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From Health Reform WK-EDGE, November 26, 2018

CMS continues streamlining, burden reduction efforts with ESRD, DME rule

By Kayla R. Bryant, J.D.

In addition to the typical annual payment adjustments, including increasing the end-stage renal disease (ESRD) prospective payment system (PPS) base rate to $235.77, CMS’ ESRD PPS final rule expands the transitional drug add-on payment adjustment (TDAPA) and streamlines the comorbidity payment adjustment process. The same rule also finalizes changes to the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program (CBP) in order to improve access to items and services, streamline the program, and generate savings to ensure program sustainability (Final rule, 83 FR 56922, November 14, 2018).

ESRD PPS. The ESRD PPD base rate for calendar year (CY) 2019 reflects an increase of $2.90 from the prior year. Other ESRD PPS changes including increasing the wage index floor for areas with values below the floor to 0.50, updating wage index values to reflect the most recent data, and updating outlier policies including the fixed-dollar loss (FDL) amounts and Medicare allowable payment (MAP) amounts as follows:

  • pediatric FDL: from $47.79 to $57.14;
  • pediatric MAP: from $37.31 to $35.18;
  • adult FDL: from $77.54 to $65.11; and
  • adult MAP: from $42.41 to $38.51.

TDAPA. Previously, the ESRD drug designation process allowed CMS to recognize when an oral-only renal dialysis drug or biologic was no longer oral-only, and included new injectable and intravenous products into the ESRD PPS bundled payment, modifying the amount when necessary. However, if an ESRD PPS functional category existed for that new product, it qualified as an outlier service. If there was not a functional category, a category was revised or added and the product was paid for using the TDAPA payment before being added to the ESRD PPS bundled payment.

Effective January 1, 2020, the new rule finalizes revisions to the drug designation process that applies to all new renal dialysis drugs and biologics, regardless of the form or route of administration—excluding oral-only forms until January 1, 2025. This rule will apply to drugs that are approved by the FDA beginning January 1, 2020. TDAPA will apply to all new renal dialysis products, regardless of whether they fall into a functional category, and will be paid at 100 percent of average sales price (ASP).

DMEPOS CBP. The changes to the CBP are necessary as current CBP contracts expire on December 31, 2018, and the process for recompeting contracts with suppliers is not yet underway. CMS has redefined "bid" under the DMEPOS CBP to mean an offer to furnish an item or items for a particular price and time period—including services directly related to furnishing the item. The agency also finalized methodologies to adjust fee schedule amounts for DMEPOS items or services furnished on or after January 1, 2019. There are three different methodologies based on geographic criteria for items and services furnished:

  1. on or after January 1, 2019, in areas that are currently in competitive bidding areas (CBAs);
  2. from January 1, 2019, through December 31, 2020, in areas that are not CBAs, not rural, and located in the contiguous U.S.; and
  3. from January 1, 2019, through December 31, 2020, in areas that are not CBAs but are either rural or non-contiguous areas.

FederalRegisterIssuances: FinalRules AgencyNews DrugNews MedicarePartBNews ProviderPaymentNews QualityNews NewsFeed

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