OVERVIEW OF THE MEDICARE END-STAGE RENAL DISEASE (ESRD) FINAL RULE CY 2018
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1 OVERVIEW OF THE MEDICARE END-STAGE RENAL DISEASE (ESRD) FINAL RULE CY 2018 S UMMARY OF CALCULATION ELEMENTS 1 Issued October 27, 2017 Rule to take effect January 1, 2018 Published December 2017 NHA/SMA
2 INDEX TO CY 2018 CHANGES IN ESRD FACTORS Background on End-Stage Renal Disease (ESRD) Prospective Payment System Update of the ESRD PPS Base Rate Update of wage index and wage index floor Update to outlier policy Impact Analysis Payment for dialysis services for patients with acute kidney injury Changes to the ESRD Quality Incentive Program (ESRD QIP) Background Changes NHA/SMA 2
3 BACKGROUND ESRD PPS bundled payment: single, per treatment payment for all approved renal dialysis services provided to patients for the treatment of ESRD either in a facility or in a patient s home Payment rate adjusted based on: Case mix Based on patient characteristics; includes both adult and pediatric adjustments Facility adjustments Low-volume Rural Wage index Applies to approximately 6,750 facilities NHA/SMA 3
4 FORMULA End-Stage Renal Disease PPS Payment Calculation: Base Rate (Labor-related portion) x Wage Index (Non-labor Related Portion) PPS Adjustment Factors Outlier Payment (Based on Eligibility) *The PPS Adjustment Factors include adjustments for patient and facility characteristics. NHA/SMA 4
5 ESRD PPS BASE RATE UPDATE Market Basket Update 1.9% Less Multi-Factor Productivity -0.6% Less Cuts Mandated by the Social Security Act -1.0% TOTAL IMPACT 0.3% CY 2017 Base Rate = $ Wage Index Budget- Neutrality Adjustment Factor Adjustments CY 2018 Base Rate = $ ($ x = $231.67) Market basket increase ($ x = $232.37) NHA/SMA 5
6 WAGE INDEX UPDATE Adjusted to account for updated wage levels in areas where ESRD facilities are located ESRD PPS wage index values are calculated without regard to geographic reclassifications (pre-reclass wage index) and are unadjusted for occupational mix CY 2018 Wage Index Floor = Wage index is applied to the labor-related share of the base rate For CY 2018, the labor-related share to which the wage index would be applied is percent NHA/SMA 6
7 OUTLIERS Facility eligible for outlier payment when the per treatment Medicare Allowable Payment (MAP) amount for ESRD outlier services exceeds the predicted MAP amount plus the fixed-dollar loss (FDL) amount Average outlier services MAP amount per treatment Standardization for outlier services Age < 18 Age >= 18 $37.41 $ MIPPS reduction Adjusted average outlier services MAP amount $37.31 $42.41 Fixed-dollar loss amount $47.79 $77.54 NHA/SMA 7
8 IMPACT ANALYSIS CY 2018 updates increase total payments by 0.5% compared to CY 2017 Hospital-based ESRD facilities Projected increase in total payments of 0.7% Freestanding ESRD facilities Projected increase in total payments of 0.5% NHA/SMA 8
9 PAYMENT FOR DIALYSIS SERVICES FOR PATIENTS WITH ACUTE KIDNEY INJURY (AKI) Payment rate for AKI dialysis: Updated to equal the final CY 2018 ESRD PPS base rate Applies the same wage index adjustments as ESRD PPS Final AKI Payment Rate = $ NHA/SMA 9
10 CHANGES TO ESRD QUALITY INCENTIVE PROGRAM The ESRD QIP changes the way Medicare pays for renal dialysis services by linking a portion of the payment directly to facility performance on quality measures Reduction of up to 2% if minimum total performance score is not met Changes to the ESRD QIP include: Finalized changes to performance score certificate (PSC) starting PY 2019 Changes to Extraordinary Circumstances Exception (ECE) policy Seeking to align policy with that of other programs Updated list of measures for PY 2021 NHA/SMA 10
11 CHANGES TO ESRD QUALITY INCENTIVE PROGRAM PY 2019 Changes to Facilityposted Performance Score Certificate (PSC) Posted certificate to include: Total performance score (TPS) achieved by facility Comparison between data for facility s TPS versus the national TPS Facility performance result for each individual measure with respect to the year involved Comparison between facility s individual performance scores versus the national performance score for each measure PY 2020 ESRD QIP Requirements Extraordinary Circumstances Exception (ECE) policy Changes Facility may submit form signed by facility s CEO/other designated personnel within 90 days of the EC Expansion of reasons to include CMS data system issues preventing data submission Ability to request ECE if normal operations are significantly affected by conditions beyond control Finalized minimum TPS at 59 Finalized reduction scale PY 2021 ESRD QIP Requirements 16 measures were finalized in CY 2017 for PY 2020 For PY 2021 Replacing 2 VAT Clinical Measures with Hemodialysis Vascular Access measures: Standardized Fistula Rate Clinical Measure Long-Term Catheter Rate Clinical Measure Revision of Standardized Transfusion Ratio Clinical Measure More restrictive definition of transfusion events NHA/SMA 11
12 NEW HEALTH ANALYTICS WARREN BRENNAN, MANAGING PARTNER P E RFORMANCE I N SIGHT NHA/SMA 12
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