[Federal Register Volume 60, Number 88 (Monday, May 8, 1995)]
[Rules and Regulations]
[Pages 22533-22535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11173]



[[Page 22533]]

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 406

[BPD-738-F]
RIN 0938-AG19


Medicare Program; Clarification of Resumption of Entitlement 
Rules for Medicare Patients With End-Stage Renal Disease (ESRD)

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Final rule.

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SUMMARY: In this final rule, we clarify the terms of Medicare 
entitlement when an individual resumes a regular course of renal 
dialysis treatment or receives a kidney transplant after a previous 
course of treatment has been terminated (with or without a transplant) 
and add the same considerations for those who have a second transplant 
or begin dialysis after a previous transplant. We also respond to 
comments on a proposal to revise the definition of ESRD for the purpose 
of qualifying for Medicare.
    These revisions are necessary so that beneficiaries, providers, 
suppliers, and other insurers can determine with certainty when 
Medicare coverage begins and ends. Beneficiaries rely on this 
information to make informed decisions whether or not to enroll or re-
enroll in the Medicare Supplementary Medical Insurance Program (part 
B).

EFFECTIVE DATE: These regulations are effective on June 7, 1995.

FOR FURTHER INFORMATION CONTACT: Denis Garrison, (410) 966-5643.

SUPPLEMENTARY INFORMATION:

I. Background

    End-stage renal disease (ESRD) is a disease that results from the 
destruction of normal kidney tissues over a long period of time. The 
individual often does not experience any symptoms until the kidney has 
lost more than half of its function. The loss of kidney function in 
ESRD is usually irreversible and permanent.

Definition of ESRD

    Section 226A of the Social Security Act (the Act) provides for 
Medicare coverage for certain individuals who are medically determined 
to have ESRD. Once an individual is medically determined to have ESRD, 
the Act specifies that one of two conditions must be met before 
entitlement begins. That is, the individual must begin a regular course 
of dialysis or receive a kidney transplant. The Act provides that 
entitlement begins with the third month after the month in which a 
regular course of renal dialysis is initiated or, if earlier, with the 
month the transplant occurs.
    The Act does not define ESRD. Our regulations, in Sec. 406.13(b), 
define it as that stage of kidney impairment that appears irreversible 
and permanent and requires a regular course of dialysis or kidney 
transplantation to maintain life. (A parallel definition of ESRD also 
appears in Sec. 405.2102 which defines ESRD as it relates to the 
conditions for coverage that must be met by suppliers furnishing ESRD 
care to Medicare beneficiaries.)

Resumption of Entitlement to ESRD Benefits

    Paragraphs (c)(2) and (c)(3) of section 226A of the Act specify the 
conditions for beginning a new period of entitlement when a kidney 
transplant fails or a regular course of dialysis begins again. However, 
this section refers to those instances when entitlement has not yet 
ended and specifies that Part A (Hospital Insurance) entitlement 
``begins'' (although it may not yet have ended) with the month when 
regular dialysis treatments begin again. The importance of 
``beginning'' Part A entitlement again is that it offers the 
opportunity for those who previously refused Part B (Supplementary 
Medical Insurance) entitlement or allowed their Part B entitlement to 
lapse to enroll in Part B without waiting for the annual general 
enrollment period (January through March). Most kidney dialysis 
treatments are covered under Part B.

Proposed Rule

    On January 6, 1994, we published a proposed rule, at 59 FR 714, 
which proposed a change in the definition of end-stage renal disease 
(ESRD) and a clarification regarding Medicare entitlement when an 
individual's regular course of renal dialysis treatment resumes after a 
previous course of treatment has been terminated (with or without a 
transplant). The proposal resulted from our concern that there may be a 
misunderstanding of the extent of kidney failure that constitutes ESRD 
for which the law grants Medicare entitlement. We were also concerned 
that our regulations on resumption of entitlement based on ESRD might 
be misinterpreted resulting in loss of benefits for some individuals. 
Further, for those individuals whose Part A entitlement had not yet 
ended, we believe that the intention is to re-enroll the individual in 
Part A with that month, without a new application.
    Proposed definition--We were concerned that data revealed nearly 1 
percent of newly entitled individuals terminated their course of 
dialysis with a return of kidney function. We believed that physicians' 
certifications leading to eligibility for the patients who terminated 
dialysis may have arisen from a misunderstanding of the extent of the 
kidney failure that is a predicate to Medicare entitlement. 
Consequently, we proposed to amend the definition of ESRD that appeared 
in Sec. 406.13 to require that the condition be ``evidenced by 
generally accepted diagnostic criteria and laboratory findings.'' We 
believed that this addition would make clear that an individual who 
receives dialysis does not necessarily have end-stage renal disease.
    End of and Resumption of Entitlement--We proposed to treat the 
situation in which dialysis ends, then begins again within 12 months, 
or in which a second transplant is received within 36 months, as a 
resumption of entitlement. Accordingly, we proposed to delete from 
paragraph (f) of Sec. 406.13 the reference to continuation of 
entitlement. We would revise paragraph (g), which specifies the 
conditions for resumption of entitlement, to include the situation 
where coverage resumes despite a previous course of treatment.
    In our revision of Sec. 406.13(g) we stated that entitlement would 
be resumed under any one of three conditions and we used the language 
we removed from paragraph (f). Under Sec. 406.13(g)(1), a new period of 
entitlement would begin if an individual initiates a regular course of 
renal dialysis during the 12-month period after the previous course of 
dialysis ended, and he or she would be entitled to a new period of Part 
A benefits and, therefore, eligible to enroll in Part B effective with 
the month the regular course of dialysis is resumed.
    The Act does not mention the beginning of a new period of 
entitlement when a second kidney transplant occurs during the 36-month 
period following the initial transplant, since there is never a waiting 
period for entitlement based on a transplant. However, we believe that, 
by analogy, the provisions for beginning a new period of entitlement in 
cases where a regular course of dialysis begins or recurs during the 36 
months indicate that we should construe the law as requiring resumption 
of Part A entitlement and a new period of Part B enrollment in cases of 
re-transplantation that occur without the beneficiary's resuming (or 
initiating) dialysis treatments. We, therefore, proposed to revise 
Sec. 406.13(g) to state that entitlement would begin when an individual 
initiates a new, regular [[Page 22534]] course of renal dialysis, or 
has a kidney transplant, during the 36-month period after an earlier 
kidney transplant, and that he or she would be entitled to resume Part 
A and be eligible to enroll in Part B effective with the month the 
regular course of dialysis begins or with the month the subsequent 
kidney transplant occurs.
    We also proposed to make technical revisions to Sec. 406.13(g) to 
clarify the other condition for resumption of entitlement. That is, 
entitlement is resumed if an individual initiates a regular course of 
renal dialysis more than 12 months after the previous regular course of 
dialysis ended or more than 36 months after the month of a kidney 
transplant, and the individual is eligible to enroll in Part A and Part 
B effective with the month in which the regular course of dialysis 
treatment is resumed. If he or she is otherwise eligible to Part A 
benefits under the conditions specified in Sec. 406.13(c), and files an 
application, entitlement would begin with the month in which dialysis 
treatments are initiated or resumed, without a waiting period, subject 
to the basic limitations of entitlement in Sec. 406.13(e)(1).

II. Analysis of and Responses to Public Comments

    Comment: Several commenters were concerned that the proposed 
revision to the definition of ESRD would not achieve HCFA's stated 
goals of clarifying the entitlement to Medicare's ESRD benefit or 
eliminating the one percent alleged error rate. In fact, the change in 
the definition of ESRD to refer to ``generally accepted diagnostic 
criteria and laboratory findings'' could be inappropriate if HCFA 
attempts to establish one easily defined set of laboratory values or 
other criteria which represent a clear boundary between cases of ESRD 
and non-ESRD. One commenter remarked that patients with many 
comorbidities, especially cardiovascular complications, could die of 
heart attacks or other events while their physicians wait to put them 
on dialysis until their laboratory values reach an arbitrary and too 
strict standard. The commenters asked that any system that relies on 
sets of laboratory values or other criteria should provide for medical 
review of questionable cases by a group of knowledgeable physicians, 
with an opportunity for input by the physician of the patient in 
question.
    Response: In creating the Medicare ESRD program, the Congress 
clearly intended that Medicare should be available only to patients who 
have ESRD and require regular dialysis treatments or a kidney 
transplant to survive. It was certainly not our intent in proposing a 
change in the definition of ESRD to cause physicians to delay 
prescribing dialysis for patients who do not yet meet a prescribed set 
of laboratory values but have other comorbid conditions that the 
physicians believe would benefit from dialysis treatment. In fact, we 
have always been confident that physicians who believe that dialysis is 
a necessary component in treating a patient's medical condition 
prescribe such treatment without regard to the expectation of Medicare 
coverage.
    After considering the comments, we now believe that changes being 
made in the way we review medical evidence of ESRD will accomplish more 
to ensure that patients meet the definition of ESRD than would a change 
to the definition of ESRD in the regulations. Under the screening 
process that is expected to be used by the ESRD networks in reviewing 
ESRD medical evidence report forms, patients who meet certain 
prescribed laboratory test values will automatically be considered to 
have ESRD. Cases that fail to meet the laboratory test values will then 
be sent to the network's medical review board for further review. At 
this stage, the treating physician will have the opportunity to furnish 
additional information on the patient's condition. Only after the 
medical review board has completed its review of the case and concluded 
that the patient's condition is not ESRD will the patient's Medicare 
claim be denied. Therefore, we have decided not to revise the 
definition of ESRD, as proposed, and are retaining the existing 
definition of ESRD in Sec. 406.13(b).
    Comment: The proposed rule does not address the issues of 
notification to HCFA to ensure continuity of benefits when a patient 
returns to dialysis within 12 months after regaining kidney function or 
during the 36 months following transplantation.
    Response: The actual process used to prevent terminations from 
occurring when an individual resumes dialysis or receives another 
transplant is not appropriate for inclusion in regulations. However, in 
cases in which an individual ceases dialysis or receives a transplant, 
the individual is notified immediately that Medicare will terminate in 
the future (12 months after dialysis ends or 36 months after 
transplant) unless by that time dialysis is resumed or another 
transplant is received. Three months before the termination is 
effective, we send the individual another notice and an ESRD medical 
evidence form (HCFA-2728) and advise the individual to have the form 
completed by the treating source without delay if dialysis has been 
resumed or another transplant received. We believe this process 
provides ample time for an individual to notify us about resumption of 
dialysis or receipt of a new transplant in order to prevent an 
incorrect termination of Medicare entitlement.

III. Provisions of the Final Regulations

    Definition of ESRD--This final rule does not incorporate the 
proposed definition of ESRD. We are retaining the existing definition 
of ESRD in Sec. 406.13(b).
    Resumption of Entitlement to ESRD Benefits--We are incorporating 
the provisions of the proposed rule. In addition, we are making a 
technical revision by expanding Sec. 406.13(g)(1) to indicate that a 
new period of Medicare entitlement begins if an individual receives a 
kidney transplant during the 12-month period after a course of dialysis 
ends; he or she is entitled to resume Part A benefits and eligible to 
enroll in Part B benefits effective with the month the transplant 
occurs. This was inadvertently omitted from the proposed rule and 
assures that both individuals who resume dialysis and those who receive 
a transplant during the 12-month period after a course of dialysis ends 
will be treated the same with respect to the right to immediately 
enroll in Part B benefits without having to wait for the annual general 
enrollment period.

IV. Collection of Information Requirements

    This rule contains no information collection requirements. 
Consequently, this rule need not be reviewed by the Office of 
Management and Budget under the authority of the Paperwork Reduction 
Act of 1980 (44 U.S.C. 3501 et seq.).

V. Regulatory Impact Statement

    We generally prepare a regulatory flexibility analysis that is 
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
through 612) unless the Secretary certifies that a final rule will not 
have a significant economic impact on a substantial number of small 
entities. For purposes of the RFA, we consider all physicians and 
dialysis facilities to be small entities. Individuals are not included 
in the definition of a small entity.
    Also, section 1102(b) of the Act requires the Secretary to prepare 
a regulatory impact analysis if a final rule may have a significant 
impact on the operations of a substantial number of small rural 
hospitals. This analysis must [[Page 22535]] conform to the provisions 
of section 604 of the RFA. For purposes of section 1102(b) of the Act, 
we define a small rural hospital as a hospital that is located outside 
of a Metropolitan Statistical Area and has fewer than 50 beds.
    This final rule incorporates the technical provisions of the 
proposed rule regarding resumption of entitlement. This rule has no 
budget impact because it merely conforms the regulations more closely 
to the intent of the Social Security Act in order to avoid any 
ambiguity concerning the conditions for resumption of Medicare 
entitlement. Therefore, we are not preparing analyses for either the 
RFA or section 1102(b) of the Act since we have determined, and the 
Secretary certifies, that this final rule will not result in a 
significant economic impact on a substantial number of small entities 
and will not have a significant impact on the operations of a 
substantial number of small rural hospitals. In accordance with the 
provisions of Executive Order 12866, this regulation was not reviewed 
by the Office of Management and Budget.

List of Subjects in 42 CFR Part 406

    Health facilities, Kidney diseases, Medicare.

    42 CFR chapter IV, part 406 is amended as follows:

PART 406--HOSPITAL INSURANCE ELIGIBILITY AND ENTITLEMENT

    1. The authority citation for part 406 continues to read as 
follows:

    Authority: Secs. 202(t), 202(u), 226, 226A, 1102, 1818, and 1871 
of the Social Security Act (42 U.S.C. 402(t), 402(u), 426, 426-1, 
1302, 1395i-2, and 1395hh) and 103 of Pub. L. 89-97 (42 U.S.C. 426a) 
unless otherwise noted.

    2. In Sec. 406.13, paragraphs (f) and (g) are revised to read as 
follows:


Sec. 406.13  Individual who has end-stage renal disease.

* * * * *
    (f) End of entitlement. Entitlement ends with----
    (1) The end of the 12th month after the month in which a regular 
course of dialysis ends; or
    (2) The end of the 36th month after the month in which the 
individual has received a kidney transplant.
    (g) Resumption of entitlement. Entitlement is resumed under the 
following conditions:
    (1) An individual who initiates a regular course of renal dialysis 
or has a kidney transplant during the 12-month period after the 
previous course of dialysis ended is entitled to Part A benefits and 
eligible to enroll in Part B with the month the regular course of 
dialysis is resumed or the month the kidney is transplanted.
    (2) An individual who initiates a regular course of renal dialysis 
or has a kidney transplant during the 36-month period after an earlier 
kidney transplant is entitled to Part A benefits and eligible to enroll 
in Part B with the month the regular course of dialysis begins or with 
the month the subsequent kidney transplant occurs.
    (3) An individual who initiates a regular course of renal dialysis 
more than 12 months after the previous course of regular dialysis ended 
or more than 36 months after the month of a kidney transplant is 
eligible to enroll in Part A and Part B with the month in which the 
regular course of dialysis is resumed. If he or she is otherwise 
entitled under the conditions specified in paragraph (c) of this 
section, including the filing of an application, entitlement begins 
with the month in which dialysis is initiated or resumed, without a 
waiting period, subject to the limitations of paragraph (e)(1) of this 
section.

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)

    Dated: November 29, 1994.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.

    Dated: January 5, 1995.
Donna E. Shalala,
Secretary.
[FR Doc. 95-11173 Filed 5-5-95; 8:45 am]
BILLING CODE 4120-01-P