Health Reform WK-EDGE Final ESRD PPS base rate almost a dollar lower than proposed rate
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Tuesday, November 19, 2019

Final ESRD PPS base rate almost a dollar lower than proposed rate

By Cathleen Calhoun, J.D.

What is being changed for 2020 in the ESRD final rule?

CMS finalized the calendar year (CY) 2020 end-stage renal disease (ESRD) prospective payment system (PPS) base rate at $239.33, almost a dollar lower than the proposed base rate of $240.27. CMS also established a transitional add-on payment adjustment to support the use of certain new and innovative renal dialysis equipment or supplies furnished by ESRD facilities. CMS will pay the adjustment, called the Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES), for equipment and supplies that meet certain requirements. In addition, CMS is updating the outlier policy, as well as updating the outlier services fixed-dollar loss (FDL) amounts for adult and pediatric patients and Medicare Allowable Payment (MAP) amounts for adult and pediatric patients. CMS is also discontinuing the application of the erythropoiesis-stimulating agent (ESA) monitoring policy (EMP) under the ESRD PPS, among other changes (Final rule, 84 FR 60478, November 8, 2019).

Rates. In accordance with §1881(b)(14)(F)(i) of the Social Security Act, and amended by section 3401(h) of the Affordable Care Act (P.L. 111-148), the ESRD PPS payment amounts are required to be annually increased by an ESRD market basket increase factor and reduced by the productivity adjustment. The final CY 2020 ESRD PPS base rate of $239.33 reflects a productivity-adjusted market basket increase (1.7 percent), and application of the wage index budget-neutrality adjustment factor (1.000244), equaling $239.33 ($235.27 x 1.017 x 1.000244 = $239.33).

Outlier policy change. The outlier services fixed-dollar loss (FDL) amounts for adult and pediatric patients and Medicare Allowable Payment (MAP) amounts for adult and pediatric patients for CY 2020 are changed, using 2018 claims data. The changes include:

  • decrease in the fixed dollar-loss (FDL) amount from $57.14 to $41.04 for pediatric beneficiaries
  • decrease in the fixed dollar-loss (FDL) amount from $65.11 to $48.33 for adult beneficiaries
  • decrease in the Medicare Allowable Payment (MAP) amount from $35.18 to $32.32 for pediatric beneficiaries
  • decrease in the Medicare Allowable Payment (MAP) amount from $38.51 to $35.78 for adult beneficiaries

Renal dialysis equipment and supplies. A transitional add-on payment adjustment for certain new and innovative renal dialysis equipment or supplies furnished by ESRD facilities is established. In order for CMS to pay the adjustment, called the Transitional Add-on Payment Adjustment for New and Innovative Equipment and Supplies (TPNIES), the equipment and supplies must be:

  1. designated by CMS as a renal dialysis service
  2. new, meaning granted marketing authorization by FDA on or after January 1, 2020
  3. commercially available by January 1 of the particular calendar year, meaning the year in which the payment adjustment would take effect
  4. under application meaning that a Healthcare Common Procedure Coding System (HCPCS) application has been submitted
  5. innovative, meaning they meet the substantial clinical improvement criteria specified in the Inpatient Prospective Payment System regulations at 42 CFR 412.87(b)(1)
  6. assets that are not capital-related

CMS will pay the TPNIES for 2 calendar years. After that, the equipment or supply will qualify as an outlier service and no change to the ESRD PPS base rate will be made.

ESRD QIP. The rule contains several new requirements for the ESRD Quality Incentive Program (QIP) beginning with payment year (PY) 2022, including, but not limited to:

  • updates to the scoring methodology for the National Healthcare Safety Network (NHSN) Dialysis Event reporting measure allowing new facilities (and facilities that are eligible to report data on the measure for less than 12 months) to receive a score on that measure.
  • converting the STrR clinical measure (NQF #2979) to a reporting measure while CMS examines concerns raised by stakeholders regarding the measure’s validity.

Transitional Drug Add-on Payment Adjustment (TDAPA). The rule makes a number of changes regarding TDAPA and notes that other changes are being finalized. Specifically, changes include:

  • CMS will no longer apply the TDAPA for a new renal dialysis drug or biological product beginning no later than 2-calendar quarters after CMS determines a full quarter of average sales price (ASP) data is not available.
  • CMS is excluding from being eligible for the TDAPA, effective January 1, 2020—drugs approved by the FDA under section 505(j) of the Federal Food, Drug, and Cosmetic Act (FDC Act) and drugs approved under section 505(c) of the FDC Act that are classified by FDA as new drug application (NDA) Types 3, 5, 7 or 8, Type 3 in combination with Type 2 or Type 4, Type 5 in combination with Type 2, or Type 9 when the "parent NDA" is Type 3, 5, 7 or 8.

FederalRegisterIssuances: FinalRules AgencyNews DrugNews DMENews MedicarePartBNews ProviderPaymentNews

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