KEY TAKEAWAYS:
|
Last week, CMS released the proposed CY 2018 End Stage Renal Disease annual payment update. This year, CMS departed from the usual practice of combining the outpatient dialysis facility payment update with that for Durable Medical Equipment. We recognize it is out of vogue to compliment the current presidential administration, but 134 page rules is something we could get used to.
The proposed base rate will increase by 0.7 percent. Overall, payments, after considering outlier adjustments and other minor factors will increase 0.8 percent, or approximately $102 million. This payment increase is slightly lower than the 0.9 percent we had estimated in April. The difference is accounted for by an increase in the multifactor productivity adjustment from 0.3 percent to 0.5 percent.
Outlier payments for high cost patients are designed to be 1.0 percent of all payments to providers. However, in recent years, total outlier payments have been declining. In CY 2015, outlier payments were 0.93 percent of total payments. However, CMS’s review of CY 2016 claims data indicated that only 0.78 percent of total payments will be for outlier services that year.
CMS credits changes in utilization of Erythropoiesis Stimulating Agents (ESAs) for the decline in payments. Specifically, CMS noted that utilization of Epoetin (EPO) alfa decreased and utilization of the longer-acting ESA drugs darbepoetin and EPO beta, increased. Overall, the amount dialysis providers spent on these drugs declined about 20 percent from CY 2015 to CY 2016.
In response, CMS has recalibrated the Medicare Allowed Payment (MAP) and Fixed-dollar Loss amount, which is added to the MAP to determine the outlier threshold. CMS believes the decline in outlier payments as a percentage of total payments has stabilized and the recalibration will ensure these payments meet the policy goal of 1.0 percent of total payments in CY 2018.
Meanwhile, CMS has also become concerned that reduced ESA utilization has led to lower achieved hemoglobin values that may increase the frequency of red blood transfusions. Patients who are eligible for kidney transplant and have received transfusions are at increased risk of becoming sensitized to the donor pool thereby making transplant more difficult.
As go dialysis trends, so goes DVA which performs more than half of all dialysis treatments in the US. Transfusion ratings from DVA that were classified as “Worse than Expected” in the ESRD Medicare Compare database increased about 20 percent, from 99 facilities to 120 between 2015 and 2016.
To combat, the reliance on transfusions to manage anemia, CMS has proposed to refine its transfusion performance measure, effective in 2021.
There was no mention in the proposed rule of the home training add-on payment which almost doubled last year as part of a larger federal effort to encourage home dialysis. The CHRONIC Act which reported out of Senate Finance a few weeks ago is another part of the plan. That bill includes a provision that patients receiving home dialysis can consult with their nephrologist via telemedicine for two out of three monthly visits beginning in 2019.
However, so far the increased payment does not appear to be having much of an impact on DVA’s home dialysis training. While the absolute number of facilities offering home dialysis training has increased, the proportion of DVA facilities with that offering has remained at about 27 percent since 2014.
The proposed rule, like all rules and guidance that have been issued by the Trump administration, includes a Request for Information from ESRD constituencies on improving the regulatory regime. We will be reviewing comments on the ESRD rule and others to get a sense of what changes the Trump administration is likely to consider. All indications suggest there will be significant changes to how Medicare is managed in the coming months and years.
The proposed rule also includes a request for comments on how social risk factors can be included in the ESRD Quality Improvement Program and/or the payment system. Policy makers have long struggled with how to account for social risk factors like poverty and race without essentially making excuses for providers who care for a disproportionate share of high risk populations.
Inclusion of social risk factors to the ESRD QIP will be an especially daunting task as ESRD patients tend to be disproportionately low income, young, male, African-American and residing in urban areas.
Like most payment updates this year, the dialysis rule offers little in the way of major policy initiatives - which of course is newsworthy in itself. This president's administration lacks the obsession with Medicare reform that characterized the Obama era. They certainly have plans - eliminating therapy as a payment factor in home health and skilled nursing are very active efforts as this point - but rulemaking to date suggests they will not be as aggressive or prescriptive as the previous administration.
Call with questions. We are always here.
Emily Evans
Managing Director
Health Policy
@HedgeyeEEvans
