November 8, 2005 - Kidney Care Partners (KCP) has commended officials within the Centers for Medicare and Medicaid Services (CMS) for addressing in the final 2006 Physician Fee Schedule Rule released last week many issues that were identified as problems in the proposed rule. Press release via U.S. Newswire.

November 3, 2005 - The Centers for Medicare and Medicaid Services (CMS) has published the final version of its 2006 Physician Fee Schedule, which includes adjustments regarding dialysis pharmaceutical payments and the dialysis composite rate. News release from CMS.

The rule makes several changes to Medicare payment for separately billable drugs and biologicals furnished by ESRD facilities. The cumulative impact of these changes will be a 1.2 percent increase in payment per treatment. Under the new methodology, the payment rate will be set at average sales price (ASP) plus 6 percent, consistent with payment rates for most other drugs under Medicare Part B. This approach will apply for all separately billed drugs in both independent and hospital based facilities. At the same time, the rule increases the drug add-on adjustment to the composite rate. This adjustment was established to offset payment cuts that occurred when the payment for drugs and biologicals was reduced as a result of the ASP plus 6 percent methodology. The rule also revises geographic designations and wage index adjustments with respect to ESRD payment, but provides for a four-year transition.

The 1218-page document can be downloaded from this CMS web page.

Physicians will receive a pay cut of 4.4 percent from Medicare in 2006, although the Centers for Medicare & Medicaid Services (CMS) says they still expect to pay an additional $57.6 billion to 875,000 physicians and other health care professionals in 2006, according to a final rule released today that updates the Medicare Physician Fee Schedule. Article from SeniorJournal.com.

September 8, 2005 - The Centers for Medicare and Medicaid Services (CMS) has issued a correction to the proposed rule containing its 2006 Physician Fee Schedule, which includes adjustments regarding dialysis pharmaceutical payments and the dialysis composite rate. The correction increases the proposed composite rate drug add-on adjustment for 2006 to 11.3%, from the 8.9% figure CMS initially reported. DaVita press release via Yahoo.

September 2, 2005 - The Centers for Medicare and Medicaid Services (CMS) has published a correction in the proposed changes for the Physician Fee Schedule for 2006 related to ESRD drug reimbursement.

Correction to the Proposed ESRD Drug Add-on Adjustment

Published in the Federal Register, August 8, 2005

ESRD industry representatives have brought to our attention an error in the estimation of the market shares for the top ten ESRD drugs that we used in our calculation of the proposed drug add-on adjustment for 2006.

After an analysis of the 2003 expenditure data used to assign weights to the top ten ESRD drugs, we determined that our data did not appropriately account for three �J� code changes that were implemented in 2003. As a result the total expenditures for Iron Sucrose, Sodium Ferric Gluconate, and Calcitriol were understated.

In addition, the weight for EPO incorrectly included expenditures for hospital-based facilities. Since the purpose of the weighting was to allocate the drug spread to all other drugs paid using the proposed ASP+6% pricing, hospital-based data should not have been included because we had proposed to continue paying for other hospital-based facility drugs based on cost. The attached table shows the revised weights compared to the weights included in the proposed rule.

Using these revised weights, the proposed recalculated 2005 drug add-on adjustment should be 10.4 percent, and the proposed 2006 update should be 0.8 percent. The correct total drug add-on adjustment proposed for 2006 is 11.3 percent.

We note that for the final rule we intend to use more recent 2004 billing data to compute the final drug add-on adjustment for 2006.

Related Links:

• "Correction to the Proposed ESRD Drug Add-on Adjustment: Revised Table 22" is available at http://www.cms.hhs.gov/providers/esrd/090105_ESRD_Correction.pdf
  
• (CMS-1502-CN) Correction notice to the Physician Fee NPRM ; Correction Notice published September 1, 2005 - http://www.cms.hhs.gov/physicians/pfs/1502pcor_notice.pdf
  
• (CMS-1502-P) Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2006; Proposed Rule published August 8, 2005 - [url] http://www.cms.hhs.gov/providerupdate/regs/cms1502P.pdf
  
• Additional ESRD information is available at http://www.cms.hhs.gov/providers/esrd/ and http://www.cms.hhs.gov/providers/esrd.asp on the CMS website.
  

August 17, 2005 - In the proposed Physician Fee Schedule for 2006, the Centers for Medicare and Medicaid Services (CMS) is proposing to cut reimbursement for several medications given during dialysis treatments, including Epogen, by switching from average acquisition cost to average sales price plus 6%.

This switch uses manufacturer-reported drug prices rather than continuing to use an inflation index to update 2003 acquisition costs reported by dialysis facilities. The change will result in lower payments to dialysis providers for Epogen administered in their facilities.

If implemented, DaVita states that the changes would effectively cut their 2006 composite rate by 2.5%, reducing DaVita's standalone 2006 Medicare reimbursement by approximately $15-20 million. Press release from DaVita via PR Newswire.

August 11, 2005 - The proposed changes to Medicare Physician Fee Schedule for 2006 has been posted in the Federal Register. (WARNING: 2.7 MB file)

"Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2006" - 302 page pdf file.

August 3, 2005 - Proposed changes to Medicare reimbursement for end-stage renal disease treatments and drugs are being reviewed by the dialysis community. The changes appeared in an August 1st release of the proposed Physician Fee Schedule for 2006. A summary taken from the document (pages 121-123) of the proposed ESRD-related changes appears below:

"G. End Stage Renal Disease (ESRD) Related Provisions

On November 15, 2004, we published the Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2005 final rule in the Federal Register (69 FR 66319), revising payments to ESRD facilities in accordance with provisions of the MMA. This final rule implemented section 1881(b) of the Act, as amended by section 623 of the MMA, which directed the Secretary to make a number of revisions to the composite rate payment system, as well as payment for separately billable drugs furnished by ESRD facilities. Changes that were implemented January 1, 2005 included a revision to payments for drugs billed separately by ESRD facilities whereby the top ten ESRD drugs are paid based on acquisition costs (as determined by the Office of Inspector General (OIG))and other separately billed drugs are paid average sales price (ASP) +6 percent.

Also, in accordance with section 623 of the MMA, an adjustment of 8.7 percent was made to the composite payment rate to account for the difference between previous payments for separately billed drugs and biologicals and the revised pricing that took effect January 1, 2005. As required by section 623 of the MMA, we are proposing to update this addon adjustment to reflect changes in ESRD drug utilization. In addition, we are proposing to revise the add-on adjustment to reflect the methodology we will be using for ESRD drugs.

Section 623 of the MMA also required the establishment of basic case-mix adjustments to the composite payment rate for a limited number of patient characteristics. The November 15, 2004 final rule implemented three categories of patient characteristic adjustments (age, low body mass index (BMI), and body surface area (BSA)) that were implemented April 1, 2005. We are proposing to maintain these categories and patient characteristics as established in the November 15, 2004 final rule (69 FR 66238).

Also, section 1881(b)(12)of the Act as amended by section 623 of the MMA provided authority to revise the geographic adjustment applied to the composite payment rate. Accordingly, we are proposing to revise the geographic classifications and wage indexes currently in effect for adjusting composite rate payments. As required by section 623 of the MMA, these proposed changes will be phased in over time.

In addition, we are proposing revisions to the regulations applicable to the composite rate exceptions process to reflect section 623 of the MMA provisions that restrict exceptions to pediatric facilities."

Related article: "Physicians May Leave Medicare After Pay Cut of 4.3 Percent Announced" - article from SeniorJournal.com.

The regulations also include a final rule to increase payment rates for hospital inpatient care an average of 3.7% in FY 2006 and 3.3% for facilities that do not submit data on quality of care. News summary from Kaiser Network on "CMS Releases Fiscal Year 2006 Medicare Reimbursement Regulations".


August 2, 2005 - The Centers for Medicare and Medicaid Services (CMS) is the largest payer for dialysis (end-stage renal disease) patient care in the United States. Yesterday, CMS released its proposed Physician Fee Schedule for 2006.

The proposed rule would revise payment for separately billable drugs and biologicals furnished by ESRD facilities. Under the proposal, the payment rate will be set at average sales price (ASP) plus 6 percent, consistent with payment rates for most other drugs under Medicare Part B. CMS is also proposing to change the drug add-on adjustment which was established to account for the difference between previous payments for separately billed drugs and biologicals and the revised pricing that took effect January 1, 2005. Revisions to geographic designations and wage index adjustments, with respect to ESRD payment, are also included in the proposed rule. Press release from CMS.

The proposed 2006 Physician Fee Schedule (PFS) is a huge 787-page WORD document that can be downloaded from this CMS web page. The sections with implications for ESRD reimbursement are spread throughout the document.

A search revealed that "ESRD" appears 334 times in the document and "dialysis" appears 83 times.

The comment period will close on September 30, 2005.

This document also contained several important end-stage renal disease (ESRD) reimbursement changes that CMS wants to implement in 2006. These include:

• Revised Pricing Methodology for Separately Billable Drugs and Biologicals Furnished by ESRD Facilities
  
• Adjustment to Account for Changes in the Pricing of Separately Billable Drugs and Biologicals and the Estimated Increase in Expenditures for Drugs and Biologicals
  
• Proposed Revisions to Geographic Designations and Wage Indexes Applied to the End Stage Renal Disease Composite Payment Rate Wage Index
  
• Proposed Revisions to �413.170 (Scope) and �413.174 (Prospective rates for hospital-based and independent ESRD facilities)
  
• Proposed Revisions to the Composite Payment Rate Exceptions Process
  

[Page reviewed on 11/15/2005]