treatments
furnished--explains an increase in costs for furnishing dialysis
compared to urban areas. Since low-volume and rural areas are
independent variables in the regression we believe that a low-volume
facility located in a rural area would be eligible for both adjustments
because measure. We believe that while the magnitude of the payment
multiplier is small, rural facilities would still benefit from the
adjustment and, therefore, we propose a 1.008 facility-level payment
multiplier under the ESRD PPS for rural areas. We solicit comment on
this proposal.
(3) Further Investigation Into Targeting High-Cost Rural ESRD
Facilities
Section 3127 of the Patient Protection and Affordable Care Act of
2010 (the Affordable Care Act) required that the Medicare Payment
Advisory Commission (MedPAC) study and report to Congress on: 1)
Adjustments in payments to providers of services and suppliers that
furnish items and services in rural areas; 2) access by Medicare
beneficiaries' to items and services in rural areas; 3) the adequacy of
payments to providers of services and suppliers that furnish items and
services in rural areas; and 4) the quality of care furnished in rural
areas. The report required by section 3127(b) of the Affordable Care
Act was published in the MedPAC June 2012 Report to Congress: Medicare
and the Health Care Delivery System (hereinafter referred to as June
2012 Report to Congress), which is available at http://medpac.gov/-documents-/reports. In addition to the findings presented on each of
the four topics, this report presented a set of principles designed to
guide expectations and policies with respect to rural access, quality,
and payments for all sectors, which can be used to guide Medicare
payment policy. For purposes of this proposed rule, we were most
interested in the principles of payment adequacy and special payments
to rural providers.
In the June 2012 Report to Congress, MedPAC explained that
providers in rural areas often have a low volume of patients and in
some cases, this lack of scale increases costs and puts the provider at
risk of closure. MedPAC stated that to maintain access in these cases,
Medicare may need to make higher payments to low-volume providers that
cannot achieve the economies of scale available to urban providers.
However, they explained that low volume alone is not a sufficient
measure to assess whether higher payments are warranted and that
Medicare should not pay higher rates to two competing low-volume
providers in close proximity. They stated that these payments may deter
small neighboring providers from consolidating care in one facility,
which results in poorly targeted payments and can contribute to poorer
outcomes for the types of care where there is a volume-outcome
relationship. MedPAC further explained that to target special payments
when warranted, Medicare should direct these payments to providers that
are uniquely essential for maintaining access to care in a given
community. The payments need to be structured in a way that encourages
efficient delivery of healthcare services.
MedPAC presented three principles guiding special payments that
will allow beneficiaries' needs to be met efficiently: 1) Payments
should be targeted toward low-volume isolated providers--that is,
providers that have low patient volume and are at a distance from other
providers. Distance is required because supporting two neighboring
providers who both struggle with low-volume can discourage mergers that
could lead to lower cost and higher quality care; 2) the magnitude of
special rural payment adjustments should be empirically justified--that
is, the payments should increase to the extent that factors beyond the
providers' control increase their costs; and 3) rural payment
adjustments should be designed in ways that encourage cost control on
the part of providers.
We were interested in the information that MedPAC provided in their
report regarding services furnished to Medicare beneficiaries in rural
areas. We believe that the adjustment that we proposed in this rule,
which we arrived at through a regression analysis, is consistent with
principle two above, which states that the magnitude of special rural
payment adjustments should be empirically justified. We considered
alternatives to deriving the adjustment from the regression analysis in
an effort to increase the value of the adjustment. For example, we
could establish a larger adjustment outside of the regression and
offset it by a reduction to the base rate. We also considered analyzing
different subsets of rural areas and designating those areas as the
payment variable in our model. Because we were able to determine
through the regression analysis that rural location is a predictor of
cost variation among ESRD facilities, we are planning to analyze the
facilities that are located in rural areas to see if there are subsets
of rural providers that experience higher costs. We are also planning
to explore potential policies to target areas that are isolated or
identify where there is a need for health care services, such as, for
example, the frontier counties (that is, counties with a population
density of six or fewer people per square mile) and we would also
consider the use of Health Professional Shortage Area (HPSA)
designations managed by the Health Resources and Services
Administration (HRSA). Information regarding HPSAs can be found on the
HRSA Web site:http://bhpr.hrsa.gov/shortage/hpsas/designationcriteria/.
We believe that this type of analysis would be consistent with the
June 2012 Report to Congress's principle that special payments should
target the low-volume facilities that are isolated. We are soliciting
comments on establishing a larger payment adjustment outside of the
regression analysis. We note that such an adjustment would need to be
offset by a further reduction to the base rate. For example, we could
compare the average cost per treatment reported on the cost report of
ESRD facilities located in rural areas with ESRD facilities located in
urban areas and develop a methodology to derive the
[[Page 37823]]
magnitude of the adjustment. In addition, we are soliciting comments on
targeting subsets of rural areas for purposes of using those facilities
located in those areas for analysis as payment variables in the
regression analysis used to develop the payment multipliers for the
refinement for CY 2016.
e. Proposed Refinement of the Case-Mix Adjustments for Pediatric
Patients
Section 1881(b)(14)(A)(i) of the Act requires the Secretary to
implement a payment system under which a single payment is made for
renal dialysis services. This provision does not distinguish between
services furnished to adult and pediatric patients. Therefore, we
developed a methodology that used the ESRD PPS base rate for pediatric
patients and finalized pediatric payment adjusters in our CY 2011 ESRD
PPS final rule at 75 FR 49131 through 49134. Specifically, the
methodology for calculating the pediatric payment adjusters reflects
case mix adjustments for age and modality. We noted in our CY 2011 ESRD
PPS final rule that the payment adjustments applicable to composite
rate services for pediatric patients were obtained from the facility
level model of composite rate costs for patients less than 18 years of
age and yielded a regression-based multiplier of 1.199. However, based
upon public comments received expressing concern that the payment
multiplier was inadequate for pediatric care, we revised our
methodology and we finalized pediatric payment adjusters that reflected
the overall difference in average payments per treatment between
pediatric and adult dialysis patients for composite rate (CR) services
and separately billable (SB) items in CY 2007 based on the 872
pediatric dialysis patients reflected in the data.
We indicated in the CY 2011 ESRD PPS final rule (75 FR 49131
through 49134), that the average CY 2007 MAP for composite rate
services for pediatric dialysis patients was $216.46, compared
to$156.12 for adult patients. The difference in composite rate payment
is reflected in the overall adjustment for pediatric patients as
calculated using the variables of (1) age less than 13 years, or 13
through 17 years; (2) dialysis modality PD or HD. While the composite
rate Medicare Allowable Payment (MAP) for pediatric patients was higher
than that for adult patients ($216.46 versus $156.12), the separately
billable MAP was lower for pediatric patients ($48.09versus $83.27), in
CY 2007. There are fewer separately billable items in the pediatric
model, largely because of the predominance of the PD modality for
younger patients and the smaller body size of pediatric patients. The
overall difference in the CY 2007 MAP between adult and pediatric
dialysis patients was computed at 10.5 percent or $216.46 + $48.09 =
$264.55 and $156.12 + $83.27 = $239.39. $264.55/$239.39 = 1.105.
For purposes of regression analysis, we are not proposing any
changes to the formula used to establish the pediatric payment
multipliers and will continue to apply the computations of MultEB= P *
C * (WCR + WSB * MultSB), where P is the ratio of the average MAP per
session for pediatric patients to the average MAP per session for adult
patients as shown below, C is the average payment multiplier for adult
patients (1.1151), WCR (0.798) and WSB (0.202) are the proportion of
MAP for CR and SB services, respectively, among pediatric patients, and
MultSB represents the SB model multipliers. We are using updated values
for P, C, WCR, and WSB along with the updated SB multipliers to
calculate the updated EB multipliers. The overall difference in the CY
2013 MAP between adult and pediatric dialysis patients was computed at
8.2 percent (P = $283.42/$ 261.91= 1.082). The regression analysis for
a new pediatric payment model for Medicare pediatric ESRD patients for
CY 2016 will use the same methodology that was used for the CY 2011
ESRD PPS final rule, except for the use of more recent data years (2012
through 2013) and in the method of obtaining payment data.
Specifically, we used the projected total expanded bundle MAP based on
2013 claims to calculate the ratio of pediatric total MAP per session
to adult total MAP per session. The projected MAP was calculated by
pricing out utilization of SBs based on line items in the claims,
rather than using actual payments from the claims as in the pre-2011
data. These adjustment factors reflect a proposed 8.21 percent increase
to account for the overall difference in average payments per treatment
for pediatric patients. The proposed updated pediatric SB and EB
multipliers are shown below in Table 5.
f. Proposed Refinement Payment Multipliers
i. Proposed Adult Case-Mix and Facility-Level Payment Adjustments
Table 4--CY 2016 Proposed Adult Case-Mix and Facility-Level Payment Adjustments
--------------------------------------------------------------------------------------------------------------------------------------------------------
PY2011 Final Rule (based on PY2016 NPRM (based on 2012-2013 data)
2006-2008 data) ---------------------------------------------------------------
-------------------------------- Composite rate
multipliers
% of Medicare % of Medicare based on Separately Expanded
dialysis Expanded dialysis Freestanding billable bundle payment
treatments on bundle payment treatments on and Hospital- multipliers multiplier
average multiplier average based
facilities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Age:
18-44............................................... 13.5 1.171 12.8 1.308 1.044 1.257
45-59............................................... 26.8 1.013 27.8 1.084 1.000 1.068
60-69............................................... 23.8 1.000 25.8 1.086 1.005 1.070
70-79............................................... 22.9 1.011 21.1 1.000 1.000 1.000
80+................................................. 13.0 1.016 12.4 1.145 0.961 1.109
Body surface area (per 0.1 m\2\)\3\..................... .............. 1.020 .............. 1.039 1.000 1.032
Underweight (BMI < 18.5)................................ 4.0 1.025 3.3 1.000 1.090 1.017
Time since onset of renal dialysis < 4 months........... 4.8 1.510 4.0 1.307 1.409 1.327
Facility low volume status.............................. 1.8 1.189 1.7 1.368 0.955 1.239
Comorbidities: \4\
Pericarditis (acute)................................ 0.4 1.114 0.1 1.000 1.209 1.040
Gastro-intestinal tract bleeding (acute)............ 1.1 1.183 0.5 1.000 1.426 1.082
Bacterial pneumonia (acute)......................... 2.0 1.135 .............. .............. .............. ..............
[[Page 37824]]
Hereditary hemolytic or sickle cell anemia (chronic) 2.0 1.072 0.1 1.000 1.999 1.192
Myelodysplastic syndrome (chronic).................. 1.6 1.099 0.3 1.000 1.494 1.095
Monoclonal gammopathy (chronic)..................... 1.2 1.024 .............. .............. .............. ..............
Rural................................................... -- -- 15.0 1.015 0.978 1.008
--------------------------------------------------------------------------------------------------------------------------------------------------------
ii. Proposed Pediatric Case-Mix Payment Adjustments
Table 5--CY 2016 Proposed Pediatric Case-Mix Payment Adjustments
--------------------------------------------------------------------------------------------------------------------------------------------------------
Patient characteristics PY 2011 Final rule (based on PY 2016 NPRM (based on 2012 and 2013 data)
------------------------------------- 2006-2008 data) -----------------------------------------------
Cell -------------------------------- Separately Expanded
Age Modality Payment Population % billable bundle payment
Population % multiplier multiplier multiplier
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. <13 PD.................... 20.58 1.033 27.62 0.410 1.063
2.................................. <13 HD.................... 16.57 1.219 19.23 1.406 1.306
3.................................. 13-17 PD.................... 18.20 1.067 20.19 0.569 1.102
4.................................. 13-17 HD.................... 44.66 1.277 32.96 1.494 1.327
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. Proposed CY 2016 ESRD PPS Update
a. ESRD Bundled Market Basket
i. Overview and Background
In accordance with section 1881(b)(14)(F)(i) of the Act, as added
by section 153(b) of MIPPA and amended by section 3401(h) of the
Affordable Care Act, beginning in 2012, the ESRD payment amounts are
required to be annually increased by an ESRD market basket increase
factor that is reduced by the productivity adjustment described in
section 1886(b)(3)(B)(xi)(II) of the Act. The application of the
productivity adjustment may result in the increase factor being less
than 0.0 for a year and may result in payment rates for a year being
less than the payment rates for the preceding year. The statute also
provides that the market basket increase factor should reflect the
changes over time in the prices of an appropriate mix of goods and
services used to furnish renal dialysis services.
Section 1881(b)(14)(F)(i)(I) of the Act, as added by section
217(b)(2)(A) of PAMA, provides that in order to accomplish the purposes
of subparagraph (I) with respect to 2016, 2017, and 2018, after
determining the market basket percentage increase factor for each of
2016, 2017, and 2018, the Secretary shall reduce such increase factor
by 1.25 percentage points for each of 2016 and 2017 and by 1 percentage
point for 2018.. Accordingly, for CY 2016, we will reduce the proposed
amount of the market basket percentage increase factor by 1.25 percent
as required by section 1881(b)(14)(F)(i)(I) of the Act, and will
further reduce it by the productivity adjustment.
ii. Proposed Market Basket Update Increase Factor and Labor-Related
Share for ESRD Facilities for CY 2016
As required under section 1881(b)(14)(F)(i) of the Act, CMS
developed an all-inclusive ESRDB input price index (75 FR 49151 through
49162) and subsequently revised and rebased the ESRDB input price index
in the CY 2015 ESRD final rule (79 FR 66129 through 66136). Although
``market basket'' technically describes the mix of goods and services
used for ESRD treatment, this term is also commonly used to denote the
input price index (that is, cost categories, their respective weights,
and price proxies combined) derived from a market basket. Accordingly,
the term ``ESRDB market basket,'' as used in this document, refers to
the ESRDB input price index.
We propose to use the CY 2012-based ESRDB market basket as
finalized and described in the CY 2015 ESRD PPS final rule (79 FR 66129
through 66136) to compute the CY 2016 ESRDB market basket increase
factor and labor-related share based on the best available data.
Consistent with historical practice, we estimate the ESRDB market
basket update based on IHS Global Insight (IGI), Inc.'s forecast using
the most recently available data. IGI is a nationally recognized
economic and financial forecasting firm that contracts with CMS to
forecast the components of the market baskets.
Using this methodology and the IGI forecast for the first quarter
of 2015 of the CY 2012-based ESRDB market basket (with historical data
through the fourth quarter of 2014), and consistent with our historical
practice of estimating market basket increases based on the best
available data, the proposed CY 2016 ESRDB market basket increase
factor is 2.0 percent. As required by section 1881(b)(14)(F)(i)(I) of
the Act as amended by section 217(b)(2) of PAMA, we must reduce the
amount of the market basket increase factor by 1.25 percent, resulting
in a proposed CY 2016 ESRDB market basket percentage increase factor of
0.75 percent.
For the CY 2016 ESRD payment update, we propose to continue using a
labor-related share of 50.673 percent for the ESRD PPS payment, which
was finalized in the CY 2015 ESRD final rule (79 FR 66136) but was
applied in CY 2015 using a 2-year transition.
[[Page 37825]]
iii. Proposed Productivity Adjustment
Under section 1881(b)(14)(F)(i) of the Act, as amended by section
3401(h) of the Affordable Care Act, for CY 2012 and each subsequent
year, the ESRD market basket percentage increase factor shall be
reduced by the productivity adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act. The statute defines the productivity
adjustment as equal to the 10-year moving average of changes in annual
economy-wide private nonfarm business MFP (as projected by the
Secretary for the 10-year period ending with the applicable fiscal
year, year, cost reporting period, or other annual period) (the ``MFP
adjustment''). The Bureau of Labor Statistics (BLS) is the agency that
publishes the official measure of private nonfarm business MFP. Please
see http://www.bls.gov/mfp to obtain the BLS historical published MFP
data.
MFP is derived by subtracting the contribution of labor and capital
input growth from output growth. The projections of the components of
MFP are currently produced by IGI, a nationally recognized economic
forecasting firm with which CMS contracts to forecast the components of
the market basket and MFP. As described in the CY 2012 ESRD PPS final
rule (76 FR 40503 through 40504), to generate a forecast of MFP, IGI
replicates the MFP measure calculated by the BLS using a series of
proxy variables derived from IGI's U.S. macroeconomic models. In the CY
2012 ESRD PPS final rule, we identified each of the major MFP component
series employed by the BLS to measure MFP as well as provided the
corresponding concepts determined to be the best available proxies for
the BLS series.
Beginning with the CY 2016 rulemaking cycle, the MFP adjustment is
calculated using a revised series developed by IGI to proxy the
aggregate capital inputs. Specifically, IGI has replaced the Real
Effective Capital Stock used for Full Employment GDP with a forecast of
BLS aggregate capital inputs recently developed by IGI using a
regression model. This series provides a better fit to the BLS capital
inputs, as measured by the differences between the actual BLS capital
input growth rates and the estimated model growth rates over the
historical time period. Therefore, we are using IGI's most recent
forecast of the BLS capital inputs series in the MFP calculations
beginning with the CY 2016 rulemaking cycle. A complete description of
the MFP projection methodology is available on our Web site at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html. Although
we discuss the IGI changes to the MFP proxy series in this proposed
rule, in the future, when IGI makes changes to the MFP methodology, we
will announce them on our Web site rather than in the annual
rulemaking.
Using IGI's first quarter 2015 forecast, the MFP adjustment for CY
2016 (the 10-year moving average of MFP for the period ending CY 2016)
is projected to be 0.6 percent. We invite public comment on these
proposals.
iv. Calculation of the ESRDB Market Basket Update, Adjusted for
Multifactor Productivity for CY 2016
Under section 1881(b)(14)(F) of the Act, beginning in CY 2012, ESRD
PPS payment amounts shall be annually increased by an ESRD market
basket percentage increase factor reduced by the productivity
adjustment. For CY 2016, section 1881(b)(14)(F)(i)(I) of the Act, as
amended by section 217(b)(2)(A)(ii) of PAMA, requires the Secretary to
implement a 1.25 percentage point reduction to the ESRDB market basket
increase factor in addition to the productivity adjustment.
As a result of these provisions, the proposed CY 2016 ESRD market
basket increase is 0.15 percent. The proposed ESRDB market basket
percentage increase factor for CY 2016 is 2.0 percent, which is based
on the 1st quarter 2015 forecast of the CY 2012-based ESRDB market
basket. This market basket percentage is then reduced by the 1.25
percent, as required by the section 1881(b)(14)(F)(i)(I). The market
basket percentage increase is then further reduced by the MFP
adjustment (the 10-year moving average of MFP for the period ending CY
2016) of 0.6 percent, which is also based on IGI's 1st quarter 2015
forecast. As is our general practice, if more recent data is
subsequently available (for example, a more recent estimate of the
market basket or MFP adjustment), we will use such data to determine
the CY 2016 market basket update and MFP adjustment in the CY 2016 ESRD
PPS final rule.
b. The Proposed CY 2016 ESRD PPS Wage Indices
i. Annual Update of the Wage Index
Section 1881(b)(14)(D)(iv)(II) of the Act provides that the ESRD
PPS may include a geographic wage index payment adjustment, such as the
index referred to in section 1881(b)(12)(D) of the Act, as the
Secretary determines to be appropriate. In the CY 2011 ESRD PPS final
rule (75 FR 49117), we finalized the use of the Office of Management
and Budget's (OMB) Core-Based Statistical Areas (CBSAs)-based
geographic area designations to define urban and rural areas and their
corresponding wage index values.
For CY 2016, we would continue to use the same methodology as
finalized in the CY 2011 ESRD PPS final rule (75 FR 49117) for
determining the wage indices for ESRD facilities. Specifically, we are
updating the wage indices for CY 2016 to account for updated wage
levels in areas in which ESRD facilities are located. We use the most
recent pre-floor, pre-reclassified hospital wage data collected
annually under the inpatient prospective payment system. The ESRD PPS
wage index values are calculated without regard to geographic
reclassifications authorized under section 1886(d)(8) and (d)(10) of
the Act and utilize pre-floor hospital data that are unadjusted for
occupational mix. The proposed CY 2016 wage index values for urban
areas are listed in Addendum A (Wage Indices for Urban Areas) and the
proposed CY 2016 wage index values for rural areas are listed in
Addendum B (Wage Indices for Rural Areas). Addenda A and B are located
on the CMS Web site athttp://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/End-Stage-Renal-Disease-ESRD-Payment-Regulations-and-Notices.html.
In the CY 2011 and CY 2012 ESRD PPS final rules (75 FR 49116
through 49117 and 76 FR 70239 through 70241, respectively), we also
discussed and finalized the methodologies we use to calculate wage
index values for ESRD facilities that are located in urban and rural
areas where there is no hospital data. For urban areas with no hospital
data, we compute the average wage index value of all urban areas within
the State and use that value as the wage index. For rural areas with no
hospital data, we compute the wage index using the average wage index
values from all contiguous CBSAs to represent a reasonable proxy for
that rural area.
For CY 2016, we are applying this criteria to American Samoa and
the Northern Mariana Islands, where we apply the wage index for Guam as
established in the CY 2014 ESRD PPS final rule (78 FR 72172) (0.9611),
and Hinesville-Fort Stewart, Georgia, where we apply the statewide
urban average based on the average of all urban areas within the state
(78 FR 72173) (0.8699). We note that if hospital data becomes available
for these areas, we will use that data for the appropriate CBSAs
instead of the proxy.
[[Page 37826]]
A wage index floor value has been used in lieu of the calculated
wage index values below the floor in making payment for renal dialysis
services under the ESRD PPS. In the CY 2011 ESRD PPS final rule (75 FR
49116 through 49117), we finalized that we would continue to reduce the
wage index floor by 0.05 for each of the remaining years of the ESRD
PPS transition. In the CY 2012 ESRD PPS final rule (76 FR 70241), we
finalized the 0.05 reduction to the wage index floor for CYs 2012 and
2013, resulting in a wage index floor of 0.5500 and 0.5000,
respectively. We continued to apply and to reduce the wage index floor
by 0.05 in the CY 2013 ESRD PPS final rule (77 FR 67459 through 67461).
Although our intention initially was to provide a wage index floor only
through the 4-year transition to 100 percent implementation of the ERSD
PPS (75 FR 49116 through 49117; 76 FR 70240 through 70241), in the CY
2014 ESRD PPS final rule (78 FR 72173), we continued to apply the wage
index floor and continued to reduce the floor by 0.05 per year for CY
2014 and for CY 2015.
For CY 2016, we are proposing to continue to apply the CY 2015 wage
index floor, that is, 0.4000, to areas with wage index values below the
floor but we are not proposing to reduce the wage index floor for CY
2016. Our review of the wage indices show that CBSAs in Puerto Rico
continue to be the only areas with wage index values that would benefit
from a wage index floor because they are so low. Therefore, we believe
that we need more time to study the wage indices that are reported for
Puerto Rico to assess the appropriateness of discontinuing the wage
index floor and leave it at 0.4000. Because the wage index floor is
only applicable to a small number of CBSAs, the impact to the base rate
through the wage index budget neutrality factor would be insignificant.
To the extent other geographical areas fall below the floor in CY 2016
or beyond, we believe they should have the benefit of the 0.4000 wage
index floor as well. We will continue to review wage index values and
the appropriateness of a wage index floor in the future.
ii. Implementation of New Labor Market Delineations
As noted earlier in this section, in the CY 2011 ESRD PPS final
rule (75 FR 49117), we finalized for the ESRD PPS the use of the CBSA-
based geographic area designations described in OMB bulletin 03-04,
issued June 6, 2003 as the basis for revising the urban and rural areas
and their corresponding wage index values. This bulletin, as well as
subsequent bulletins, is available online at http://www.whitehouse.gov/omb/bulletins_index2003-2005.
OMB publishes bulletins regarding CBSA changes, including changes
to CBSA numbers and titles. In accordance with our established
methodology, we have historically adopted via rulemaking CBSA changes
that are published in the latest OMB bulletin. On February 28, 2013,
OMB issued OMB Bulletin No. 13-01, which established revised
delineations for Metropolitan Statistical Areas, Micropolitan
Statistical Areas, and Combined Statistical Areas, and provided
guidance on the use of the delineations of these statistical areas. A
copy of this bulletin may be obtained at http://www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b-13-01.pdf. According to OMB,
``[t]his bulletin provides the delineations of all Metropolitan
Statistical Areas, Metropolitan Divisions, Micropolitan Statistical
Areas, Combined Statistical Areas, and New England City and Town Areas
in the United States and Puerto Rico based on the standards published
on June 28, 2010, in the Federal Register (75 FR 37246 through 37252)
and Census Bureau data.'' In the CY 2015 ESRD PPS final rule (79 FR
40226) and this proposed rule, when referencing the new OMB geographic
boundaries of statistical areas, we use the term ``delineations''
rather than the term ``definitions'' that we have used in the past,
consistent with OMB's use of the terms (75 FR 37249). Because the
bulletin was not issued until February 28, 2013, with supporting data
not available until later, and because the changes made by the bulletin
and their ramifications needed to be extensively reviewed and verified,
we were unable to undertake such a lengthy process before publication
of the FY 2014 IPPS/LTCH PPS proposed rule and, thus, did not implement
changes to the hospital wage index for FY 2014 based on these new CBSA
delineations.
Likewise, for the same reasons, the CY 2014 ESRD PPS wage index
(based upon the pre-floor, pre-reclassified hospital wage data, which
is unadjusted for occupational mix) also did not reflect the new CBSA
delineations. In the FY 2015 IPPS/LTCH PPS final rule, we implemented
the new CBSA delineations as described in the February 28, 2013 OMB
Bulletin No. 13-01, beginning with the FY 2015 IPPS wage index (79 FR
49951 through 49963). Similarly, in the CY 2015 ESRD PPS final rule (79
FR 66137 through 66142), we implemented the new CBSA delineations as
described in the February 28, 2013 OMB Bulletin No. 13-01, beginning
with the CY 2015 ESRD PPS wage index.
In order to implement these changes for the ESRD PPS, we identified
the new labor market area delineation for each county and facility in
the country and determined that there would be new CBSAs, urban
counties that would become rural, rural counties that would become
urban, and existing CBSAs that would be split apart. In the CY 2015
final rule (79 FR 66137 and 66138), we provided tables that showed the
CBSA delineations and wage index values for CY 2014 and the CY 2015
CBSA delineations, wage index values, and the percentage change in
these values for those counties that changed from rural to urban, from
urban to rural, and from one urban area to another and also showed the
changes to the statewide rural wage index.
While we believe that the new CBSA delineations result in wage
index values that are more representative of the actual costs of labor
in a given area, we recognized that use of the new CBSA delineations
results in reduced payments to some facilities. For this reason, we
implemented the new CBSA delineations using a 2-year transition with a
50/50 blended wage index value for all facilities in CY 2015 and 100
percent of the wage index based on the new CBSA delineations in CY
2016. Therefore, for CY 2016, we are completing the transition and will
apply 100 percent of the wage index based on the new CBSA delineations
and the most recent hospital wage data.
A facility's wage index is applied to the labor-related share of
the ESRD PPS base rate. In the CY 2011 ESRD PPS final rule (75 FR
49117), we finalized a policy to use the labor-related share of 41.737
percent for the ESRD PPS which was based on the ESRDB market basket
finalized in that rule. In the CY 2015 ESRD PPS final rule (79 FR
66136), we finalized a new labor-related share of 50.673 percent, which
was based on the rebased and revised ESRDB market basket finalized in
that rule, and transitioned the new labor-related share over a 2-year
period. For CY 2015, the labor-related share is based 50 percent on the
old labor-related share and 50 percent on the new labor-related share,
and the labor-related share in CY 2016 is based 100 percent on the new
labor-related share.
c. CY 2016 Update to the Outlier Policy
Section 1881(b)(14)(D)(ii) of the Act requires that the ESRD PPS
include a payment adjustment for high cost outliers due to unusual
variations in the type or amount of medically necessary
[[Page 37827]]
care, including variability in the amount of erythropoiesis stimulating
agents (ESAs) necessary for anemia management. Some examples of the
patient conditions that may be reflective of higher facility costs when
furnishing dialysis care would be frailty, obesity, comorbidities such
as cancer, and possibly race and gender. The ESRD PPS recognizes high
cost patients, and we have codified the outlier policy in our
regulations at 42 CFR 413.237, which provide that ESRD outlier services
are the following items and services that are included in the ESRD PPS
bundle: (i) ESRD-related drugs and biologicals that were or would have
been, prior to January 1, 2011, separately billable under Medicare Part
B; (ii) ESRD-related laboratory tests that were or would have been,
prior to January 1, 2011, separately billable under Medicare Part B;
(iii) medical/surgical supplies, including syringes, used to administer
ESRD-related drugs, that were or would have been, prior to January 1,
2011, separately billable under Medicare Part B; and (iv) renal
dialysis service drugs that were or would have been, prior to January
1, 2011, covered under Medicare Part D, excluding oral-only drugs used
in the treatment of ESRD.
In the CY 2011 ESRD PPS final rule (75 FR 49142), we stated that
for purposes of determining whether an ESRD facility would be eligible
for an outlier payment, it would be necessary for the facility to
identify the actual ESRD outlier services furnished to the patient by
line item on the monthly claim. Renal dialysis drugs, laboratory tests,
and medical/surgical supplies that are recognized as outlier services
were originally specified in Attachment 3 of Change Request 7064,
Transmittal 2033 issued August 20, 2010, rescinded and replaced by
Transmittal 2094, dated November 17, 2010. Transmittal 2094 identified
additional drugs and laboratory tests that may also be eligible for
ESRD outlier payment. Transmittal 2094 was rescinded and replaced by
Transmittal 2134, dated January 14, 2011, which was issued to correct
the subject on the Transmittal page and made no other changes.
Furthermore, we use administrative issuance and guidance to continually
update the renal dialysis service items available for outlier payment
via our quarterly update CMS Change Requests, when applicable. We use
this separate guidance to identify renal dialysis service drugs which
were or would have been covered under Part D for outlier eligibility
purposes and in order to provide unit prices for calculating imputed
outlier services. In addition, we also identify through our monitoring
efforts items and services that are either incorrectly being identified
as eligible outlier services or any new items and services that may
require an update to the list of renal dialysis items and services that
qualify as outlier services, which are made through administrative
issuances.
Our regulations at 42 CFR 413.237 specify the methodology used to
calculate outlier payments. An ESRD facility is eligible for an outlier
payment if its actual or imputed MAP amount per treatment for ESRD
outlier services exceeds a threshold. The MAP amount represents the
average incurred amount per treatment for services that were or would
have been considered separately billable services prior to January 1,
2011. The threshold is equal to the ESRD facility's predicted ESRD
outlier services MAP amount per treatment (which is case-mix adjusted)
plus the fixed-dollar loss amount. In accordance with Sec. 413.237(c)
of the regulations, facilities are paid 80 percent of the per treatment
amount by which the imputed MAP amount for outlier services (that is,
the actual incurred amount) exceeds this threshold. ESRD facilities are
eligible to receive outlier payments for treating both adult and
pediatric dialysis patients.
In the CY 2011 ESRD PPS final rule, using 2007 data, we established
the outlier percentage at 1.0 percent of total payments (75 FR 49142
through 49143). We also established the fixed-dollar loss amounts that
are added to the predicted outlier services MAP amounts. The outlier
services MAP amounts and fixed-dollar loss amounts are different for
adult and pediatric patients due to differences in the utilization of
separately billable services among adult and pediatric patients (75 FR
49140). As we explained in the CY 2011 ESRD PPS final rule (75 FR 49138
through 49139), the predicted outlier services MAP amounts for a
patient are determined by multiplying the adjusted average outlier
services MAP amount by the product of the patient-specific case-mix
adjusters applicable using the outlier services payment multipliers
developed from the regression analysis to compute the payment
adjustments.
For the CY 2016 outlier policy, we would use the existing
methodology for determining outlier payments by applying outlier
services payment multipliers that resulted from the updated regression
analyses performed for this proposed rule. The updated outlier services
payment multipliers are represented by the updated separately billable
payment multipliers presented in Table 4 for patients age 18 years and
older and in Table 5 for patients age <18 years. We used these updated
outlier services payment multipliers to calculate the predicted outlier
service MAP amounts and projected outlier payments for CY 2016.
For CY 2016, we propose that the outlier services MAP amounts and
fixed-dollar loss amounts would be derived from claims data from CY
2014. Because we believe that any adjustments made to the MAP amounts
under the ESRD PPS should be based upon the most recent data year
available in order to best predict any future outlier payments, we
propose the outlier thresholds for CY 2016 would be based on
utilization of renal dialysis items and services furnished under the
ESRD PPS in CY 2014. We recognize that the utilization of ESAs and
other outlier services have continued to decline under the ESRD PPS,
and that we have lowered the MAP amounts and fixed-dollar loss amounts
every year under the ESRD PPS. However, we believe for the first time
since the implementation of the ESRD PPS that data for CY 2014 is
reflective of relatively stable ESA use. We have included Table 6
(Total Medicare ESA Utilization in the ESRD Population) below to
demonstrate the leveling off of the decline in ESA utilization.
Table 6--Total Medicare ESA Utilization in the ESRD Population
--------------------------------------------------------------------------------------------------------------------------------------------------------
2009 2010 2011 2012 2013 2014 \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total ESA Utilization
--------------------------------------------------------------------------------------------------------------------------------------------------------
Epogen (x100,000)....................................... 2,083,893 2,075,217 1,655,778 1,319,383 1,262,186 1,143,405
Darbepoetin (x100,000).................................. 533 496 379 280 242 291
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 37828]]
ESA Utilization per Session
--------------------------------------------------------------------------------------------------------------------------------------------------------
Epogen.................................................. 5,404 5,171 3,995 3,078 2,895 2,858
Darbepoetin............................................. 1.38 1.24 0.91 0.65 0.55 0.73
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ 2014 based on December 2014 claims.
i. CY 2016 Update to the Outlier Services MAP Amounts and Fixed-Dollar
Loss Amounts
For CY 2016, we are not proposing any change to the methodology
used to compute the MAP or fixed-dollar loss amounts. Rather, we will
continue to update the outlier services MAP amounts and fixed-dollar
loss amounts to reflect the utilization of outlier services reported on
2014 claims. For this proposed rule, the outlier services MAP amounts
and fixed dollar loss amounts were updated using the 2014 claims from
the March 2015 claims file. The impact of this update is shown in Table
7, which compares the outlier services MAP amounts and fixed-dollar
loss amounts used for the outlier policy in CY 2015 with the updated
proposed estimates for this rule. The estimates for the proposed CY
2016 outlier policy, which are included in Column II of Table 7, were
inflation adjusted to reflect projected 2016 prices for outlier
services.
Table 7--Outlier Policy: Impact of Using Updated Data to Define the Outlier Policy
----------------------------------------------------------------------------------------------------------------
Column I Final outlier policy Column II Proposed outlier
for CY 2015 (based on 2013 policy for CY 2016 (based on
data price inflated to 2015) * 2014 data price inflated to
-------------------------------- 2016) *
-------------------------------
Age < 18 Age >= 18 Age < 18 Age >= 18
----------------------------------------------------------------------------------------------------------------
Average outlier services MAP amount per $39.89 $52.98 $38.87 $50.20
treatment......................................
Adjustments:
Standardization for outlier services........ 1.1145 0.9878 0.9929 0.9788
MIPPA reduction............................. 0.98 0.98 0.98 0.98
Adjusted average outlier services MAP amount 43.57 51.29 37.82 48.15
Fixed-dollar loss amount that is added to the 54.35 86.19 49.99 85.66
predicted MAP to determine the outlier
threshold......................................
Patient months qualifying for outlier payment... 6.3% 6.3% 7.7% 6.4%
----------------------------------------------------------------------------------------------------------------
As demonstrated in Table 7, the estimated fixed-dollar loss amount
per treatment that determines the CY 2016 outlier threshold amount for
adults (Column II; $85.66) is slightly lower than that used for the CY
2015 outlier policy (Column I; $86.19). The lower threshold is
accompanied by a decline in the adjusted average MAP for outlier
services from $51.29 to $48.15. For pediatric patients, the fixed
dollar loss amount also fell, from $54.35 to $49.99. Likewise, the
adjusted average MAP for outlier services fell from $43.57 to $37.82.
We estimate that the percentage of patient months qualifying for
outlier payments in CY 2016 will be 6.4 percent for adult patients and
7.7 percent for pediatric patients, based on the 2014 claims data. The
pediatric outlier MAP and fixed-dollar loss amounts continue to be
lower for pediatric patients than adults due to the continued lower use
of outlier services (primarily reflecting lower use of ESAs and other
injectable drugs).
ii. Outlier Policy Percentage
In the CY 2011 ESRD PPS final rule (75 FR 49081), in accordance
with 42 CFR 413.220(b)(4), we reduced the per treatment base rate by 1
percent to account for the proportion of the estimated total payments
under the ESRD PPS that are outlier payments. Based on the 2014 claims,
outlier payments represented approximately 0.9 percent of total
payments, slightly below the 1 percent target due to small declines in
the use of outlier services. Recalibration of the thresholds using 2014
data is expected to result in aggregate outlier payments close to the 1
percent target in CY 2016. We believe the update to the outlier MAP and
fixed-dollar loss amounts for CY 2016 will increase payments for ESRD
beneficiaries requiring higher resource utilization and move us closer
to meeting our 1 percent outlier policy. We note that recalibration of
the fixed-dollar loss amounts in this proposed rule would result in no
change in payments to ESRD facilities for beneficiaries with renal
dialysis items and services that are not eligible for outlier payments,
but would increase payments to ESRD facilities for beneficiaries with
renal dialysis items and services that are eligible for outlier
payments. Therefore, beneficiary co-insurance obligations would also
increase for renal dialysis services eligible for outlier payments.
We note that many industry stakeholder associations and renal
facilities have expressed disappointment that the outlier target
percentage has not been achieved under the ESRD PPS and have asked that
CMS eliminate the outlier policy. With regard to the suggestion that we
eliminate the outlier adjustment altogether, we note that, under
section 1881(b)(14)(D)(ii) of the Act, the ESRD PPS must include a
payment adjustment for high cost outliers due to unusual variations in
the type or amount of medically necessary care, including variations in
the amount of erythropoiesis stimulating agents necessary for anemia
management. We believe that the ESRD PPS is required to include an
outlier adjustment in order to comply with section 1881(b)(14)(D)(ii)
of the Act.
[[Page 37829]]
In addition, we believe that the ESRD PPS base rate captures the
cost for the average renal patient, and to the extent data analysis
continues to show that certain patients, including certain racial and
ethnic groups, receive more ESAs than the average patient, we believe
an outlier policy, even a small one, is an important payment adjustment
to provide under the ESRD PPS. We are not proposing to modify the 1
percent outlier percentage for CY 2016 because we believe that the
regression analysis continues to demonstrate high cost patients and
that the proposed elimination of the comorbidity categories of
bacterial pneumonia and monoclonal gammopathy and other regression
updates would assist facilities in receiving outlier payments in CY
2016 that are 1 percent of total ESRD PPS payments.
We understand the industry's frustration that payments under the
outlier policy have not reached 1 percent of total ESRD PPS payments
since the implementation of the payment system. As we explained in the
CY 2014 ESRD PPS final rule (78 FR 72165), each year we simulate
payments under the ESRD PPS in order to set the outlier fixed-dollar
loss and MAP amounts for adult and pediatric patients to try to achieve
the 1 percent outlier policy. We would not increase the base rate to
account for years where outlier payments were less than 1 percent of
total ESRD PPS payments, nor would we reduce the base rate if the
outlier payments exceed 1 percent of total ESRD PPS payments.
We believe the 1 percent outlier percentage has not been reached
under the payment system due to the significant drop, over 25 percent,
in the utilization of high cost drugs such as Epogen since the
implementation of the payment system. However, we have learned in our
discussions with ESRD facilities that many facilities are not willing
to report outlier services on the ESRD facility monthly claim form as
they do not believe that they will reach the outlier threshold. We
issued sub-regulatory guidance for CY 2015 that instructs ESRD
facilities to include all composite rate drugs and biologicals
furnished to the beneficiary on the monthly claim form (Change Request
8978, issued December 2, 2014). In CY 2015 ESRD PPS final rule (79 FR
66149 through 66150), we discussed the drug categories that we consider
to be used for the treatment of ESRD with the expectation that all of
those drugs and biologicals would be reported on the claim. In addition
to this guidance, we also have included a clarification for how
facilities are to report laboratory services and drugs and biologicals
on the monthly claim form in sections II.C.1 and II.C.2 of this
proposed rule, respectively.
d. Annual Updates and Policy Changes to the CY 2016 ESRD PPS
i. ESRD PPS Base Rate
In the CY 2011 ESRD PPS final rule (75 FR 49071 through 49083), we
discussed the implementation of the ESRD PPS per treatment base rate
that is codified in the Medicare regulations at Sec. 413.220 and Sec.
413.230. The CY 2011 ESRD PPS final rule also provides a detailed
discussion of the methodology used to calculate the ESRD PPS base rate
and the computation of factors used to adjust the ESRD PPS base rate,
outlier payments, and geographic wage budget neutrality in accordance
with sections 1881(b)(14)(D)(ii) and 1881(b)(14)(A)(ii) of the Act,
respectively. Specifically, the ESRD PPS base rate was developed from
CY 2007 claims, that is, the lowest per patient utilization year as
required by section 1881(b)(14)(A)(ii) of the Act, updated to CY 2011,
and represented the average per treatment MAP for renal dialysis
services. The payment system is updated annually by the ESRDB market
basket less productivity adjustment which is discussed in section
II.B.2.a.iv of this proposed rule.
ii. Annual Payment Rate Update for CY 2016
We are proposing an ESRD PPS base rate for CY 2016 of $230.20. This
update reflects several factors, described in more detail below.
Market Basket Increase: Section 1881(b)(14)(F)(i)(I) of the Act
provides that, beginning in 2012, the ESRD PPS payment amounts are
required to be annually increased by the ESRD market basket percentage
increase factor. The latest CY 2016 projection for the ESRDB market
basket is 2.0 percent. In CY 2016, this amount must be reduced by 1.25
percentage points as required by section 1881(b)(14)(F)(i)(I), as
amended by section 217(b)(2)(A) of PAMA, which is calculated as 2.0-
1.25 = 0.75. This amount is then further reduced by the productivity
adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act as
required by section 1881(b)(14)(F)(i)(II) of the Act. The proposed
multi-factor productivity adjustment for CY 2016 is 0.6, thus yielding
a proposed update to the base rate of 0.15 percent for CY 2016 (0.75-
0.6 = 0.15 percent).
Wage Index Budget-Neutrality Adjustment Factor: We compute a wage
index budget-neutrality adjustment factor that is applied to the ESRD
PPS base rate. For CY 2016, we are not proposing any changes to the
methodology used to calculate this factor which is described in detail
in CY 2014 ESRD PPS final rule (78 FR 72174). The CY 2016 proposed wage
index budget-neutrality adjustment factor is 1.000332.
Refinement Budget-Neutrality Adjustment Factor: In order to
implement the refinement in a budget-neutral manner, we are proposing
to adjust the ESRD PPS base rate by a budget-neutrality adjustment
factor so that total projected PPS payments in CY 2016 are equal to
what the payments would have been in CY 2016 had we not implemented the
refinement. In CY 2011, we standardized the base rate to account for
the overall effects of the ESRD PPS adjustment factors by making a 5.93
percent reduction to the base rate. To account for the overall effects
of the refinement, we are proposing a 4 percent reduction (that is, a
factor of 0.959703) to the ESRD PPS base rate to account for the
additional dollars paid to facilities through the payment adjustments.
While the per treatment base rate would be reduced, we believe that
this refinement improves payment accuracy and we would expect payments
to be better targeted to those characteristics that increase costs for
facilities. Notably, a significant portion of impact of the adjusters
on the base rate arises from changes in the age adjustments.
In summary, we are proposing a CY 2016 ESRD PPS base rate of
$230.20. This reflects a market basket increase of 0.15 percent, the CY
2016 wage index budget-neutrality adjustment factor of 1.000332, and
the refinement budget-neutrality adjustment of 0.959703.
3. Section 217(c) of PAMA and the ESRD PPS Drug Designation Process
As part of the CY 2016 ESRD PPS rulemaking, section 217(c) of PAMA
requires the Secretary to implement a drug designation process for--
(1) Determining when a product is no longer an oral-only drug; and
(2) Including new injectable and intravenous products into the
bundled payment under such system.
In accordance with section 217(c) of PAMA, we are proposing a
process that would allow us to recognize when an oral-only renal
dialysis service drug or biological is no longer oral only and to
include new injectable and intravenous products into the ESRD PPS
bundled payment, and, when appropriate, to modify the ESRD PPS payment
amount to reflect the costs of furnishing a new injectable or
intravenous renal dialysis service drug or biological that is not
bundled in the ESRD PPS payment
[[Page 37830]]
amount. We believe that this process, which we refer to as the drug
designation process under the ESRD PPS, would provide a systematic
method for including new injectable and intravenous drugs and
biologicals that are designated as renal dialysis services in the ESRD
PPS bundled payment.
a. Stakeholder Comments From the CY 2015 ESRD PPS Proposed and Final
Rules
In the CY 2015 ESRD PPS proposed rule (79 FR 40235), we sought
stakeholder comments on the potential components of a drug designation
process. While we did not directly address these comments in our CY
2015 final rule, we committed to considering the comments in
formulating our drug designation process proposal in CY 2016. We were
encouraged by the consensus among stakeholders regarding the
significant and fundamental elements of a drug designation process and
the recommendation that CMS rely upon the rulemaking process when
considering any change to the ESRD PPS to account for new injectable
and intravenous drugs or biologicals. We contemplated these comments in
the development of the drug designation process proposed below.
We note that commenters largely emphasized the additional costs
associated with furnishing new injectable and intravenous renal
dialysis services and encouraged CMS to use the most recent year of
data for pricing and utilization when adding new injectable drugs and
biologicals to the bundled payment. Specifically, an industry
association and many of its members offered a 7-principle drug
designation process that included:
A clear definition of what drugs and biologicals are in
the ESRD PPS.
A criterion related to the frequency with which a drug or
biological may be used.
A criterion for determining when drugs or biologicals are
equivalent or interchangeable with existing products that are already
in the bundle.
Reliance upon rulemaking whenever making changes to the
bundle.
A transition for adding new drugs and biologicals to the
ESRD bundle.
Tracking of costs of new drugs and biologicals before
adding them to the ESRD bundle.
An increase in the bundled rate to cover the costs of
providing such drugs and biologicals.
b. Background
Section 1881(b)(14)(A)(i) of the Act requires the Secretary to
implement the ESRD PPS, under which a single payment is made to a
provider of services or a renal dialysis facility for renal dialysis
services in lieu of any other payment. The renal dialysis services that
are included in the ESRD PPS bundle are described in section
1881(b)(14)(B) of the Act and include: (i) Items and services included
in the composite rate for renal dialysis services as of December 31,
2010; (ii) erythropoiesis stimulating agents (ESAs) and any oral form
of such agents that are furnished to individuals for the treatment of
ESRD; (iii) other drugs and biologicals that are furnished to
individuals for the treatment of ESRD and for which payment was made
separately under Title XVIII of the Act, and any oral equivalent form
of such drug or biological; and (iv) diagnostic laboratory tests and
other items and services not described in clause (i) that are furnished
to individuals for the treatment of ESRD.
We implemented the ESRD PPS in our CY 2011 ESRD PPS final rule (75
FR 49030 through 49214) and codified our definition of renal dialysis
services at 42 CFR 413.171. In addition to former composite rate items
and services and ESAs, we defined renal dialysis services at 42 CFR
413.171(3) as including other drugs and biologicals that are furnished
to individuals for the treatment of ESRD and for which payment was
(prior to January 1, 2011) made separately under Title XVIII of the Act
(including drugs and biologicals with only an oral form). In the CY
2011 ESRD PPS final rule (75 FR 49037 through 49053), we discussed the
other drugs and biologicals referenced at 42 CFR 413.171(3) and
finalized how they were included in the ESRD PPS. We explained that we
interpreted clause (iii) as encompassing not only injectable drugs and
biologicals (other than ESAs) used for the treatment of ESRD, but also
all non-injectable drugs furnished under Title XVIII of the Act (75 FR
49039). Under this interpretation, the ``any oral equivalent form of
such drug or biological'' language pertains to the oral versions of
injectable drugs other than ESAs. In addition, as we discuss in section
II.B.4 of this proposed rule (75 FR 49040), we concluded that, to the
extent oral-only drugs and biologicals that are used for the treatment
of ESRD do not fall within clause (iii) of the statutory definition of
renal dialysis services, such drugs would fall under clause (iv).
In the CY 2011 ESRD PPS final rule (75 FR 49044 through 49053) we
explained that to identify drugs and biologicals that are used for the
treatment of ESRD and that therefore meet the definition of renal
dialysis services that would be included in the ESRD PPS base rate, we
performed an extensive analysis of Medicare payments for Part B drugs
and biologicals billed on ESRD claims and said that we evaluated each
drug and biological to identify its category by indication or mode of
action. We also explained that categorizing drugs and biologicals on
the basis of drug action would allow us to determine which categories
(and therefore, the drugs and biologicals within the categories) would
be considered used for the treatment of ESRD (75 FR 49047).
Using this approach, in our CY 2011 ESRD PPS final rule we
established categories of drugs and biologicals that are not considered
used for the treatment of ESRD (75 FR 49049-49050), categories that are
always considered used for the treatment of ESRD (75 FR 49050), and
categories of drugs that may be used for the treatment of ESRD but are
also commonly used to treat other conditions (75 FR 49051). Those drugs
and biologicals that were identified as not used for the treatment of
ESRD were not considered renal dialysis services and therefore these
drugs were not included in computing the base rate. The categories of
drugs and biologicals that are always considered used for the treatment
of ESRD were identified as access management, anemia management, anti-
infectives (specifically vancomycin and daptomycin used to treat access
site infections) bone and mineral metabolism, and cellular management
(75 FR 49050). We note that we removed anti-infectives from the list of
categories of drugs and biologicals that are included in the ESRD PPS
base rate and not separately payable in the CY 2015 ESRD PPS final rule
(79 FR 66149-66150). The current categories of drugs that are included
in the ESRD PPS base rate and that may be used for the treatment of
ESRD but are also commonly used to treat other conditions are
antiemetics, anti-infectives, antipruritics, anxiolytics, drugs used
for excess fluid management, drugs used for fluid and electrolyte
management including volume expanders, and pain management (analgesics)
(79 FR 66150).
In the CY 2011 ESRD PPS final rule (75 FR 49050) we explained that
for those categories of drugs and biologicals that are always
considered used for the treatment of ESRD we used the payments for the
drugs included in the category in computing the ESRD PPS base rate,
that is, the injectable forms
[[Page 37831]]
(previously covered under Part B) and oral or other forms of
administration (covered under Part D). For purposes of the inclusion of
payments related to the oral or other forms of administration for those
drugs that are always considered used for the treatment of ESRD, we
stated that based on our determination at the time of the final rule,
there were oral or other forms of injectable drugs only for the bone
and mineral metabolism and cellular management categories. Therefore,
we included the payments under Part D for oral vitamin D (calcitrol,
doxercalcitrol and paracalcitrol) and oral levocarnitine in our
computation of the base rate (75 FR 49042).
Regarding why we chose to identify ESRD drugs and biologicals by
category rather than in a specific list, in response to a commenter's
request to provide a specific list of ESRD-only drugs, we explained
that using categories of drugs and biologicals allows us to respond to
changes in drug therapies over time based upon many factors including
new developments, evidence-based medicine, and patient outcomes (75 FR
49050). By categorizing drugs and biologicals based on drug action, we
can account for other drugs and biologicals that may be used for those
same actions in the future under the ESRD PPS. We further explained
that, while we have included drugs and biologicals used in 2007 in the
final ESRD base rate, we recognize that these may change. Because there
are many drugs and biologicals that have many uses and because new
drugs and biologicals are being developed, we stated that we did not
believe that a drug-specific list would be beneficial (75 FR 49050).
Rather than specifying the specific drugs and biologicals used for the
treatment of ESRD, we identified drugs and biologicals based on the
mechanism of action. We stated that we did not finalize a specific list
of the drugs and biologicals because we did not want to inadvertently
exclude drugs that may be substitutes for drugs identified and we
wanted the ability to reflect new drugs and biologicals as they become
available. We did, however, provide a list of the specific Part B drugs
and biologicals that were included in the proposed and final ESRD PPS
base rate in Table C in the Appendix of the CY 2011 ESRD PPS final rule
(75 FR 49205 through 49209) and a list of the former Part D drugs that
were bundled in the ESRD PPS in Table C in the Appendix of the final
rule (75 FR 49210). This list is located at the following address:
http://www.thefederalregister.org/fdsys/pkg/FR-2010-08-12/pdf/2010-18466.pdf.
We emphasized that any drug or biological furnished for the purpose
of access management, anemia management, vascular access or
peritonitis, cellular management and bone and mineral metabolism will
be considered a renal dialysis service under the ESRD PPS and will not
be eligible for separate payment. We also noted that any ESRD drugs or
biologicals developed in the future that are administered by a route of
administration other than injection or oral would be considered renal
dialysis services and would be in the ESRD PPS bundled base rate. We
also stated that any drug or biological used as a substitute for a drug
or biological that was included in the ESRD PPS bundled base rate would
also be a renal dialysis service and would not be eligible for separate
payment (75 FR 49050).
In the CY 2011 ESRD PPS final rule (75 FR 49050 through 49051) we
explained that for categories of drugs and biologicals that may be used
for the treatment of ESRD but are also commonly used to treat other
conditions, we used the payments made under Part B in 2007 for these
drugs in computing the ESRD PPS base rate, which only included payments
made for the injectable forms of the drugs. We excluded the Part D
payments for the oral (or other form of administration) substitutes for
the drugs and biological described above because they were not
furnished or billed by ESRD facilities or furnished in conjunction with
dialysis treatments (75 FR 49051). For those reasons, we presumed that
these drugs and biologicals that were paid under Part D were prescribed
for reasons other than for the treatment of ESRD. However, we noted
that if these drugs and biologicals currently paid under Part D are
furnished by an ESRD facility for the treatment of ESRD, they would be
considered renal dialysis services and we would not provide separate
payment.
In the CY 2011 ESRD PPS final rule (75 FR 49075), we included in
Table 19 the Medicare allowable payments for all of the components of
the ESRD PPS base rate for CY 2007 inflated to CY 2009, including
payments for drugs and biologicals and the amount each contributed to
the base rate, except for the oral-only renal dialysis drugs where
payment under the ESRD PPS has been delayed. We grouped the injectable
and intravenous drugs and biologicals by action, specifically, into
functional categories. In past rules we have referred to these
categories as drug categories but we believe the term functional
categories is more precise and better reflects how we use the
categories. We propose to define this term in 42 CFR 413.234(a) later
in this discussion. Since the ESRD PPS CY 2011 final rule was
published, the base rate has been updated by the ESRDB market basket,
discussed in section II.B.2.a of this proposed rule, which reflects
changes in the drug price indices. In addition, we have designated
several new drugs and biologicals as renal dialysis services because
they fit within the functional categories captured in the base rate and
no adjustment to the base rate was made. We are proposing that this
approach of considering drugs and biologicals as included in the ESRD
PPS base rate if they fit within one of our functional categories would
continue as part of the drug designation process described below.
c. Proposed Drug Designation Process
i. Inclusion of New Injectable and Intravenous Products in the ESRD PPS
Bundled Payment
In accordance with section 217(c)(2) of PAMA, we propose to include
new injectable and intravenous products in the ESRD PPS bundled payment
by first determining whether the new injectable or intravenous products
are reflected currently in the ESRD PPS. We propose to make this
determination by assessing whether the product can be used to treat or
manage a condition for which there is an ESRD PPS functional category.
Under our proposed regulation at 42 CFR 413.234(b)(1), if the new
injectable or intravenous product can be used to treat or manage a
condition for which there is an ESRD PPS functional category, the new
injectable or intravenous product would be considered reflected in the
ESRD PPS bundled payment and no separate payment would be available.
Specifically, any new drug, biosimilar, or biologic that fits into one
of the ESRD functional categories would be considered to be included in
the ESRD PPS. These drugs and biologicals would count toward the
calculation of an outlier payment. In the calculation of the outlier
payment we price drugs using the ASP payment methodology, which is
currently ASP+6 percent.
If, however, the new injectable or intravenous product is used to
treat or manage a condition for which there is not an ESRD PPS
functional category, the new injectable or intravenous product would
not be considered included in the ESRD PPS bundled payment, and we
propose to take the following steps as described in our proposed
regulation at Sec. 413.234(b)(2): (i) Revise an existing ESRD PPS
[[Page 37832]]
functional category or add a new ESRD PPS functional category for the
condition that the new injectable or intravenous product is used to
treat or manage; (ii) pay for the new injectable or intravenous product
using the transitional drug add-on payment adjustment discussed in
section II.B.3.c.ii below; and (iii) add the new injectable or
intravenous product to the ESRD PPS bundled payment following payment
of the transitional drug add-on payment adjustment.
For purposes of the drug designation process, we propose to define
a new injectable or intravenous product in our regulation at Sec.
413.234(a) as an injectable or intravenous product that is approved by
the Food and Drug Administration (FDA) under section 505 of the Federal
Food, Drug, and Cosmetic Act or section 351 of the Public Health
Service Act, commercially available, assigned a Healthcare Common
Procedure Coding System (HCPCS) code, and designated by CMS as a renal
dialysis service under Sec. 413.171. Following FDA approval,
injectable or intravenous drugs then go through a process to establish
a billing code, specifically a HCPCS code. Information regarding the
HCPCS process is available on the CMS Web site at http://www.cms.gov/medicare/coding/MedHCPCSGenInfo/Application_Form_and_Instructions.html.
We would designate injectable and intravenous products as renal
dialysis services under the ESRD PPS by analyzing the FDA labeling
information, the HCPCS application information, and studies submitted
as part of these two standardized processes. A change request would be
issued to include new drugs added to the functional categories.
We propose to define ESRD PPS functional category at Sec.
413.234(a) as a distinct grouping of drugs and biologicals, as
determined by CMS, whose end action effect is the treatment or
management of a condition or conditions associated with ESRD. We would
codify this definition in regulation text to formalize the approach we
adopted in CY 2011 because the drug designation process is dependent on
the functional categories. As discussed above, we have established 12
functional categories that are used to treat conditions associated with
ESRD, which are displayed in Table 8 below.
Table 8--ESRD PPS Functional Categories
----------------------------------------------------------------------------------------------------------------
Category Rationale for association
----------------------------------------------------------------------------------------------------------------
Access Management...................... Drugs used to ensure access by removing clots from grafts, reverse
anticoagulation if too much medication is given, and provide
anesthetic for access placement.
Anemia Management...................... Drugs used to stimulate red blood cell production and/or treat or
prevent anemia. This category includes ESAs as well as iron.
Bone and Mineral Metabolism............ Drugs used to prevent/treat bone disease secondary to dialysis. This
category includes phosphate binders and calcimimetics.
Cellular Management.................... Drugs used for deficiencies of naturally occurring substances needed
for cellular management. This category includes levocarnitine.
Antiemetic............................. Used to prevent or treat nausea and vomiting secondary to dialysis.
Excludes antiemetics used in conjunction with chemotherapy as these
are covered under a separate benefit category.
Anti-infectives........................ Used to treat infections. May include antibacterial and antifungal
drugs.
Antipruritic........................... Drugs in this classification have multiple clinical indications and are
included for their action to treat itching secondary to dialysis.
Anxiolytic............................. Drugs in this classification have multiple actions but are included for
the treatment of restless leg syndrome secondary to dialysis.
Excess Fluid Management................ Drug/fluids used to treat fluid excess/overload.
Fluid and Electrolyte Management Intravenous drugs/fluids used to treat fluid and electrolyte needs.
Including Volume Expanders.
Pain Management........................ Drugs used to treat graft site pain and to treat pain medication
overdose.
----------------------------------------------------------------------------------------------------------------
We propose to determine whether a new injectable or intravenous
product falls into one of our existing functional categories by
assessing whether the product is used to treat or manage the condition
for which we have created a category. We believe that this approach to
determining whether a new drug falls into one of our existing drug
categories is consistent with the policy we finalized in the CY 2011
ESRD PPS final rule (75 FR 49047 through 49052).
ii. Transitional Drug Add-On Payment Adjustment
We anticipate that there may be new drugs that do not fall within
the existing ESRD PPS functional categories and therefore, are not
reflected in the ESRD PPS payment amount. Where a new injectable or
intravenous product is used to treat or manage a condition for which
there is not a functional category, we propose to pay for the new
injectable or intravenous product using a transitional drug add-on
payment adjustment under the authority of section 1881(b)(14)(D)(iv) of
the Act. The transitional drug add-on payment adjustment would be based
on the ASP pricing methodology and would be paid until we have
collected sufficient claims data for rate setting for the new
injectable or intravenous product, but not for less than 2 years. We
believe that a 2-year timeframe is necessary for adequate data
collection, rate-setting and regulation development. Two years is
necessary for rulemaking purposes because it is a year-long process
that involves developing policies based on data, proposing those
policies, allowing for public comment, finalizing the proposed rule,
and allowing for a period of time before the rule becomes effective.
The minimum 2-year period also allows 1 year for payment of the
adjustment before the beginning of a rulemaking cycle in which we could
propose to add the drug to the bundled payment. For these reasons, we
believe 2 years is the minimum amount of time necessary to pay the
adjustment. The proposed regulation text for the transitional drug add-
on payment adjustment is at Sec. 413.234(c).
We believe paying a transitional drug add-on payment adjustment for
new injectable and intravenous products will allow us to analyze price
and utilization data for both the injectable and, if applicable, any
oral or other forms of the drug in order to pay for the drugs under the
ESRD PPS. We propose that when a facility furnishes the new injectable
drug they would report the drug to Medicare on the monthly facility
bill and would append a CMS payment modifier that would instruct our
claims
[[Page 37833]]
processing systems to include a payment amount that equals the Part B
drug payment amount, which is derived using the ASP methodology. We
believe that this payment approach is consistent with the policy we
finalized in the CY 2013 ESRD PPS final rule (77 FR 67463) which states
that we will use the ASP methodology, including any modifications
finalized in the Physician Fee Schedule (PFS) final rules, to compute
outlier MAP amounts, the drug add-on (formerly paid under the composite
rate and no longer paid as part of the ESRD PPS), and any other policy
that requires the use of payment amounts for drugs and biologicals that
would be separately paid absent the ESRD PPS. We would issue sub-
regulatory billing and payment guidance along with the payment modifier
in conjunction with our final rule guidance. Under our proposed
regulations at Sec. 413.234(c), following payment of the transitional
drug add-on payment adjustment, we would propose to modify the ESRD PPS
base rate, if appropriate, to account for the new injectable or
intravenous product.
We note that outlier payments would not be available for new
injectable or intravenous products during the time in which these
products are paid for using the new transitional drug add-on payment
adjustment. While a new injectable drug or biological being paid under
the transitional drug-add would otherwise be considered an outlier
service because the drug or biological would have been considered
separately billable prior to the implementation of the ESRD PPS, we do
not believe that it would be appropriate to include the payment amount
for the new drug or biological in the outlier calculation during this
interim transition period. This is because during the interim period we
would be making a payment for the specific drug in addition to the base
rate, whereas outlier services have been incorporated into the base
rate. For example, we have included the MAP amount for EPO in the base
rate and it qualifies as an outlier. However, when the product is
reflected in the base rate after payment of the transitional drug add-
on payment adjustment, it would be considered eligible for outlier
payments discussed in section II.B.2.c of this rule.
iii. Determination of When an Oral-Only Renal Dialysis Service Drug is
no Longer Oral-Only
Section 217(c)(1) of PAMA requires us to adopt a process for
determining when oral-only drugs are no longer oral-only. In our CY
2011 ESRD PPS final rule (75 FR 49038 through 49039), we described
oral-only drugs as those that have no injectable equivalent or other
form of administration. We propose to define the term oral-only drug as
part of our drug designation process in our regulations at 42 CFR
413.234(a). For CY 2016, and in accordance with Section 217(c)(1) of
PAMA, we propose that an oral-only drug would no longer be considered
oral-only if an injectable or other form of administration of the oral-
only drug is approved by the FDA. We propose to codify this process in
our regulations at 42 CFR 413.234(d).
We note that the FDA has well defined standards for identifying all
drug dosages and forms of administration that are approved for use in
the United States and this list may be viewed at www.FDA.gov/developmentapprovalprocess.gov.
In the CY 2011 ESRD PPS proposed and final rules (74 FR 49929 and
75 FR 49038), we noted that the only oral-only drugs and biologicals
that we identified were phosphate binders and calcimimetics, which fall
into the bone and mineral metabolism category. We defined these oral-
only drugs as renal dialysis services in our regulations at Sec.
413.171 (75 FR 49044), we delayed the Medicare Part B payment for these
oral-only drugs until CY 2014 at Sec. 413.174(f)(6) and continued to
pay for them under Medicare Part D. If injectable or intravenous forms
of phosphate binders or calcimimetics are approved by the FDA, under
our proposed drug designation process at Sec. 413.234(b)(1), these
drugs would be considered reflected in the ESRD PPS bundled payment
because these drugs are included in an existing functional category so
no additional payment would be available for inclusion of these drugs.
However, we are proposing that we would not apply this process to
injectable or intravenous forms of phosphate binders and calcimimetics
when they are approved because payment for the oral forms of these
drugs was delayed. As we discussed above, we determined in CY 2011 that
both classes of drugs (phosphate binders and calcimimetics) were
furnished for the treatment of ESRD and are therefore renal dialysis
services. In addition, we had utilization data for both classes of
drugs because the oral versions existed at that time. However, for
reasons discussed in the CY 2011 ESRD PPS final rule (75 FR 49043
through 49044), we chose to delay their inclusion in the payment
amount. We propose that when a non-oral version of a phosphate binder
or calcimimetic is approved by the FDA, we would include the oral and
any non-oral version of the drug in the ESRD PPS bundled payment.
Specifically, we propose that we would develop a computation for the
inclusion of the oral and non-oral forms of the phosphate binder or
calcimimetic so that the drug could be appropriately reflected in the
ESRD PPS base rate. We would not take this approach for any subsequent
drugs that are approved by the FDA and fall within the bone and mineral
metabolism functional category (or any other functional categories)
because we did not delay payment for any other drugs or biologicals for
which we had 2007 utilization data when the ESRD PPS was implemented in
CY 2011 and, therefore, we believe the other functional categories
appropriately reflect renal dialysis service drugs and biologicals.
4. Delay of Payment for Oral-Only Renal Dialysis Services
As we discussed in the CY 2014 ESRD PPS final rule (78 FR 72185
through 72186) and again in the CY 2015 ESRD PPS final rule (79 FR
66147 through 66148), section 1881(b)(14)(A)(i) of the Act requires the
Secretary to implement a payment system under which a single payment is
made to a provider of services or a renal dialysis facility for renal
dialysis services in lieu of any other payment. Section 1881(b)(14)(B)
of the Act defines renal dialysis services, and subclause (iii) of such
section states that these services include other drugs and biologicals
that are furnished to individuals for the treatment of ESRD and for
which payment was made separately under this title, and any oral
equivalent form of such drug or biological.
We interpreted this provision as including not only injectable
drugs and biologicals used for the treatment of ESRD (other than ESAs
and any oral form of ESAs, which are included under clause (ii) of
section 1881(b)(14)(B) of the Act), but also all oral drugs and
biologicals used for the treatment of ESRD and furnished under title
XVIII of the Act. We also concluded that, to the extent oral-only drugs
or biologicals used for the treatment of ESRD do not fall within clause
(iii) of section 1881(b)(14)(B), such drugs or biologicals would fall
under clause (iv) of such section, and constitute other items and
services used for the treatment of ESRD that are not described in
clause (i) of section 1881(b)(14)(B).
We finalized and promulgated the payment policies for oral-only
renal dialysis service drugs or biologicals in the CY 2011 ESRD PPS
final rule (75 FR 49038 through 49053), where we defined renal dialysis
services at 42 CFR 413.171 as including other drugs and biologicals
that are furnished to
[[Page 37834]]
individuals for the treatment of ESRD and for which payment was made
separately prior to January 1, 2011 under Title XVIII of the Act,
including drugs and biologicals with only an oral form. Although we
included oral-only renal dialysis service drugs and biologicals in the
definition of renal dialysis services in the CY 2011 ESRD PPS final
rule (75 FR 49044), we also finalized a policy to delay payment for
these drugs under the PPS until January 1, 2014 in the same rule. We
stated that there were certain advantages to delaying the
implementation of payment for oral-only drugs and biologicals,
including allowing ESRD facilities additional time to make operational
changes and logistical arrangements in order to furnish oral-only renal
dialysis service drugs and biologicals to their patients. Accordingly,
we codified the delay in payment for oral-only renal dialysis service
drugs and biologicals at 42 CFR 413.174(f)(6), and provided that
payment to an ESRD facility for renal dialysis service drugs and
biologicals with only an oral form is incorporated into the PPS payment
rates effective January 1, 2014.
On January 3, 2013, ATRA was enacted. Section 632(b) of ATRA
precluded the Secretary from implementing the policy under 42 CFR
413.176(f)(6) relating to oral-only renal dialysis service drugs and
biologicals prior to January 1, 2016. Accordingly, in the CY 2014 ESRD
PPS final rule (78 FR 72185 through 72186), we delayed payment for
oral-only renal dialysis service drugs and biologicals under the ESRD
PPS until January 1, 2016. We implemented this delay by revising the
effective date at Sec. 413.174(f)(6) for providing payment for oral-
only renal dialysis service drugs under the ESRD PPS from January 1,
2014 to January 1, 2016. In addition, we changed the date when oral-
only renal dialysis service drugs and biologicals would be eligible for
outlier services under the outlier policy described in Sec.
413.237(a)(1)(iv) from January 1, 2014 to January 1, 2016.
On April 1, 2014, PAMA was enacted. Section 217(a)(1) of PAMA
amended section 632(b)(1) of ATRA, which now precludes the Secretary
from implementing the policy under 42 CFR 413.174(f)(6) relating to
oral-only renal dialysis service drugs and biologicals prior to January
1, 2024. We implemented this delay in the CY 2015 ESRD PPS final rule
(79 FR 66262) by modifying the effective date for providing payment for
oral-only renal dialysis service drugs and biologicals under the ESRD
PPS at Sec. 413.174(f)(6) from January 1, 2016 to January 1, 2024. We
also changed the date in Sec. 413.237(a)(1)(iv) regarding outlier
payments for oral-only renal dialysis service drugs made under the ESRD
PPS from January 1, 2016 to January 1, 2024.
On December 19, 2014, section 204 of ABLE was enacted, which delays
the inclusion of renal dialysis service oral-only drugs and biologicals
under the ESRD PPS until 2025. It amended section 632(b)(1) of ATRA, as
amended by section 217(a)(1) of PAMA by striking ``2024'' and inserting
``2025.'' As we did in the CY 2014 ESRD PPS final rule (78 FR 72186)
and the CY 2015 ESRD PPS final rule (79 FR 66148) referenced above, we
are proposing to implement this delay by modifying the effective date
for providing payment for oral-only renal dialysis service drugs and
biologicals under the ESRD PPS at 42 CFR 413.174(f)(6) from January 1,
2024 to January 1, 2025. We also are proposing to change the date in
Sec. 413.237(a)(1)(iv) regarding outlier payments for oral-only renal
dialysis service drugs made under the ESRD PPS from January 1, 2024 to
January 1, 2025. We continue to believe that oral-only renal dialysis
service drugs and biologicals are an essential part of the ESRD PPS
bundle and should be paid for under the ESRD PPS.
5. Reporting Medical Director Fees on ESRD Facility Cost Reports
In the 1980s, following audits by the Office of the Inspector
General and the Medicare administrative contractors (MACs) that
revealed instances in which independent facilities compensated their
medical directors and administrators excessively, CMS set limits for
reasonable compensation when reporting medical director fees on ESRD
facility cost reports. End-Stage Renal Disease Program; Prospective
Reimbursement for Dialysis Services and Approval of Special Purpose
Renal Dialysis Facilities, 48 FR 21254, 21261 through 21262 (May 11,
1983); End-Stage Renal Disease Program: Composite Rates and Methodology
for Determining the Rates, 51 FR 29404, 29407 (Aug. 15, 1986). In
Transmittal 12, issued in July 1989, of the Provider Reimbursement
Manual Part I, Chapter 27, titled, ``Reimbursement for ESRD and
Transplant Services'', CMS adopted a policy for reporting allowable
compensation for physician owners and medical directors of ESRD
facilities and set a limit at the Reasonable Compensation Equivalent
(RCE) limit of the specialty of internal medicine for a metropolitan
area of greater than one million people. In the Provider Reimbursement
Manual Part I, Chapter 27--Outpatient Maintenance Dialysis Services,
2723--Responsibility of Intermediaries, we explain that the
intermediary reviews facility cost reports to ensure that the
compensation paid to medical directors does not exceed the RCE limit.
The RCE limit for a board-certified physician of internal medicine has
been updated over the interim years. The most recent update to the RCE
limit was finalized in the FY 2015 IPPS final rule published on August
22, 2014 (79 FR 50157 through 50162). In that rule, CMS finalized an
RCE limit of $197,500 per year beginning in CY 2015 for a board-
certified physician of internal medicine.
The requirements for medical directors of ESRD facilities are
discussed in the Conditions for Coverage for ESRD facilities, which
were updated in 2008 to reflect advances in dialysis technology and
standard care practices since the requirements were last revised in
their entirety in 1976. Conditions for Coverage for ESRD Facilities,
(73 FR 20470) April 15, 2008). With the update to the Conditions for
Coverage, all Medicare-certified ESRD facilities are required to have a
medical director who is responsible for the delivery of patient care
and outcomes in the facility as codified in 42 CFR part 494 (Conditions
for Coverage for End-Stage Renal Disease Facilities). We discuss the
qualifications of an ESRD facility medical director in 42 CFR
494.140(a) (Standard: Medical director), where we require that a
medical director must be a board-certified physician in internal
medicine or pediatrics by a professional board and have completed a
board-approved training program in nephrology with at least 12 months
of experience providing care to patients receiving dialysis, but if
such a physician is not available, another physician may direct the
facility, subject to the approval of the Secretary. We recognize that
the RCE limit of $197,500 per year for a board-certified physician of
internal medicine may be less than the expense a facility incurs if
they employ a board-certified nephrologist as their medical director.
We also appreciate that the reasonable compensation limits are
generally used when determining payment for providers that are
reimbursed on a reasonable cost basis; they typically are not used in
prospective payment systems, like the ESRD PPS, that update payment
rates using market basket methodologies. We believe that the
application of the RCE limit is no longer relevant now that 100 percent
of ESRD facilities are paid under the ESRD PPS beginning in CY 2014.
Therefore, beginning in CY 2016 we propose to
[[Page 37835]]
eliminate the RCE limit for reporting an ESRD facility's medical
director fees on ESRD facility cost reports. We note that the
elimination of the RCE limit does not supersede or alter in any way the
reporting guidance furnished in the Provider Reimbursement Manual, Part
2, Chapter 42, sections 4210, 4210.1 and 4210.2. In addition, we will
continue to apply the ESRD facility-specific policy under which the
time spent by a physician in an ESRD facility on administrative duties
is limited to 25 percent per facility unless documentation is furnished
supporting the claim. In addition, if an individual provides services
to more than one dialysis facility, the individual's time must be
prorated among the different facilities and may not exceed 100 percent.
C. Clarifications Regarding the ESRD PPS
1. Laboratory Renal Dialysis Services
Section 1881(b)(14)(B)(iv) of the Act requires diagnostic
laboratory tests not included under the composite payment rate (that
is, laboratory services separately paid prior to January 1, 2011) to be
included as part of the ESRD PPS payment bundle. In the CY 2011 ESRD
PPS final rule (75 FR 49053), we defined renal dialysis services at 42
CFR 413.171 to include items and services included in the composite
payment rate for renal dialysis services as of December 31, 2010 and
diagnostic laboratory tests and other items and services not included
in the composite rate that are furnished to individuals for the
treatment of ESRD. The composite payment rate covered routine items and
services furnished to ESRD beneficiaries for outpatient maintenance
dialysis, including some laboratory tests. We finalized a policy to
include in the definition of laboratory tests under 42 CFR 413.171(4)
those laboratory tests that were separately billed by ESRD facilities
as of December 31, 2010 and laboratory tests ordered by a physician who
receives monthly capitation payments (MCPs) for treating ESRD patients
that were separately billed by independent laboratories (75 FR 49055).
We determined the average Medicare Allowable Payment (MAP) amount was
$8.40, as listed on Table 19 titled, ``Average Medicare Allowable
Payments for composite rate and separately billable services, 2007,
with adjustment for price inflation to 2009'' (75 FR 49075). This
amount included the laboratory tests that were already included under
the composite rate, as well as laboratory tests billed separately by
ESRD facilities (that is, all laboratory services paid on the 72X claim
furnished in CY 2007) and laboratory tests that were ordered by Monthly
Capitation Payment (MCP) practitioners that were separately billed by
independent labs in CY 2007.
Through the comments we received on the CY 2011 ESRD PPS proposed
rule, we learned that holding the ESRD facilities responsible for any
laboratory test that is furnished in the ESRD facility or ordered by an
MCP could have unintended consequences to patients (75 FR 49054). In
particular, commenters noted that in many instances the MCP physician
is the ESRD patient's primary care physician and often orders
laboratory tests that are unrelated to the patient's ESRD. These
commenters raised concerns that requiring ESRD facilities to pay for
these tests would result in large numbers of tests that are unrelated
to ESRD being included in the ESRD bundle. We agreed with commenters
that it would be in the best interest of the beneficiaries for an ESRD
facility to draw blood for laboratory tests that are not for the
treatment of ESRD during the dialysis session.
Commenters also requested that we produce a list of the ESRD-
related laboratory tests that are included in the ESRD PPS bundle (75
FR 49054). We received several laboratory service lists from the
commenters that they considered to be generally furnished for the
treatment of ESRD. While there was agreement for many of the laboratory
services, the lists were inconsistent and lacked stakeholder consensus.
When Medicare provides a payment for a benefit that is based on a
bundle of items and services, CMS establishes claims processing edits
that prevent payment in other settings for items and services that are
identified as being accounted for in the bundled payment. Therefore, we
needed to develop a list of ESRD-related laboratory tests to implement
claims processing edits that prevent payment in other settings for
items and services that are identified as renal dialysis services to
ensure that payment is not made to independent laboratories for ESRD-
related laboratory tests. Under the ESRD PPS we call these edits
consolidated billing (CB) requirements. We performed a clinical review
of the lists provided by the industry and all of the laboratory tests
reported in the claims data to determine which laboratory tests are
routinely furnished to ESRD beneficiaries for the treatment of ESRD.
Our clinical review resulted in Table F in the Addendum of the CY 2011
ESRD PPS final rule as the list of laboratory tests that are subject to
the ESRD PPS CB requirements (75 FR 49213). We acknowledged in that
rule that the list of laboratory tests displayed in Table F is not an
all-inclusive list and we recognized that there are other laboratory
tests that may be furnished for the treatment of ESRD (75 FR 49169). We
stated in the Medicare Benefit Policy Manual, Pub. 100-02, Chapter 11--
End-Stage Renal Disease, Section 20.2 Laboratory Services, that the
determination of whether a laboratory test is ESRD-related is a
clinical decision for the ESRD patient's ordering practitioner. If a
laboratory test is ordered for the treatment of ESRD, then the
laboratory test is not paid separately.
Due to the commenters' concerns that ESRD beneficiaries should be
able to have blood drawn for non-ESRD-related laboratory tests in the
ESRD facility, we created a methodology for allowing ESRD facilities to
receive separate payment when a laboratory service is furnished for
reasons other than for the treatment of ESRD (75 FR 49054). We created
CB requirements using a modifier to allow independent labs or ESRD
facilities (with the appropriate clinical laboratory certification in
accordance with the Clinical Laboratory Improvement Amendments), to
receive separate payment. This modifier, which is called the AY
modifier, serves as an attestation that the item or service is
medically necessary for the patient but is not being used for the
treatment of ESRD.
Following publication of the CY 2011 ESRD PPS final rule, we
received numerous inquiries regarding Table F (75 FR 49213).
Stakeholders have communicated to us that having a list of laboratory
services that is not all-inclusive is confusing because there is no
definitive guidance on which laboratory tests are included in, and
excluded from, the ESRD PPS. They further stated that leaving the
determination of when a laboratory test is ordered for the treatment of
ESRD to the practitioner creates inconsistent billing practices and
potential overuse of the AY modifier. Stakeholders stated that
practitioners can have different positions on when a laboratory test is
being ordered for the treatment of ESRD. For example, some
practitioners may believe that laboratory tests ordered commonly for
diabetes could be considered as for the treatment of ESRD because in
certain situations a patient's ESRD is a macro vascular complication of
the diabetes. Commenters believe these varying perspectives among
practitioners can translate into inconsistent billing practices.
Stakeholders have also expressed concern about potential overuse of
the AY modifier because they are aware that
[[Page 37836]]
CMS monitors the claims data for trends and behaviors. The industry's
position is that if there is a laboratory service that is subject to
the CB requirements, it is because CMS has determined that test to be
routinely furnished for the treatment of ESRD and if certain tests are
frequently reported with the AY modifier, then those laboratories or
ESRD facilities could appear to be inappropriately billing Medicare.
While we recognize stakeholders' concerns, for CY 2016, we are
reiterating our policy that any laboratory test furnished to an ESRD
beneficiary for the treatment of ESRD is considered to be a renal
dialysis service and is not payable outside of the ESRD PPS. We
continue to believe that it is necessary to use a list of laboratory
services that are routinely furnished for the treatment of ESRD for
enforcing the CB requirements. In addition, we continue to believe it
is convenient for ESRD beneficiaries to have their blood drawn at the
time of dialysis for laboratory testing for reasons other than for the
treatment of ESRD.
We have included appropriate payments into the base rate to account
for any laboratory test that a practitioner determines to be used for
the treatment of ESRD. It is important that medical necessity be the
reason for how items and services are reported to Medicare. When
services are reported appropriately, payments are made appropriately
out of the Trust Fund and ESRD beneficiaries are not unfairly
inconvenienced by constraints placed upon them because a certain
laboratory test is or is not included in the ESRD PPS. Therefore, in
order to maintain practitioner flexibility for ordering tests believed
medically necessary for the treatment of ESRD, and have those tests
included and paid under the ESRD PPS, we are not proposing a specific
list of laboratory services that are always considered furnished for
the treatment of ESRD.
We are, however, soliciting comment on the current list of
laboratory services that is used for the ESRD PPS CB requirements to
determine if there is consensus among stakeholders regarding whether
the list includes those laboratory tests that are routinely furnished
for the treatment of ESRD. Table 9 is the list of laboratory tests that
is used for the CB requirements. We agree with the stakeholders that
there can be different interpretations among practitioners as to what
is considered to be furnished for the treatment of ESRD and that there
can be some views that are more conservative than others. Stakeholder
comments will assist us in determining whether any of the laboratory
services included in the current list generally are not furnished for
ESRD treatment.
In the context of this clarification, we are proposing to remove
the lipid panel from the CB list. As we stated in the CY 2013 ESRD PPS
final rule (77 FR 67470), it was our understanding that the lipid panel
was routinely used for the treatment of ESRD. We explained that because
some forms of dialysis, particularly peritoneal dialysis, are
associated with increased cholesterol and triglyceride levels, a lipid
profile laboratory test to assess these levels would be considered
furnished for the treatment of ESRD. However, since the CY 2013 final
rule was published we have learned from stakeholders that the lipid
panel is mostly used to monitor cardiac conditions and is not routinely
furnished for the treatment of ESRD. We believe that the proposal to
remove the lipid panel is consistent with the clarification provided in
this rule that laboratory services included in Table 9 and subject to
ESRD consolidated billing are those that are routinely furnished for
the treatment of ESRD but that may occasionally be used to treat non-
ESRD-related conditions. In contrast, the lipid profile laboratory test
is not routinely used for the treatment of ESRD. We solicit comment on
this proposal.
Table 9--Laboratory Services Subject to ESRD Consolidated billing
------------------------------------------------------------------------
Short description CPT/HCPCS
------------------------------------------------------------------------
Basic Metabolic Panel (Calcium, ionized)................... 80047
Basic Metabolic Panel (Calcium, total)..................... 80048
Electrolyte Panel.......................................... 80051
Comprehensive Metabolic Panel.............................. 80053
Lipid Panel................................................ 80061
Renal Function Panel....................................... 80069
Hepatic Function Panel..................................... 80076
Assay of serum albumin..................................... 82040
Assay of aluminum.......................................... 82108
Vitamin d, 25 hydroxy...................................... 82306
Assay of calcium........................................... 82310
Assay of calcium, Ionized.................................. 82330
Assay, blood carbon dioxide................................ 82374
Assay of carnitine......................................... 82379
Assay of blood chloride.................................... 82435
Assay of creatinine........................................ 82565
Assay of urine creatinine.................................. 82570
Creatinine clearance test.................................. 82575
Vitamin B-12............................................... 82607
Vit d 1, 25-dihydroxy...................................... 82652
Assay of erythropoietin.................................... 82668
Assay of ferritin.......................................... 82728
Blood folic acid serum..................................... 82746
Assay of iron.............................................. 83540
Iron binding test.......................................... 83550
Assay of magnesium......................................... 83735
Assay of parathormone...................................... 83970
Assay alkaline phosphatase................................. 84075
Assay of phosphorus........................................ 84100
Assay of serum potassium................................... 84132
Assay of prealbumin........................................ 84134
Assay of protein, serum.................................... 84155
Assay of protein by other source........................... 84157
Assay of serum sodium...................................... 84295
Assay of transferrin....................................... 84466
Assay of urea nitrogen..................................... 84520
Assay of urine/urea-n...................................... 84540
Urea-N clearance test...................................... 84545
Hematocrit................................................. 85014
Hemoglobin................................................. 85018
Complete (cbc), automated (HgB, Hct, RBC, WBC, and Platelet 85025
count) and automated differential WBC count...............
Complete (cbc), automated (HgB, Hct, RBC, WBC, and Platelet 85027
count)....................................................
Automated rbc count........................................ 85041
Manual reticulocyte count.................................. 85044
Automated reticulocyte count............................... 85045
Reticyte/hgb concentrate................................... 85046
Automated leukocyte count.................................. 85048
Hep b core antibody, total................................. 86704
Hep b core antibody, igm................................... 86705
Hep b surface antibody..................................... 86706
Blood culture for bacteria................................. 87040
Culture, bacteria, other................................... 87070
Culture bacteri aerobic othr............................... 87071
Culture bacteria anaerobic................................. 87073
Cultr bacteria, except blood............................... 87075
Culture anaerobe ident, each............................... 87076
Culture aerobic identify................................... 87077
Culture screen only........................................ 87081
Hepatitis b surface ag, eia................................ 87340
CBC/diff wbc w/o platelet.................................. G0306
CBC without platelet....................................... G0307
------------------------------------------------------------------------
Although we are not proposing to change our policy related to
payment for ESRD-related laboratory services under the ESRD PPS, we are
clarifying that to the extent a laboratory test is performed to monitor
the levels or effects of any of the drugs that we have specifically
excluded from the ESRD PPS, these tests would be separately billable.
In the CY 2011 ESRD PPS final rule, we discuss when certain drugs and
biologicals would not be considered for the treatment of ESRD.
Specifically, Table 10, which appeared as Table 3--ESRD Drug Category
Excluded from the Final ESRD PPS Base Rate in the CY 2011 ESRD PPS
final rule (75 FR 49049), lists the drug categories that were excluded
from the ESRD PPS and the rationale for their exclusion. Laboratory
services that are furnished to monitor the medication levels or effects
of drugs and biologicals that fall in those categories would not be
considered to be furnished for the
[[Page 37837]]
treatment of ESRD. We are soliciting comment on this clarification.
Table 10--ESRD Drug Categories Excluded From the Final ESRD PPS Base
Rate
------------------------------------------------------------------------
Drug category Rationale for exclusion
------------------------------------------------------------------------
Anticoagulant................ Drugs labeled for non-renal dialysis
conditions and not for vascular access.
Antidiuretic................. Used to prevent fluid loss.
Antiepileptic................ Used to prevent seizures.
Anti-inflammatory............ May be used to treat kidney disease
(glomerulonephritis) and other
inflammatory conditions.
Antipsychotic................ Used to treat psychosis.
Antiviral.................... Used to treat viral conditions such as
shingles.
Cancer management............ Includes oral, parenteral and infusions.
Cancer drugs are covered under a
separate benefit category.
Cardiac management........... Drugs that manage blood pressure and
cardiac conditions.
Cartilage.................... Used to replace synovial fluid in a joint
space.
Coagulants................... Drugs that cause blood to clot after anti-
coagulant overdose or factor VII
deficiency.
Cytoprotective agents........ Used after chemotherapy treatment.
Endocrine/metabolic Used for endocrine/metabolic disorders
management. such as thyroid or endocrine deficiency,
hypoglycemia, and hyperglycemia.
Erectile dysfunction Androgens were used prior to the
management. development of ESAs for anemia
management and currently are not
recommended practice. Also used for
hypogonadism and erectile dysfunction.
Gastrointestinal management.. Used to treat gastrointestinal conditions
such as ulcers and gallbladder disease.
Immune system management..... Anti-rejection drugs covered under a
separate benefit category.
Migraine management.......... Used to treat migraine headaches and
symptoms.
Musculoskeletal management... Used to treat muscular disorders such as
prevent muscle spasms, relax muscles,
improve muscle tone as in myasthenia
gravis, relax muscles for intubation and
induce uterine contractions.
Pharmacy handling for oral Not a function performed by an ESRD
anti-cancer, anti-emetics facility.
and immunosuppressant drugs.
Pulmonary system management.. Used for respiratory/lung conditions such
as opening airways and newborn apnea.
Radiopharmaceutical Includes contrasts and procedure
procedures. preparation.
Unclassified drugs........... Should only be used for drugs that do not
have a HCPCS code and therefore cannot
be identified.
Vaccines..................... Covered under a separate benefit
category.
------------------------------------------------------------------------
2. Renal Dialysis Service Drugs and Biologicals
a. 2014 Part D Call Letter Follow-up
Last year, we received public comments that expressed concern that
the 2014 Part D Call Letter provision for prior authorization for drug
categories that may be used for ESRD as well as other conditions
resulted in Part D plan sponsors' inappropriately refusing to cover
oral drugs that are not renal dialysis services. Specifically, they
noted that beneficiaries had difficulties obtaining necessary
medications such as oral antibiotics prescribed for pneumonia and that
the 2014 Part D Call Letter provision led to confusion for Part D plan
sponsors and delays in beneficiaries obtaining essential medications at
the pharmacy.
In response to the comments, we explained that the guidance in the
2014 Part D Call Letter was issued in response to increases in billing
under Part D for drugs that may be prescribed for renal dialysis
services but may also be prescribed for other conditions. The guidance
strongly encouraged Part D sponsors to place beneficiary-level prior
authorization edits on all drugs in the seven categories identified in
the CY 2011 ESRD PPS final rule as drugs that may be used for dialysis
and non-dialysis purposes (75 FR 49051). These include: Antiemetics,
anti-infectives, anti-pruritics, anxiolytics, drugs used for excess
fluid management, drugs used for fluid and electrolyte management
including volume expanders, and drugs used for pain management
(analgesics). We indicated in the CY 2015 ESRD PPS final rule (79 FR
66151) that we were considering various alternatives for dealing with
this issue, as it has always been our intention to eliminate or
minimize disruptions or delays in ESRD beneficiaries receiving
essential medications and that we planned to issue further guidance to
address the issue.
In the Health Plan Management System memo issued on November 14,
2014, we encouraged sponsors to remove the beneficiary-level prior
authorization (PA) edits on these drugs. When claims are submitted to
Part D for drugs in the seven categories, we expect that they are not
being used for the treatment of ESRD and, therefore, may be coverable
under Part D. We also expect that Medicare ESRD facilities will
continue to provide all of the medications used for the treatment of
ESRD, including drugs in the seven categories. We will continue to
monitor the utilization of renal dialysis drugs and biologicals under
Part B and Part D.
b. Oral or Other Forms of Renal Dialysis Injectable Drugs and
Biologicals
The ESRD PPS includes certain drugs and biologicals that were
previously paid under Part D. Oral or other forms of injectable drugs
and biologicals used for the treatment of ESRD, for example, vitamin D
analogs, levocarnitine, antibiotics or any other oral or other form of
a renal dialysis injectable drug or biological are also included in the
ESRD PPS and may not be separately paid. These drugs are included in
the ESRD PPS payment because the payments made for both the injectable
and oral forms were included in the ESRD PPS base rate. As discussed in
section II.B.4 of this proposed rule, implementation of oral-only drugs
used in the treatment of ESRD (that is, drugs with no injectable
equivalent) under the ESRD PPS payment has been delayed until 2025.
In the CY 2011 ESRD PPS final rule (75 FR 49172), we stated that
ESRD facilities are required to record the quantity of oral medications
provided for the monthly billing period. In addition, ESRD facilities
would submit claims for oral drugs only after having
[[Page 37838]]
received an invoice of payment. We indicated that we would address
recording of drugs on an ESRD claim in future guidance. We included
this requirement because renal dialysis drugs and biologicals that were
paid separately prior to the ESRD PPS, as many of these oral
medications were, are eligible outlier items and services. If an ESRD
facility were to report a 90-day supply of a drug on a monthly claim,
the claim could receive an outlier payment erroneously.
On June 7, 2013, we issued an update to the Medicare Benefits
Policy Manual, Pub. 100-02, Chapter 11 to reflect implementation of the
ESRD PPS in Change Request 8261. In section 20.3.C of the updated
Medicare Benefits Policy Manual, we stated that for ESRD-related oral
or other forms of drugs that are filled at the pharmacy for home use,
ESRD facilities should report one line item per prescription, but only
for the quantity of the drug expected to be taken during the claim
billing period.
Example: A prescription for oral vitamin D was ordered for one
pill to be taken 3 times daily for a period of 45 days. The patient
began taking the medication on April 15, 2011. On the April claim,
the ESRD facility would report the appropriate National Drug Code
(NDC) code for the drug with the quantity 45 (15 days x 3 pills per
day). The remaining pills which would be taken in May would appear
on the May claim for a quantity of 90 (30 days x 3 pills per day).
Prescriptions for a 3 month supply of the drug would never be
reported on a single claim. Only the amount expected to be taken
during the month would be reported on that month's claim.
In February 2015, we were informed by one of the large dialysis
organizations that they, and many other ESRD chain organizations, are
out of compliance with the requirement that only the quantity of the
drug expected to be taken during the claim billing period should be
indicated on the ESRD monthly claim. They indicated that some
facilities are incorrectly reporting units that reflect a 60-day or 90-
day prescription while other facilities are not reporting the oral
drugs prescribed. The reason given for these reporting errors is the
lack of prescription processing information. Specifically, while the
facilities know when the pharmacy fills the prescription, they do not
know when the patient picks up the drug from the pharmacy and begins to
take the drug.
Due to this confusion and lack of compliance, we are reiterating
our current policy that all renal dialysis service drugs and
biologicals prescribed for ESRD patients, including the oral forms of
renal dialysis injectable drugs, must be reported by ESRD facilities
and the units reported on the monthly claim must reflect the amount
expected to be taken during that month. The facilities should use the
best information they have in determining the amount expected to be
taken in a given month, including fill information from the pharmacy
and the patient's plan of care. Any billing system changes to
effectuate this change must be made as soon as possible as this
requirement has been in effect since the ESRD PPS began in 2011. We are
analyzing ESRD facility claims data to determine the extent of the
reporting error and may take additional actions in the future.
c. Reporting of Composite Rate Drugs
As we indicated in the Medicare Claims Processing Manual, Pub. 100-
04, Chapter 8, section 50.3, as revised by Change Request 8978, issued
December 2, 2014, in an effort to enhance the ESRD claims data for
possible future refinements to the ESRD PPS, CMS announced that ESRD
facilities should begin reporting composite rate drugs on their monthly
claims. Specifically, ESRD facilities should only report the composite
rate drugs identified on the consolidated billing drug list and
provided below in Table 11.
Table 11--Composite Rate Drugs and Biologicals
------------------------------------------------------------------------
------------------------------------------------------------------------
Composite Rate Drugs and A4802 INJ PROTAMINE SULFATE
Biologicals.
J0670 INJ MEPIVACAINE
HYDROCHLORIDE
J1200 INJ DIPHENHYDRAMINE HCL
J1205 INJ CHLOROTHIAZIDE
SODIUM
J1240 INJ DIMENHYDRINATE
J1940 INJ FUROSEMIDE
J2001 INJ LIDOCAINE HCL FOR
INTRAVENOUS INFUSION,
10 MG
J2150 INJ MANNITOL
J2720 INJ PROTAMINE SULFATE
J2795 INJ ROPIVACAINE
HYDROCHLORIDE
J3410 INJ HYDROXYZINE HCL
J3480 INJ. POTASSIUM CHLORIDE,
PER 2 MEQ.
Q0163 DIPHENHYDRAMINE
HYDROCHLORIDE
------------------------------------------------------------------------
The ESRD PPS payment policy remains the same for composite rate
drugs, therefore, no separate payment is made and these drugs will not
be designated as eligible outlier services. This information will
provide CMS with the full scope of renal dialysis services which may
better target outlier services to the most costly patients.
III. End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP) for
Payment Year (PY) 2019
A. Background
For more than 30 years, monitoring the quality of care provided by
dialysis facilities to patients with end-stage renal disease (ESRD) has
been an important component of the Medicare ESRD payment system. The
ESRD Quality Incentive Program (QIP) is the most recent step in
fostering improved patient outcomes by establishing incentives for
dialysis facilities to meet or exceed performance standards established
by CMS. The ESRD QIP is authorized by section 1881(h) of the Social
Security Act (the Act), which was added by section 153(c) of the
Medicare Improvements for Patients and Providers Act (MIPPA).
Section 1881(h) of the Act requires the Secretary to establish an
ESRD QIP by (1) selecting measures; (2) establishing the performance
standards that apply to the individual measures; (3) specifying a
performance period with respect to a year; (4) developing a methodology
for assessing the total performance of each facility based on the
performance standards with respect to the measures for a performance
period; and (5) applying an appropriate payment reduction to facilities
that do not meet or exceed the established Total Performance Score
(TPS). This proposed rule discusses each of these elements and our
proposals for their application to PY 2019 and future years of the ESRD
QIP.
B. Clarification of ESRD QIP Terminology: ``CMS Certification Number
(CCN) Open Date''
Some stakeholders have expressed confusion about the use of the
term
[[Page 37839]]
``CMS Certification Number (CCN) Open Date'' under the ESRD QIP (for
example, see 79 FR 66186). We interpret this term to mean the
``Medicare effective date'' under 42 CFR 489.13, which governs when the
facility can begin to receive Medicare reimbursement for ESRD services
under the ESRD PPS. Thus, a facility is eligible, with respect to a
particular payment year, to receive scores on individual measures and
participate in general in the ESRD QIP based on the facility's CCN Open
Date (i.e., Medicare effective date).
C. Proposal To Use the Hypercalcemia Measure as a Measure Specific to
the Conditions Treated With Oral-Only Drugs
Section 217(d) of The Protecting Access to Medicare Act of 2014
(PAMA) (Pub. L. 113-93), enacted on April 1, 2014, amends section
1881(h)(2) of the Act to require the Secretary to adopt measures in the
ESRD QIP (outcomes based, to the extent feasible) that are specific to
the conditions treated with oral-only drugs for 2016 and subsequent
years. We stated in the CY 2015 ESRD PPS final rule (79 FR 66168-69)
that we believed the Hypercalcemia clinical measure, which was adopted
beginning with the PY 2016 program meets this new statutory
requirement; nevertheless, we also recognized that, consistent with
PAMA, we could adopt measures as late as for CY 2016, which would be
included in the PY 2018 ESRD QIP. We also stated that we would take
into account comments on whether the Hypercalcemia clinical measure can
be appropriately characterized as a measure specific to the conditions
treated with oral-only drugs.
Although section 1881(h)(2)(E)(i) does not define the term ``oral-
only drugs,'' we have previously interpreted that term to mean ``drugs
for which there is no injectable equivalent or other form of
administration'' (75 FR 49038). We have also previously identified
calcimimetics and phosphate binders as two types of ``oral-only drugs''
(75 FR 49044).
We are currently aware of three conditions that are treated with
calcimimetics and phosphate binders: Secondary Hyperparathyroidism,
Tertiary Hyperparathyroidism, and Hypercalcemia. Hypercalcemia is a
condition that results when the entry of calcium into the blood exceeds
the excretion of calcium into the urine or deposition in bone; the
condition may be caused by a number of other conditions, including
hyperparathyroidism. Although multiple treatment options are available
for patients with early forms of hypercalcemia, calcimimetics are
frequently prescribed for those patients who develop hypercalcemia
secondary to tertiary hyperparathyroidism, in order to most easily
control the patients' serum calcium levels. Because hypercalcemia is a
condition that is frequently treated with calcimimetics, and because
calcimimetics are oral-only drugs, we believe that the current
Hypercalcemia clinical measure (NQF #1454) meets the requirement that
the ESRD QIP measure set include for 2016 and subsequent years measures
that are specific to the conditions treated with oral-only drugs.
We acknowledge that the Hypercalcemia clinical measure is not an
outcome-based measure, and we have considered the possibility of
adopting outcome-based measures that are specific to the conditions
treated with oral-only drugs. However, we are currently not aware of
any outcome-based measures that would satisfy this requirement. We
welcome comments on whether such outcome-based measures are either
ready for implementation now or are being developed, and we intend to
consider the feasibility of developing such a measure in the future.
We seek comments on this proposal.
D. Sub-Regulatory Measure Maintenance in the ESRD QIP
In the CY 2013 ESRD PPS final rule, we finalized our policy to use
a sub-regulatory process to make non-substantive updates to measures
(77 FR 67477). We currently make available the technical specifications
for ESRD QIP measures at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html but are in the process of drafting a
CMS ESRD Measures Manual which will include not only the ESRD QIP
measure specifications, but also technical information on quality
indicators that facilities report for other CMS ESRD programs. We
expect to release the first version of the CMS ESRD Measures Manual in
the near future at the following web address: http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/index.html. The manual will be released before the beginning of the
applicable performance period, preferably at least 6 months in advance.
We believe that this update frequency will be sufficient to provide
facilities with information needed to incorporate these updates into
their ESRD data collection activities. We note that this policy is
consistent with our policy for updating the CMS National Hospital
Inpatient Quality Measures Specifications Manual, which is posted on
the QualityNet Web site (www.qualitynet.org).
We welcome recommendations from the public on technical updates to
ESRD QIP measures. We will consider the appropriateness of all
recommendations, notify those who submit recommendations as to whether
we accept the recommendation, and incorporate accepted recommendations
in a future release of the CMS ESRD Measure Manual. At present, we
intend to use JIRA, a web-based collaboration platform maintained by
the Office of the National Coordinator for Health Information
Technology, to receive, consider, and respond to recommendations for
non-substantive measure changes. Further information about how to use
the JIRA tool to make such recommendations will be published in an
upcoming CROWN Memo and will be posted to http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/index.html.
E. Proposed Revision to the Requirements for the PY 2017 ESRD QIP
1. Proposal To Modify the Small Facility Adjuster Calculation for All
Clinical Measures Beginning With the PY 2017 ESRD QIP
In the CY 2013 ESRD PPS final rule we adopted a scoring adjustment
for facilities with relatively small numbers of patients, called the
small facility adjuster, which aims to ensure that any error in measure
rates due to a small number of cases will not adversely affect facility
payment (77 FR 67511). Since we first implemented the methodology to
implement the small facility adjuster, we have encountered two issues
related to basing the adjustment on the within-facility standard error.
First, facility scores for some of the outcome measures adopted in the
ESRD QIP, such as the National Healthcare Safety Network (NHSN)
Bloodstream Infection (BSI) clinical measure, do not approximate a
normal or ``bell-shaped'' distribution. In such cases, the within-
facility standard error does not necessarily capture the spread of the
data as it would if facility scores were normally distributed. Second,
facilities and other stakeholders have commented that it is difficult
for them to independently calculate pooled within-facility standard
errors because doing so requires data for all patient-months across all
facilities, which makes the small facility adjuster unnecessarily
opaque. For these reasons, we have developed an equation for
determining the small facility adjuster that does not rely upon a
[[Page 37840]]
within-facility standard error, but nonetheless preserves the intent of
the adjuster to include as many facilities in the ESRP QIP as possible
while ensuring that the measure scores are reliable.
Therefore, beginning with the PY 2017 ESRD QIP, we propose to use
the following methodology to determine the small facility adjustment:
For the ith facility, suppose the facility's original
measure rate is pi and the number of patients (or other unit used to
establish data minimums for the measure. For example, index discharges
for the Standardized Readmission Ratio clinical measure) at the ith
facility is ni.
Where the number of eligible patients (or other
appropriate unit) needed to receive a score on a measure is L and the
upper threshold for applying the small facility adjuster is C, the ith
facility will be eligible for the adjustment when L<=ni Assuming
[GRAPHIC] [TIFF OMITTED] TP01JY15.012
where ni is the number of patients ( or other appropriate unit) at the
ith facility and C is the upper thresholds of eligible patients (or
other appropriate unit) a facility needs to have in order to be
considered for a small facility adjustment. This calculation will
produce the facility's weighting coefficient for a given clinical
measure, wi, which provides a metric for assessing the uncertainty due
to small facility sizes.
For measures where higher scores are better (for example,
the Vascular Access Type (VAT): Fistula clinical measure and the
Dialysis Adequacy clinical measures), a small facility's adjusted
performance rates (ti) will be pegged to the national mean performance
rate (P) as follows:
[cir] If pi For measures where lower scores are better (for example,
VAT: Catheter, NHSN BSI, Hypercalcemia, Standardized Readmission Ratio
(SRR), and Standardized Transfusion Ratio (STrR) clinical measures), a
small facility's adjusted performance rates (ti) will be pegged to the
national mean performance rate (P) as follows:
[cir] If pi>P, then ti = wi * pi + (1-wi) * P
[cir] If pi is less than or equal to P, the facility will not
receive an adjustment.
For the standardized ratio measures, such as the SRR and
STrR clinical measures, the national mean measure rate (that is, P) is
set to 1.
We note that the equation ti = wi * pi + (1-wi) * P is designed to
``shrink'' the facility mean toward the national mean, and that wi
reflects the degree of confidence in the estimation of the facility
mean, because it depends on facility size. Some research has shown that
this type of ``shrinkage estimator'' equation gives a small mean
squared error (that is, the combination of bias and variance) if the
national mean truly reflects the performance of a small facility, which
was the intention of the equation.\2\
---------------------------------------------------------------------------
\2\ Efron B, Morris C. Empirical Bayes on vector observations:
An extension of Stein's method. Biometrika, 59(2):335-347. Ahmed SE,
Khan SM. Improved estimation of the Poisson parameter. Statistica,
anno LIII n.2, 268-286, 1993. Ahmed SE. Combining Poisson means.
Communications in Statistics: Theory and Methods, 20, 771-789, 1991.
---------------------------------------------------------------------------
To assess the impact of the proposed small facility adjuster, we
conducted an impact analysis of this proposed methodology on individual
measure scores and facility TPSs, using the final dataset used to
calculate PY 2015 ESRD QIP scores. The full results of this analysis
can be found at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html. Table 12 summarizes these results,
presenting changes in measure scores observed after applying the
proposed small facility adjuster, as compared to measure scores
calculated with the existing small facility adjuster. For the purposes
of this analysis and for all of the measures, L was set to 11 and C was
set to 26.
Table 12--Impact of Proposed Small Facility Adjuster on Individual Measure Scores, Using the Final Dataset for
the PY 2015 ESRD QIP
----------------------------------------------------------------------------------------------------------------
# facilities # #
# National # with score facilities facilities
facilities mean in the facilities change due to with higher with lower
Measure received performance receiving new SFA method N score under score under
SFA in PY period (CY SFA under (% out of scored new SFA new SFA
2015 2013) (%) new method facilities) method method
----------------------------------------------------------------------------------------------------------------
Hgb=12............ 1,253 0.4 63 32 out of 5,513 32 0
(0.6%).
Fistula...................... 938 64.1 391 341 out of 5,547 66 275
(6.1%).
Catheter..................... 826 11.7 352 301 out of 5,562 65 236
(5.4%).
HD Kt/V...................... 588 91.1 173 248 out of 5,641 22 226
(4.4%).
Ped HD Kt/V.................. 11 80.1 1 8 out of 11 0 8
(72.7%).
PD Kt/V...................... 787 76.4 192 400 out of 1,203 62 338
(33.3%).
----------------------------------------------------------------------------------------------------------------
TPS.......................... ........... ........... ........... 513 out of 5,650 96 417
(9.1%).
Reduction.................... ........... ........... ........... 43 out of 5,650 23 20
(0.8%).
----------------------------------------------------------------------------------------------------------------
As the results in Table 12 indicate, fewer facilities received an
adjustment under the proposed small facility adjuster methodology,
because small facilities with performance rates above the national mean
do not receive an adjustment. However, those facilities that did
receive an adjustment generally received a larger adjustment under the
proposed methodology. For example, of the 43 facilities that received a
different payment reduction under the proposed small facility adjuster,
23 (53 percent) received a lower payment reduction.
[[Page 37841]]
We also assessed the impact of the proposed small facility adjuster
on the distribution of payment reductions, using the final dataset used
to calculate PY 2015 ESRD QIP payment reductions. The full results of
this analysis can be found at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html. Table 13 below compares the
distribution of payment reductions using the existing small facility
adjuster to the distribution of payment reductions using the proposed
small facility adjuster. For the purposes of this analysis and for all
of the measures, L was set to 11 and C was set to 26.
TABLE 13--Comparison of the Distribution of Payment Reductions Determined With the Existing and Proposed Small
Facility Adjuster, Using the Final Dataset for the PY 2015 ESRD QIP
----------------------------------------------------------------------------------------------------------------
Payment reduction distribution in PY 2015 using the existing SFA Estimated payment reduction distribution in PY
----------------------------------------------------------------- 2015 using the new SFA
-----------------------------------------------
Number of Percent of Percent of
Payment reduction (%) facilities facilities Payment Number of facilities
(%) reduction (%) facilities (%)
----------------------------------------------------------------------------------------------------------------
0.0............................. 5,307 93.93 0.0 5,296 93.73
0.5............................. 242 4.28 0.5 255 4.51
1.0............................. 41 0.73 1.0 45 0.80
1.5............................. 23 0.41 1.5 26 0.46
2.0............................. 378 0.65 2.0 28 0.50
----------------------------------------------------------------------------------------------------------------
Note: This table excludes 488 facilities that did not receive a score because they did not have enough data to
receive a TPS.
These results suggest that a similar number of facilities would
receive a payment reduction under the proposed small facility adjuster
methodology. A total of 343 (6.1 percent) facilities would receive a
payment reduction with the existing small facility adjuster; under the
proposed small facility adjuster methodology, a total of 354 (6.3
percent) facilities would have received a payment reduction. Based on
the results of these analyses, we believe that the proposed small
facility adjuster does not systematically alter the distribution of
measure scores, TPSs, and payment reductions, as compared to the
existing small facility adjuster. Coupled with the benefits of removing
the within-facility standard error variable from the existing adjuster
(discussed above), this leads us to believe that the benefits of the
proposed adjuster outweigh the benefits of the existing adjuster. We
therefore propose to modify the methodology for determining the small
facility adjustment as explained above.
We seek comments on this proposal.
2. Proposal To Reinstate Qualifying Patient Attestations for the ICH
CAHPS Clinical Measure
In the CY 2015 ESRD PPS final rule, we finalized our proposal to
remove the case minimum attestation for the ICH CAHPS reporting measure
due to facility confusion regarding the attestation process (79 FR
66185). We further finalized that we would determine facility
eligibility for the ICH CAHPS reporting measure based on available data
submitted via CROWNWeb, Medicare claims, and other CMS administrative
data sources. Following the publication of that rule we have determined
that we do not have reliable data sources for determining some of the
patient-level exclusions. For example, we have been unable to locate a
reliable data source for determining whether a patient is receiving
hospice care or is residing in an institution such as a prison or a
jail.
Although some facilities may be experiencing issues related to the
attestation process (for example, during the preview period, we have
encountered numerous instances where facilities have either attested
inappropriately or have failed to attest in a timely fashion), we
believe that facilities are generally able to determine whether their
patients meet one or more of the exclusion criteria for the measure.
For this reason, we believe that having facilities attest that they are
ineligible for the measure will result in more accurate measure scores,
as compared to using unreliable data sources to determine whether
facilities treated the requisite number of eligible patients during the
eligibility period, (defined as the calendar year immediately preceding
the performance period). Because we have no reason to believe that
reliable data sources for some of the patient-level exclusions for the
ICH CAHPS clinical measure will become available in the near term, and
because the PY 2017 ICH CAHPS reporting measure and the PY 2018 ICH
CAHPS clinical measure employ the same exclusion criteria, we propose
to reinstate the attestation process we previously adopted in the CY
2014 ESRD PPS final rule (78 FR 72220 through 72222) beginning with the
PY 2017 program year. However, we are now proposing to have facilities
attest on the basis of the eligibility criteria finalized in the CY
2015 ESRD PPS final rule (79 FR 66169 through 66170). Accordingly,
facilities seeking to avoid scoring on the ICH CAHPS measure due to
ineligibility must attest in CROWNWeb by January 31 of the year
immediately following the performance period (for example, January 31,
2017, for the PY 2018 ESRD QIP) that they did not treat enough eligible
patients during the eligibility period to receive a score on the ICH
CAHPS measure. Facilities that submit attestations regarding the number
of eligible patients treated at the facility during the eligibility
period by the applicable deadline will not receive a score on the ICH
CAHPS clinical measure for that program year. Facilities that do not
submit such attestations will be eligible to receive a score on the
measure. However, even if a facility is eligible to receive a score on
the measure because it has treated at least 30 survey-eligible patients
during the eligibility period (defined as the calendar year before the
performance period), the facility will still not receive a score on the
measure if it cannot collect at least 30 survey completes during the
performance period. Facility attestations are limited to the number of
eligible patients treated at the facility during the eligibility
period, and are not intended to capture the number of completed surveys
at a facility during the performance period. The ESRD QIP system will
determine how many completed surveys a facility received during the
performance period. We are not proposing to change any of the other
data minimum requirements for the PY 2017 ICH CAHPS reporting measure,
or for the ICH CAHPS clinical measure in PY 2018 and future payment
years. To reduce confusion, we will release a
[[Page 37842]]
CROWN Memo detailing how facilities are expected to attest.
We seek comments on this proposal.
F. Proposed Requirements for the PY 2018 ESRD QIP
1. Estimated Performance Standards, Achievement Thresholds, and
Benchmarks for the Clinical Measures Finalized for the PY 2018 ESRD QIP
In the CY 2015 ESRD PPS final rule, we stated that we would publish
values for the PY 2018 clinical measures, using data from CY 2014 and
the first portion of CY 2015, in the CY 2016 ESRD PPS final rule (79 FR
66209). At this time, we do not have the necessary data to assign
numerical values to the proposed performance standards, achievement
thresholds, and benchmarks because we do not yet have complete data
from CY 2014. Nevertheless, we are able to estimate these numerical
values based on the most recent data available. For the Vascular Access
Type and Hypercalcemia clinical measures, this data comes from the
period of January through December 2014. For the SRR and STrR clinical
measures, this data comes from the period of January through December
2013. In Table 14, we have provided the estimated numerical values for
all of the finalized PY 2018 ESRD QIP clinical measures, except the ICH
CAHPS clinical measure, because the performance standards for that
measure will be calculated using CY 2015 data. We will publish updated
values for the clinical measures, using data from the first part of CY
2015, in the CY 2016 ESRD PPS final rule.
Table 14--Estimated Numerical Values for the Performance Standards for the PY 2018 ESRD QIP Clinical Measures
Using The Most Recently Available Data
----------------------------------------------------------------------------------------------------------------
Measure Achievement threshold Benchmark Performance standard
----------------------------------------------------------------------------------------------------------------
Vascular Access Type:................
% Fistula........................ 53.52%................. 79.67%................. 66.02%.
% Catheter....................... 17.44%................. 2.73%.................. 9.24%.
Kt/V.................................
Adult Hemodialysis............... 89.83%................. 98.22%................. 95.07%.
Adult Peritoneal Dialysis........ 74.68%................. 96.50%................. 88.67%.
Pediatric Hemodialysis........... 50.00%................. 96.90%................. 89.45%.
Pediatric Peritoneal Dialysis.... 43.22%................. 88.39%................. 72.60%.
Hypercalcemia........................ 3.86%.................. 0.00%.................. 1.13%.
NHSN Bloodstream Infection SIR....... 1.811.................. 0...................... 0.861.
Standardized Readmission Ratio....... 1.261.................. 0.649.................. 0.998.
Standardized Transfusion Ratio....... 1.488.................. 0.451.................. 0.915.
ICH CAHPS............................ 50th percentile of 15th percentile of 90th percentile of
eligible facilities' eligible facilities' eligible facilities'
performance during CY performance during CY performance during CY
2015. 2015. 2015.
----------------------------------------------------------------------------------------------------------------
We believe that the ESRD QIP should not have lower performance
standards than in previous years. Accordingly, if the final numerical
value for a performance standard, achievement threshold, and/or
benchmark is worse than it was for that measure in the PY 2017 ESRD
QIP, then we propose to substitute the PY 2017 performance standard,
achievement threshold, and/or benchmark for that measure.
We seek comments on this proposal.
2. Proposed Modification to Scoring Facility Performance on the Pain
Assessment and Follow-Up Reporting Measure
In the CY 2015 ESRD PPS final rule, we finalized the following
calculation for scoring facility performance on the Pain Assessment and
Follow-Up reporting measure under the PY 2018 ESRD QIP (79 FR 66211):
[GRAPHIC] [TIFF OMITTED] TP01JY15.013
We have since determined that this calculation may unduly penalize
facilities that treat no eligible patients in one of the two six-month
periods evaluated under this measure; under this calculation, those
facilities would have a ``0'' for the applicable period's data, in
effect giving the facility half of its score on the remaining six-month
period as a measure score. In order to avoid such an undue impact on
facility scores, we propose that, beginning with the PY 2018 ESRD QIP,
if a facility treats no eligible patients in one of the two six-month
periods, then that facility's score will be based solely on the
percentage of eligible patients treated in the other six-month period
for whom the facility reports one of six conditions.
We seek comments on this proposal.
3. Proposed Payment Reductions for the PY 2018 ESRD QIP
Section 1881(h)(3)(A)(ii) of the Act requires the Secretary to
ensure that the application of the ESRD QIP scoring methodology results
in an appropriate distribution of payment reductions across facilities,
such that facilities achieving the lowest TPSs receive the largest
payment reductions. In the CY 2015 ESRD PPS final rule, we finalized
our proposal for calculating the minimum TPS for PY 2018 and future
payment years (79 FR 66221 through 66222). Under our current policy, a
facility will not receive a payment reduction if it achieves a minimum
TPS
[[Page 37843]]
that is equal to or greater than the total of the points it would have
received if: (i) It performs at the performance standard for each
clinical measure; and (ii) it receives the number of points for each
reporting measure that corresponds to the 50th percentile of facility
performance on each of the PY 2016 reporting measures (79 FR 66221). We
are proposing to clarify how we will account for measures in the
minimum TPS when we lack the baseline data necessary to calculate a
numerical performance standard before the beginning of the performance
period (per criterion (i) above), because we inadvertently omitted this
detail in the CY 2015 ESRD PPS final rule. Specifically, we propose,
for the PY 2018 ESRD QIP, to add the following criterion previously
adopted for the PY 2017 program (79 FR 66187): ``it received zero
points for each clinical measure that does not have a numerical value
for the performance standard established through rulemaking before the
beginning of the PY 2018 performance period.'' Under this proposal, for
PY 2018, a facility will not receive a payment reduction if it achieves
a minimum TPS that is equal to or greater than the total of the points
it would have received if: (i) It performs at the performance standard
for each clinical measure; (ii) it received zero points for each
clinical measure that does not have a numerical value for the
performance standard established through rulemaking before the
beginning of the PY 2018 performance period; and (iii) it receives the
number of points for each reporting measure that corresponds to the
50th percentile of facility performance on each of the PY 2016
reporting measures.
We were unable to calculate a minimum TPS for PY 2018 in the CY
2015 ESRD PPS final rule because we were not yet able to calculate the
performance standards for each of the clinical measures. We therefore
stated that we would publish the minimum TPS for the PY 2018 ESRD QIP
in the CY 2016 ESRD PPS final rule (79 FR 66222).
Based on the estimated performance standards listed above, we
estimate that a facility must meet or exceed a minimum TPS of 39 for PY
2018. For all of the clinical measures except the SRR, STrR, and ICH
CAHPS clinical measures, these data come from CY 2014. The data for the
SRR and STrR clinical measures come from CY 2013 Medicare claims. For
the ICH CAHPS clinical measure, we set the performance standard to zero
for the purposes of determining this minimum TPS, because we are not
able to establish a numerical value for the performance standard
through the rulemaking process before the beginning of the PY 2018
performance period. We are proposing that a facility failing to meet
the minimum TPS, as established in the CY 2016 ESRD PPS final rule,
will receive a payment reduction based on the estimated TPS ranges
indicated in Table 15 below.
Table 15--Estimated Payment Reduction Scale for PY 2018 Based on the
Most Recently Available Data From CY 2014
------------------------------------------------------------------------
Total performance score Reduction %
------------------------------------------------------------------------
100-39.................................................. 0.0
38-29................................................... 0.5
28-19................................................... 1.0
18-9.................................................... 1.5
8-0..................................................... 2.0
------------------------------------------------------------------------
We seek comments on these proposals.
4. Data Validation
One of the critical elements of the ESRD QIP's success is ensuring
that the data submitted to calculate measure scores and TPSs are
accurate. We began a pilot data-validation program in CY 2013 for the
ESRD QIP, and procured the services of a data-validation contractor
that was tasked with validating a national sample of facilities'
records as reported to CROWNWeb. For validation of CY 2014 data, our
first priority was to develop a methodology for validating data
submitted to CROWNWeb under the pilot data-validation program. That
methodology was fully developed and adopted through the rulemaking
process. For the PY 2016 ESRD QIP (78 FR 72223 through 72224), we
finalized a requirement to sample approximately 10 records from 300
randomly selected facilities; these facilities had 60 days to comply
once they received requests for records. We continued this pilot for
the PY 2017 ESRD QIP, and propose to continue doing so for the PY 2018
ESRD QIP. Under this continued validation study, we will sample the
same number of records (approximately 10 per facility) from the same
number of facilities (that is, 300) during CY 2016. If a facility is
randomly selected to participate in the pilot validation study but does
not provide us with the requisite medical records within 60 days of
receiving a request, then we propose to deduct 10 points from the
facility's TPS. Once we have developed and adopted a methodology for
validating the CROWNWeb data, we intend to consider whether payment
reductions under the ESRD QIP should be based, in part, on whether a
facility has met our standards for data validation.
In the CY 2015 ESRD PPS final rule, we also finalized that there
will be a feasibility study for validating data reported to CDC's NHSN
Dialysis Event Module for the NHSN Bloodstream Infection clinical
measure. Healthcare-Acquired Infections (HAI) are relatively rare, and
we finalized that the feasibility study would target records with a
higher probability of including a dialysis event, because this would
enrich the validation sample while reducing the burden on facilities.
For PY 2018, we propose to use the same methodology that was discussed
in the CY 2015 ESRD QIP final rule (79 FR 66187). This methodology
resembles the methodology we use in the Hospital Inpatient Quality
Reporting Program to validate the central line-associated bloodstream
infection measure, the catheter-associated urinary tract infection
measure, and the surgical site infection measure (77 FR 53539 through
53553). For the PY 2018 ESRD QIP, we propose to randomly select nine
facilities to participate in the feasibility study for data reported in
CY 2016. A CMS contractor will send these facilities quarterly requests
for lists of candidate dialysis events (for example, all positive blood
cultures drawn from its patients during the quarter, including any
positive blood cultures that were collected from the facility's
patients on the day of, or the day following, their admission to a
hospital). Facilities will have 60 days to respond to quarterly
requests for lists of positive blood cultures and other candidate
events. A CMS contractor will then determine when a positive blood
culture or other ``candidate dialysis event'' is appropriate for
further validation. With input from CDC, the CMS contractor will
utilize a methodology for identifying and requesting the candidate
dialysis events other than positive blood cultures. The contractor will
analyze the records of patients who had candidate events in order to
determine whether the facility reported dialysis events for those
patients in accordance with the NHSN Dialysis Event Protocol. If the
contractor determines that additional medical records are needed from a
facility to validate whether the facility accurately reported the
dialysis events, then the contractor will send a request for additional
information to the facility, and the facility will have 60 days from
the date of the letter to respond to the request. Overall, we estimate
that, on
[[Page 37844]]
average, quarterly lists will include two positive blood cultures per
facility, but we recognize these estimates may vary considerably from
facility to facility. If a facility is randomly selected to participate
in the feasibility study but does not provide CMS with the requisite
lists of positive blood cultures or the requisite medical records
within 60 days of receiving a request, then we proposed to deduct 10
points from the facility's TPS.
We seek comments on these proposals.
G. Proposed Requirements for the PY 2019 ESRD QIP
1. Proposed Replacement of the Four Measures Currently in the Dialysis
Adequacy Clinical Measure Topic Beginning With the PY 2019 Program Year
We consider a quality measure for removal or replacement if: (1)
Measure performance among the majority of ESRD facilities is so high
and unvarying that meaningful distinctions in improvements or
performance can no longer be made (in other words, the measure is
topped-out); (2) performance or improvement on a measure does not
result in better or the intended patient outcomes; (3) a measure no
longer aligns with current clinical guidelines or practice; (4) a more
broadly applicable (across settings, populations, or conditions)
measure for the topic becomes available; (5) a measure that is more
proximal in time to desired patient outcomes for the particular topic
becomes available; (6) a measure that is more strongly associated with
desired patient outcomes for the particular topic becomes available; or
(7) collection or public reporting of a measure leads to negative or
unintended consequences (77 FR 67475). In the CY 2015 ESRD PPS final
rule, we adopted statistical criteria for determining whether a
clinical measure is topped out, and also adopted a policy under which
we could retain an otherwise topped-out measure if we determined that
its continued inclusion in the ESRD QIP measure would address the
unique needs of a specific subset of the ESRD population (79 FR 66172
through 66174).
Subsequent to the publication of the CY 2015 ESRD PPS final rule,
we evaluated the finalized PY 2018 ESRD QIP measures against all of
these criteria. We determined that none of these measures met criterion
(1), (2), (3), (5), (6), or (7). As part of this evaluation for
criterion one, we performed a statistical analysis of the PY 2018
measures to determine whether any measures were ``topped out.'' The
full results of this analysis can be found at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html and a summary of our topped-out
analysis results appears in Table 16 below.
Table 16--PY 2018 Clinical Measures Using CROWNWeb and Medicare Claims Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
75th 90th Statistically
Measure N percentile percentile Std. Error indistinguishable Truncated CV TCV < 0.10
--------------------------------------------------------------------------------------------------------------------------------------------------------
Adult HD Kt/V................. 5822 97.0 98.3 0.09 No................. 0.03............ Yes.
Pediatric HD Kt/V............. 7 94.4 96.9 13.4 Yes................ 0.23............ No.
Adult PD Kt/V................. 1287 94.4 97.1 0.45 No................. 0.10............ No.
Pediatric PD Kt/V............. 3 88.4 88.4 13.9 Yes................ N/A\1\.......... N/A.\1\
VAT: Fistula\2\............... 5763 73.3 79.7 0.15 No................. 0.14............ No.
VAT: Catheter\3\.............. 5744 5.4 2.7 0.10 No................. <0.01........... Yes.
Hypercalcemia\2\.............. 6042 0.33 0.0 0.03 No................. <0.01........... Yes.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Insufficient data
\2\ Medicare claims data from CY 2014 were used in these calculations.
\3\ CROWNWeb data from CY 2014 was used in this calculation.
As the information presented in Table 16 indicates, none of these
clinical measures are currently topped-out in the ESRD QIP. We note
that only three facilities had 11 or more qualifying patients for the
Pediatric Peritoneal Dialysis Adequacy clinical measure, resulting in
insufficient data available to calculate a truncated coefficient of
variation. However, because the Pediatric Peritoneal Dialysis Adequacy
clinical measure addresses the unique needs of the pediatric
population, we are not proposing to remove the measure at this time.
Accordingly, we are not proposing to remove any of these measures from
the ESRD QIP.
Beginning with the PY 2019 ESRD QIP, we are proposing to replace
the four measures in the Kt/V Dialysis Adequacy measure topic--(1)
Hemodialysis Adequacy: Minimum delivered hemodialysis dose; (2)
Peritoneal Dialysis Adequacy: Delivered dose above minimum; (3)
Pediatric Hemodialysis Adequacy: Minimum spKt/V; and (4) Pediatric
Peritoneal Dialysis Adequacy--with a single more broadly applicable
measure for the topic. The new measure, Delivered Dose of Dialysis
above Minimum--Composite Score clinical measure (``Dialysis Adequacy
clinical measure'') (Measure Applications Partnership #X3717), is a
single comprehensive measure of dialysis adequacy assessing the
percentage of all patient-months, for both pediatric and adult
patients, whose average delivered dose of dialysis (either hemodialysis
or peritoneal dialysis) met the specified Kt/V threshold during the
performance period. As discussed in more detail below, this measure's
specifications allow the measure to capture a greater number of
patients, particularly pediatric hemodialysis and peritoneal dialysis
patients, than the four individual dialysis adequacy measures, and will
result in a larger and broader collection of data from patients whose
dialysis adequacy is assessed under the ESRD QIP. The measure assesses
the adequacy of dialysis using the same thresholds applied to those
patients by the existing dialysis adequacy measures, as described
below. For these reasons, we believe the new dialysis adequacy measure
meets criterion four above. We therefore propose to remove the four
individual measures within the Kt/V Dialysis Adequacy Measure Topic, as
well as the measure topic itself, and to replace those measures with a
single Dialysis Adequacy clinical measure beginning with the PY 2019
ESRD QIP. However, if based on public comments, we do not finalize our
proposal to adopt the Dialysis Adequacy clinical measure, then we would
not finalize this proposal to remove these measures and the Dialysis
Adequacy measure topic.
We seek comments on this proposal.
[[Page 37845]]
2. Proposed Measures for the PY 2019 ESRD QIP
a. PY 2018 Measures Continuing for PY 2019 and Future Payment Years
We previously finalized 16 measures in the CY 2015 ESRD PPS final
rule for the PY 2018 ESRD QIP, and these measures are summarized in
Table 17 below. In accordance with our policy to continue using
measures unless we propose to remove or replace them, (77 FR 67477), we
will continue to use 12 of these measures in the PY 2019 ESRD QIP. As
noted above, we are proposing to remove four of these clinical
measures--(1) Hemodialysis Adequacy: Minimum delivered hemodialysis
dose; (2) Peritoneal Dialysis Adequacy: Delivered dose above minimum;
(3) Pediatric Hemodialysis Adequacy: Minimum spKt/V; and (4) Pediatric
Peritoneal Dialysis Adequacy--and replace them with a single,
comprehensive clinical measure covering the patient populations
previously captured by these four individual clinical measures.
Table 17--PY 2018 ESRD QIP Measures Being Continued in PY 2019
------------------------------------------------------------------------
NQF # Measure title and description
------------------------------------------------------------------------
0257.............................. Vascular Access Type: AV Fistula, a
clinical measure
Percentage of patient-months on
hemodialysis during the last
hemodialysis treatment of the month
using an autogenous AV fistula with
two needles.
0256.............................. Vascular Access Type: Catheter >= 90
days, a clinical measure
Percentage of patient-months for
patients on hemodialysis during the
last hemodialysis treatment of
month with a catheter continuously
for 90 days or longer prior to the
last hemodialysis session.
N/A\1\............................ National Healthcare Safety Network
(NHSN) Bloodstream Infection in
Hemodialysis Patients, a clinical
measure
Number of hemodialysis outpatients
with positive blood cultures per
100 hemodialysis patient-months.
1454.............................. Hypercalcemia, a clinical measure
Proportion of patient-months with 3-
month rolling average of total
uncorrected serum calcium greater
than 10.2 mg/dL.
N/A............................... Standardized Readmission Ratio, a
clinical measure
Standardized hospital readmissions
ratio of the number of observed
unplanned readmissions to the
number of expected unplanned
readmissions.
N/A............................... Standardized Transfusion Ratio, a
clinical measure
Risk-adjusted standardized
transfusion ratio for all adult
Medicare patients.
0258.............................. In-Center Hemodialysis Consumer
Assessment of Healthcare Providers
and Systems (ICH CAHPS) Survey
Administration, a clinical measure
Facility administers, using a third-
party CMS-approved vendor, the ICH
CAHPS survey in accordance with
survey specifications and submits
survey results to CMS.
N/A\2\............................ Mineral Metabolism Reporting, a
reporting measure
Number of months for which facility
reports serum phosphorus or serum
plasma for each Medicare patient.
N/A............................... Anemia Management Reporting, a
reporting measure
Number of months for which facility
reports ESA dosage (as applicable)
and hemoglobin/hematocrit for each
Medicare patient.
N/A\3\............................ Pain Assessment and Follow-Up, a
reporting measure
Facility reports in CROWNWeb one of
six conditions for each qualifying
patient once before August 1 of the
performance period and once before
February 1 of the year following
the performance period.
N/A\4\............................ Clinical Depression Screening and
Follow-Up, a reporting measure
Facility reports in CROWNWeb one of
six conditions for each qualifying
patient once before February 1 of
the year following the performance
period.
N/A\5\............................ NHSN Healthcare Personnel Influenza
Vaccination, a reporting measure
Facility submits Healthcare
Personnel Influenza Vaccination
Summary Report to CDC's NHSN
system, according to the
specifications of the Healthcare
Personnel Safety Component
Protocol, by May 15 of the
performance period.
------------------------------------------------------------------------
\1\ We note that this measure is based upon a current NQF-endorsed
bloodstream infection measure (NQF#1460).
\2\ We note that this measure is based upon a current NQF-endorsed serum
phosphorus measure (NQF #0255).
\3\ We note that this measure is based upon a current NQF-endorsed pain
assessment and follow-up measure (NQF #0420).
\4\ We note that this measure is based upon a current NQF-endorsed
clinical depression screening and follow-up measure (NQF #0418).
\5\ We note that this measure is based upon an NQF-endorsed HCP
influenza vaccination measure (NQF #0431).
b. Proposed New Dialysis Adequacy Clinical Measure Beginning With the
PY 2019 ESRD QIP
Section 1881(h)(2)(A)(i) of the Act states that the ESRD QIP
measure set must include measures on ``dialysis adequacy.'' Kt/V is a
widely accepted measure of dialysis adequacy in the ESRD community. It
is a measure of small solute (urea) removal from the body, is
relatively simple to measure and report, and is associated with
survival among dialysis patients. While the current dialysis adequacy
measures have allowed us to capture a greater proportion of the ESRD
population than previously accounted for under the URR Hemodialysis
Adequacy clinical measure, the specifications for these measures still
result in the exclusion of some patients from the measures. For
example, the Pediatric Hemodialysis Adequacy clinical measure's
specifications have limited the number of pediatric patients included
in the ESRD QIP because very few facilities (10 facilities, based on CY
2013 data) were eligible to receive a score on the measure. We are
therefore proposing to adopt a single comprehensive Dialysis Adequacy
clinical measure under the authority of section 1881(h)(2)(A)(i) of the
Act.
The Measure Applications Partnership conditionally supported the
proposed Dialysis Adequacy clinical measure in its 2015 Pre-Rulemaking
Report, noting that this measure meets critical program objectives to
include more outcome measures and measures applicable to the pediatric
population in the set.\3\
---------------------------------------------------------------------------
\3\ https://www.qualityforum.org/map/
---------------------------------------------------------------------------
The Dialysis Adequacy clinical measure assesses the percentage of
all patient-months for both adult and pediatric patients whose average
delivered dose of dialysis (either hemodialysis or peritoneal dialysis)
met the specified threshold during the performance period. A primary
difference between the single
[[Page 37846]]
comprehensive Dialysis Adequacy clinical measure and the four
previously finalized dialysis adequacy clinical measures is how
facility eligibility for the measure is determined. Under the four
previously finalized dialysis adequacy clinical measures, facility
eligibility was determined based on the number of qualifying patients
treated for each individual measure (for example, the number of
qualifying adult hemodialysis patients for the Hemodialysis Adequacy:
Minimum Delivered Hemodialysis Dose clinical measure). As a result, a
facility had to treat at least 11 qualifying patients for each of these
measures in order to receive a score on that measure. By contrast, a
facility's eligibility to receive a score on the proposed Dialysis
Adequacy clinical measure, which includes both adults and children, and
both hemodialysis and peritoneal dialysis modalities, is determined
based on the total number of qualifying patients treated at a facility.
As a result, a facility that would not be eligible to receive a score
on one or more of our current dialysis adequacy clinical measures
because it did not meet the case minimum for one or more of those
measures would be eligible to receive a score on the proposed dialysis
adequacy measure if it had at least 11 total qualifying patients,
defined as adults and pediatric patients receiving either hemodialysis
or peritoneal dialysis. Therefore, we anticipate that adopting the
single comprehensive Dialysis Adequacy clinical measure will allow us
to evaluate the care provided to a greater proportion of ESRD patients,
particularly pediatric ESRD patients.
We are proposing that patients' dialysis adequacy would be assessed
based on the following Kt/V thresholds previously assessed under the
individual dialysis adequacy clinical measures:
For hemodialysis patients, all ages: spKt/V >= 1.2
(calculated from the last measurement of the month)
For pediatric (age < 18 years) peritoneal dialysis
patients: Kt/V urea 1.8 (dialytic + residual, measured
within the past six months)
For adult (age 18 years) peritoneal dialysis
patients: Kt/V urea 1.7 (dialytic + residual, measured
within the past four months)
These thresholds reflect the best evidence-based minimum threshold for
adequate dialysis for the described patient groups and are consistent
with dialysis adequacy measures previously implemented in the QIP.
Patient eligibility for inclusion in the measure would be determined on
a patient-month level, based on the patient's age, treatment modality
type, whether a patient has been on dialysis for 90 days or more, and
the number of hemodialysis treatments the patient receives per week.
All eligible patient-months at a facility would be counted toward the
denominator. Eligible patient months where the patient met the specific
dialysis adequacy threshold would be counted toward the numerator.
Technical specifications for the Dialysis Adequacy clinical measure can
be found at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html.
We seek comments on our proposal to adopt this measure beginning
with the PY 2019 ESRD QIP.
c. Proposed New Reporting Measures Beginning With the PY 2019 ESRD QIP
i. Proposed Ultrafiltration Rate Reporting Measure
The ultrafiltration rate measures the rapidity with which fluid
(ml) is removed at dialysis per unit (kg) body weight in unit (hour)
time. A patient's ultrafiltration rate is under the control of the
dialysis facility and is monitored throughout a patient's hemodialysis
session. Studies suggest that higher ultrafiltration rates are
associated with higher mortality and higher odds of an ``unstable''
dialysis session,\4\ and that rapid rates of fluid removal during
dialysis can precipitate events such as intradialytic hypotension,
subclinical yet significantly decreased organ perfusion, and in some
cases myocardial damage and heart failure.
---------------------------------------------------------------------------
\4\ Flythe SE., Kimmel SE., Brunelli SM. Rapid fluid removal
during dialysis is associated with cardiovascular morbidity and
mortality. Kidney International (2011) Jan; 79(2):250-7. Flythe JE,
Curhan GC, Brunelli SM. Disentangling the ultrafiltration rate--
mortality association: The respective roles of session length and
weight gain. Clin J Am Soc Nephrol. 2013 Jul;8(7):1151-61. Movilli,
E et al. ``Association between high ultrafiltration rates and
mortality in uraemic patients on regular hemodialysis. A 5-year
prospective observational multicenter study.'' Nephrology Dialysis
Transplantation 22.12(2007): 3547-3552.
---------------------------------------------------------------------------
Section 1881(h)(2)(A)(iv) gives the Secretary authority to adopt
other measures for the ESRD QIP that cover a wide variety of topics.
Section 1881(h)(2)(B)(ii) of the Act states that ``In the case of a
specified area or medical topic determined appropriate by the Secretary
for which a feasible and practical measure has not been endorsed by the
entity with a contract under section 1890(a) of Act [in this case NQF],
the Secretary may specify a measure that is not so endorsed so long as
due consideration is given to measures that have been endorsed or
adopted by a consensus organization identified by the Secretary.'' We
have given due consideration to endorsed measures, as well as those
adopted by a consensus organization. Because no NQF-endorsed measures
or measures adopted by a consensus organization on ultrafiltration
rates currently exist, we are proposing to adopt the Ultrafiltration
Rate reporting measure under the authority of section 1881(h)(2)(B)(ii)
of the Act.
We are proposing to adopt a measure that is based on Measure
Applications Partnership #XAHMH, ``Ultrafiltration Rate Greater than 13
ml/kg/hr'' (``Ultrafiltration Rate measure''). This measure assesses
the percentage of patient-months for patients with an ultrafiltration
rate greater than 13 ml/kg/hr. The Measure Applications Partnership
expressed conditional support for the Ultrafiltration Rate measure,
noting it would ``consider the measure for inclusion in the program
once it has been reviewed for endorsement.'' The measure upon which our
proposed measure is based is currently under review for endorsement by
NQF; however, we believe the measure is ready for adoption because it
has been fully tested for reliability and addresses a critical aspect
of patients' clinical care not currently addressed by the ESRD QIP
measure set.
For PY 2019 and future payment years, we propose that facilities
must report an ultrafiltration rate for each qualifying patient at
least once per month in CROWNWeb. Qualifying patients for this proposed
measure are defined as patients 18 years of age or older, on
hemodialysis, and who are assigned to the same facility for at least
the full calendar month (for example, if a patient is admitted to a
facility during the middle of a month, the facility will not be
required to report for that patient for that month). We further propose
that facilities will be granted a one month period following the
calendar month to enter this data. For example, we would require a
facility to report ultrafiltration rates for January 2017 on or before
February 28, 2017. Facilities would be scored on whether they
successfully report the required data within the timeframe provided,
not on the values reported. Technical specifications for the
Ultrafiltration Rate reporting measure can be found at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html.
We seek comments on this proposal.
[[Page 37847]]
ii. Proposed Full-Season Influenza Vaccination Reporting Measure
According to the Centers for Disease Control and Prevention (CDC),
seasonal influenza, which occurs between October and March/April of the
following year, is associated with approximately 20,000 deaths \5\ and
226,000 hospitalizations annually.\6\ While overall rates of influenza
infection are highest among children, rates of serious illness and
mortality are highest among adults aged 65 years or older, children
aged two or younger, and immunocompromised patients such as patients
with ESRD. Observational data have found associations between influenza
vaccination and reduced mortality and hospitalization in this patient
population. Specifically, multiple studies have found that vaccinated
patients have significantly lower odds of all-cause mortality and
modestly lower odds of all-cause hospitalization compared to
unvaccinated patients.\7\ However, influenza vaccination rates in the
ESRD population have historically been lower than the Healthy People
2020 goal of 70 percent of both pediatric and adult populations in the
United States,\8\ with recent reports from the U.S. Renal Data System
and Dialysis Facility Reports showing vaccination rates of 67 percent
and 68 percent, respectively, among ESRD patients for the 2011-2012
season.\9\ Based on these findings, we believe that encouraging closer
evaluation of patients' influenza vaccination status in the dialysis
facility will increase the number of patients with ESRD who receive an
influenza vaccination and increase influenza vaccination rates in this
population, which will in turn improve patient health and well-being.
---------------------------------------------------------------------------
\5\ Centers for Disease Control and Prevention (CDC). Estimates
of Deaths Associated with Seasonal Influenza--United States, 1976-
2007. MMWR (2010) 59:33. Available at: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5933a1.htm.
\6\ Centers for Disease Control and Prevention (CDC). Prevention
and Control of Influenza with Vaccines: Recommendations of the
Advisory Committee on Immunization Practices (ACIP).
MMWR2010a;59(RR-8):1-62.
\7\ Bond TC, Spaulding AC, Krisher J, et al. Mortality of
dialysis patients according to influenza and pneumococcal
vaccination status. Am J Kidney Dis. 2012;60:959-65; Gilbertson DT,
Unruh M, McBean AM, et al. Influenza vaccine delivery and
effectiveness in end-stage renal disease. Kidney Int. 2003;63:738-
43.
\8\ http://www.healthypeople.gov/2020/topics-objectives/topic/immunization-and-infectious-diseases/objectives (Healthy People 2020
IID-12.11 and IID-12.12).
\9\ US Renal Data System, USRDS 2014 Annual Data Report: An
overview of the epidemiology of kidney disease in the United States.
National Institutes of Health, National Institute of Diabetes and
Digestive and Kidney Diseases, Bethesda, MD, 2014.
---------------------------------------------------------------------------
We are proposing to use a measure that is based on ``ESRD
Vaccination--Full-Season Influenza Vaccination'' (Measure Applications
Partnership #XDEFM). This measure assesses the percentage of ESRD
patients = 6 months of age on October 1 and on chronic
dialysis = 30 days in a facility at any point between
October 1 and March 31 who either (1) received an influenza
vaccination; (2) were offered but declined the vaccination; or (3) were
determined to have a medical contraindication. The Measure Applications
Partnership conditionally supported the use of the ESRD Vaccination--
Full-Season Influenza Vaccination measure in the ESRD QIP in its
January 2014 Pre-Rulemaking Report because ``influenza vaccination is
very important for dialysis patients.'' Nevertheless, the Measure
Applications Partnership declined to give the measure full support
because it was not sure that the measure was more suitable to drive
improvement than NQF #0226: ``Influenza Immunization in the ESRD
Population (Facility Level)''. We have reviewed the measure
specifications for NQF #0226 and determined that it is not appropriate
to use as the basis for a reporting measure because the denominator
statement of NQF #0226 excludes all patients for whom data during the
flu season is incomplete, potentially excluding patients who died from
influenza, but might not have died if they had received an influenza
vaccination. We therefore believe it is more appropriate to adopt a
reporting measure based on the ESRD Vaccination--Full-Season Influenza
Vaccination measure (Measure Applications Partnership #XDEFM) because
this measure includes patients who died from influenza, but might not
have died if they had received an influenza vaccination, and we believe
it is important to include such patients in an influenza immunization
clinical measure for the ESRD QIP, should we propose to adopt such a
measure in the future.
For these reasons, we are proposing to adopt a reporting measure
based on ``ESRD Vaccination--Full-Season Influenza Vaccination''
(``Full-Season Influenza Vaccination reporting measure'') so that we
can collect data that we can use in the future to calculate both
achievement and improvement scores, should we propose to adopt a
clinical version of this measure in future rulemaking.
Section 1881(h)(2)(B)(ii) of the Act states that ``In the case of a
specified area or medical topic determined appropriate by the Secretary
for which a feasible and practical measure has not been endorsed by the
entity with a contract under section 1890(a) of the Act [in this case
NQF], the Secretary may specify a measure that is not so endorsed as
long as due consideration is given to measures that have been endorsed
or adopted by a consensus organization identified by the Secretary.''
Because we have given due consideration to endorsed measures, as well
as those adopted by a consensus organization, and determined it is not
practical or feasible to adopt those measures in the ESRD QIP, we are
proposing to adopt the Full-Season Influenza Vaccination reporting
measure under the authority of section 1881(h)(2)(B)(ii) of the Act.
For PY 2019 and future payment years, we propose that facilities
must report one of the following conditions in CROWNWeb once per
performance period, for each qualifying patient (defined below):
1. If the patient received an influenza vaccination:
a. Influenza Vaccination Date
b. Where Influenza Vaccination Received: (1) Documented at
facility; (2) Documented outside facility; or (3) Patient self-reported
outside facility
2. If the patient did not receive an influenza vaccination:
a. Reason:
i. Already vaccinated this flu season
ii. Medical Reason: Allergic or adverse reaction
iii. Other medical reason
iv. Declined
v. Other reason
We note that while facilities are expected to retain patient
influenza immunization documentation for their own records, facilities
are not required to supply this documentation to CMS under the Full-
Season Influenza Vaccination reporting measure.
For this measure, a qualifying patient would be defined as a
patient aged six months or older as of October 1 who has been on
chronic dialysis for 30 or more days in a facility at any point between
October 1 and March 31. This measure would include in-center
hemodialysis, peritoneal dialysis, and home dialysis patients. This
proposed measure would capture the same data described in ``ESRD
Vaccination--Full-Season Influenza Vaccination'', but we would require
that facilities report the data on or before May 15 following the
performance period for that year. We believe this reporting deadline
will ensure that facilities have sufficient time to collect and enter
data for all qualifying patients following the influenza season, and
aligns this
[[Page 37848]]
reporting effort with that of the NHSN Healthcare Personnel Influenza
Vaccination reporting measure finalized in the CY 2015 ESRD PPS final
rule for PY 2018 (79 FR 66206 through 66208). Second, we are proposing
to score facilities based on whether they successfully report the data,
and not based on the measure results. Technical specifications for the
Full-Season Influenza Vaccination reporting measure can be found at
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html.
We seek comments on this proposal.
3. Proposed Performance Period for the PY 2019 ESRD QIP
Section 1881(h)(4)(D) of the Act requires the Secretary to
establish the performance period with respect to a payment year, and
that the performance period occur prior to the beginning of such year.
We are proposing to establish CY 2017 as the performance period for the
PY 2019 ESRD QIP for all but the influenza vaccination measures because
it is consistent with the performance period we have historically used
for these measures and accounts for seasonal variations that might
affect a facility's measure score. We are proposing that the
performance period for both the NHSN Healthcare Personnel Influenza
Vaccination reporting measure and the proposed Full-Season Influenza
Vaccination reporting measure will be from October 1, 2016 through
March 31, 2017, because this period spans the length of the 2016-2017
influenza season.
We seek comments on these proposals.
4. Proposed Performance Standards, Achievement Thresholds, and
Benchmarks for the PY 2019 ESRD QIP
Section 1881(h)(4)(A) of the Act provides that ``the Secretary
shall establish performance standards with respect to measures selected
. . . for a performance period with respect to a year.'' Section
1881(h)(4)(B) of the Act further provides that the ``performance
standards . . . shall include levels of achievement and improvement, as
determined appropriate by the Secretary.'' We use the performance
standards to establish the minimum score a facility must achieve to
avoid a Medicare payment reduction. We use achievement thresholds and
benchmarks to calculate scores on the clinical measures.
a. Proposed Performance Standards, Achievement Thresholds, and
Benchmarks for the Clinical Measures in the PY 2019 ESRD QIP
For the same reasons stated in the CY 2013 ESRD PPS final rule (77
FR 67500 through 76502), we are proposing for PY 2019 to set the
performance standards, achievement thresholds, and benchmarks for the
clinical measures at the 50th, 15th, and 90th percentile, respectively,
of national performance in CY 2015, because this will give us enough
time to calculate and assign numerical values to the proposed
performance standards for the PY 2019 program prior to the beginning of
the performance period. We continue to believe these standards will
provide an incentive for facilities to continuously improve their
performance, while not reducing incentives to facilities that score at
or above the national performance rate for the clinical measures.
We seek comments on these proposals.
b. Estimated Performance Standards, Achievement Thresholds, and
Benchmarks for the Clinical Measures Proposed for the PY 2019 ESRD QIP
At this time, we do not have the necessary data to assign numerical
values to the proposed performance standards for the clinical measures,
because we do not yet have data from CY 2015 or the first portion of CY
2016. We will publish values for the clinical measures, using data from
CY 2015 and the first portion of CY 2016, in the CY 2017 ESRD PPS final
rule.
c. Proposed Performance Standards for the PY 2019 Reporting Measures
In the CY 2014 ESRD PPS Final Rule, we finalized performance
standards for the Anemia Management and Mineral Metabolism reporting
measures (78 FR 72213). In the CY 2015 ESRD PPS Final Rule, we
finalized our proposal to modify the measure specifications for the
Mineral Metabolism reporting measure to allow facilities to report
either serum phosphorus data or plasma phosphorus data for the Mineral
Metabolism reporting measure (79 FR 66191). We are not proposing any
changes to these policies for the PY 2019 ESRD QIP.
In the CY 2015 ESRD PPS Final Rule, we finalized performance
standards for the Screening for Clinical Depression and Follow-Up, Pain
Assessment and Follow-Up, and NHSN Healthcare Provider Influenza
Vaccination reporting measures (79 FR 66209). We are not proposing any
changes to these policies.
For the Ultrafiltration Rate reporting measure, we propose to set
the performance standard as successfully reporting an ultrafiltration
rate for each qualifying patient in CROWNWeb on a monthly basis, for
each month of the reporting period.
For the Full-Season Influenza Vaccination reporting measure, we
propose to set the performance standard as successfully reporting one
of the above-listed vaccination statuses for each qualifying patient in
CROWNWeb on or before May 15th of the performance period.
We seek comments on these proposals.
5. Proposal for Scoring the PY 2019 ESRD QIP
a. Scoring Facility Performance on Clinical Measures Based on
Achievement
In the CY 2014 ESRD PPS Final Rule, we finalized a policy for
scoring performance on clinical measures based on achievement (78 FR
72215). Under this methodology, facilities receive points along an
achievement range based on their performance during the performance
period for each measure, which we define as a scale between the
achievement threshold and the benchmark. In determining a facility's
achievement score for each clinical measure under the PY 2019 ESRD QIP,
we propose to continue using this methodology for all clinical measures
except the ICH CAHPS clinical measure. The facility's achievement score
would be calculated by comparing its performance on the measure during
CY 2017 (the proposed performance period) to the achievement threshold
and benchmark (the 15th and 90th percentiles of national performance on
the measure in CY 2015).
We seek comment on this proposal.
b. Scoring Facility Performance on Clinical Measures Based on
Improvement
In the CY 2014 ESRD PPS Final Rule, we finalized a policy for
scoring performance on clinical measures based on improvement (78 FR
72215 through 72216). In determining a facility's improvement score for
each measure under the PY 2019 ESRD QIP, we propose to continue using
this methodology for all clinical measures except the ICH CAHPS
clinical measure. Under this methodology, facilities receive points
along an improvement range, defined as a scale running between the
improvement threshold and the benchmark. We propose to define the
improvement threshold as the
[[Page 37849]]
facility's performance on the measure during CY 2016. The facility's
improvement score would be calculated by comparing its performance on
the measure during CY 2017 (the proposed performance period) to the
improvement threshold and benchmark.
We seek comment on this proposal.
c. Scoring the ICH CAHPS Clinical Measure
In the CY 2015 ESRD PPS final rule, we finalized a policy for
scoring performance on the ICH CAHPS clinical measure based on both
achievement and improvement (79 FR 66209 through 66210). Under this
methodology, facilities will receive an achievement score and an
improvement score for each of the three composite measures and three
global ratings in the ICH CAHPS survey instrument. A facility's ICH
CAHPS score will be based on the higher of the facility's achievement
or improvement score for each of the composite measures and global
ratings, and the resulting scores on each of the composite measures and
global ratings will be averaged together to yield an overall score on
the ICH CAHPS clinical measure. For PY 2019, the facility's achievement
score would be calculated by comparing where its performance on each of
the three composite measures and three global ratings during CY 2017
falls relative to the achievement threshold and benchmark for that
measure and rating based on CY 2015 data. The facility's improvement
score would be calculated by comparing its performance on each of the
three composite measures and three global ratings during CY 2017 to its
performance rates on these items during CY 2016.
We seek comments on this proposal.
d. Proposal for Calculating Facility Performance on Reporting Measures
In the CY 2013 ESRD PPS final rule, we finalized policies for
scoring performance on the Anemia Management and Mineral Metabolism
reporting measures in the ESRD QIP (77 FR 67506). We are not proposing
any changes to these policies for the PY 2019 ESRD QIP.
In the CY 2015 ESRD PPS final rule, we finalized policies for
scoring performance on the Clinical Depression Screening and Follow-Up,
Pain Assessment and Follow-Up, and NHSN Healthcare Provider Influenza
Vaccination reporting measures (79 FR 66210 through 66211). We are not
proposing any changes to these policies.
With respect to the Ultrafiltration Rate reporting measure, we are
proposing to score facilities with a CCN Open Date before July 1, 2017
using the same formula previously finalized for the Mineral Metabolism
and Anemia Management reporting measures (77 FR 67506):
[GRAPHIC] [TIFF OMITTED] TP01JY15.015
As with the Anemia Management and Mineral Metabolism reporting
measures, we would round the result of this formula (with half rounded
up) to generate a measure score from 0-10.
With respect to the Full-Season Influenza Immunization reporting
measure, we are proposing to score facilities with a CCN Open Date
before January 1, 2017 based on the proportion of eligible patients for
which the facility successfully submits one of the vaccination status
indicators listed above by the May 15, 2017 deadline using the
following formula:
[GRAPHIC] [TIFF OMITTED] TP01JY15.014
We seek comments on these proposals.
6. Weighting the Clinical Measure Domain and Total Performance Score
i. Proposal for Weighting the Clinical Measure Domain for PY 2019
In the CY 2015 ESRD PPS final rule, we finalized policies regarding
the criteria we would use to assign weights to measures in a facility's
Clinical Measure Domain score (79 FR 66214 through 66216).
Specifically, we stated that in deciding how to weight measures and
measure topics within the Clinical Measure Domain, we would take into
consideration: (1) The number of measures and measure topics in a
proposed subdomain; (2) how much experience facilities have had with
the measures; and (3) how well the measures align with CMS' highest
priorities for quality improvement for patients with ESRD.
In the same rule, we finalized the Dialysis Adequacy measure topic
and Vascular Access Type measure topic's weights for PY 2018 at 18
percent of a facility's Clinical Measure Domain score because
facilities have substantially more experience with the Dialysis
Adequacy measure topic as compared to the other measures in the
Clinical Care subdomain (79 FR 66214). Beginning in PY 2019, we are
proposing to remove the Dialysis Adequacy measure topic and replace it
with the Dialysis Adequacy clinical measure. Because this proposed
measure is a composite of the measures previously included in the
Dialysis Adequacy measure topic, with the same Kt/V thresholds
currently used for those measures, we believe that facilities are
already familiar with the concepts underlying this proposed measure and
that the measure should be weighted at 18 percent of a facility's
Clinical Measure Domain score. We are
[[Page 37850]]
not proposing any further changes to the weighting for the remaining
clinical measures and measure topics within the Clinical Measure Domain
because the previously finalized weights are aligned with the criteria
used to establish measure and measure topic weights. For these reasons,
we propose to use the following weighting system in Table 18 below for
calculating a facility's Clinical Measure Domain score beginning in PY
2019.
Table 18--Proposed Clinical Measure Domain Weighting for the PY 2019
ESRD QIP
------------------------------------------------------------------------
Measure weight in the
Measures/measure topics by subdomain Clinical Measure Domain
score (%)
------------------------------------------------------------------------
Safety Subdomain............................... 20
NHSN Bloodstream Infection measure......... 20
Patient and Family Engagement/Care Coordination 30
Subdomain.....................................
ICH CAHPS measure.......................... 20
SRR measure................................ 10
Clinical Care Subdomain........................ 50
STrR measure............................... 7
Dialysis Adequacy measure.................. 18
Vascular Access Type measure topic......... 18
Hypercalcemia measure...................... 7
------------------------------------------------------------------------
We seek comments on this proposal for weighting a facility's
Clinical Measure Domain score.
ii. Weighting the Total Performance Score
We continue to believe that while the reporting measures are
valuable, the clinical measures evaluate actual patient care and
therefore justify a higher combined weight (78 FR 72217). We are
therefore not proposing to change our policy, finalized in the CY 2015
ESRD PPS final rule (79 FR 66219), under which clinical measures will
be weighted as finalized for the Clinical Domain score, and the
Clinical Domain score will comprise 90 percent of a facility's TPS,
with the reporting measures weighted equally to form the remaining 10
percent of a facility's TPS. We are also not proposing any changes to
the policy that facilities must be eligible to receive a score on at
least one reporting measure and at least one clinical measure to be
eligible to receive a TPS, or the policy that a facility's TPS will be
rounded to the nearest integer, with half of an integer being rounded
up.
7. Proposed Minimum Data for Scoring Measures for the PY 2019 ESRD QIP
Our policy is to score facilities on clinical and reporting
measures for which they have a minimum number of qualifying patients
during the performance period. With the exception of the Standardized
Readmission Ratio, Standardized Transfusion Ratio, and ICH CAHPS
clinical measures, a facility must treat at least 11 qualifying cases
during the performance period in order to be scored on a clinical or
reporting measure. A facility must have at least 11 index discharges to
be eligible to receive a score on the SRR clinical measure and 10
patient-years at risk to be eligible to receive a score on the STrR
clinical measure. In order to receive a score on the ICH CAHPS clinical
measure, a facility must have treated at least 30 survey-eligible
patients during the eligibility period and receive 30 completed surveys
during the performance period. We are not proposing to change these
minimum data policies for the measures that we have proposed to
continue including in the PY 2019 ESRD QIP measure set.
For the proposed Dialysis Adequacy clinical measure, we propose
that facilities with at least 11 qualifying patients will receive a
score on the measure. We believe that maintaining a case minimum of 11
for this measure adequately addresses both the privacy and reliability
concerns previously discussed in the CY 2013 ESRD PPS final rule (77 FR
67510 through 67512), and aligns with the case minimum policy for the
previously finalized clinical process measures.
For the proposed Ultrafiltration Rate and Full-Season Influenza
reporting measures, we also propose that facilities with at least 11
qualifying patients will receive a score on the measure. We believe
that setting the case minimum at 11 for these reporting measures
strikes the appropriate balance between the need to maximize data
collection and the need to not unduly burden or penalize small
facilities. We further believe that setting the case minimum at 11 is
appropriate because this aligns with case minimum policy for the vast
majority of the reporting measures in the ESRD QIP.
Under our current policy, we begin counting the number of months
for which a facility is open on the first day of the month after the
facility's CCN Open Date. Only facilities with a CCN Open Date before
July 1, 2017 would be eligible to be scored on the Anemia Management,
Mineral Metabolism, Pain Assessment and Follow-Up, Clinical Depression
Screening and Follow-Up reporting measures, and only facilities with a
CCN Open Date before January 1, 2017 would be eligible to be scored on
the NHSN Bloodstream Infection clinical measure, ICH CAHPS clinical
measure, and NHSN Healthcare Personnel (HCP) Influenza Vaccination
reporting measure. Consistent with our policy regarding the NHSN HCP
Influenza Vaccination reporting measure, we propose that facilities
with a CCN Open Date after January 1, 2017 would not be eligible to
receive a score on the Full-Season Influenza Vaccination reporting
measure because these facilities might have difficulty reporting the
data by the proposed reporting deadline of May 15, 2017. We further
propose that, consistent with our CCN Open Date policy for other
reporting measures, facilities with a CCN Open Date after July 1, 2017,
would not be eligible to receive a score on the Ultrafiltration Rate
reporting measure because of the difficulties these facilities may face
in meeting the requirements of this measure due to the short period of
time left in the performance period.
We seek comments on these proposals.
Table 19 displays the proposed patient minimum requirements for
each of the measures, as well as the proposed CCN Open Dates after
which a facility would not be eligible to receive a score on a
reporting measure.
[[Page 37851]]
Table 19--Proposed Minimum Data Rrequirements for the PY 2019 ESRD QIP
----------------------------------------------------------------------------------------------------------------
Minimum data
Measure requirements CCN open date Small facility adjuster
----------------------------------------------------------------------------------------------------------------
Dialysis Adequacy (Clinical)......... 11 qualifying patients. N/A.................... 11-25 qualifying
patients.
Vascular Access Type: Catheter 11 qualifying patients. N/A.................... 11-25 qualifying
(Clinical). patients.
Vascular Access Type: Fistula 11 qualifying patients. N/A.................... 11-25 qualifying
(Clinical). patients.
Hypercalcemia (Clinical)............. 11 qualifying patients. N/A.................... 11-25 qualifying
patients.
NHSN Bloodstream Infection (Clinical) 11 qualifying patients. Before January 1, 2017. 11-25 qualifying
patients.
SRR (Clinical)....................... 11 index discharges.... N/A.................... 11-41 index discharges.
STrR (Clinical)...................... 10 patient-years at N/A.................... 10--21 patient-years at
risk. risk.
ICH CAHPS (Clinical)................. Facilities with 30 or Before January 1, 2017. N/A.
more survey-eligible
patients during the
calendar year
preceding the
performance period
must submit survey
results. Facilities
will not receive a
score if they do not
obtain a total of at
least 30 completed
surveys during the
performance period.
Anemia Management (Reporting)........ 11 qualifying patients. Before July 1, 2017.... N/A.
Mineral Metabolism (Reporting)....... 11 qualifying patients. Before July 1, 2017.... N/A.
Depression Screening and Follow-Up 11 qualifying patients. Before July 1, 2017.... N/A.
(Reporting).
Pain Assessment and Follow-Up 11 qualifying patients. Before July 1, 2017.... N/A.
(Reporting).
NHSN HCP Influenza Vaccination N/A.................... Before January 1, 2017. N/A.
(Reporting).
Ultrafiltration Rate (Reporting)..... 11 qualifying patients. Before July 1, 2017.... N/A.
Full-Season Influenza Vaccination 11 qualifying patients. Before January 1, 2017. N/A.
(Reporting).
----------------------------------------------------------------------------------------------------------------
8. Proposed Payment Reductions for the PY 2019 ESRD QIP
Section 1881(h)(3)(A)(ii) of the Act requires the Secretary to
ensure that the application of the scoring methodology results in an
appropriate distribution of payment reductions across facilities, such
that facilities achieving the lowest TPSs receive the largest payment
reductions. We propose that, for the PY 2019 ESRD QIP, a facility will
not receive a payment reduction if it achieves a minimum TPS that is
equal to or greater than the total of the points it would have received
if:
It performed at the performance standard for each clinical
measure; and
It received the number of points for each reporting
measure that corresponds to the 50th percentile of facility performance
on each of the PY 2017 reporting measures. We recognize that we are not
proposing a policy regarding the inclusion of measures for which we are
not able to establish a numerical value for the performance standard
through the rulemaking process before the beginning of the performance
period in the PY 2019 minimum TPS. We have not proposed such a policy
because no measures in the proposed PY 2019 measure set meet this
criterion. However, should we choose to adopt a clinical measure in
future rulemaking without the baseline data required to calculate a
performance standard before the beginning of the performance period, we
will propose a criterion accounting for that measure in the minimum TPS
for the applicable payment year at that time.
The PY 2017 program is the most recent year for which we will have
calculated final measure scores before the beginning of the proposed
performance period for PY 2019 (that is, CY 2017). Because we have not
yet calculated final measure scores, we are unable to determine the
50th percentile of facility performance on the PY 2017 reporting
measures. We will publish that value in the CY 2017 ESRD PPS final rule
once we have calculated final measure scores for the PY 2017 program.
Section 1881(h)(3)(A)(ii) of the Act requires that facilities
achieving the lowest TPSs receive the largest payment reductions. In
the CY 2014 ESRD PPS final rule (78 FR 72223 through 72224), we
finalized a payment reduction scale for PY 2016 and future payment
years: for every 10 points a facility falls below the minimum TPS, the
facility would receive an additional 0.5 percent reduction on its ESRD
PPS payments for PY 2016 and future payment years, with a maximum
reduction of 2.0 percent. We are not proposing any changes to this
policy for the PY 2019 ESRD QIP.
Because we are not yet able to calculate the performance standards
for each of the clinical measures, we are also not able to calculate a
proposed minimum TPS at this time. We will publish the minimum TPS,
based on data from CY 2015 and the first part of CY 2016, in the CY
2017 ESRD PPS final rule.
We seek comments on this proposal.
H. Future Achievement Threshold Policy Under Consideration
Under our current methodology, we set performance standards,
achievement thresholds, and benchmarks for the clinical measures at the
50th, 15th, and 90th percentiles, respectively, of national performance
on the measure during the baseline period (77 FR 67500 through 67502).
As we continue to refine ESRD QIP's policies, we are evaluating
different methods of ensuring that facilities strive for continuous
improvement in their delivery of care to patients with ESRD. For future
rulemaking, we are considering increasing the achievement threshold
from the 15th percentile to the 25th percentile of national performance
during the baseline period. We believe this increase in the achievement
threshold will add additional incentives for facilities to improve
performance, thereby improving patient outcomes and
[[Page 37852]]
quality of care. We have analyzed the impact of this policy change on
facility payment reductions using the same data used to calculate the
PY 2018 minimum TPS. The full results of this analysis can be found at
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html.
We invite comment on this policy that we are considering for
adoption in the ESRD QIP in the future.
I. Monitoring Access to Dialysis Facilities
In the CY 2015 ESRD PPS final rule, we finalized our commitment to
conduct a study to determine the impact of adopting the Standardized
Readmission Ratio (SRR) and Standardized Transfusion Ratio clinical
measures on access to care, and stated that we would make further
details about the study and its methodology available to the public for
review (79 FR 66189). We intend to publish the methodology for this
study in the second half of the year, and encourage all interested
parties to review this methodology and submit any comments using the
process outlined on the Web page.
IV. Advancing Health Information Exchange
HHS has a number of initiatives designed to improve health and
health care quality through the adoption of health information
technology and nationwide health information exchange. As discussed in
the August 2013 Statement ``Principles and Strategies for Accelerating
Health Information Exchange'' (available at http://www.healthit.gov/sites/default/files/acceleratinghieprinciples_strategy.pdf), HHS
believes that all individuals, their families, their healthcare and
social service providers, and payers should have consistent and timely
access to health information in a standardized format that can be
securely exchanged between the patient, providers, and others involved
in the individual's care. Health IT that facilitates the secure,
efficient and effective sharing and use of health-related information
when and where it is needed is an important tool for settings across
the continuum of care, including ESRD facilities.
The Office of the National Coordinator for Health Information
Technology (ONC) has released a document entitled ``Connecting Health
and Care for the Nation: A Shared Nationwide Interoperability Roadmap
Draft Version 1.0 (draft Roadmap) (available at http://www.healthit.gov/sites/default/files/nationwide-interoperability-roadmap-draft-version-1.0.pdf) which describes barriers to
interoperability across the current health IT landscape, the desired
future state that the industry believes will be necessary to enable a
learning health system, and a suggested path for moving from the
current state to the desired future state. In the near term, the draft
Roadmap focuses on actions that will enable a majority of individuals
and providers across the care continuum to send, receive, find and use
a common set of electronic clinical information at the nationwide level
by the end of 2017. Moreover, the vision described in the draft Roadmap
significantly expands the types of electronic health information,
information sources and information users well beyond clinical
information derived from electronic health records (EHRs). This shared
strategy is intended to reflect important actions that both public and
private sector stakeholders can take to enable nationwide
interoperability of electronic health information such as: (1)
Establishing a coordinated governance framework and process for
nationwide health IT interoperability; (2) improving technical
standards and implementation guidance for sharing and using a common
clinical data set; (3) enhancing incentives for sharing electronic
health information according to common technical standards, starting
with a common clinical data set; and (4) clarifying privacy and
security requirements that enable interoperability.
In addition, ONC has released the draft version of the 2015
Interoperability Standards Advisory (available at http://www.healthit.gov/standards-advisory), which provides a list of the best
available standards and implementation specifications to enable
priority health information exchange functions. Providers, payers, and
vendors are encouraged to take these ``best available standards'' into
account as they implement interoperable health information exchange
across the continuum of care.
We encourage stakeholders to utilize health information exchange
and certified health IT to effectively and efficiently help providers
improve internal care delivery practices, support management of care
across the continuum, enable the reporting of electronically specified
clinical quality measures, and improve efficiencies and reduce
unnecessary costs. As adoption of certified health IT increases and
interoperability standards continue to mature, HHS will seek to
reinforce standards through relevant policies and programs.
V. Collection of Information Requirements
A. Legislative Requirement for Solicitation of Comments
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval.
In order to fairly evaluate whether an information collection
requirement should be approved by OMB, section 3506(c)(2)(A) of the
Paperwork Reduction Act of 1995 requires that we solicit comment on the
following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
B. Requirements in Regulation Text
In sections II.B.1.d.ii, II.B.1.d.iii, II.B.3, and II.B.4 of this
proposed rule, we are proposing changes to regulatory text for the ESRD
PPS in CY 2016. However, the changes that are being proposed do not
impose any new information collection requirements.
C. Additional Information Collection Requirements
This proposed rule does not impose any new information collection
requirements in the regulation text, as specified above. However, this
proposed rule does make reference to several associated information
collections that are not discussed in the regulation text contained in
this document. The following is a discussion of these information
collections.
1. ESRD QIP
a. Wage Estimates
In previous rulemaking, we used the mean hourly wage of a
registered nurse as the basis of the wage estimates for all collection
of information calculations in the ESRD QIP (for example, 77 FR 67521).
However, we believe that reporting data for the ESRD QIP measures can
be accomplished by other administrative staff within the dialysis
facility. The Bureau of Labor Statistiscs (the Bureau) is ``the
principal Federal agency responsible for measuring labor market
activity, working conditions, and
[[Page 37853]]
price changes in the economy.'' \10\ Acting as an independent agency,
the Bureau provides objective information not only for the government,
but also for the public. The Bureau's National Occupational Employment
and Wage Estimate describes Medical Records and Health Information
Technicians as those responsible for organizing and managing health
information data.\11\ Therefore, we believe it is reasonable assume
these individuals would be tasked with submitting measure data to
CROWNWeb rather than a Registered Nurse, whose duties are centered on
providing and coordinating care for patients.\12\ The mean hourly wage
of a Medical Records and Health Information Technician is $18.68 per
hour.\13\ Under OMB Circular 76-A, in calculating direct labor,
agencies should not only include salaries and wages, but also ``other
entitlements'' such as fringe benefits.\14\ This Circular provides that
the civilian position full fringe benefit cost factor is 36.25 percent.
Therefore, using these assumptions, we estimate an hourly labor cost of
$25.45 as the basis of the wage estimates for all collection of
information calculations in the ESRD QIP.
---------------------------------------------------------------------------
\10\ http://www.bls.gov/bls/infohome.htm.
\11\ http://www.bls/gov/ooh/healthcare/medical-records-and-health-information-technicians.htm.
\12\ http://www.bls.gov/ooh/healthcare/registered-nurses.htm.
\13\ http://www,bls.gov/ooh/healthcare/medical-records-and-health-information-technicians.html.
\14\ http://www.whitehouse.gov/omb/circulars_a076_a76_incl_tech_correction.
---------------------------------------------------------------------------
b. Changes in Time Required To Submit Data Based on Proposed Reporting
Requirements
In previous rulemaking, we estimated that data entry associated
with the ESRD QIP took approximately 5 minutes per data element to
complete (for example, 77 FR 67521). However, a large number of
facilities now submit data using the batch submission process, which
allows facilities to submit data extracted from their internal
Electronic Health Records (EHRs) directly to CROWNWeb. Because the
batch submission process can be automated with very little human
intervention, we believe the overall time required to submit measure
data using CROWNWeb is substantially less than previously estimated. We
are therefore revising our estimate to be 2.5 minutes per data element
submitted, a change of -2.5 minutes, which takes into account the small
percentage of data that is manually reported, as well as the human
interventions required to modify batch submission files such that they
meet CROWNWeb's internal data validation requirements.
c. Data Validation Requirements for the PY 2018 ESRD QIP
Section III.F.4 in this proposed rule outlines our data validation
proposals for PY 2018. Specifically, we propose to randomly sample
records from 300 facilities as part of our continuing pilot data-
validation program. Each sampled facility would be required to produce
approximately 10 records, and the sampled facilities will be reimbursed
by our validation contractor for the costs associated with copying and
mailing the requested records. The burden associated with these
validation requirements is the time and effort necessary to submit the
requested records to a CMS contractor. We estimate that it will take
each facility approximately 2.5 hours to comply with this requirement.
If 300 facilities are asked to submit records, we estimate that the
total combined annual burden for these facilities will be 750 hours
(300 facilities x 2.5 hours). Since we anticipate that Medical Records
and Health Information Technicians or similar administrative staff
would submit this data, we estimate that the aggregate cost of the
CROWNWeb data validation would be $19,088 (750 hours x $25.45/hour)
total or $64 ($19,088/300 facilities) per facility in the sample. The
burden associated with these requirements is captured in an information
collection request currently available for review and comment, OMB
control number 0938-NEW.
Under the proposed continuation of the feasibility study for
validating data reported to the NHSN Dialysis Event Module, we propose
to randomly select nine facilities to provide CMS with a quarterly list
of all positive blood cultures drawn from their patients during the
quarter, including any positive blood cultures collected on the day of,
or the day following, a facility patient's admission to a hospital. A
CMS contractor will review the lists to determine if dialysis events
for the patients in question were accurately reported to the NHSN
Dialysis Event Module. If we determine that additional medical records
are needed to validate dialysis events, facilities will be required to
provide those records within 60 days of a request for this information.
We estimate fewer than ten respondents in a 12-month period; therefore,
in accordance with the implementing regulations of the PRA at 44 U.S.C.
3502(3)(A)(i), the burden associated with the aforementioned
requirements is exempt.
d. Proposed Ultrafiltration Rate Reporting Measure
We proposed to include, beginning with the PY 2019 ESRD QIP, a
reporting measure requiring facilities to report in CROWNWeb an
ultrafiltration rate at least once per month for each qualifying
patient. We estimate the burden associated with this measure to be the
time and effort necessary for facilities to collect and submit the
information required for the ultrafiltration rate reporting measure. We
estimated that approximately 6,264 facilities will treat 773,737 ESRD
patients nationwide in PY 2019. The ultrafiltration rate reporting
measure has 12 elements per patient per year, and we estimate it will
take facilities approximately 0.042 hours (2.5 minutes) to submit data
for each qualifying patient each month. Therefore, the estimated total
annual burden associated with reporting this measure in PY 2019 is
approximately 389,963 hours (773,737 ESRD patients nationwide x 12 data
elements/year x 0.042 hours per element), or 62 hours per facility. We
anticipate that Medical Records and Health Information Technicians or
similar administrative staff will be responsible for this reporting. We
therefore believe the cost for all ESRD facilities to comply with the
reporting requirements associated with the ultrafiltration rate
reporting measure would be approximately $9,924,558 (389,963 x $25.45/
hour), or $1,584 per facility. The burden associated with these
requirements is captured in an information collection request currently
available for review and comment, OMB control number 0938--NEW.
e. Proposed Full-Season Influenza Vaccination Reporting Measure
We proposed to include, beginning with the PY 2019 ESRD QIP, a
measure requiring facilities to report patient influenza vaccination
status annually using the CROWNWeb system. We estimate the burden
associated with this measure to be the time and effort necessary for
facilities to collect and submit the information required for this
measure. We estimated that approximately 6,264 facilities will treat
773,737 ESRD patients nationwide in PY 2019. The Full-Season Influenza
Vaccination reporting measure has just 1 element per patient per year,
and we estimate it will take facilities approximately 0.042 hours, or
2.5 minutes, to submit this data for each patient on an annual basis.
Therefore, the estimated total annual burden associated with reporting
this measure in PY 2019 is approximately 32,497
[[Page 37854]]
hours (737,773 ESRD patients nationwide x 1 element/year x 0.042 hours/
element), or 5 hours per facility. Again, we anticipate that Medical
Records and Health Information Technicians or similar administrative
staff will be responsible for this reporting. In total, we stated that
we believe the cost for all ESRD facilities to comply with the
reporting requirements associated with the Full-Season Influenza
Vaccination reporting measure would be approximately $827,049 (32,497
hours x $25.45/hour), or $132 per facility. The burden associated with
these requirements is captured in an information collection request
currently available for review and comment, OMB control number 0938--
NEW.
VI. Response to Comments
Because of the large number of public comments we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
VII. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review (September 30, 1993),
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act,
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22,
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4,
1999) and the Congressional Review Act (5 U.S.C. 804(2).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) Having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local or tribal governments or communities (also
referred to as economically significant); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order.
A regulatory impact analysis (RIA) must be prepared for major rules
with economically significant effects ($100 million or more in any 1
year). This rule is not economically significant within the meaning of
section 3(f)(1) of the Executive Order, since it does not meet the $100
million threshold. However, OMB has determined that the actions are
significant within the meaning of section 3(f)(4) of the Executive
Order. Therefore, OMB has reviewed these proposed regulations, and the
Departments have provided the following assessment of their impact. We
solicit comments on the regulatory impact analysis provided.
2. Statement of Need
This rule proposes a number of routine updates and several policy
changes to the ESRD PPS in CY 2016. The proposed routine updates
include the CY 2016 wage index values, the wage index budget-neutrality
adjustment factor, and outlier payment threshold amounts. Other
proposed policy changes include implementation of section
1881(b)(14)(F)(i)(I), as amended by section 217(b)(2) of PAMA, which
requires a 1.25 percent decrease to the payment update as discussed in
section II.B.2.a.iv of this rule, the delay in payment for oral-only
drugs under the ESRD PPS until January 1, 2025 as required by section
204 of ABLE, the implementation of a geographic facility adjustment
paid to rural facilities, and the updated payment multipliers based
upon the regression analysis discussed in section II.B.1 of this
proposed rule. Failure to publish this proposed rule would result in
ESRD facilities not receiving appropriate payments in CY 2016.
This rule proposes to implement requirements for the ESRD QIP,
including a proposal to adopt a measure set for the PY 2019 program, as
directed by section 1881(h) of the Act. Failure to propose requirements
for the PY 2019 ESRD QIP would prevent continuation of the ESRD QIP
beyond PY 2018. In addition, proposing requirements for the PY 2019
ESRD QIP provides facilities with more time to review and fully
understand new measures before their implementation in the ESRD QIP.
3. Overall Impact
We estimate that the proposed revisions to the ESRD PPS will result
in an increase of approximately $20 million in payments to ESRD
facilities in CY 2016, which includes the amount associated with
updates to outlier threshold amounts, updates to the wage index,
changes in the CBSA delineations, changes in the labor-related share,
and changes involved with the refinement.
For PY 2018, we anticipate that the new burdens associated with the
collection of information requirements will be approximately $19
thousand, totaling an overall impact of approximately $11.8 million as
a result of the PY 2018 ESRD QIP.\15\ For PY 2019, we estimate that the
proposed requirements related to the ESRD QIP will cost approximately
$10.7 million dollars, and the payment reductions will result in a
total impact of approximately $3.8 million across all facilities,
resulting in a total impact from the proposed ESRD QIP of approximately
$14.6 million.
---------------------------------------------------------------------------
\15\ We note that the aggregate impact of the PY 2018 ESRD QIP
was included in the CY 2015 ESRD PPS final rule (79 FR 66256 through
66258). The previously finalized aggregate impact of $11.8 million
reflects the PY 2018 estimated payment reductions and the collection
of information requirements for the NHSN Healthcare Personnel
Influenza Vaccination reporting measure.
---------------------------------------------------------------------------
B. Detailed Economic Analysis
1. CY 2016 End-Stage Renal Disease Prospective Payment System
a. Effects on ESRD Facilities
To understand the impact of the changes affecting payments to
different categories of ESRD facilities, it is necessary to compare
estimated payments in CY 2015 to estimated payments in CY 2016. To
estimate the impact among various types of ESRD facilities, it is
imperative that the estimates of payments in CY 2015 and CY 2016
contain similar inputs. Therefore, we simulated payments only for those
ESRD facilities for which we are able to calculate both current
payments and new payments.
For this proposed rule, we used the December 2014 update of CY 2014
National Claims History file as a basis for Medicare dialysis
treatments and payments under the ESRD PPS. We updated the 2014 claims
to 2015 and 2016 using various updates. The
[[Page 37855]]
updates to the ESRD PPS base rate are described in section II.B.2 of
this proposed rule. Table 20 shows the impact of the estimated CY 2016
ESRD payments compared to estimated payments to ESRD facilities in CY
2015.
Table 20--Impact of Proposed Changes in Payments to ESRD Facilities for CY 2016 Proposed Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
Effect of Effect of
2016 changes Effect of total 2016
Effect of in wage Effect of 2016 proposed
Number of 2016 indexes, 2016 proposed changes
Number of treatments changes in CBSA changes in refinement (refinement
Facility type facilities (in outlier (percent) payment changes to and routine
millions) policy designations rate update payment updates to
(percent) and labor (percent) rate the payment
share (percent) rate)
(percent) (percent)
A B C D E F G
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Facilities.............................................. 6,264 40.0 0.1 0.0 0.15 0.0 0.3
Type:
Freestanding............................................ 5,812 37.7 0.1 0.0 0.15 0.0 0.2
Hospital based.......................................... 452 2.3 0.1 0.1 0.16 0.1 0.5
Ownership Type:
Large dialysis organization............................. 4,380 28.5 0.1 -0.1 0.15 0.1 0.3
Regional chain.......................................... 926 6.0 0.1 0.2 0.15 -0.3 0.2
Independent............................................. 584 3.6 0.1 0.1 0.15 -0.1 0.2
Hospital based \1\...................................... 374 1.9 0.1 0.0 0.16 0.4 0.7
Geographic Location:
Rural................................................... 1,239 5.9 0.1 -1.2 0.15 1.0 0.0
Urban................................................... 5,025 34.1 0.1 0.2 0.15 -0.2 0.3
Census Region:
East North Central...................................... 1,036 5.8 0.1 -0.3 0.15 0.2 0.1
East South Central...................................... 518 3.0 0.1 -1.2 0.15 0.7 -0.2
Middle Atlantic......................................... 680 4.9 0.1 0.9 0.15 -0.3 0.8
Mountain................................................ 359 2.0 0.1 -0.1 0.15 -0.1 0.1
New England............................................. 182 1.3 0.1 1.1 0.15 -0.6 0.7
Pacific \2\............................................. 760 5.6 0.1 1.4 0.15 -0.8 0.8
Puerto Rico and Virgin Islands.......................... 47 0.3 0.1 -4.0 0.15 -0.2 -3.9
South Atlantic.......................................... 1,386 9.3 0.1 -0.4 0.15 0.3 0.2
West North Central...................................... 455 2.1 0.1 -0.6 0.15 0.4 0.0
West South Central...................................... 841 5.8 0.1 -0.7 0.15 0.2 -0.2
Facility Size:
Less than 4,000 treatments \3\.......................... 1,305 3.5 0.1 -0.3 0.15 0.4 0.3
4,000 to 9,999 treatments............................... 2,239 10.8 0.1 -0.3 0.15 0.1 0.1
10,000 or more treatments............................... 2,514 25.3 0.1 0.2 0.15 -0.1 0.3
Unknown................................................. 206 0.3 0.1 0.1 0.15 -0.2 0.1
Percentage of Pediatric Patients:
Less than 2%............................................ 6,156 39.6 0.1 0.0 0.15 0.0 0.3
Between 2% and 19%...................................... 42 0.4 0.1 -0.1 0.15 0.4 0.5
Between 20% and 49%..................................... 14 0.0 0.1 -0.2 0.15 0.4 0.4
More than 50%........................................... 52 0.0 0.1 0.0 0.15 0.5 0.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes hospital-based ESRD facilities not reported to have large dialysis organization or regional chain ownership.
\2\ Includes Facilities located in Guam, American Samoa, and the Northern Mariana Islands.
\3\ Of the 1,305 Facilities with less than 4,000 treatments, only 385 qualify for the low-volume adjustment. The low-volume adjustment is mandated by
Congress, and is not applied to pediatric patients. The impact to these Low volume Facilities is a 7.0 percent increase in payments.
Note: Totals do not necessarily equal the sum of rounded parts, as percentages are multiplicative, not additive.
Column A of the impact table indicates the number of ESRD
facilities for each impact category and column B indicates the number
of dialysis treatments (in millions). The overall effect of the
proposed changes to the outlier payment policy described in section
II.B.2.c of this proposed rule is shown in column C. For CY 2016, the
impact on all ESRD facilities as a result of the changes to the outlier
payment policy will be a 0.1 percent increase in estimated payments.
Nearly all ESRD facilities are anticipated to experience a positive
effect in their estimated CY 2016 payments as a result of the proposed
outlier policy changes.
Column D shows the effect of the proposed CY 2016 wage indices, and
the final year of the transitions for the implementation of both the
new CBSA delineations and the labor-related share. Facilities located
in the census region of Puerto Rico and the Virgin Islands would
receive a 4.0 percent decrease in estimated payments in CY 2016. Since
most of the facilities in this category are located in Puerto Rico, the
decrease is primarily due to the change in the labor-related share. The
other categories of types of facilities in the impact table show
changes in estimated payments ranging from a 1.2 percent decrease to a
1.4 percent increase due to these proposed updates.
Column E shows the effect of the ESRD PPS payment rate update of
0.15 percent, which reflects the proposed ESRDB market basket
percentage increase factor for CY 2016 of 2.0 percent, the 1.25 percent
reduction as required by the section 1881(b)(14)(F)(i)(I) of the Act,
and the MFP adjustment of 0.6 percent.
Column F shows the effect of the ESRD PPS refinement as discussed
in section II.B.1. While the overall estimated impact of the refinement
is 0.0 percent, the impact by categories ranges from a 0.8 percent
decrease to a 1.0 percent increase.
Column G reflects the overall impact (that is, the effects of the
proposed outlier policy changes, the proposed wage index, the effect of
the change in CBSA delineations, the effect of the change in the labor-
related share, the effect of the payment rate update, and the effect of
the refinement). We expect that overall ESRD facilities will experience
a 0.3 percent increase in estimated payments in 2016. ESRD facilities
in Puerto Rico and the Virgin Islands are expected to receive a 3.9
percent decrease in their estimated payments in CY 2016. This larger
[[Page 37856]]
decrease is primarily due to the negative impact of the change in the
labor-related share. The other categories of types of facilities in the
impact table show impacts ranging from a decrease of 0.2 percent to an
increase of 0.8 percent in their 2016 estimated payments.
b. Effects on Other Providers
Under the ESRD PPS, Medicare pays ESRD facilities a single bundled
payment for renal dialysis services, which may have been separately
paid to other providers, (for example, laboratories, durable medical
equipment suppliers, and pharmacies) by Medicare prior to the
implementation of the ESRD PPS. Therefore, in CY 2016, we estimate that
the proposed ESRD PPS will have zero impact on these other providers.
c. Effects on the Medicare Program
We estimate that Medicare spending (total Medicare program
payments) for ESRD facilities in CY 2016 will be approximately $8.7
billion. This estimate takes into account a projected increase in fee-
for-service Medicare dialysis beneficiary enrollment of 1.5 percent in
CY 2016.
d. Effects on Medicare Beneficiaries
Under the ESRD PPS, beneficiaries are responsible for paying 20
percent of the ESRD PPS payment amount. As a result of the projected
0.3 percent overall increase in the proposed ESRD PPS payment amounts
in CY 2016, we estimate that there will be an increase in beneficiary
co-insurance payments of 0.3 percent in CY 2016, which translates to
approximately $10 million.
e. Alternatives Considered
1. CY 2016 ESRD PPS
In section II.B.1.c.i of this proposed rule, we propose updated
payment multipliers for five age groups resulting from our regression
analysis. In section II.B.2.d.ii, we propose a regression budget-
neutrality adjustment to account for the overall effects of the
refinement. We are proposing a 4 percent reduction (that is, a factor
of 0.959703) to the ESRD PPS base rate to account for the additional
dollars paid to facilities through the payment adjustments and indicate
that a significant portion of additional impact of the adjusters on the
base rate arises from changes in the age adjustments. To mitigate some
of the reduction, we considered reducing the number of age categories
to three and providing a payment adjustment for only those patients in
the youngest (18-44) and oldest (80+) age groups. We did not adopt this
approach because while it would reduce the impact of the age
adjustments on the base rate, it would also significantly reduce the
explanatory power of the system and reduce payments to facilities with
patients who are between the ages of 44 through 79, that is,
approximately 75 percent of patients.
Also, in section II.B.1.d.ii of this proposed rule, we are
proposing to modify the eligibility criteria for the low-volume payment
adjustment by excluding facilities of common ownership that are located
within 5 road miles from one another. We considered proposing a
geographic proximity criterion of 10 road miles; however, this approach
negatively impacted rural facilities which are important to ensure
access of essential renal dialysis services.
2. End-Stage Renal Disease Quality Incentive Program
a. Effects of the PY 2019 ESRD QIP
The ESRD QIP provisions are intended to prevent possible reductions
in the quality of ESRD dialysis facility services provided to
beneficiaries as a result of payment changes under the ESRD PPS. The
methodology that we are proposing to use to determine a facility's TPS
for PY 2019 is described in section III.G.9 of this proposed rule. Any
reductions in ESRD PPS payments as a result of a facility's performance
under the PY 2019 ESRD QIP would affect the facility's reimbursement
rates in CY 2019.
We estimate that, of the total number of dialysis facilities
(including those not receiving a TPS), approximately 8 percent or 495
of the facilities would likely receive a payment reduction in PY 2019.
Facilities that do not receive a TPS are not eligible for a payment
reduction.
In conducting our impact assessment, we have assumed that there
will be an initial count of 6,264 dialysis facilities paid under the
ESRD PPS. Table 21 shows the overall estimated distribution of payment
reductions resulting from the PY 2019 ESRD QIP.
Table 21--Estimated Distribution of PY 2019 ESRD QIP Payment Reductions
----------------------------------------------------------------------------------------------------------------
Cumulative Cumulative
Percentage reduction Frequency Percent frequency percent
----------------------------------------------------------------------------------------------------------------
0....................................... 5509 91.76 5509 91.76
0.5..................................... 430 7.16 5939 98.92
1....................................... 41 0.68 5980 99.60
1.5..................................... 18 0.30 5998 99.90
2....................................... 6 0.10 6004 100.00
----------------------------------------------------------------------------------------------------------------
Note:This table excludes 260 facilities that we estimate will not receive a payment reduction because they will
not report enough data to receive a Total Performance Score.
To estimate whether or not a facility would receive a payment reduction
in PY 2019, we scored each facility on achievement and improvement on
several measures we have previously finalized and for which there were
available data from CROWNWeb and Medicare claims. Measures used for the
simulation are shown in Table 22.
Table 22--Data Used To Estimate PY 2019 ESRD QIP Payment Reductions
----------------------------------------------------------------------------------------------------------------
Period of time used to
calculate achievement
Measure thresholds, performance Performance Period
standards, benchmarks, and
improvement thresholds
----------------------------------------------------------------------------------------------------------------
Vascular Access Type:
% Fistula......................... Jan 2013--Dec 2013............ Jan 2014--Dec 2014.
% Catheter........................ Jan 2013--Dec 2013............ Jan 2014--Dec 2014.
Dialysis Adequacy..................... Jan 2013--June 2013........... July 2013--Dec 2013.
Hypercalcemia......................... Jan 2013--Dec 2013............ Jan 2014--Dec 2014.
[[Page 37857]]
SRR................................... Jan 2012- Dec 2012............ Jan 2013--Dec 2013.
STrR.................................. Jan 2012- Dec 2012............ Jan 2013--Dec 2013.
----------------------------------------------------------------------------------------------------------------
Clinical measure topic areas with less than 11 cases for a facility
were not included in that facility's Total Performance Score. Each
facility's Total Performance Score was compared to the estimated
minimum Total Performance Score and the payment reduction table found
in section III.G.9 of this proposed rule. Facility reporting measure
scores were estimated using available data from CY 2014. Facilities
were required to have a score on at least one clinical and one
reporting measure in order to receive a Total Performance Score.
To estimate the total payment reductions in PY 2019 for each
facility resulting from this proposed rule, we multiplied the total
Medicare payments to the facility during the one year period between
January 2014 and December 2014 by the facility's estimated payment
reduction percentage expected under the ESRD QIP, yielding a total
payment reduction amount for each facility: (Total ESRD payment in
January 2014 through December 2014 times the estimated payment
reduction percentage). For PY 2014, the total payment reduction for the
495 facilities estimated to receive a reduction is approximately $3.85
million ($3,859,742). Further, we estimate that the total costs
associated with the collection of information requirements for PY 2019
described in section III.C.1 of this proposed rule would be
approximately $10.7 million for all ESRD facilities. As a result, we
estimate that ESRD facilities will experience an aggregate impact of
approximately $14.6 million ($10,751,607 + $3,859,742 = $14,611,249) in
PY 2019, as a result of the PY 2019 ESRD QIP.
Table 23 below shows the estimated impact of the finalized ESRD QIP
payment reductions to all ESRD facilities for PY 2019. The table
estimates the distribution of ESRD facilities by facility size (both
among facilities considered to be small entities and by number of
treatments per facility), geography (both urban/rural and by region),
and by facility type (hospital based/freestanding facilities). Given
that the time periods used for these calculations will differ from
those we are proposing to use for the PY 2019 ESRD QIP, the actual
impact of the PY 2019 ESRD QIP may vary significantly from the values
provided here.
TABLE 23--IMPACT OF PROPOSED QIP PAYMENT REDUCTIONS TO ESRD FACILITIES IN PY 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of
Number of Number of facilities Payment reduction
Number of treatments 2013 facilities with expected to (percent change
facilities (in millions) QIP score receive a in total ESRD
payment reduction payments)
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Facilities........................................... 6,264 40.0 6,004 495 -0.04
Facility Type:
Freestanding......................................... 5,812 37.7 5,614 464 -0.04
Hospital-based....................................... 452 2.3 390 31 -0.06
Ownership Type:
Large Dialysis....................................... 4,380 28.5 4,259 356 -0.04
Regional Chain....................................... 926 6.0 888 55 -0.03
Independent.......................................... 584 3.6 538 56 -0.07
Hospital-based (non-chain)........................... 374 1.9 319 28 -0.07
Facility Size:
Large Entities....................................... 5,306 34.5 5,147 411 -0.04
Small Entities \1\................................... 958 5.5 857 84 -0.07
Rural Status:
(1) Yes.............................................. 1,332 6.5 1,257 66 -0.03
(2) No............................................... 4,932 33.5 4,747 429 -0.05
Census Region:
Northeast............................................ 861 6.2 825 50 -0.03
Midwest.............................................. 1,490 7.9 1,386 112 -0.05
South................................................ 2,744 18.1 2,655 243 -0.05
West................................................. 1,112 7.5 1,085 77 -0.04
US Territories \2\................................... 57 0.4 53 13 -0.16
Census Division:
East North Central................................... 1,036 5.8 962 86 -0.05
East South Central................................... 518 3.0 500 48 -0.06
Middle Atlantic...................................... 680 4.9 658 43 -0.03
Mountain............................................. 359 2.0 348 25 -0.04
New England.......................................... 182 1.3 167 7 -0.02
Pacific.............................................. 760 5.6 744 53 -0.04
South Atlantic....................................... 1,386 9.3 1,337 143 -0.06
West North Central................................... 455 2.1 424 26 -0.03
West South Central................................... 841 5.8 818 52 -0.03
US Territories\2\.................................... 47 0.3 46 12 -0.17
Facility Size (# of total treatments):
Less than 4,000 treatments........................... 1,305 3.5 1,185 109 -0.07
4,000-9,999 treatments............................... 2,239 10.8 2,211 166 -0.04
[[Page 37858]]
Over 10,000 treatments............................... 2,514 25.3 2,491 203 -0.04
Unknown.............................................. 206 0.3 117 17 -0.11
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Small Entities include hospital-based and satellite facilities and non-chain facilities based on DFC self-reported status.
\2\ Includes Puerto Rico and Virgin Islands.
\3\ Based on claims and CROWNWeb data through December 2014.
b. Alternatives Considered
In section III.G.2.c.ii of this proposed rule, we are proposing to
adopt the Full-Season Influenza Vaccination reporting measure. Under
this proposed measure, data on patient immunization status would be
entered into CROWNWeb for each qualifying patient treated at the
facility during the performance period. We considered proposing to
collect patient immunization data using the CDC's Surveillance for
Dialysis Patient Influenza Vaccination module within the NHSN; however,
the proposed measure's data sources are administrative claims and
``electronic clinical data'' which the Measure Justification Form
explains will be collected via CROWNWeb (MAP #XDEFM). Because the
measure specifications reviewed by the Measures Application Partnership
do not include NHSN as a data source for this measure, we have decided
not to propose to use the NHSN system to collect patient-level
influenza vaccination data for this measure at this time.
We ultimately decided to have facilities report data for this
measure in CROWNWeb rather than using an alternative data source, for
two main reasons. First, the data elements needed for this measure have
already been developed in CROWNWeb and will appear in a new release
soon. Second, facilities are already familiar with the use and
functionality of CROWNWeb because they are using it to report data for
other measures in the ESRD QIP, and we believe that familiarity with
CROWNWeb will reduce the burden of reporting data for the Full Season
Influenza reporting measure.
C. Accounting Statement
As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars_a004_a-4), in Table 24 below, we have
prepared an accounting statement showing the classification of the
transfers and costs associated with the various provisions of this
proposed rule.
TABLE 24--Accounting Statement: Classification of Estimated Transfers
and Costs/Savings
------------------------------------------------------------------------
------------------------------------------------------------------------
ESRD PPS for CY 2016
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers......... $20 million.
From Whom to Whom...................... Federal government to ESRD
providers.
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Increased Beneficiary Co-insurance $ 10 million.
Payments.
From Whom to Whom...................... Beneficiaries to ESRD
providers.
------------------------------------------------------------------------
ESRD QIP for PY 2018 \16\
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers......... $-11.6 million.
------------------------------------------------------------------------
Category Costs
------------------------------------------------------------------------
Annualized Monetized ESRD Provider $19 thousand.
Costs.
------------------------------------------------------------------------
ESRD QIP for PY 2019
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers......... $-3.8 million.
From Whom to Whom...................... Federal government to ESRD
providers.
------------------------------------------------------------------------
Category Costs
------------------------------------------------------------------------
Annualized Monetized ESRD Provider $10.7 million.
Costs.
------------------------------------------------------------------------
\16\ We note that the aggregate impact of the PY 2018 ESRD QIP was
included in the CY 2015 ESRD PPS final rule (79 FR 66256 through
66258). The values presented here capture those previously finalized
impacts plus the collection of information requirements related for PY
2018 presented in this notice of proposed rulemaking.
[[Page 37859]]
VIII. Regulatory Flexibility Act Analysis
The Regulatory Flexibility Act (September 19, 1980, Pub. L. 96-354)
(RFA) requires agencies to analyze options for regulatory relief of
small entities, if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, nonprofit organizations, and small
governmental jurisdictions. Approximately 15 percent of ESRD dialysis
facilities are considered small entities according to the Small
Business Administration's (SBA) size standards, which classifies small
businesses as those dialysis facilities having total revenues of less
than $38.5 million in any 1 year. Individuals and States are not
included in the definitions of a small entity. For more information on
SBA's size standards, see the Small Business Administration's Web site
at http://www.sba.gov/content/small-business-size-standards (Kidney
Dialysis Centers are listed as 621492 with a size standard of $38.5
million).
We do not believe ESRD facilities are operated by small government
entities such as counties or towns with populations of 50,000 or less,
and therefore, they are not enumerated or included in this estimated
RFA analysis. Individuals and States are not included in the definition
of a small entity.
For purposes of the RFA, we estimate that approximately 15 percent
of ESRD facilities are small entities as that term is used in the RFA
(which includes small businesses, nonprofit organizations, and small
governmental jurisdictions). This amount is based on the number of ESRD
facilities shown in the ownership category in Table 20. Using the
definitions in this ownership category, we consider the 584 facilities
that are independent and the 374 facilities that are shown as hospital-
based to be small entities. The ESRD facilities that are owned and
operated by LDOs and regional chains would have total revenues of more
than $38.5 million in any year when the total revenues for all
locations are combined for each business (individual LDO or regional
chain), and are not, therefore, included as small entities.
For the ESRD PPS updates proposed in this rule, a hospital-based
ESRD facility (as defined by ownership type) is estimated to receive a
0.7 percent increase in payments for CY 2016. An independent facility
(as defined by ownership type) is also estimated to receive a 0.2
percent increase in payments for CY 2016.
We estimate that of the 495 ESRD facilities expected to receive a
payment reduction in the PY 2019 ESRD QIP, 84 are ESRD small entity
facilities. We present these findings in Table 21 (``Estimated
Distribution of PY 2019 ESRD QIP Payment Reductions'') and Table 23
(``Impact of Proposed QIP Payment Reductions to ESRD Facilities for PY
2019'') above. We estimate that the payment reductions will average
approximately $7,797 per facility across the 495 facilities receiving a
payment reduction, and $7,509 for each small entity facility. Using our
estimates of facility performance, we also estimated the impact of
payment reductions on ESRD small entity facilities by comparing the
total estimated payment reductions for 958 small entity facilities with
the aggregate ESRD payments to all small entity facilities. We estimate
that there are a total of 958 small entity facilities, and that the
aggregate ESRD PPS payments to these facilities would decrease 0.07
percent in PY 2019.
Therefore, the Secretary has determined that this proposed rule
would not have a significant economic impact on a substantial number of
small entities. We solicit comment on the RFA analysis provided.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. Any
such regulatory impact analysis must conform to the provisions of
section 603 of the RFA. For purposes of section 1102(b) of the Act, we
define a small rural hospital as a hospital that is located outside of
a metropolitan statistical area and has fewer than 100 beds. We do not
believe this proposed rule will have a significant impact on operations
of a substantial number of small rural hospitals because most dialysis
facilities are freestanding. While there are 139 rural hospital-based
dialysis facilities, we do not know how many of them are based at
hospitals with fewer than 100 beds. However, overall, the 139 rural
hospital-based dialysis facilities will experience an estimated 0.1
percent decrease in payments. As a result, this proposed rule is not
estimated to have a significant impact on small rural hospitals.
Therefore, the Secretary has determined that this proposed rule would
not have a significant impact on the operations of a substantial number
of small rural hospitals.
IX. Unfunded Mandates Reform Act Analysis
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2015, that
is approximately $144 million. This proposed rule does not include any
mandates that would impose spending costs on State, local, or Tribal
governments in the aggregate, or by the private sector, of $141
million.
X. Federalism Analysis
Executive Order 13132 on Federalism (August 4, 1999) establishes
certain requirements that an agency must meet when it promulgates a
proposed rule (and subsequent final rule) that imposes substantial
direct requirement costs on State and local governments, preempts State
law, or otherwise has Federalism implications. We have reviewed this
proposed rule under the threshold criteria of Executive Order 13132,
Federalism, and have determined that it will not have substantial
direct effects on the rights, roles, and responsibilities of States,
local or Tribal governments.
XI. Congressional Review Act
This proposed rule is subject to the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.) and has been transmitted to the Congress
and the Comptroller General for review.
In accordance with the provisions of Executive Order 12866, this
proposed rule was reviewed by the Office of Management and Budget.
XII. Files Available to the Public via the Internet
The Addenda for the annual ESRD PPS proposed and final rulemakings
will no longer appear in the Federal Register. Instead, the Addenda
will be available only through the Internet and is posted on the CMS
Web site at http://www.cms.gov/ESRDPayment/PAY/list.asp In addition to
the Addenda, limited data set (LDS) files are available for purchase at
http://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/LimitedDataSets/EndStageRenalDiseaseSystemFile.html. Readers who
experience any problems accessing the Addenda or LDS files, should
contact Michelle Cruse at (410) 786-7540.
List of Subjects in 42 CFR Part 413
Health facilities, Kidney diseases, Medicare, Reporting and
recordkeeping requirements.
[[Page 37860]]
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR chapter IV as follows:
PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR
END-STAGE RENAL DISEASE SERVICES; OPTIONAL PROSPECTIVELY DETERMINED
PAYMENT RATES FOR SKILLED NURSING FACILITIES
0
1. The authority citation for part 413 is revised to read as follows:
Authority: Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (i), and
(n), 1861(v), 1871, 1881, 1883 and 1886 of the Social Security Act
(42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a), (i), and (n),
1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww); and sec. 124 of
Pub.L. 106-113 (113 Stat. 1501A-332), sec. 3201 of Pub. L. 112-96
(126 Stat. 156), sec. 632 of Pub. L. 112-240 (126 Stat. 2354), sec.
217 of Pub. L. 113-93, and sec. 204 of Pub. L. 113-295.
0
2. Section 413.174 is amended by revising paragraph (f)(6) to read as
follows:
Sec. 413.174 Prospective rates for hospital based and independent
ESRD facilities.
* * * * *
(f) * * *
(6) Effective January 1, 2025, payment to an ESRD facility for
renal dialysis service drugs and biologicals with only an oral form
furnished to ESRD patients is incorporated within the prospective
payment system rates established by CMS in Sec. 413.230 and separate
payment will no longer be provided.
0
3. Section 413.232 is amended by--
0
A. Revising paragraph (c)(2).
0
B. Removing paragraph (d).
0
C. Redesignating paragraphs (e), (f), (g) and (h) as paragraphs (d),
(e), (f) and (g) respectively.
0
D. In newly redesignated paragraph (e), the reference ``paragraph (g)''
is removed and the reference ``paragraph (f)'' is added in its place.
0
E. In newly redesignated paragraph (g) introductory text, the reference
``paragraph (f)'' is removed and the reference ``paragraph (e)'' is
added in its place.
0
F. In newly redesignated paragraph (g)(1), the reference ``paragraph
(f)'' is removed and the reference ``paragraph (e)'' is added in its
place.
The revision reads as follows:
Sec. 413.232 Low-volume adjustment.
* * * * *
(c) * * *
(2) 5 miles or less from the ESRD facility in question.
* * * * *
0
4. Add Sec. 413.233 to read as follows:
Sec. 413.233 Rural facility adjustment.
CMS adjusts the base rate for facilities in rural areas, as defined
in Sec. 413.231(b)(2).
0
5. Add Sec. 413.234 to read as follows:
Sec. 413.234. Drug designation process.
(a) Definitions. For purposes of this section, the following
definitions apply:
ESRD PPS functional category. A distinct grouping of drugs or
biologicals, as determined by CMS, whose end action effect is the
treatment or management of a condition or conditions associated with
ESRD.
New injectable or intravenous product. An injectable or intravenous
product that is approved by the Food and Drug Administration under
section 505 of the Federal Food, Drug, and Cosmetic Act or section 351
of the Public Health Service Act, commercially available, assigned a
Healthcare Common Procedure Coding System code, and designated by CMS
as a renal dialysis service under Sec. 413.171.
Oral-only drug. A drug or biological with no injectable equivalent
or other form of administration other than an oral form.
(b) Effective January 1, 2016, new injectable or intravenous
products are included in the ESRD PPS bundled payment using the
following drug designation process--
(1) If the new injectable or intravenous product is used to treat
or manage a condition for which there is an ESRD PPS functional
category, the new injectable or intravenous product is considered
included in the ESRD PPS bundled payment and no separate payment is
available.
(2) If the new injectable or intravenous product is used to treat
or manage a condition for which there is not an ESRD PPS functional
category, the new injectable or intravenous product is not considered
included in the ESRD PPS bundled payment and the following steps occur:
(i) An existing ESRD PPS functional category is revised or a new
ESRD PPS functional category is added for the condition that the new
injectable or intravenous product is used to treat or manage;
(ii) The new injectable or intravenous product is paid for using
the transitional drug add-on payment adjustment described in paragraph
(c) of this section; and
(iii) The new injectable or intravenous product is added to the
ESRD PPS bundled payment following payment of the transitional drug
add-on payment adjustment.
(c) Transitional drug add-on payment adjustment. (1) A new
injectable or intravenous product that is not considered included in
the ESRD PPS base rate is paid for using a transitional drug add-on
payment adjustment, which is based on ASP pricing methodology.
(2) The transitional drug add-on payment adjustment is paid until
sufficient claims data for rate setting analysis for the new injectable
or intravenous product is available, but not for less than two years.
(3) Following payment of the transitional drug add-on payment
adjustment the ESRD PPS base rate will be modified, if appropriate, to
account for the new injectable or intravenous product in the ESRD PPS
bundled payment.
(d) An oral-only drug is no longer considered oral-only if an
injectable or other form of administration of the oral-only drug is
approved by the Food and Drug Administration.
0
6. Section 413.237 is amended by revising paragraph (a)(1)(iv) to read
as follows:
Sec. 413.237 Outliers
(a) * * *
(1) * * *
(iv) Renal dialysis services drugs that were or would have been,
prior to January 1, 2011, covered under Medicare Part D, including
ESRD-related oral-only drugs effective January 1, 2025.
* * * * *
Dated: June 23, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: June 24, 2015.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2015-16074 Filed 6-26-15; 04:15 pm]
BILLING CODE 4120-01-P
Office of the Federal Register, National Archives and Records Administration
Section
Proposed Rules
Action
Proposed rule.
Dates
To be assured consideration, comments must be received at one of
Contact
Stephanie Frilling, (410) 786-4507, for issues related to the ESRD PPS, refinement of the case-mix payment adjustments, drug designation process, delay of payment for oral-only drugs and biologicals, Part B payment for self-administered drugs, and reporting of medical director fees on the cost report.
FR Citation
80
FR
37807
RIN Number
0938-AS48
CFR Associated
Health Facilities; Kidney Diseases; Medicare
and
Reporting and Recordkeeping Requirements