CMS proposes CY 2025 ESRD Prospective Payment System rule

CMS has proposed to increase Medicare payments to end-stage renal disease (ESRD) facilities in a new rule for the ESRD Prospective Payment System in calendar year (CY) 2025.

The proposed rule from CMS would increase the base rate under the PPS to $273.20, a 2.2% boost for both freestanding and hospital-based ESRD facilities compared to the current year’s rate. Hospital-based facilities would see a higher boost in overall Medicare payments at a projected 3.9%, while freestanding facilities are slated for a 2.1% increase.

The rate also reflects the application of the wage index budget-neutrality adjustment factor (0.990228) and a CY 2025 proposed productivity-adjusted market basket increase of 1.8%. The wage index will be new next year, with CMS proposing to combine data from the Bureau of Labor Statistics Occupation Employment Wage & Statistics and freestanding ESRD facility cost reports to generate an ESRD PPS-specific wage index. The agency also proposes to update the wage index to reflect the latest core-based statistical area delineations, determined by the Office of Management and Budget, although it will still apply a floor of 0.600 and a 5% cap on decreases from the prior year.

CMS estimates that the proposed increase would result in $7.2 billion in Medicare payments to the over 7,700 ESRD facilities participating in the program.

The proposed rule would also allow Medicare payment for acute kidney injury renal dialysis services furnished to patients in their homes. ESRD facilities would be able to bill Medicare for home and self-dialysis training add-on payment adjustments for qualifying beneficiaries.

The rule would also update the payment rate for acute kidney injury services to $273.20 as in CY 2024.

Additionally, the proposed rule for the CY 2025 ESRD Prospective Payment System would update the outlier policy, the low-volume payment adjustment (LVPA) and the bundle payment as it relates to oral-only drugs.

First, the proposed rule would expand the list of ESRD outlier services to include drugs and biological products that would have been included in the composite rate before CMS started using the Prospective Payment System. CMS would also apply some technical updates that would update the fixed-dollar loss (FDL) and Medicare allowable payment (MAP) amounts for CY 2025.

For pediatric beneficiaries, the proposed FDL amount would grow from $11.32 to $223.44, and the proposed MAP amount would increase from $23.36 to $58.39 as compared to CY 2024 values. For adult beneficiaries, the proposed FDL amount would decrease from $71.76 to $49.46, and the proposed MAP amount would decrease from $36.28 to $33.57.

Second, CMS proposed to create a two-tiered LVPA system in which ESRD facilities that furnished fewer than 3,000 treatments per cost reporting year would earn a 28.4% positive adjustment to their base rate. ESRD facilities that furnished between 3,000-3,999 services would earn an 18.1% adjustment. CMS would determine eligibility for the LVPA based on the median treatment count over the past three cost reporting years.

Finally, the proposed rule would follow through on including oral-only renal dialysis drugs and biological products in the ESRD PPS bundled payment by January 1, 2025. CMS had previously excluded the products because of a lack of data. However, the agency is ready to operationalize the inclusion of the products in the ESRD Prospective Payment System moving forward, according to the proposed rule.

For the ESRD Quality Incentive Program, CMS has proposed to replace the Kt/V Dialysis Adequacy Comprehensive clinical measure and the National Healthcare Safety Network (NHSN) Dialysis Event reporting measure by payment year 2027.

Stakeholders can comment on the proposed rule through August 26, 2024.