CMS proposes 9.3% cut for hospital-based ESRD services in CY 2014

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The Centers for Medicare & Medicaid Services yesterday issued a proposed rule that would reduce overall Medicare payments to end stage renal disease facilities by 9.4% in calendar year 2014, primarily due to a provision in the law that requires an payment adjustment to reflect the decline in per patient utilization of ESRD drugs and biological since 2007. Hospital-based facilities would see a 9.3% payment cut. 2014 is the first year all Medicare ESRD facilities will be paid 100% under the ESRD prospective payment system. The 9.4% reduction reflects a 2.9% ESRD bundled market basket update minus a 12% drug utilization adjustment, 0.4% productivity adjustment and wage index budget-neutrality adjustment as required by law. This results in a 2014 ESRD PPS base rate of $216.95. CMS seeks comment on whether the drug utilization adjustment should be phased in over more than one year. For payment year 2016, the rule also proposes to update requirements for the ESRD Quality Incentive Program, which adjusts payments to dialysis facilities based on their performance on quality measures. The rule also addresses issues related to coverage and payment of durable medical equipment, prosthetics, orthotics, and supplies. The proposed rule will be published in the July 8 Federal Register with comments accepted until Aug. 30.

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