CMS Expands Medicare Reimbursement for Home Dialysis, ESRD

New and innovative home dialysis machines will soon qualify for additional Medicare reimbursement, according to the latest End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) final rule.

CMS released the final rule yesterday, which introduced the new transitional add-on payment for dialysis machines used in patient homes and also included an update to Medicare reimbursement rates for ESRD care in 2021 and other payment policy updates for the COVID-19 public health emergency.

The rule specifically expands eligibility for the ESRD PPS’ transitional add-on payment adjustment for new and innovative equipment and supplies (TPNIES) to certain capital-related assets, including home dialysis machines.

The TPNIES was introduced last year to encourage the development of innovative solutions for kidney care under the White House’s Executive Orders on Advancing American Kidney Health and Protecting and Improving Medicare for Our Nation’s Seniors.

The rate for the home dialysis add-on will be 65 percent of the price determined by Medicare Administrative Contractors, reduced by an average per treatment offset of $9.32 calendar years. It will go into effect at the start of calendar year (CY) 2021.

CMS said in an announcement that it intends for the TPNIES to incent the “development of new and innovative home dialysis machines that give Medicare beneficiaries with ESRD more dialysis treatment options in the home that can improve their quality of life.”

The add-on payment may also encourage ESRD patients, who are at higher risk of hospitalization due to COVID-19, to stay home, CMS stated.

The final rule will also update the ESRD PPS base rate to $251.13, an increase of $13.80 compared to the current base rate.

The new rate reflects an addition for calcimimetics, a productivity-adjusted market basket increase, and an updated wage index factor, which will also be updated in 2021 to account for new core-based statistical area (CBSA) delineations as determined by the Office of Management and Budget, CMS stated.

The rate will also be $253.13 for ESRD facilities delivering renal dialysis services to patients with acute kidney injury (AKI).

Additionally, the final rule updated the low-volume payment adjustment eligibility criteria and attestation requirement for the COVID-19 public health emergency. In the rule, CMS said it will hold harmless ESRD facilities that would otherwise qualify for the payment adjustment but are experiencing a temporary boost in volume because of the virus.

For 2021 and the subsequent two calendar years, CMS will also approve ESRD facilities for the adjustment if services are less than 2,000 for any six months of their cost-reporting period ending in 2020 even if the total number of treatments furnished during the year would exceed the low-volume threshold.

Overall, CMS projects the final rule to increase total Medicare reimbursements to ESRD facilities by 2 percent compared to the current year. Hospital-based ESRD facilities, however, are projected to face a 0.2 percent decline, the agency reported.

More than 85 percent of Medicare fee-for-service beneficiaries with ESRD have to travel to a facility to receive dialysis treatment at least three times a week, with an average of 12 hours per week spent receiving dialysis at the facility, according to CMS.

“Medicare beneficiaries with ESRD have long been ill-served by a system that too often fails to incentivize the types of care that yield the best health outcomes for their quality of life,” CMS Administrator Seema Verma, said in the announcement. “Fortunately, they have found an advocate in President Trump, who is delivering on his promise to put patients first. By promoting innovation in ESRD, today’s announcement furthers the bold, transformative improvements initiated by this Administration.”

Improving kidney care has been a top priority for the current Administration, which recently approved several new payment and care delivery models, including the  Kidney Care First (KCF), Comprehensive Kidney Care Contracting (CKCC) Options of the Kidney Care Choices (KCC) Model, and the upcoming ESRD Treatment Choices (ETC) Model.

The models aim to test whether new Medicare reimbursement options can improve quality of care while reducing costs for patients with kidney disease. The latter model will also determine if an alternative payment model will incent greater use of home dialysis and kidney transplants.

To view the complete final rule, click here. All policies unless otherwise stated will be effective on January 1, 2021.