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From Health Law Daily, June 27, 2016

Quality incentives, bidding program updates lead way in 2017 ESRD PPS

By Anthony H. Nguyen, J.D.

Proposed updates and changes to the end-stage renal disease (ESRD) prospective payment system (PPS) base payment rate for calendar year (CY) 2017 have been issued by CMS in a Proposed rule. In addition to the ESRD PPS base rate update, CMS would implement changes to the fixed dollar loss amount outlier policy, quality incentive program, and durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) Competitive Bidding Program (CBP). In an advance release of the Proposed rule, set to officially publish in the Federal Register June 30, 2016, the ESRD PPS base rate for CY 2017 would be set at $231.04.

Comments must be received by August 23, 2016.

Base rate and wage index. The ESRD PPS base rate for CY 2017 would be set at $231.04, reflecting a reduced market basket increase as required by section 1881(b)(14)(F)(i)(I) of the Social Security Act, and applying the wage index and home and self-dialysis training budget-neutrality adjustment factors. The base rate is an increase of 65 cents from the CY 2016 base rate.

For CY 2017, CMS is not proposing any changes to the application of the wage index floor, and would continue to apply the current wage index floor of 0.4000 to areas with wage index values below the floor.

Quality incentives. Section 153(c) of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) (P.L. 111-275) amended the Social Security Act to require CMS to establish an ESRD Quality Incentive Program (QIP) that selects measures, establishes performance standards, specifies a performance period for each payment year (PY), assesses the total performance of each facility, applies an appropriate payment reduction to each facility that does not meet a minimum total performance score (TPS), and publicly reports the results. The Proposed rule would address three different payment years for the ESRD QIP.

CMS did not propose any new clinical or reporting measures for the PY 2018 ESRD QIP, which had been last updated as part of the CY 2016 ESRD PPS Final rule (see ESRD payments, quality program updated, November 6, 2015). However, two changes made to the hypercalcemia clinical measure, involving updates to technical specifications, were included in the Proposed rule. The PY 2018 ESRD QIP measure set contains eight clinical measures and three reporting measures encompassing anemia management, dialysis adequacy, vascular access type, patient experience of care, infections, hospital readmissions, and mineral metabolism management.

The PY 2019 ESRD QIP, established by the CY 2016 ESRD PPS Final rule as well, would have a new Safety Measure Domain as a third category of measures in PY 2019. CMS would reintroduce the Expanded National Healthcare Safety Network (NHSN) Dialysis Event reporting measure and combine it with the existing NHSN Bloodstream Infection (BSI) clinical measure.

For PY 2020, CMS would apportion a higher percentage of a facility’s TPS to the Clinical Measure Domain, as compared to PY 2019. In addition, CMS would add the Standardized Hospitalization Ratio (SHR) clinical measure to ensure that the ESRD QIP maintains the most broadly applicable clinical measures.

Surety bonds. CMS is also addressing issues related to its durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) Competitive Bidding Program (CBP). CMS would require bidding entities to obtain and provide proof of a bid surety bond, set at $100,000, for each competitive bidding area (CBA) in which the entity submits its bid, in accordance with Section 1847(a)(1)(G) of the Social Security Act, as added by section 522(a) of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (P.L. 114-10).

Forfeiture conditions would also be established for the bid surety bonds. If a bidding entity does not accept a contract offer when its composite bid is at or below the median composite bid rate for suppliers used in the calculation of the single payment amount, the bid surety bond for the applicable CBA will be forfeited and CMS will collect on the bid surety bond.

Any bidding entity providing a falsified bid surety bond would be barred from participating in the DMEPOS CBP for the current and subsequent round of competition. In addition, any bidding entity that breaches a contract to avoid bid surety bond forfeiture will be barred from the next round of bidding. CMS would provide an appeals process for breaches of contract via notice; as a result, notice of breach will be issued rather than a notice of termination.

Outlier policy. CMS would update the outlier services fixed dollar loss amounts for adult and pediatric patients and Medicare Allowable Payments (MAP) for adult patients for CY 2017 using 2015 claims data. As a result, the fixed-dollar loss amount for pediatric beneficiaries would increase from $62.19 to $67.44 and the MAP amount would increase from $39.20 to $39.92. For adult beneficiaries, the fixed-dollar loss amount would decrease from $86.97 to $83.00 and the MAP amount would decrease from $50.81 to $47.26.

Comprehensive care. CMS is also seeking applications for its Comprehensive ESRD Care (CEC) model, with successful applicants joining the program January 1, 2017. The CEC Model is designed to identify, test, and evaluate new ways to improve care for Medicare beneficiaries with ESRD. CMS will partner with health care providers and suppliers to test the effectiveness of a new payment and service delivery model; participants are eligible for shared savings when total cost of care is reduced and quality is improved.

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