Kidney Dialysis Payment Changes

Several weeks ago, CMS proposed a new payment system for renal dialysis facilities - bundled payments. It is expected to hurt some drug makers. However, the verdict is out as to how it could impact facilities.

Meanwhile, the Office of Inspector General, in its FY 2010 Work Plan, included a few renal issues in its items to be analyzed. Among them:

Medicare Payments for End-Stage Renal Disease Drugs
We will review dialysis facilities’ fourth-quarter 2008 average acquisition costs for selected ESRD drugs and compare these to fourth-quarter 2008 Medicare payment amounts. Medicare bases payment on 106 percent of the drugs’ ASPs. However, effective January 1, 2011, MIPPA will change payments for ESRD items and services by bundling ESRD drugs, which are currently billed separately, with all of the other costs of ESRD care. Previous OIG reviews have found that Medicare payments for the majority of separately billable ESRD drugs are consistently higher than average acquisition costs reported by dialysis facilities and prices paid by the Department of Veterans Affairs (VA). We will also compare facilities’ 2008 fourth-quarter average acquisition costs to the costs that facilities reported for these drugs in previous quarters.
(OEI; 03-09-00280; expected issue date: FY 2010; work in progress)


Renal Dialysis Facilities’ Dosing Guidelines for Erythropoiesis-Stimulating
Agents
We will review whether protocols used by renal dialysis facilities for erythropoiesis-stimulating agents (ESA) adhere to FDA labeling recommendations. In response to research published in 2007, FDA approved revised labeling for ESAs, including a “black box” warning recommending that ESAs be dosed to maintain a hemoglobin value of less than 12 g/dL. According to the revised labeling for ESAs, maintaining hemoglobin levels above 12 g/dL can adversely affect a patient’s health, possibly resulting in death. There are concerns that dialysis facilities may be using dosing guidelines, standards, and protocols that are not consistent with the revised labeling
recommendations. We will determine the extent to which renal dialysis facilities’ protocols for administering ESAs are consistent with CMS’s monitoring policy for ESA claims.
(OEI; 03-09-00010; expected issue date: FY 2010; work in progress)

Ambulance Services Used To Transport End-Stage Renal Disease Beneficiaries
We will review the extent to which ambulance services are used to transport ESRD beneficiaries to and from dialysis facilities. CMS’s “Medicare Benefit Policy Manual,” Pub. No. 100-02, ch. 10, § 10.3, describes coverage of ambulance services to and from renal dialysis facilities for ESRD patients who require dialysis. Furthermore, section 623(f) of the MMA requires the Secretary to develop a report on a bundled PPS for ESRD services. The bundled PPS for ESRD services generally does not provide for ambulance services. In CY 2005, payments for ambulance services between beneficiaries’ residences and hospital-based or freestanding ESRD facilities were approximately $262 million. We will examine factors such as the percentage of
the population using ambulance services, the feasibility of contracting by freestanding facilities with ambulance suppliers, and the coverage policies of other health insurance programs.
(OAS; W-00-10-35417; various reviews; expected issue date: FY 2010; new start)