CY 2018 MEDICARE PAYMENTS. On Friday, CMS released the CY 2018 ESRD payment update and there were few surprises. The ESRD payment base rate will increase from $231.55 to $232.37. The final number landed $0.94 below the proposed amount due to a downward revision in the market basket adjustment from 2.20 percent to 1.90 percent.
The downward revision was mostly attributable to a decrease in the projected growth of the price proxy used to estimate ESA cost growth. This decline in the market basket adjustment was exacerbated by an increase in the multi-factor productivity index which was mainly the result of upward revisions of historical data by the Bureau of Labor Statistics. Also contributing to the increase was slower projected labor and capital input growth
OUTLIER PAYMENTS. CMS finalized recalibration of thresholds for establishing when a dialysis provider qualifies for outlier payments. These thresholds are designed to ensure 1 percent of all dialysis payments are for high cost or outlier cases. In 2016, total outlier payments were 0.78 percent of all payments or about $76 million. That amount represents a dramatic decline from 0.93 percent in 2015. CMS credits the decline with lower utilization of certain dialysis-associated drugs.
However, there could be another explanation. ACA marketplace insurers have complained that dialysis providers are encouraging a shift of high cost ESRD patients from Medicare to ACA exchange plans by providing premium assistance. An Interim Final Rule issued in December 2016 required dialysis providers that paid for premium support to make certain disclosures to patients about other insurance providers like Medicare and Medicaid. The Interim Final Rule also requires dialysis providers to receive assurances that the insurers will accept the premium support payments for the plan year.
The new disclosure requirements are expected to severely limit third party premiums assistance and so CMS may find that the outlier payments in CY 2018 are higher than expected. CMS has the authority to retrieve higher than expected outlier payments. A claw-back, if it were to occur, would be announced through rulemaking in 2018.
So, be warned.
CMS expects ESRD payments to increase about 0.50 percent in CY 2018 after considering all payment adjustments.
Call with questions
Emily Evans
Managing Director
Health Policy
@HedgeyeEEvans
LinkedIn
