CMS Finalizes Medicare Reimbursement Increase for ESRD Facilities

CMS has finalized a 3.1 percent increase in Medicare reimbursement for end-stage renal disease (ESRD) facilities in the Calendar Year (CY) 2023 ESRD Prospective Payment System (PPS) final rule.

Medicare will pay a projected $7.9 billion in 2023 to the 7,800 ESRD facilities that furnish renal dialysis services to beneficiaries. The CY 2023 ESRD PPS base rate is $265.57, representing a $7.67 increase from the current base rate of $257.90.

The 3.1 percent reimbursement increase for all ESRD facilities is similar to the update announced in the ESRD PPS proposed rule. CMS expects payments to increase by 3.1 percent for hospital-based ESRD facilities and 3.0 percent for freestanding facilities.

CMS has also finalized its proposal to rebase and revise the ESRD bundled market basket to a 2020 base year, resulting in a labor-related share of 55.2 percent.

The wage index floor will increase from 0.5 to 0.6 and the rule finalized a permanent 5 percent cap on ESRD PPS wage index decreases. Specifically, an ESRD’s facility wage index for CY 2023 will not be less than 95 percent of its final wage index for CY 2022.

The final rule includes decreases to the Medicare allowable payment amounts and the fixed-dollar loss amounts for adult and pediatric patients. Additionally, CMS has finalized its proposal to include the word “functional” in the definition of oral-only drugs and solidified revisions to clarify the descriptions of the ESRD PPS functional categories.

The Acute Kidney Injury (AKI) dialysis payment rate will also equal the ESRD PPS base rate for CY 2023.

CMS finalized several changes to the ESRD Quality Incentive Program (QIP), which assess ESRD performance and applies a payment reduction for facilities that do not meet a minimum total performance score.

The agency finalized its proposal to collect data on all ESRD QIP measures and has paused the use of certain measure data that was impacted by the COVID-19 public health emergency.

Starting in 2024, CMS will express the Standardized Hospitalization Ratio (SHR) clinical measure and Standardized Readmission Ratio (SRR) clinical measure results as rates. The rule also included policies that will be effective in 2025 and 2026, including solidifying the adoption of the COVID-19 Vaccination Coverage among Healthcare Personnel measure.

In addition, CMS finalized revisions to the ESRD Treatment Choices (ETC) Model, including changes to the improvement scoring methodology and to the requirements related to flexibilities regarding kidney disease patient education services.

The final rule can be viewed here.