July 8, 2013

CMS proposes 9.4% cut for dialysis providers

Daily Briefing

    Federal regulators last week issued draft regulations that would reduce Medicare payments to dialysis providers by 9.4% in fiscal year (FY) 2014, Modern Healthcare reports.

    Under the last-minute "fiscal cliff" deal, CMS proposed $4.9 billion in savings from recalculating bundled payments for dialysis providers. The proposal came in response to a Government Accountable Office report that found Medicare had overpaid for end-stage renal disease treatment by relying on outdated drug-use trends. Specifically, Medicare relied on 2007 treatment protocols for anti-anemia drugs to calculate payments, though their use has declined significantly in recent years due to safety concerns.

    To set the new payment rate, CMS compared treatment costs for end-stage renal disease in 2007 and 2012 and concluded that a $29.52 reduction in the $264.47 base rate per treatment was justifiable.

    The cut would set the 2014 dialysis base rate at $216.95, or down 12%. The cut was slightly mitigated by an adjusted market basket update that increased payments by 2.5%, Modern Health care reports.

    Additionally, the proposed rule would alter the ESRD Quality Improvement Program, potentially costing providers as must as 2% of their Medicare payments if they fail to fulfill performance measures.

    The deadline for public comments on the proposal is Aug. 30. CMS has specifically requested input on whether there should be a phase-in period before the transition to the new base rate (Daly, Modern Healthcare, 7/1 [subscription required]).

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