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CMS Issues Payment Rule, Quality Incentive for Dialysis Providers

 |  By cclark@healthleadersmedia.com  
   July 27, 2010

Dialysis services for nearly 330,000 Medicare patients with end stage renal disease will be paid under a new system that creates a bundled, case-adjusted rate starting Jan. 1, the Centers for Medicare & Medicaid Services announced Monday with its final rule.

In addition, the agency proposed a rule that would create a new Quality Incentive Program (QIP) for dialysis services—the first pay for performance program in fee-for-service—that will link a facility’s payment to how well it meets new performance standards.  The QIP will take effect on Jan. 1, 2012.

About 600 hospital-based and 4,330 free-standing end-stage renal disease facilities are affected.  In 2007, the value of these services was $9.2 billion for dialysis treatments and other related services such as medication.

“The new payment system and quality incentive program for dialysis services have significant potential to improve patient outcomes and promote efficient delivery of healthcare services,” says CMS’ new Administrator Donald Berwick, MD.

“In addition, for the first time in any of our payment systems, the quality of care facilities furnish to patients will be reflected in their payment rates.” He added, the QIP “is a critical tool for encouraging and supporting dialysis facilities to focus their energies thoroughly on the quality of dialysis care they provide to Medicare beneficiaries.” 

The new payment system provides an adjustment to help patients learn skills to receive dialysis at home if appropriate.

According to a Medicare statement released yesterday, both the new prospective payment system and the proposed QIP are required by the Medicare Improvements for Patients and Providers Act of 2008. That law requires that dialysis facilities be paid a single bundled rate for renal dialysis services and home dialysis. The proposed QIP creates payment incentives for dialysis facilities to improve patient outcomes.

Currently, Medicare pays for certain dialysis services under a partial bundled rate, referred to as the composite rate, which represents 60% of total Medicare payments to end stage renal disease facilities.  The remainder is billed separately for drugs and non-routine lab testing.

The new bundled case-mix adjusted payment includes dialysis treatments and supplies, end-stage renal disease drugs and clinical lab tests. It sets a base payment rate of $229.63 for each dialysis treatment, which includes payment for services in the current composite rate, as well as most items and services now paid for separately.

The QIP proposal includes several quality measures, including whether patients are receiving appropriate treatment for anemia and whether patients’ urea reduction ratios—indicating whether dialysis treatments are effectively removing waste—are working as well as they should. 

According to CMS, “the law requires CMS to reduce the payment rates to a dialysis facility by up to 2% if that facility fails to meet or exceed the established performance scores with regard to performance standards established for each quality measure,” and would take effect after Jan. 1, 2012.

Facilities that receive Medicare payment are already reporting their performance to CMS according to law. 

Also, the proposed QIP rule includes options for making facility performance scores available to the general public, and to patients.

 

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