50738 Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Parts 413 and 414 

[CMS–1674–F] 

RIN 0938–AT04 

Medicare Program; End-Stage Renal 

Disease Prospective Payment System, 

Payment for Renal Dialysis Services 

Furnished to Individuals With Acute 

Kidney Injury, and End-Stage Renal 

Disease Quality Incentive Program 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Final rule. 

SUMMARY: This rule updates and makes 

revisions to the end-stage renal disease 

(ESRD) prospective payment system 

(PPS) for calendar year (CY) 2018. It also 

updates the payment rate for renal 

dialysis services furnished by an ESRD 

facility to individuals with acute kidney 

injury (AKI). This rule also sets forth 

requirements for the ESRD Quality 

Incentive Program (QIP), including for 

payment years (PYs) 2019 through 2021. 

DATES: These regulations are effective 

January 1, 2018. 

FOR FURTHER INFORMATION CONTACT: 

ESRDPayment@cms.hhs.gov, for 

issues related to the ESRD PPS and 

coverage and payment for renal dialysis 

services furnished to individuals with 

AKI. 

Delia Houseal, (410) 786–2724, for 

issues related to the ESRD QIP. 

Joel Andress, (410) 786–5237, for 

measure related issues with ESRD QIP. 

SUPPLEMENTARY INFORMATION: 

Electronic Access 

This Federal Register document is 

also available from the Federal Register 

online database through Federal Digital 

System (FDsys), a service of the U.S. 

Government Printing Office. This 

database can be accessed via the 

internet at http://www.gpo.gov/fdsys/. 

Addenda Are Only Available Through 

the Internet on the CMS Web site 

In the past, a majority of the Addenda 

referred to throughout the preamble of 

our proposed and final rules were 

available in the Federal Register. 

However, the Addenda of the annual 

proposed and final rules will no longer 

be available in the Federal Register. 

Instead, these Addenda to the annual 

proposed and final rules will be 

available only through the Internet on 

the CMS Web site. The Addenda to the 

end-stage renal disease (ESRD) 

prospective payment system (PPS) rules 

are available at: http://www.cms.gov/

ESRDPayment/PAY/list.asp. Readers 

who experience any problems accessing 

any of the Addenda to the proposed and 

final rules of the ESRD PPS that are 

posted on the CMS Web site identified 

above should contact ESRDPayment@

cms.hhs.gov. 

Table of Contents 

To assist readers in referencing 

sections contained in this preamble, we 

are providing a Table of Contents. Some 

of the issues discussed in this preamble 

affect the payment policies, but do not 

require changes to the regulations in the 

Code of Federal Regulations (CFR). 

I. Executive Summary 

A. Purpose 

1. End-Stage Renal Disease (ESRD) 

Prospective Payment System (PPS) 

2. Coverage and Payment for Renal Dialysis 

Services Furnished to Individuals With 

Acute Kidney Injury (AKI) 

3. End-Stage Renal Disease (ESRD) Quality 

Incentive Program (QIP) 

B. Summary of the Major Provisions 

1. ESRD PPS 

2. Payment for Renal Dialysis Services 

Furnished to Individuals With AKI 

3. ESRD QIP 

C. Summary of Cost and Benefits 

1. Final Impacts of the ESRD PPS 

2. Final Impacts of Payment for Renal 

Dialysis Services Furnished to 

Individuals With AKI 

3. Final Impacts of the ESRD QIP 

II. Calendar Year (CY) 2018 End-Stage Renal 

Disease (ESRD) Prospective Payment 

System (PPS) 

A. Background 

1. Statutory Background 

2. Description of the System for Payment 

of Renal Dialysis Services 

3. Updates to the ESRD PPS 

B. Summary of the Proposed Provisions, 

Public Comments, and Responses to 

Comments on the Calendar Year (CY) 

2018 ESRD PPS 

1. Pricing Eligible Outlier Drugs and 

Biologicals That Were or Would Have 

Been, Prior to January 1, 2011, 

Separately Billable Under Medicare 

Part B 

a. Summary of Outlier Calculation 

b. Use of ASP Methodology Under the 

ESRD PPS 

c. Pricing Methodologies Under Section 

1847A of the Act 

d. Pricing Eligible Outlier Drugs and 

Biologicals That Were or Would Have 

Been, Prior to January 1, 2011, 

Separately Billable Under Medicare 

Part B 

2. CY 2018 ESRD PPS Update 

a. CY 2018 ESRD Bundled Market Basket 

Update, Productivity Adjustment, and 

Labor-Related Share for the ESRD PPS 

b. Final CY 2018 ESRD PPS Wage Indices 

i. Annual Update of the Wage Index 

ii. Application of the Wage Index Under 

the ESRD PPS 

c. CY 2018 Update to the Outlier Policy 

i. CY 2018 Update to the Outlier Services 

MAP Amounts and FDL Amounts 

ii. Outlier Percentage 

d. Final Impacts to the CY 2018 ESRD PPS 

Base Rate 

i. ESRD PPS Base Rate 

ii. Annual Payment Rate Update for CY 

2018 

C. Miscellaneous Comments 

III. Calendar Year (CY) 2018 Payment for 

Renal Dialysis Services Furnished to 

Individuals With Acute Kidney Injury 

(AKI) 

A. Background 

B. Summary of the Proposed Provisions, 

Public Comments, and Responses to 

Comments on CY 2018 Payment for 

Renal Dialysis Services Furnished to 

Individuals With AKI 

1. Annual Payment Rate Update for CY 

2018 

a. CY 2018 AKI Dialysis Payment Rate 

b. Geographic Adjustment Factor 

IV. End-Stage Renal Disease (ESRD) Quality 

Incentive Program (QIP) for Payment 

Year (PY) 2021 

A. Background 

B. Summary of the Proposed Provisions, 

Public Comments, Responses to 

Comments, and Newly Finalized Policies 

for the End-Stage Renal Disease (ESRD) 

Quality Incentive Program (QIP) 

1. Accounting for Social Risk Factors in the 

ESRD QIP 

2. Change to the Performance Score 

Certificate (PSC) Beginning With PY 

2019 ESRD QIP 

3. Requirements Beginning With the PY 

2020 ESRD QIP 

a. Clarification on the Minimum Data 

Policy for Scoring Measures Finalized for 

the PY 2020 ESRD QIP 

b. Changes to the Extraordinary 

Circumstances Exception (ECE) Policy 

c. Solicitation of Comments on the 

Inclusion of Acute Kidney Injury (AKI) 

Patients in the ESRD QIP 

d. Estimated Performance Standards, 

Achievement Thresholds, and 

Benchmarks for the Clinical Measures 

Finalized for the PY 2020 ESRD QIP 

e. Policy for Weighting the Clinical 

Measure Domain for PY 2020 

f. Payment Reductions for the PY 2020 

ESRD QIP 

g. Data Validation 

4. Requirements for the PY 2021 ESRD QIP 

a. Measures for the PY 2021 ESRD QIP 

b. Replacement of the Vascular Access 

Type (VAT) Clinical Measures Beginning 

With the PY 2021 Program Year 

c. Revision of the Standardized 

Transfusion Ratio (STrR) Clinical 

Measure Beginning With the PY 2021 

Program Year 

d. New Vascular Access Measures 

Beginning With the PY 2021 ESRD QIP 

i. New Hemodialysis Vascular Access: 

Standardized Fistula Rate Clinical 

Measure (NQF #2977) 

ii. New Hemodialysis Vascular Access: 

Long-Term Catheter Rate (NQF #2978) 

Beginning With the PY 2021 ESRD QIP 

e. Performance Period for the PY 2021 

ESRD QIP 


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f. Performance Standards, Achievement 

Thresholds, and Benchmarks for the PY 

2021 ESRD QIP 

i. Performance Standards, Achievement 

Thresholds, and Benchmarks for the 

Clinical Measures in the PY 2021 ESRD 

QIP 

ii. Performance Standards, Achievement 

Thresholds, and Benchmarks for the 

Clinical Measures Proposed for the PY 

2021 ESRD QIP 

iii. Performance Standards for the PY 2021 

Reporting Measures 

g. Scoring the PY 2021 ESRD QIP 

i. Scoring Facility Performance on Clinical 

Measures Based on Achievement 

ii. Scoring Facility Performance on Clinical 

Measures Based on Improvement 

iii. Scoring the ICH CAHPS Clinical 

Measure 

iv. Scoring the Proposed Hemodialysis 

Vascular Access: Standardized Fistula 

Rate and Long-Term Catheter Rate 

Measures and the Vascular Access 

Measure Topic 

v. Calculating Facility Performance on 

Reporting Measures 

h. Weighting the Measure Domains, and 

Weighting the TPS for PY 2021 

i. Example of the PY 2021 ESRD QIP 

Scoring Methodology 

j. Minimum Data for Scoring Measures for 

the PY 2021 ESRD QIP 

k. Payment Reductions for the PY 2021 

ESRD QIP 

C. Miscellaneous Comments 

V. Advancing Health Information Exchange 

VI. Collection of Information Requirements 

A. Legislative Requirement for the 

Solicitation of Comments 

B. Requirements in Regulation Text 

C. Additional Information Collection 

Requirements 

1. ESRD QIP 

a. Wage Estimates 

b. Time Required To Submit Data Based on 

Reporting Requirements for PY 2020 

c. Data Validation Requirements for the PY 

2020 ESRD QIP 

VII. Economic Analyses 

A. Regulatory Impact Analysis 

1. Introduction 

2. Statement of Need 

3. Overall Impact 

B. Detailed Economic Analysis 

1. CY 2018 End-Stage Renal Disease 

Prospective Payment System 

a. Effects on ESRD Facilities 

b. Effects on Other Providers 

c. Effects on the Medicare Program 

d. Effects on Medicare Beneficiaries 

e. Alternatives Considered 

2. CY 2018 Payment for Renal Dialysis 

Services Furnished to Individuals With 

AKI 

a. Effects on ESRD Facilities 

b. Effects on Other Providers 

c. Effects on the Medicare Program 

d. Effects on Medicare Beneficiaries 

e. Alternatives Considered 

3. ESRD QIP 

a. Effects of the PY 2021 ESRD QIP on 

ESRD Facilities 

b. Effects on Other Providers 

d. Effects on Medicare Beneficiaries 

e. Alternatives Considered 

C. Accounting Statement 

VIII. Regulatory Flexibility Act Analysis 

IX. Unfunded Mandates Reform Act Analysis 

X. Federalism Analysis 

XI. Reducing Regulation and Controlling 

Regulatory Costs 

XII. Congressional Review Act 

XIII. Files Available to the Public via the 

Internet 

Acronyms 

Because of the many terms to which 

we refer by acronym in this final rule, 

we are listing the acronyms used and 

their corresponding meanings in 

alphabetical order below: 

Affordable Care Act the Patient Protection 

and Affordable Care Act 

ABLE Stephen Beck, Jr., Achieving a Better 

Life Experience Act of 2014 

AKI Acute Kidney Injury 

AMP Average Manufacturer Price 

ASP Average Sales Price 

ASPE Office of the Assistant Secretary for 

Planning and Evaluation 

ATRA American Taxpayer Relief Act of 

2012 

AV Arterial Venous 

BLS Bureau of Labor Statistics 

BSI Bloodstream Infection 

CBSA Core Based Statistical Area 

CCN CMS Certification Number 

CDC Centers for Disease Control and 

Prevention 

CEO Chief Executive Officer 

CFR Code of Federal Regulations 

CMS Centers for Medicare & Medicaid 

Services 

CROWNWeb Consolidated Renal 

Operations in a Web-Enabled Network 

CY Calendar Year 

DFC Dialysis Facility Compare 

DFR Dialysis Facility Report 

ECE Extraordinary Circumstances 

Exception 

EPO Epoetin 

ESA Erythropoiesis Stimulating Agent 

ESRD End-Stage Renal Disease 

ESRDB End-Stage Renal Disease Bundled 

ESRD PPS End-Stage Renal Disease 

Prospective Payment System 

ESRD QIP End-Stage Renal Disease Quality 

Incentive Program 

FFS Fee-For-Service 

FDA Food and Drug Administration 

FDL Fixed-Dollar Loss 

HCPCS Healthcare Common Procedure 

Coding System 

ICD International Classification of Diseases 

ICH CAHPS In-Center Hemodialysis 

Consumer Assessment of Healthcare 

Providers and Systems 

IGI IHS Global Inc. 

IPPS Inpatient Prospective Payment System 

IQR Interquartile Range 

IUR Inter-unit Reliability 

Kt/V A measure of dialysis adequacy where 

K is dialyzer clearance, t is dialysis time, 

and V is total body water volume 

MAP Medicare Allowable Payment 

MFP Multifactor Productivity 

MIPPA Medicare Improvements for Patients 

and Providers Act of 2008 (Pub. L. 110– 

275) 

NHSN National Healthcare Safety Network 

NQF National Quality Forum 

OMB Office of Management and Budget 

PAMA Protecting Access to Medicare Act of 

2014 

PD Peritoneal Dialysis 

PPS Prospective Payment System 

PY Payment Year 

QIP Quality Incentive Program 

RFA Regulatory Flexibility Act 

SBA Small Business Administration 

SHR Standardized Hospitalization Ratio 

SRR Standardized Readmission Ratio 

STrR Standardized Transfusion Ratio 

TCV Truncated Coefficient of Variation 

TDAPA Transitional Drug Add-on Payment 

Adjustment 

TEP Technical Expert Panel 

The Act Social Security Act 

The Secretary Secretary of the Department 

of Health and Human Services 

TPEA Trade Preferences Extension Act of 

2015 

TPS Total Performance Score 

UFR Ultrafiltration Rate 

VAT Vascular Access Type 

WAMP Widely Available Market Price 

I. Executive Summary 

A. Purpose 

1. End-Stage Renal Disease (ESRD) 

Prospective Payment System (PPS) 

On January 1, 2011, we implemented 

the end-stage renal disease (ESRD) 

prospective payment system (PPS), a 

case-mix adjusted, bundled prospective 

payment system for renal dialysis 

services furnished by ESRD facilities. 

This rule updates and makes revisions 

to the ESRD PPS for calendar year (CY) 

2018. Section 1881(b)(14) of the Social 

Security Act (the Act), as added by 

section 153(b) of the Medicare 

Improvements for Patients and 

Providers Act of 2008 (MIPPA) (Pub. L. 

110–275), and section 1881(b)(14)(F) of 

the Act, as added by section 153(b) of 

MIPPA and amended by section 3401(h) 

of the Patient Protection and Affordable 

Care Act (the Affordable Care Act) (Pub. 

L. 111–148), established that beginning 

CY 2012, and each subsequent year, the 

Secretary of the Department of Health 

and Human Services (the Secretary) 

shall annually increase payment 

amounts by an ESRD market basket 

increase factor, reduced by the 

productivity adjustment described in 

section 1886(b)(3)(B)(xi)(II) of the Act. 

2. Coverage and Payment for Renal 

Dialysis Services Furnished to 

Individuals With Acute Kidney Injury 

(AKI) 

On June 29, 2015, the President 

signed the Trade Preferences Extension 

Act of 2015 (TPEA) (Pub. L. 114–27). 

Section 808(a) of TPEA amended 

section 1861(s)(2)(F) of the Act to 

provide coverage for renal dialysis 

services furnished on or after January 1, 


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2017, by a renal dialysis facility or a 

provider of services paid under section 

1881(b)(14) of the Act to an individual 

with AKI. Section 808(b) of TPEA 

amended section 1834 of the Act by 

adding a new subsection (r) that 

provides for payment for renal dialysis 

services furnished by renal dialysis 

facilities or providers of services paid 

under section 1881(b)(14) of the Act to 

individuals with AKI at the ESRD PPS 

base rate beginning January 1, 2017. 

3. End-Stage Renal Disease (ESRD) 

Quality Incentive Program (QIP) 

This rule also finalizes requirements 

for the end-stage renal disease (ESRD) 

quality incentive program (QIP), 

including for payment years (PYs) 2019, 

2020, and 2021. The program is 

authorized under section 1881(h) of the 

Social Security Act (the Act). The ESRD 

QIP is the most recent step in fostering 

improved patient outcomes by 

establishing incentives for dialysis 

facilities to meet or exceed performance 

standards established by the Centers for 

Medicare & Medicaid Services (CMS). 

B. Summary of the Major Provisions 

1. ESRD PPS 

• Update to the ESRD PPS base rate 

for CY 2018: The CY 2018 ESRD PPS 

base rate is $232.37. This amount 

reflects a reduced market basket 

increase as required by section 

1881(b)(14)(F)(i)(I) of the Act (0.3 

percent), and application of the wage 

index budget-neutrality adjustment 

factor (1.000531), equaling $232.37 

($231.55 × 1.003 × 1.000531 = $232.37). 

• Annual update to the wage index: 

We adjust wage indices on an annual 

basis using the most current hospital 

wage data and the latest core-based 

statistical area (CBSA) delineations to 

account for differing wage levels in 

areas in which ESRD facilities are 

located. For CY 2018, we did not 

propose any changes to the application 

of the wage index floor and we will 

continue to apply the current wage 

index floor (0.4000) to areas with wage 

index values below the floor. 

• Update to the outlier policy: 

Consistent with our policy to annually 

update the outlier policy using the most 

current data, we are updating the outlier 

services fixed-dollar loss (FDL) amounts 

for adult and pediatric patients and 

Medicare Allowable Payment (MAP) 

amounts for adult and pediatric patients 

for CY 2018 using CY 2016 claims data. 

Based on the use of more current data, 

the FDL amount for pediatric 

beneficiaries would decrease from 

$68.49 to $47.79 and the MAP amount 

would decrease from $38.29 to $37.31, 

as compared to CY 2017 values. For 

adult beneficiaries, the FDL amount 

would decrease from $82.92 to $77.54 

and the MAP amount would decrease 

from $45.00 to $42.41. The 1 percent 

target for outlier payments was not 

achieved in CY 2016. Outlier payments 

represented approximately 0.78 percent 

of total payments rather than 1.0 

percent. We believe using CY 2016 

claims data to update the outlier MAP 

and FDL amounts for CY 2018 will 

increase payments for ESRD 

beneficiaries requiring higher resource 

utilization in accordance with a 1 

percent outlier percentage. 

• Update to the pricing of drugs and 

biologicals under the outlier policy: We 

are finalizing a change to the ESRD PPS 

outlier policy to allow the use of any 

pricing methodology available under 

section 1847A of the Act to determine 

the cost of certain eligible outlier service 

drugs and biologicals in computing 

outlier payments when average sales 

price (ASP) data is not available. 

2. Payment for Renal Dialysis Services 

Furnished to Individuals With AKI 

We are updating the AKI payment rate 

for CY 2018. The final CY 2018 payment 

rate is $232.37, which is equal to the CY 

2018 ESRD PPS base rate. 

3. ESRD QIP 

This rule sets forth requirements for 

the ESRD QIP, for payment years (PYs) 

2019, 2020 and 2021 as follows: 

• Updating the Performance Score 

(PSC) Certificate Beginning in PY 2019: 

We are updating the Performance Score 

Certificate (PSC) beginning in PY 2019 

by shortening and simplifying it. 

• Changes to the Extraordinary 

Circumstances Exception (ECE) Policy: 

In an effort to align our policy with the 

Extraordinary Circumstances Exception 

(ECE) policy adopted by other quality 

reporting and value-based purchasing 

programs, we are updating the ECE 

Policy for the ESRD QIP. Specifically, 

we are updating this policy to (1) allow 

the facility to submit a form signed by 

the facility’s CEO or designated 

personnel; (2) expand the reasons for 

which an ECE can be requested to 

include an unresolved issue with a CMS 

data system which affected the ability of 

the facility to submit data; and (3) 

specify that a facility does not need to 

be closed in order to request and receive 

consideration for an ECE, as long as the 

facility can demonstrate that its normal 

operations have been significantly 

affected by an extraordinary 

circumstance outside of its control. 

• PY 2021 Measure Set: Beginning 

with PY 2021, we are updating the 

Standardized Transfusion Ratio (STrR) 

Clinical Measure to align the measure 

specifications used in the ESRD QIP 

with those endorsed by the National 

Quality Forum (NQF), and replacing the 

two existing Vascular Access Type 

(VAT) measures with newly NQFendorsed vascular access measures that 

address long-held concerns of the ESRD 

community. Specifically, we are 

replacing the VAT measures with the 

Hemodialysis Vascular Access: 

Standardized Fistula Rate Clinical 

Measure and the Hemodialysis Vascular 

Access: Long-Term Catheter Rate 

Clinical Measure. 

• Data Validation: For PY 2020, we 

are continuing the pilot validation study 

for validation of Consolidated Renal 

Operations in a Web-Enabled Network 

(CROWNWeb) data. Under this 

continued pilot validation study, we 

will continue using the same 

methodology used for the PY 2018 and 

PY 2019 ESRD QIP. Under this 

methodology, we will sample 

approximately 10 records per facility 

from 300 facilities during CY 2018. 

For PY 2020, we are also continuing 

the National Healthcare Safety Network 

(NHSN) Bloodstream Infection (BSI) 

Data Validation study that we finalized 

in the CY 2017 ESRD PPS final rule (81 

FR 77894 through 77896), with a minor 

update to the sampling methodology. 

Under the updated sampling 

methodology, we will incorporate a 

targeted sample to select 35 facilities to 

participate in an NHSN dialysis event 

validation study for two quarters of data 

reported in CY 2018. 

C. Summary of Costs and Benefits 

In section VII of this final rule, we set 

forth a detailed analysis of the impacts 

of the finalized changes for affected 

entities and beneficiaries. The impacts 

include the following: 

1. Final Impacts of the ESRD PPS 

The impact chart in section VII of this 

final rule displays the estimated change 

in payments to ESRD facilities in CY 

2018 compared to estimated payments 

in CY 2017. The overall impact of the 

CY 2018 changes is projected to be a 0.5 

percent increase in payments. Hospitalbased ESRD facilities have an estimated 

0.7 percent increase in payments 

compared with freestanding facilities 

with an estimated 0.5 percent increase. 

We estimate that the aggregate ESRD 

PPS expenditures will increase by 

approximately $60 million from CY 

2017 to CY 2018. This reflects a $40 

million increase from the payment rate 

update and a $20 million increase due 

to the updates to the outlier threshold 

amounts. We note that the decrease in 

the projection of aggregate ESRD PPS 


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expenditures from the figure in the CY 

2018 ESRD PPS proposed rule ($100 

million) is due to the decrease in the 

ESRD PPS base rate update factor (that 

is, from 0.7 percent to 0.3 percent). As 

a result of the projected 0.5 percent 

overall payment increase, we estimate 

that there will be an increase in 

beneficiary co-insurance payments of 

0.5 percent in CY 2018, equivalent to 

approximately $10 million. 

2. Final Impacts of Payment for Renal 

Dialysis Services Furnished to 

Individuals With AKI 

We anticipate an estimated $20 

million will be paid to ESRD facilities 

in CY 2018 as a result of AKI patients 

receiving renal dialysis services in the 

ESRD facility at the ESRD PPS base rate 

versus receiving those services in the 

hospital outpatient setting. In the CY 

2018 ESRD PPS proposed rule, we 

estimated $2 million would be paid to 

ESRD facilities in CY 2018 for AKI 

patients. Based on actual preliminary 

ESRD facility claims data available after 

publication of the CY 2018 ESRD PPS 

proposed rule, we have updated this 

estimate for the final rule. 

3. Final Impacts of the ESRD QIP 

The impact chart in section VII of this 

final rule displays estimated impacts of 

the ESRD QIP for payment year (PY) 

2021. The overall impact is an expected 

reduction in payment to all facilities of 

$29 million. The PY 2021 estimated 

total facility burden for the collection of 

data is $91 million, which represents a 

zero net increase from PY 2020. 

II. Calendar Year (CY) 2018 End-Stage 

Renal Disease (ESRD) Prospective 

Payment System (PPS) 

A. Background 

1. Statutory Background 

On January 1, 2011, we implemented 

the end-stage renal disease (ESRD) 

prospective payment system (PPS), a 

case-mix adjusted bundled PPS for renal 

dialysis services furnished by ESRD 

facilities as required by section 

1881(b)(14) of the Social Security Act 

(the Act), as added by section 153(b) of 

the Medicare Improvements for Patients 

and Providers Act of 2008 (MIPPA) 

(Pub. L. 110–275). Section 

1881(b)(14)(F) of the Act, as added by 

section 153(b) of MIPPA and amended 

by section 3401(h) of the Patient 

Protection and Affordable Care Act (the 

Affordable Care Act) (Pub. L. 111–148), 

established that beginning with calendar 

year (CY) 2012, and each subsequent 

year, the Secretary of the Department of 

Health and Human Services (the 

Secretary) shall annually increase 

payment amounts by an ESRD market 

basket increase factor, reduced by the 

productivity adjustment described in 

section 1886(b)(3)(B)(xi)(II) of the Act. 

Section 632 of the American Taxpayer 

Relief Act of 2012 (ATRA) (Pub. L. 112– 

240) included several provisions that 

apply to the ESRD PPS. Section 632(a) 

of ATRA added section 1881(b)(14)(I) to 

the Act, which required the Secretary, 

by comparing per patient utilization 

data from 2007 with such data from 

2012, to reduce the single payment for 

renal dialysis services furnished on or 

after January 1, 2014 to reflect the 

Secretary’s estimate of the change in the 

utilization of ESRD-related drugs and 

biologicals (excluding oral-only ESRDrelated drugs). Consistent with this 

requirement, we finalized $29.93 as the 

total drug utilization reduction and 

finalized a policy to implement the 

amount over a 3- to 4-year transition 

period in the CY 2014 ESRD PPS final 

rule (78 FR 72161 through 72170). 

Section 632(b) of ATRA prohibited 

the Secretary from paying for oral-only 

ESRD-related drugs and biologicals 

under the ESRD PPS prior to January 1, 

2016. And section 632(c) of ATRA 

required the Secretary, by no later than 

January 1, 2016, to analyze the case-mix 

payment adjustments under section 

1881(b)(14)(D)(i) of the Act and make 

appropriate revisions to those 

adjustments. 

On April 1, 2014, the Protecting 

Access to Medicare Act of 2014 (PAMA) 

(Pub. L. 113–93) was enacted. Section 

217 of PAMA included several 

provisions that apply to the ESRD PPS. 

Specifically, sections 217(b)(1) and (2) 

of PAMA amended sections 

1881(b)(14)(F) and (I) of the Act and 

replaced the drug utilization adjustment 

that was finalized in the CY 2014 ESRD 

PPS final rule (78 FR 72161 through 

72170) with specific provisions that 

dictated the market basket update for 

CY 2015 (0.0 percent) and how the 

market basket should be reduced in CYs 

2016 through CY 2018. 

Section 217(a)(1) of PAMA amended 

section 632(b)(1) of ATRA to provide 

that the Secretary may not pay for oralonly ESRD-related drugs under the 

ESRD PPS prior to January 1, 2024. 

Section 217(a)(2) of PAMA further 

amended section 632(b)(1) of ATRA by 

requiring that in establishing payment 

for oral-only drugs under the ESRD PPS, 

the Secretary must use data from the 

most recent year available. Section 

217(c) of PAMA provided that as part of 

the CY 2016 ESRD PPS rulemaking, the 

Secretary shall establish a process for (1) 

determining when a product is no 

longer an oral-only drug; and (2) 

including new injectable and 

intravenous products into the ESRD PPS 

bundled payment. 

Finally, on December 19, 2014, the 

President signed the Stephen Beck, Jr., 

Achieving a Better Life Experience Act 

of 2014 (ABLE) (Pub. L. 113–295). 

Section 204 of ABLE amended section 

632(b)(1) of ATRA, as amended by 

section 217(a)(1) of PAMA, to provide 

that payment for oral-only renal dialysis 

services cannot be made under the 

ESRD PPS bundled payment prior to 

January 1, 2025. 

2. Description of the System for 

Payment of Renal Dialysis Services 

Under the ESRD PPS, a single, pertreatment payment is made to an ESRD 

facility for all of the renal dialysis 

services defined in section 

1881(b)(14)(B) of the Act and furnished 

to individuals for the treatment of ESRD 

in the ESRD facility or in a patient’s 

home. We have codified our definitions 

of renal dialysis services at 42 CFR 

413.171, which is in subpart H of 42 

CFR part 413. Our other payment 

policies are also included in regulations 

in subpart H of 42 CFR part 413. The 

ESRD PPS base rate is adjusted for 

characteristics of both adult and 

pediatric patients and accounts for 

patient case-mix variability. The ESRD 

PPS provides for the following adult 

and pediatric patient-level adjustments: 

The adult patient-level adjusters include 

five age categories, body surface area, 

low body mass index, onset of dialysis, 

and four co-morbidity categories; while 

the pediatric patient-level adjusters 

include two age categories and two 

dialysis modalities (§§ 413.235(a) and 

(b)). 

The ESRD PPS provides for three 

facility-level adjustments. The first 

payment adjustment accounts for ESRD 

facilities furnishing a low volume of 

dialysis treatments (§ 413.232). The 

second adjustment reflects differences 

in area wage levels developed from Core 

Based Statistical Areas (CBSAs) 

(§ 413.231). The third payment 

adjustment accounts for ESRD facilities 

furnishing renal dialysis services in a 

rural area (§ 413.233). 

The ESRD PPS allows for a training 

add-on for home and self-dialysis 

modalities (§ 413.235(c)) and an 

additional payment for high cost 

outliers due to unusual variations in the 

type or amount of medically necessary 

care when applicable (§ 413.237). 

The ESRD PPS also provides for a 

transitional drug add-on payment 

adjustment (TDAPA) to pay for a new 

injectable or intravenous product that is 

not considered included in the ESRD 

PPS base rate, meaning a product that is 

used to treat or manage a condition for 


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which there is not an existing ESRD PPS 

functional category (§ 413.234). The 

ESRD PPS functional categories 

represent distinct groupings of drugs or 

biologicals, as determined by CMS, 

whose end action effect is the treatment 

or management of a condition or 

conditions associated with ESRD. New 

injectable or intravenous products that 

are not included in a functional category 

in the ESRD PPS base rate are paid for 

using the TDAPA for a minimum of 2 

years, until sufficient claims data for 

rate setting analysis is available. At that 

point, utilization would be reviewed 

and the ESRD PPS base rate modified, 

if appropriate, to account for these 

products. The TDAPA is based on 

pricing methodologies under section 

1847A of the Act (§ 413.234(c)). 

3. Updates to the ESRD PPS 

Policy changes to the ESRD PPS are 

proposed and finalized annually in the 

Federal Register. The CY 2011 ESRD 

PPS final rule was published on August 

12, 2010 in the Federal Register (75 FR 

49030 through 49214). That rule 

implemented the ESRD PPS beginning 

on January 1, 2011 in accordance with 

section 1881(b)(14) of the Act, as added 

by section 153(b) of MIPPA, over a 4- 

year transition period. Since the 

implementation of the ESRD PPS, we 

have published annual rules to make 

routine updates, policy changes, and 

clarifications. 

On November 4, 2016, we published 

in the Federal Register a final rule (81 

FR 77384 through 77969) entitled, 

‘‘Medicare Program; End-Stage Renal 

Disease Prospective Payment System, 

Coverage and Payment for Renal 

Dialysis Services Furnished to 

Individuals With Acute Kidney Injury, 

End-Stage Renal Disease Quality 

Incentive Program, Durable Medical 

Equipment, Prosthetics, Orthotics and 

Supplies Competitive Bidding Program 

Bid Surety Bonds, State Licensure and 

Appeals Process for Breach of Contract 

Actions, Durable Medical Equipment, 

Prosthetics, Orthotics and Supplies 

Competitive Bidding Program and Fee 

Schedule Adjustments, Access to Care 

Issues for Durable Medical Equipment; 

and the Comprehensive End-Stage Renal 

Disease Care Model; Final Rule’’ 

(hereinafter referred to as the CY 2017 

ESRD PPS final rule). In that rule, we 

updated the ESRD PPS base rate for CY 

2017, the wage index and wage index 

floor, the outlier policy, and the home 

and self-dialysis training add-on 

payment adjustment. For further 

detailed information regarding these 

updates, see 81 FR 77384. 

B. Summary of the Proposed Provisions, 

Public Comments, and Responses to 

Comments on the Calendar Year (CY) 

2018 ESRD PPS 

The proposed rule, entitled ‘‘Medicare 

Program; End-Stage Renal Disease 

Prospective Payment System, Payment 

for Renal Dialysis Services Furnished to 

Individuals with Acute Kidney Injury, 

and End-Stage Renal Disease Quality 

Incentive Program’’ (82 FR 31190 

through 31233), hereinafter referred to 

as the CY 2018 ESRD PPS proposed 

rule, was published in the Federal 

Register on July 5, 2017, with a 

comment period that ended on August 

28, 2017. In that proposed rule, for the 

ESRD PPS, we proposed to make a 

number of annual updates for CY 2018, 

including updates to the ESRD PPS base 

rate, wage index and outlier thresholds, 

and to update the pricing of certain 

drugs and biologicals under the outlier 

policy. We received approximately 58 

public comments on our proposals, 

including comments from ESRD 

facilities; national renal groups, 

nephrologists and patient organizations; 

patients and care partners; 

manufacturers; health care systems; and 

nurses. 

In this final rule, we provide a 

summary of each proposed provision, a 

summary of the public comments 

received and our responses to them, and 

the policies we are finalizing for the CY 

2018 ESRD PPS. 

1. Pricing Eligible Outlier Drugs and 

Biologicals That Were or Would Have 

Been, Prior to January 1, 2011, 

Separately Billable Under Medicare 

Part B 

a. Summary of Outlier Calculation 

Our regulations at 42 CFR 413.237 

specify the methodology used to 

calculate outlier payments. Under the 

ESRD PPS outlier policy, an ESRD 

facility is eligible for an outlier payment 

when the facility’s per treatment 

imputed Medicare Allowable Payment 

(MAP) amount for ESRD outlier services 

furnished to a beneficiary exceeds the 

predicted ESRD outlier services MAP 

amount for outlier services plus the 

fixed-dollar loss (FDL) amount, as 

specified in § 413.237(b). In the CY 2011 

ESRD PPS final rule (75 FR 49134 

through 49147), we discussed the 

details of establishing the outlier policy 

under the ESRD PPS, including 

determining eligibility for outlier 

payments. We discussed the proposed 

CY 2018 updates to the outlier policy in 

the CY 2018 ESRD PPS proposed rule 

(82 FR 31198 through 31200). 

Under § 413.237(a)(1), ESRD outlier 

services include (1) certain items and 

services included in the ESRD PPS 

bundle that were or would have been 

separately billable under Medicare Part 

B prior to the implementation of the 

ESRD PPS, including ESRD-related 

drugs and biologicals, ESRD-related 

laboratory tests, and other ESRD-related 

medical/surgical supplies; and (2) 

certain renal dialysis service drugs 

included in the ESRD PPS bundle that 

were covered under Medicare Part D 

prior to the implementation of the ESRD 

PPS. For the Centers for Medicare & 

Medicaid Services (CMS) to calculate 

outlier eligibility and payments, ESRD 

facilities must identify on the monthly 

claim which outlier services have been 

furnished. CMS provides a list of outlier 

services on the CMS Web site, https:// 

www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ESRDpayment/

Outlier_Services.html, which is subject 

to certain additions and exclusions as 

discussed in the CY 2012 ESRD PPS 

final rule (76 FR 70246) and Chapter 8, 

Section 20.1 of CMS Publication 100–04 

(https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/

downloads/clm104c08.pdf). 

It is important for ESRD facilities to 

report the outlier services on the claim 

because imputed outlier service MAP 

amounts for a beneficiary are based on 

the actual utilization of outlier services. 

Specifically, we estimate an ESRD 

facility’s imputed costs for ESRD outlier 

services based on available pricing data. 

In the CY 2011 ESRD PPS final rule we 

finalized the pricing data that we use to 

estimate imputed outlier services MAP 

amounts for the different categories of 

outlier services (75 FR 49141). With 

regard to Part B ESRD-related drugs and 

biologicals that were separately billable 

prior to implementation of the ESRD 

PPS, we finalized a policy to base the 

prices for these items on the most 

current average sales price (ASP) data 

plus 6 percent. Our rationale for this 

decision was that ASP data for ESRDrelated drugs and biologicals is updated 

quarterly and was the basis for payment 

of these drugs and biologicals prior to 

the implementation of the ESRD PPS. 

b. Use of ASP Methodology Under the 

ESRD PPS 

Since the implementation of the ESRD 

PPS, we have referred to the use of the 

ASP methodology when we needed to 

price ESRD-related drugs and 

biologicals previously paid separately 

under Part B (prior to the ESRD PPS) for 

purposes of ESRD PPS policies or 

calculations. For example, in the CY 

2011 ESRD PPS final rule, we finalized 

the use of the ASP plus 6 percent 

methodology for pricing Part B ESRDrelated drugs and biologicals under the 


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outlier policy (75 FR 49141). In the CY 

2012 ESRD PPS final rule (76 FR 20244), 

we stated that under the outlier policy 

we use the ASP methodology. 

In the CY 2013 ESRD PPS final rule 

(77 FR 67463), we finalized that for CY 

2013 and subsequent years we would 

continue to use the ASP methodology, 

including any modifications finalized in 

the Physician Fee Schedule final rules, 

to compute outlier MAP amounts. (We 

referred to the Physician Fee Schedule 

since this is typically the rulemaking 

vehicle CMS uses for provisions related 

to covered Part B drugs and biologicals, 

however, we note that other vehicles 

such as standalone rules or the 

outpatient prospective payment system 

rules, are used as well.) In the CY 2013 

ESRD PPS final rule, we also finalized 

the use of the ASP methodology for any 

other policy that requires the use of 

payment amounts for drugs and 

biologicals that, absent the ESRD PPS, 

would be paid separately. 

In accordance with this policy, in the 

CY 2016 ESRD PPS proposed rule (80 

FR 37829 through 37833), we proposed 

to use ASP methodology for purposes of 

two policies (pricing new injectable and 

intravenous products included in the 

ESRD PPS bundled payment amount for 

outlier payments and determining the 

TDAPA under the ESRD PPS drug 

designation process. A detailed 

discussion of our proposals can be 

found in the CY 2016 ESRD PPS 

proposed rule (80 FR 37831 through 

37833). 

As we discussed in the CY 2016 ESRD 

PPS final rule (80 FR 69023 through 

69024), commenters expressed concern 

regarding the availability of ASP data 

when including new injectable or 

intravenous products into the ESRD PPS 

bundled payment, for purposes of both 

the outlier calculation and TDAPA. A 

commenter pointed out that under the 

proposal, new products would qualify 

as outlier services, and if we fail to 

allow separate payment at launch, there 

would be no ASP upon which to base 

an outlier payment. That commenter 

recommended that we consider how to 

avoid jeopardizing beneficiary access by 

implementing an outlier payment based 

on wholesale acquisition cost (WAC) or 

another readily available price. We 

agreed with the commenter, and stated 

that in the event we do not establish an 

ASP, WAC could be used. We explained 

that we consider WAC pricing to be a 

part of the pricing methodologies 

specified in section 1847A of the Act, 

and we would use the methodologies 

available to us under that authority in 

order to accurately determine a price for 

the calculation of outlier payments for 

new injectable and intravenous drugs 

that fit into one of the existing ESRD 

PPS functional categories. However, we 

did not address extending this policy to 

Part B ESRD-related drugs and 

biologicals that are currently eligible for 

outlier consideration that may not have 

ASP data. 

Also, in the CY 2016 ESRD PPS final 

rule (80 FR 69024), other commenters 

expressed concern regarding the use of 

ASP data for purposes of the TDAPA. 

The commenters suggested that ASP 

would not be truly reflective of the 

actual cost of the drugs. One commenter 

pointed out that there is often a data lag 

between ASP and the actual cost of the 

drugs and as a result, the TDAPA may 

not reflect the actual cost of the drug. 

We responded that the ASP 

methodology is a part of the pricing 

methodologies specified in section 

1847A of the Act, which may also 

include WAC pricing during the first 

quarter of sales as specified in section 

1847A(c)(4) of the Act. We agreed with 

commenters that ASP pricing may not 

always be the most appropriate way to 

calculate the TDAPA. Therefore, we 

revised the regulation text at 

§ 413.234(c)(1) to refer to the pricing 

methodologies under section 1847A of 

the Act, rather than ASP pricing 

methodology, because these 

methodologies include ASP as well as 

WAC. 

c. Pricing Methodologies Under Section 

1847A of the Act 

Medicare Part B follows the 

provisions under section 1847A of the 

Act for purposes of determining the 

payment amounts for drugs and 

biologicals that are described in section 

1842(o)(1)(C) of the Act and that are 

furnished on or after January 1, 2005. 

While most Part B drugs (excluding 

those paid on a cost or prospective 

payment basis) are paid at ASP plus 6 

percent, there are cases where ASP is 

unavailable. For example, when a new 

drug or biological is brought to market, 

sales data is not sufficiently available 

for the manufacturer to compute an 

ASP. In these cases, the payment 

amount for these drugs could be 

determined using WAC (as specified in 

section 1847A(c)(4) of the Act) or, when 

WAC is not available, the Medicare 

Administrative Contractor has 

discretion in determining the payment 

amount. Under section 1847A(d) of the 

Act, CMS also has the authority to 

substitute an Average Manufacturer 

Price (AMP) or Widely Available Market 

Price (WAMP)-based payment amount 

for the ASP-based payment amount 

when the ASP exceeds the AMP or 

WAMP by a threshold amount. As 

discussed in the CY 2013 Physician Fee 

Schedule final rule (77 FR 69140 

through 69141), published in the 

Federal Register on November 1, 2012, 

the AMP price substitution policy is not 

utilized frequently and WAMP-based 

price substitutions are not currently 

implemented. CMS also uses a carryover 

pricing policy in the very rare situations 

when a manufacturer’s ASP data for a 

multiple source drug product is missing, 

as discussed in the CY 2011 Physician 

Fee Schedule final rule (75 FR 73461 

through 73462). 

For newly approved drugs, ASP-based 

payment limits typically become 

effective two quarters after the drug’s 

first quarter of sales (a discussion about 

the use of partial quarter ASP data is 

available in the CY 2012 Physician Fee 

Schedule final rule, 75 FR 73465). We 

note that if WAC-based partial quarter 

payment amounts are used, such 

payment amounts will typically exceed 

payments based on ASP. Thus, there 

may be circumstances where WACbased partial quarter pricing of the drug 

increases the beneficiary’s cost sharing 

payment. In order to minimize financial 

impact on beneficiaries, in situations 

where less than a quarter’s worth of ASP 

data is available, an ASP-based payment 

limit will be used, if it is available. 

d. Pricing Eligible Outlier Drugs and 

Biologicals That Were or Would Have 

Been, Prior to January 1, 2011, 

Separately Billable Under Medicare 

Part B 

As we have described above, section 

1847A of the Act provides methods that 

are used to determine payment amounts 

for most separately paid Part B drugs, 

that is, drugs and biologicals that are not 

paid on a cost or PPS basis (see section 

1842(o)(1) of the Act). We are aware of 

several circumstances in which an ASPbased payment amount is not available. 

For example, an ASP-based payment 

amount is not available when drugs or 

biologicals are new to market and 

manufacturers have not yet reported 

ASP data. Based on CMS’ experience 

with determining Part B drug payment 

limits under section 1847A of the Act, 

we believe the instances are limited 

when ASP data would not be available 

for drugs or biologicals that could 

qualify for the ESRD outlier calculation. 

Nevertheless, we believe that these 

drugs and biologicals, when they are 

determined to be an ESRD outlier 

service, should count toward the outlier 

calculation, regardless of the limited 

frequency. 

In the CY 2018 ESRD PPS proposed 

rule, we proposed to extend the use of 

all pricing methodologies under section 

1847A of the Act for purposes of the 

ESRD PPS outlier policy, specifically for 


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current ESRD-related drugs and 

biologicals that were or would have 

been separately billable under Part B 

prior to the implementation of the ESRD 

PPS and are outlier eligible for CY 2018 

and subsequent years. As we noted in 

the CY 2018 ESRD PPS proposed rule, 

we have already established a policy 

under the drug designation process in 

the CY 2016 ESRD PPS final rule (80 FR 

69023), whereby we use the pricing 

methodologies specified in section 

1847A of the Act to determine the 

TDAPA for a new injectable or 

intravenous product that is not 

considered included in the ESRD PPS 

base rate (§ 413.234(c)). In addition, we 

have established that we use these 

methodologies to determine a price for 

the calculation of outlier payments for 

new injectable and intravenous drugs 

that fit into one of the existing the 

functional categories (80 FR 69023). 

We explained in the CY 2018 ESRD 

PPS proposed rule that we believe using 

the pricing methodologies under section 

1847A of the Act is consistent with the 

ESRD PPS drug designation process, 

including TDAPA, and how covered 

drugs and biologicals are paid under 

Medicare Part B. We stated that we 

believe consistency with Medicare Part 

B payment for drugs and biologicals 

would be beneficial to ESRD facilities 

because this is the way CMS pays for 

injectable drugs and biologicals reported 

on the ESRD claim with the AY 

modifier; and therefore facilities would 

be able to predict outlier payments. 

Therefore, we proposed to apply any 

pricing methodology available under 

section 1847A of the Act as appropriate 

when ASP pricing is unavailable for 

eligible drugs and biologicals under the 

outlier policy that were or would have 

been separately billable under Part B 

prior to the implementation of the ESRD 

PPS. 

We noted in the CY 2018 ESRD PPS 

proposed rule that, in situations in 

which ASP data is not available and 

other methodologies under section 

1847A of the Act do not apply 

(including but not limited to AMP price 

substitution or carryover pricing), we 

believe that a WAC-based payment 

amount can be determined instead. 

Based on our experience with 

determining Part B drug payments 

under section 1847A of the Act, we 

stated, we believe that drugs and 

biologicals that are approved by the 

Food and Drug Administration and are 

being sold in the United States nearly 

always have WAC amounts published in 

pricing compendia. We noted that we 

believe this proposal is consistent with 

the intent of the ESRD PPS outlier 

policy, which is to provide a payment 

adjustment for high cost patients due to 

unusual variations in the type or 

amount of medically necessary care. If 

there are drugs and biologicals that 

ESRD facilities furnish for the treatment 

of ESRD that qualify as ESRD outlier 

services and do not have ASP data, we 

stated that we would want these items 

counted toward an outlier payment 

since they are a part of the cost the 

facility is incurring. When a drug or 

biological does not have ASP data or 

WAC data or cannot otherwise be priced 

under section 1847A of the Act, we 

proposed that it would not count toward 

the outlier calculation. When the 

utilization of a drug or biological is not 

counted toward the outlier calculation, 

it may result in a lower outlier payment 

or no outlier payment to the ESRD 

facility. 

We solicited comment on our 

proposal to use any pricing 

methodology available under section 

1847A of the Act for purposes of the 

ESRD PPS outlier policy. We also 

solicited comment on our proposal that 

when pricing methodologies are not 

available under section 1847A of the 

Act, the drug or biological would not 

count toward the outlier calculation. 

The comments and our responses to 

the comments on our outlier proposals 

are set forth below. 

Comment: Most commenters on this 

proposal, including national dialysis 

provider organizations, several large 

dialysis organizations, a patient 

advocacy organization, a drug 

manufacturer, a health system and a 

professional association expressed 

support for the proposal to use the 

pricing methodologies available under 

section 1847A of the Act to price drugs 

and biologicals for the outlier policy. 

Commenters noted that, historically, 

new drugs and biologicals used in the 

treatment of ESRD that come to market 

can be expensive and not having access 

to outlier payments may create an 

unintended barrier. While they believe 

that it is unlikely a new drug or 

biological will not have an ASP or 

WAC, they indicated that it is important 

to ensure that payment policies do not 

disincentivize the use of drugs and 

biologicals. Another commenter stated 

patients who require outlier drugs 

should not be denied the individualized 

care they need and deserve due to 

revisions to the pricing methodology. 

Response: We appreciate the 

commenters’ support for our outlier 

proposal. We also agree with the 

importance of beneficiary access to new 

therapies when they come to market 

and, as discussed more fully below, we 

believe the policy we are finalizing 

ensures that every drug and biological 

within an ESRD PPS functional 

category, except for drugs that are 

eligible for the TDAPA, is included in 

the outlier calculation. 

Comment: Several commenters 

expressed concern about the availability 

of an outlier payment in the event there 

is no pricing data available for drugs 

and biologicals. The commenters offered 

alternative pricing approaches that 

would be applied when no price is 

available using the methods described 

in section 1847A of the Act to ensure 

that all drugs and biologicals could be 

priced for the outlier calculation. 

Several commenters urged CMS to rely 

upon contract pricing rather than not 

include a new drug in the outlier 

calculation. One commenter asked that 

CMS provide an analysis of the proposal 

to clarify the impact on the ESRD PPS. 

Another commenter recommended 

pricing the drug or biological by the 

hospital’s cost-to-charge ratio for Cost 

Center 7300, Drugs Charged to Patients, 

for hospital-based ESRD facilities or the 

hospital-specific Reasonable Cost Factor 

that is currently used for payment of 

vaccines and blood products on ESRD 

claims from hospital-based facilities. 

Since this Reasonable Cost Factor is 

already used in the ESRD PPS, the 

commenter stated that applying it to this 

category of drugs and biologicals should 

be relatively easy administratively. The 

commenter indicated that adding an 

additional last resort pricing method 

would allow for hospital-based ESRD 

facilities to receive outlier payments or 

payments for non-ESRD related services 

(meaning, we believe, separately billable 

items and services reported with the AY 

modifier) that reflect the costs of drugs 

or biologicals for which no other pricing 

method is possible. 

Response: We agree with the 

commenters that all eligible drugs and 

biologicals should be counted in the 

outlier calculation, to maintain 

consistency in the policies under the 

ESRD PPS and to ensure patient access 

to necessary medications. Also, while 

we appreciate the commenters’ 

suggestions for alternative pricing 

methodologies, none of the suggestions 

fall under the pricing methodologies in 

section 1847A of the Act. Since our goal 

is to ensure all eligible drugs and 

biologicals are counted in the outlier 

calculation, while maintaining 

consistency with the drug pricing 

policies under the ESRD PPS, we 

believe adopting any of the suggested 

alternatives would make drug pricing 

policies under the ESRD PPS 

inconsistent. 

As we stated in the CY 2018 ESRD 

PPS proposed rule (82 FR 31196), we 

believe that using the pricing 


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methodologies under section 1847A of 

the Act is consistent with the ESRD PPS 

drug designation process for new 

injectable and intravenous drugs, and 

how covered drugs and biologicals are 

paid under Medicare Part B. We 

continue to believe that consistency 

with Medicare Part B payment for drugs 

and biologicals is beneficial to ESRD 

facilities because, as mentioned above, 

this is the way CMS pays for injectable 

drugs and biologicals on the ESRD claim 

with the AY modifier; and therefore, 

facilities would be able to predict 

outlier payments. We continue to 

believe it is preferable to have one 

pricing policy for Part B drugs and 

biologicals under the ESRD PPS 

applicable to both the drug designation 

process, including TDAPA, and outlier 

policy. Therefore, we are not adopting 

the commenters’ suggestions at this 

time. 

Upon further review and discussion, 

while we believe the ASP and WAC 

pricing methodologies under section 

1847A of the Act are sufficient to price 

most eligible drugs and biologicals for 

the purposes of outlier payment, we 

note that Medicare Administrative 

Contractors are authorized to use 

invoice pricing in scenarios in which 

neither ASP nor WAC data is available. 

This is consistent with chapter 17, 

section 20.1.3 of the Medicare Claims 

Processing Manual, which directs the 

Medicare Administrative Contractors to 

develop payment allowance limits for 

covered drugs and biologicals that are 

not included in the ASP Medicare Part 

B Drug Pricing File or Not Otherwise 

Classified Pricing File based on the 

published WAC or invoice pricing. 

Invoice pricing is not as robust a 

measure of actual sales price as ASP, 

but it is nearly universally available. 

Therefore, as we now believe the pricing 

methodologies under section 1847A of 

the Act and related guidance are 

sufficiently comprehensive, we are not 

finalizing the proposal to not count 

certain drugs and biologicals toward the 

outlier calculation when pricing 

methodologies are not available under 

section 1847A of the Act. 

We intend to analyze the utilization of 

drugs and biologicals and how they are 

priced on a consistent basis to monitor 

the use of those methodologies 

described in section 1847A of the Act. 

With regard to the comment that we 

provide an analysis of the impact of this 

proposal, currently we are aware of only 

2 drugs with low utilization that were 

unable to be priced using ASP for 

outlier purposes. Those particular drugs 

had WAC prices and thus could be 

priced using the pricing methods under 

section 1847A of the Act; therefore, we 

believe the impact is negligible. 

Comment: MedPAC commented that 

CMS should rely on ASP data when 

pricing drugs and biologics under the 

ESRD PPS outlier policy and drug 

designation process, including TDAPA, 

with one exception: New, single-source 

drugs and biologics, and the first 

biosimilar to reference a biologic (that 

lacks ASP data). MedPAC recommended 

that new single-source drugs and 

biologics, and the first biosimilar to a 

reference biologic (that lack ASP data), 

should be priced using WAC data only 

for 2 to 3 calendar quarters to permit 

time for manufacturers to report sales 

data to CMS and for the agency to 

calculate an ASP. If at the end of 2 to 

3 calendar quarters, ASP data are not 

available, MedPAC recommended CMS 

should not use WAC for purposes of 

calculating outlier payments. 

MedPAC referred to its June 2017 

report to the Congress, entitled 

‘‘Medicare and the Health Care Delivery 

System,’’ which raised concerns about 

the accuracy of WAC data. MedPAC 

stated that unlike an ASP, a product’s 

WAC does not incorporate prompt-pay 

or other discounts. If discounts are 

available, then a product’s WAC price 

would be greater than it otherwise 

would be under the ASP-based formula. 

Consequently, MedPAC noted that using 

WAC data to determine payments under 

the outlier policy could result in higher 

spending for beneficiaries and 

taxpayers. 

MedPAC further commented that, to 

reduce the need to use less accurate 

prices, such as WAC, and to improve 

the accuracy of ASP data, it 

recommended in the June 2017 report 

that Congress improve ASP data 

reporting by requiring all manufacturers 

of Part B drugs and biologics to report 

ASP and impose civil monetary 

penalties for failure to report. As noted 

by MedPAC, under current policy, not 

all manufacturers of Part B drugs are 

required to submit their ASP data. 

Section 1927(b)(3) of the Act requires 

only manufacturers with Medicaid drug 

rebate agreements in place to report 

their sales data to calculate ASP for each 

of their Part B drugs. 

Response: Our intent for the outlier 

proposal was to have a consistent drug 

pricing policy under the ESRD PPS with 

respect to Part B drugs and to protect 

beneficiary access to renal dialysis 

services. We believe that our proposal 

achieves those goals. We further believe 

that a change as substantial as relying 

only on ASP data for TDAPA pricing, as 

suggested by MedPAC, is out of scope 

for this rulemaking because we did not 

propose any changes to the TDAPA. 

Therefore, we are not adopting the 

MedPAC recommendation for TDAPA 

in this final rule. We share MedPAC’s 

concern that ongoing reliance on the use 

of WAC pricing under the ESRD PPS 

could result in higher payments and 

will consider limiting the use of the 

other non-ASP pricing methods 

available under section 1847A of the 

Act in the future if our monitoring 

indicates they are used for an extended 

period of time and manufacturers are 

not reporting ASP data. 

Final Rule Action: We are finalizing 

our proposal to use the pricing 

methodologies in section 1847A of the 

Act, as appropriate, to price drugs and 

biologicals for the outlier calculation 

when ASP pricing data is not available. 

We are not finalizing the proposal to not 

count certain drugs and biologicals 

toward the outlier calculation when 

pricing methodologies are not available 

under section 1847A of the Act. 

2. CY 2018 ESRD PPS Update 

a. CY 2018 ESRD Bundled Market 

Basket Update, Productivity 

Adjustment, and Labor-Related Share 

for the ESRD PPS 

In accordance with section 

1881(b)(14)(F)(i) of the Act, as added by 

section 153(b) of MIPPA and amended 

by section 3401(h) of the Affordable 

Care Act, beginning in 2012, the ESRD 

PPS payment amounts are required to be 

annually increased by an ESRD market 

basket increase factor and reduced by 

the productivity adjustment described 

in section 1886(b)(3)(B)(xi)(II) of the 

Act. The application of the productivity 

adjustment may result in the increase 

factor being less than 0.0 for a year and 

may result in payment rates for a year 

being less than the payment rates for the 

preceding year. The statute also 

provides that the market basket increase 

factor should reflect the changes over 

time in the prices of an appropriate mix 

of goods and services used to furnish 

renal dialysis services. 

Section 1881(b)(14)(F)(i)(I) of the Act, 

as added by section 217(b)(2)(A) of 

PAMA, provides that in order to 

accomplish the purposes of 

subparagraph (I) with respect to 2016, 

2017, and 2018, after determining the 

market basket percentage increase factor 

for each of 2016, 2017, and 2018, the 

Secretary shall reduce such increase 

factor by 1.25 percentage points for each 

of 2016 and 2017 and by 1.0 percentage 

point for 2018. Accordingly, for CY 

2018, we proposed to reduce the 

amount of the market basket percentage 

increase by 1.0 percent and to further 

reduce it by the productivity 

adjustment. 


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We proposed to use the CY 2012- 

based ESRDB market basket as finalized 

and described in the CY 2015 ESRD PPS 

final rule (79 FR 66129 through 66136) 

to compute the CY 2018 ESRDB market 

basket increase factor and labor-related 

share based on the best available data. 

Consistent with historical practice, we 

estimate the ESRDB market basket 

update based on the IHS Global Inc. 

(IGI) forecast using the most recently 

available data. IGI is a nationally 

recognized economic and financial 

forecasting firm that contracts with CMS 

to forecast the components of the market 

baskets. 

As a result of these provisions, and 

using the IGI forecast for the first quarter 

of 2017 of the CY 2012-based ESRDB 

market basket (with historical data 

through the 4th quarter of 2016), the 

proposed CY 2018 ESRD market basket 

increase was 0.7 percent. This market 

basket increase was calculated by 

starting with the proposed CY 2018 

ESRDB market basket percentage 

increase factor of 2.2 percent, reducing 

it by the mandated legislative 

adjustment of 1.0 percent (required by 

section 1881(b)(14)(F)(I)(i) of the Act), 

and reducing it further by the 

multifactor productivity (MFP) 

adjustment (the 10-year moving average 

of MFP for the period ending CY 2018) 

of 0.5 percent. As is our general 

practice, we proposed that if more 

recent data are subsequently available 

(for example, a more recent estimate of 

the market basket or MFP adjustment), 

we will use such data to determine the 

CY 2018 market basket update and MFP 

adjustment in the CY 2018 ESRD PPS 

final rule. 

The IGI 3rd quarter 2017 forecast of 

the CY 2018 ESRDB market basket 

update is 1.9 percent. The decrease from 

the 1st quarter 2017 forecast (2.2 

percent) to the 3rd quarter 2017 forecast 

(1.9 percent) is mostly attributable to a 

decrease in the projected growth of the 

series ‘‘Producer Price Index: 

Commodity Data—Biological products 

excluding diagnostic, for human use.’’ 

This series is used as the price proxy to 

estimate the ‘‘erythropoiesis-stimulating 

agent (ESAs)’’ cost category. The IGI 3rd 

quarter 2017 forecast of the MFP 

adjustment is 0.6 percent. The increase 

from the 1st quarter 2017 MFP forecast 

(0.5 percent) to the 3rd quarter 2017 

MFP forecast (0.6) is mainly attributable 

to the incorporation of upward revisions 

of historical data by the Bureau of Labor 

Statistics (BLS), as well as slower 

projected labor input growth and capital 

input growth. Slower growth in labor 

and capital inputs result in a faster 

growth in topline MFP since MFP is 

measured as the change in outputs 

divided by the change in inputs. 

For the CY 2018 ESRD payment 

update, we proposed to continue using 

a labor-related share of 50.673 percent 

for the ESRD PPS payment, which was 

finalized in the CY 2015 ESRD PPS final 

rule (79 FR 66136). 

We did not receive any comments on 

the proposed CY 2018 market basket 

update, MFP adjustment, or laborrelated share. 

Final Rule Action: As noted above, 

the final CY 2018 market basket update 

and MFP adjustment in the ESRD PPS 

final rule will be based on the most 

recent forecast of data available. 

Therefore, using the IGI 3rd quarter 

2017 forecast with historical data 

through the 2nd quarter 2017, the final 

CY 2018 ESRDB update is 0.3 percent. 

This is based on a 1.9 percent market 

basket update, less a 1.0 percent 

adjustment as required by section 

1881(b)(14)(F)(i)(I) of the Act, as 

amended by section 217(b)(2)(A)(ii) of 

PAMA, and further reduced by a 0.6 

percent MFP update. 

b. Final CY 2018 ESRD PPS Wage 

Indices 

i. Annual Update of the Wage Index 

Section 1881(b)(14)(D)(iv)(II) of the 

Act provides that the ESRD PPS may 

include a geographic wage index 

payment adjustment, such as the index 

referred to in section 1881(b)(12)(D) of 

the Act, as the Secretary determines to 

be appropriate. In the CY 2011 ESRD 

PPS final rule (75 FR 49117), we 

finalized the use of the Office of 

Management and Budget’s (OMB’s) 

CBSAs-based geographic area 

designations to define urban and rural 

areas and their corresponding wage 

index values. OMB publishes bulletins 

regarding CBSA changes, including 

changes to CBSA numbers and titles. 

The latest bulletin, as well as 

subsequent bulletins, is available online 

at https://www.whitehouse.gov/omb/

information-for-agencies/bulletins. 

For CY 2018, we stated that we would 

continue to use the same methodology 

as finalized in the CY 2011 ESRD PPS 

final rule (75 FR 49117) for determining 

the wage indices for ESRD facilities. 

Specifically, we are updating the wage 

indices for CY 2018 to account for 

updated wage levels in areas in which 

ESRD facilities are located. We use the 

most recent pre-floor, pre-reclassified 

hospital wage data collected annually 

under the inpatient prospective 

payment system. The ESRD PPS wage 

index values are calculated without 

regard to geographic reclassifications 

authorized under sections 1886(d)(8) 

and (d)(10) of the Act and utilize prefloor hospital data that are unadjusted 

for occupational mix. The final CY 2018 

wage index values for urban areas are 

listed in Addendum A (Wage Indices for 

Urban Areas) and the final CY 2018 

wage index values for rural areas are 

listed in Addendum B (Wage Indices for 

Rural Areas). Addenda A and B are 

located on the CMS Web site at https:// 

www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ESRDpayment/

End-Stage-Renal-Disease-ESRDPayment-Regulations-and-Notices.html. 

In the CY 2011 and CY 2012 ESRD 

PPS final rules (75 FR 49116 through 

49117 and 76 FR 70239 through 70241, 

respectively), we also discussed and 

finalized the methodologies we use to 

calculate wage index values for ESRD 

facilities that are located in urban and 

rural areas where there is no hospital 

data. For urban areas with no hospital 

data, we compute the average wage 

index value of all urban areas within the 

State and use that value as the wage 

index. For rural areas with no hospital 

data, we compute the wage index using 

the average wage index values from all 

contiguous CBSAs to represent a 

reasonable proxy for that rural area. 

We apply the wage index for Guam 

(0.9611) to American Samoa and the 

Northern Mariana Islands as established 

in the CY 2014 ESRD PPS final rule (78 

FR 72172). We apply the statewide 

urban average based on the average of 

all urban areas within the state (78 FR 

72173) (0.8472) to Hinesville-Fort 

Stewart, Georgia. We note that if 

hospital data becomes available for 

these areas, we will use that data for the 

appropriate CBSAs instead of the proxy. 

A wage index floor value has been 

used instead of the calculated wage 

index values below the floor in making 

payment for renal dialysis services 

under the ESRD PPS. Currently, all 

areas with wage index values that fall 

below the floor are located in Puerto 

Rico. However, the wage index floor 

value is applicable for any area that may 

fall below the floor. A detailed 

description of the history of the wage 

index floor under the ESRD PPS can be 

found in the CY 2018 ESRD PPS 

proposed rule (82 FR 31198). 

In the proposed rule, for CY 2018 and 

subsequent years, we proposed to 

maintain the current wage index floor of 

0.4000 for CBSAs that have wage index 

values that fall below the floor. We 

stated that the cost report analyses that 

we have conducted over the years are 

inconclusive and have not convinced us 

that an increase in the wage index floor 

is warranted at this time. We explained 

that we continued to believe 

maintaining the current wage index 


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Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 50747 

floor value of 0.4000 is appropriate as it 

continues to provide additional 

payment support to the lowest wage 

areas and avoids the need for an 

additional budget-neutrality adjustment 

that would reduce the ESRD PPS base 

rate, beyond the adjustment needed to 

reflect updated hospital wage data, in 

order to maintain budget neutrality for 

wage index updates. We noted that we 

would continue to monitor and analyze 

ESRD facility cost reports and projected 

impacts to guide future rulemaking with 

regard to the wage index floor (82 FR 

31198). 

The comments and our responses to 

the comments on our wage index 

proposals are set forth below. 

Comment: A national dialysis 

organization and a large dialysis 

organization support the methodology 

for determining the wage indices and 

the continued application of the wage 

index floor. However, they asked that 

CMS consider how the current policy 

could be modified to adjust wage index 

values to account for laws requiring 

wage increases. They noted that under 

the current methodology for 

determining the wage indices for ESRD 

facilities, there can be a lag of several 

years with the wage index recognizing 

these changes. 

Response: We agree with commenters 

that there is a data lag that occurs when 

a State changes its minimum wage or 

staffing requirements and when it is 

reflected in the hospital-reported wage 

data. We also believe it is more prudent 

to base the wage index on actual 

reported data rather than anticipated 

changes and the uncertainty of what 

may or may not be reported. For this 

reason, we are retaining the current 

methodology for determining wage 

indices. 

Comment: Although we did not 

propose to change the wage index floor, 

we received comments from the major 

dialysis providers in Puerto Rico and a 

coalition of healthcare stakeholders in 

Puerto Rico. The commenters described 

the economic and healthcare crisis in 

Puerto Rico and recommended that 

CMS should use the United States 

Virgin Islands wage index for payment 

rate calculations in Puerto Rico as a 

proxy for CY 2018, given disadvantages 

recognized by CMS analysis, the 

unreliability of hospital-reported data in 

Puerto Rico and the inconsistencies 

with the wage indices used for other 

Territories. One commenter indicated 

that making this change for CY 2018 is 

similar to the CMS policy established in 

the CY 2017 Physician Fee Schedule 

final rule (81 FR 80261 through 80265) 

about the applicable geographic practice 

cost index (GPCI) factors and would be 

a natural ‘‘outgrowth’’ policy to define 

as a temporary measure derived from 

analysis and language presented in the 

CY 2017 ESRD PPS final rule and the 

CY 2018 ESRD PPS proposed rule, as 

well as from other previous regulatory 

cycles. 

Commenters indicated that the 

primary issue is that Puerto Rico 

hospitals report comparatively lower 

wages that are not adjusted for 

occupational mix and, as CMS indicates 

in the CY 2017 ESRD PPS proposed rule 

(81 FR 42817), in Puerto Rico, only 

registered nurses (RNs) can provide 

dialysis therapy in the outpatient 

setting. This staffing variable artificially 

lowers the reportable index values even 

though the actual costs of dialysis 

service wages in Puerto Rico are much 

higher than the data CMS is relying 

upon. In addition, several commenters 

stated that non-labor costs, including 

utilities and shipping costs and the CY 

2015 change in the labor-share based on 

the rebased and revised ESRDB market 

basket compound the issue even further. 

One organization stated that it does not 

believe maintaining the current wage 

index for Puerto Rico for CY 2018 is 

enough to offset the poor economic 

conditions, high operational costs and 

epidemiologic burden of ESRD on the 

island. 

Response: We did not propose to 

change the wage index floor or 

otherwise change the wage indexes for 

Puerto Rico and will maintain the 

current wage index floor of 0.4000 for 

CY 2018. We note that the current wage 

index floor and labor-related share have 

been in effect since CY 2015 and neither 

the floor nor the labor share has been 

reduced since then. More importantly, 

the wage index is solely intended to 

reflect differences in labor costs and not 

to account for non-labor cost 

differences, such as utilities or shipping 

costs. 

With regard to staffing in Puerto Rico 

facilities, we have learned that ESRD 

facilities there utilize RNs similarly to 

ESRD facilities on the mainland, that is, 

facilities utilize dialysis technicians and 

aides to provide dialysis services with 

oversight by an RN. In addition, hourly 

wages for RNs and dialysis support staff 

were approximately half of those 

salaries in mainland ESRD facilities. For 

these reasons, we do not agree that the 

hospital-reported data is unreliable, and 

we believe using that data is more 

appropriate than applying the wage 

index value for the Virgin Islands where 

salaries are considerably higher. 

Final Rule Action: After considering 

the public comments we received 

regarding the wage index, we are 

finalizing the CY 2018 ESRD PPS wage 

indices based on the latest hospital 

wage data as proposed. In addition, we 

are maintaining a wage index floor of 

0.4000. 

ii. Application of the Wage Index Under 

the ESRD PPS 

A facility’s wage index is applied to 

the labor-related share of the ESRD PPS 

base rate. In the CY 2015 ESRD PPS 

final rule (79 FR 66136), we finalized 

the labor-related share of 50.673 

percent, which is based on the 2012- 

based ESRDB market basket. Thus, for 

CY 2018, the labor-related share to 

which a facility’s wage index would be 

applied is 50.673 percent. 

c. CY 2018 Update to the Outlier Policy 

Section 1881(b)(14)(D)(ii) of the Act 

requires that the ESRD PPS include a 

payment adjustment for high cost 

outliers due to unusual variations in the 

type or amount of medically necessary 

care, including variability in the amount 

of ESAs necessary for anemia 

management. Some examples of the 

patient conditions that may be reflective 

of higher facility costs when furnishing 

dialysis care would be frailty, obesity, 

and comorbidities such as cancer. The 

ESRD PPS recognizes high cost patients, 

and we have codified the outlier policy 

in our regulations at 42 CFR 413.237. 

The policy provides the following ESRD 

outlier items and services are included 

in the ESRD PPS bundle: (1) ESRDrelated drugs and biologicals that were 

or would have been, prior to January 1, 

2011, separately billable under 

Medicare Part B; (2) ESRD-related 

laboratory tests that were or would have 

been, prior to January 1, 2011, 

separately billable under Medicare Part 

B; (3) medical/surgical supplies, 

including syringes, used to administer 

ESRD-related drugs that were or would 

have been, prior to January 1, 2011, 

separately billable under Medicare Part 

B; and (4) renal dialysis services drugs 

that were or would have been, prior to 

January 1, 2011, covered under 

Medicare Part D, including ESRD 

related oral-only drugs effective January 

1, 2025. 

In the CY 2011 ESRD PPS final rule 

(75 FR 49142), we stated that for 

purposes of determining whether an 

ESRD facility would be eligible for an 

outlier payment, it would be necessary 

for the facility to identify the actual 

ESRD outlier services furnished to the 

patient by line item (that is, date of 

service) on the monthly claim. Renal 

dialysis drugs, laboratory tests, and 

medical/surgical supplies that are 

recognized as outlier services were 

originally specified in Attachment 3 of 

Change Request 7064, Transmittal 2033 


sradovich on DSK3GMQ082PROD with RULES2
50748 Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 

issued August 20, 2010, rescinded and 

replaced by Transmittal 2094, dated 

November 17, 2010. Transmittal 2094 

identified additional drugs and 

laboratory tests that may also be eligible 

for ESRD outlier payment. Transmittal 

2094 was rescinded and replaced by 

Transmittal 2134, dated January 14, 

2011, which was issued to correct the 

subject on the Transmittal page and 

made no other changes. 

Furthermore, we use administrative 

issuances and guidance to continually 

update the renal dialysis service items 

available for outlier payment via our 

quarterly update CMS Change Requests, 

when applicable. We use this separate 

guidance to identify renal dialysis 

service drugs that were or would have 

been covered under Medicare Part D for 

outlier eligibility purposes and in order 

to provide unit prices for calculating 

imputed outlier services. In addition, 

we identify through our monitoring 

efforts items and services that are either 

incorrectly being identified as eligible 

outlier services or any new items and 

services that may require an update to 

the list of renal dialysis items and 

services that qualify as outlier services, 

which are made through administrative 

issuances. 

Our regulations at 42 CFR 413.237 

specify the methodology used to 

calculate outlier payments. An ESRD 

facility is eligible for an outlier payment 

if its actual or imputed MAP amount per 

treatment for ESRD outlier services 

exceeds a threshold. The MAP amount 

represents the average incurred amount 

per treatment for services that were or 

would have been considered separately 

billable services prior to January 1, 

2011. The threshold is equal to the 

ESRD facility’s predicted ESRD outlier 

services MAP amount per treatment 

(which is case-mix adjusted) plus the 

FDL amount. In accordance with 

§ 413.237(c) of our regulations, facilities 

are paid 80 percent of the per treatment 

amount by which the imputed MAP 

amount for outlier services (that is, the 

actual incurred amount) exceeds this 

threshold. ESRD facilities are eligible to 

receive outlier payments for treating 

both adult and pediatric dialysis 

patients. 

In the CY 2011 ESRD PPS final rule, 

using 2007 data, we established the 

outlier percentage at 1.0 percent of total 

payments (75 FR 49142 through 49143). 

We also established the FDL amounts 

that are added to the predicted outlier 

services MAP amounts. The outlier 

services MAP amounts and FDL 

amounts are different for adult and 

pediatric patients due to differences in 

the utilization of separately billable 

services among adult and pediatric 

patients (75 FR 49140). As we explained 

in the CY 2011 ESRD PPS final rule (75 

FR 49138 through 49139), the predicted 

outlier services MAP amounts for a 

patient are determined by multiplying 

the adjusted average outlier services 

MAP amount by the product of the 

patient-specific case-mix adjusters 

applicable using the outlier services 

payment multipliers developed from the 

regression analysis to compute the 

payment adjustments. 

For the CY 2018 outlier policy, we 

used the existing methodology for 

determining outlier payments by 

applying outlier services payment 

multipliers that were developed for the 

CY 2016 ESRD PPS final rule (80 FR 

68993 through 68994, 69002). We used 

these outlier services payment 

multipliers to calculate the predicted 

outlier service MAP amounts and 

projected outlier payments for CY 2018. 

For CY 2018, we proposed that the 

outlier services MAP amounts and FDL 

amounts would be derived from claims 

data from CY 2016. As we stated in the 

CY 2018 ESRD PPS proposed rule, we 

believe that any adjustments made to 

the MAP amounts under the ESRD PPS 

should be based upon the most recent 

data year available in order to best 

predict any future outlier payments. 

Therefore, we proposed the outlier 

thresholds for CY 2018 would be based 

on utilization of renal dialysis items and 

services furnished under the ESRD PPS 

in CY 2016. We stated that we recognize 

that the utilization of ESAs and other 

outlier services have continued to 

decline under the ESRD PPS, and that 

we have lowered the MAP amounts and 

FDL amounts every year under the 

ESRD PPS. 

In the CY 2017 ESRD PPS final rule 

(81 FR 77860), we stated that based on 

the CY 2015 claims data, outlier 

payments represented approximately 

0.93 percent of total payments. In the 

CY 2018 ESRD PPS proposed rule (82 

FR 31199), we discussed that the CY 

2016 claims data show outlier payments 

represented approximately 0.78 percent 

of total payments. We explained that 

data indicates that trends in the 

utilization of the ESAs could be a reason 

for the decrease. Beginning in 2015 and 

continuing into 2016, there were large 

shifts in the composition of the 

utilization of ESA drugs. Specifically, 

utilization of Epoetin (EPO) alfa 

decreased and utilization of the longeracting ESA drugs, darbepoetin and EPO 

beta, increased, based on estimates of 

average ESA utilization per session. As 

EPO alfa is measured in different units 

than both darbepoetin and EPO beta, it 

is difficult to compare the overall 

utilization of ESAs between 2014 and 

2016 by units alone. 

As we stated in the CY 2018 ESRD 

PPS proposed rule, in examining the 

claims data, we find that compositional 

shift away from use of EPO alfa to the 

longer acting darbepoetin and EPO beta 

was a significant factor in the decrease 

in total ESA costs in 2016. We first 

calculated the actual cost for ESAs 

administered during 2016. We then 

calculated the projected cost of ESAs 

that was used for the CY 2016 ESRD 

PPS final rule, using total utilization 

from 2014 and drug prices the from 3rd 

quarter 2015 inflated to 2016 prices. The 

actual costs of ESAs administered in 

2016 were roughly 20 percent lower 

than the value projected in the CY 2016 

ESRD PPS final rule. We then calculated 

the projected cost of ESAs assuming that 

the utilization of various ESAs per 

dialysis session in 2014 and 2016 were 

similar and also used the prices and 

total dialysis session count from 2016. 

The projected costs from these two 

scenarios were similar and suggest that 

compositional change in ESA utilization 

was likely a significant factor in the 

decrease in the total cost of ESAs 

between 2014 and 2016. We noted that 

we continue to believe that the decline 

is leveling off and that 1.0 percent is an 

appropriate threshold for outlier 

payments. 

i. CY 2018 Update to the Outlier 

Services MAP Amounts and FDL 

Amounts 

For CY 2018, we did not propose any 

changes to the methodology used to 

compute the MAP or FDL amounts. 

Rather, we proposed to update the 

outlier services MAP amounts and FDL 

amounts to reflect the utilization of 

outlier services reported on 2016 claims. 

For this final rule, the outlier services 

MAP amounts and FDL amounts were 

updated using the latest available 2016 

claims data. The impact of this update 

is shown in Table 1, which compares 

the outlier services MAP amounts and 

FDL amounts used for the outlier policy 

in CY 2017 with the updated estimates 

for this rule. The estimates for the CY 

2018 outlier policy, which are included 

in Column II of Table 1, were inflationadjusted to reflect projected 2018 prices 

for outlier services. 


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TABLE 1—OUTLIER POLICY: IMPACT OF USING UPDATED DATA TO DEFINE THE OUTLIER POLICY

Column I final outlier policy for 

CY 2017 

(based on 2015 data, price 

inflated to 2017) * 

Column II final outlier policy for 

CY 2018 

(based on 2016 data, price 

inflated to 2018) 

Age < 18 Age >= 18 Age < 18 Age >= 18 

Average outlier services MAP amount per treatment ..................................... $38.77 $47.00 $37.41 $44.27 

Adjustments ..................................................................................................... ........................ ........................ ........................ ........................

Standardization for outlier services ................................................................. 1.0078 0.9770 1.0177 0.9774 

MIPPA reduction .............................................................................................. 0.98 0.98 0.98 0.98 

Adjusted average outlier services MAP amount ............................................. $38.29 $45.00 $37.31 $42.41 

Fixed-dollar loss amount that is added to the predicted MAP to determine 

the outlier threshold ..................................................................................... $68.49 $82.92 $47.79 $77.54 

Patient-months qualifying for outlier payment ................................................. 4.6% 6.7% 9.0% 7.4% 

* Note that Column I was obtained from Column II of Table 1 from the CY 2017 ESRD PPS final rule. 

As demonstrated in Table 1, the 

estimated FDL amount per treatment 

that determines the CY 2018 outlier 

threshold amount for adults (Column II; 

$77.54) is lower than that used for the 

CY 2017 outlier policy (Column I; 

$82.92). The lower threshold is 

accompanied by a decrease in the 

adjusted average MAP for outlier 

services from $45.00 to $42.41. For 

pediatric patients, there is a decrease in 

the FDL amount from $68.49 to $47.79. 

There is a slight decrease in the adjusted 

average MAP for outlier services among 

pediatric patients, from $38.29 to 

$37.31. 

We estimate that the percentage of 

patient-months qualifying for outlier 

payments in CY 2018 will be 7.4 percent 

for adult patients and 9.0 percent for 

pediatric patients, based on the 2016 

claims data. The pediatric outlier MAP 

amount continues to be lower for 

pediatric patients than adults due to the 

continued lower use of outlier services 

(primarily reflecting lower use of ESAs 

and other injectable drugs). 

ii. Outlier Percentage 

In the CY 2011 ESRD PPS final rule 

(75 FR 49081), under § 413.220(b)(4), we 

reduced the per treatment base rate by 

1 percent to account for the proportion 

of the estimated total payments under 

the ESRD PPS that are outlier payments 

as described in § 413.237. Based on the 

2016 claims, outlier payments 

represented approximately 0.78 percent 

of total payments, below the 1 percent 

target due to small overall declines in 

the use of outlier services. Recalibration 

of the thresholds using 2016 data is 

expected to result in aggregate outlier 

payments close to the 1 percent target in 

CY 2018. We believe the update to the 

outlier MAP and FDL amounts for CY 

2018 will increase payments for ESRD 

beneficiaries requiring higher resource 

utilization and move us closer to 

meeting our 1 percent outlier policy. We 

note that recalibration of the FDL 

amounts in this final rule will result in 

no change in payments to ESRD 

facilities for beneficiaries with renal 

dialysis items and services that are not 

eligible for outlier payments, but will 

increase payments to ESRD facilities for 

beneficiaries with renal dialysis items 

and services that are eligible for outlier 

payments. Therefore, beneficiary 

coinsurance obligations will also 

increase for renal dialysis services 

eligible for outlier payments. 

The comments and our responses to 

the comments on the proposal to update 

the outlier thresholds using CY 2016 

data are set forth below: 

Comment: A national dialysis 

organization and a large dialysis 

organization expressed concern about 

the statement made in the CY 2018 

ESRD PPS proposed rule (82 FR 31199) 

that ESAs administered in 2016 were 

roughly 20 percent lower than the value 

we projected in the CY 2016 ESRD PPS 

final rule. They do not disagree with the 

conclusion that there should be no 

change in the threshold for outlier 

payments. However, they indicated that 

understanding the cost and utilization 

of drugs generally, and ESAs in 

particular, is important to 

understanding the adequacy of the 

payment system. They expressed 

concern that the preamble of the CY 

2018 ESRD PPS proposed rule does not 

describe how CMS determined this 

value and it seems inconsistent with 

trends that some ESRD facilities see in 

their own data. 

Response: In the CY 2017 ESRD PPS 

final rule (81 FR 77860), we stated that 

based on the CY 2015 claims data, 

outlier payments represented 

approximately 0.93 percent of total 

payments. For this final rule, CY 2016 

claims data show outlier payments 

representing approximately 0.78 percent 

of total payments. To address the 

commenters’ concern regarding how we 

determined that the actual costs of ESAs 

administered in 2016 were roughly 20 

percent lower than the value projected 

in the CY 2016 ESRD PPS final rule, we 

have included more detail of the 

analysis here. As we discussed above, 

beginning in 2015 and continuing into 

2016, there were large shifts in the 

composition of the utilization of ESA 

drugs in the claims data. Specifically, 

estimates of average ESA utilization of 

EPO alfa (Healthcare Common 

Procedure Coding System (HCPCS) 

Q4081) per dialysis session decreased 

from 28.54 units in 2014 to 13.73 units 

in 2016, and utilization of the longeracting ESA drugs, darbepoetin (HCPCS 

J0886) and EPO beta (HCPCS Q9972/

J0887), increased, from 0.75 and 0.001 

mcg in 2014 to 2.13 and 3.01 mcg in 

2016, respectively. As EPO alfa is 

measured in different units than both 

darbepoetin and EPO beta, it is difficult 

to compare the overall utilization of 

ESAs between 2014 and 2016 by units 

alone. 

In examining the claims data, we 

continue to find that the compositional 

shift away from use of EPO alfa to the 

longer acting darbepoetin and EPO beta 

was a significant factor in explaining 

why total ESA costs actually incurred in 

2016 were lower than the total ESA 

costs projected for 2016 using 2014 data. 

We first calculated the actual cost for 

ESAs administered during 2014 and 

2016. We found shifts in the 

composition of costs per dialysis session 

associated with each ESA that were 

proportional to changes in utilization 

per session. Specifically, estimates of 

average ESA cost of EPO alfa per 

dialysis session decreased from $32.50 

in 2014 to $17.19 in 2016, and average 

cost per session of darbepoetin and EPO 

beta increased from $2.79 and $0.00 in 

2014 to $8.53 and $5.08 in 2016, 

respectively. Total calculated costs of 

ESAs in 2014 and 2016 were $1.6 

billion and $1.4 billion. We then 


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calculated the projected cost of ESAs 

that was used for the CY 2016 ESRD 

PPS final rule, using total utilization 

from 2014 and drug prices from the 3rd 

quarter 2015 inflated to 2016 prices, to 

be $1.7 billion. The actual costs of ESAs 

administered in 2016 were roughly 20 

percent lower than this value projected 

in the CY 2016 ESRD PPS final rule (80 

FR 68974). 

In order to understand the reason for 

this difference, we created a projected 

2016 value using an alternative 

scenario. In this scenario, we calculated 

the projected cost of ESAs assuming that 

the utilization of various ESAs per 

dialysis session in 2016 was equivalent 

to that in 2014, but instead we used the 

prices and total dialysis session count 

from 2016. The projected costs from 

these two scenarios were similar and 

suggest that neither the difference in the 

projected (3rd quarter 2015 prices 

inflated to 2016) versus actual ESA 

prices for 2016 nor changes in the 

number of dialysis sessions between 

2014 and 2016 explain the difference 

between the projected and actual cost of 

ESAs in 2016. Therefore, the residual 

factor indicates that compositional 

changes in ESA utilization were the 

most likely factor in the decrease in the 

total cost of ESAs between 2014 and 

2016. We continue to believe that the 

decline is leveling off and that 1.0 

percent is an appropriate target for 

outlier payments. 

Comment: Although we did not 

propose changes to the outlier target 

percentage or update methodology, we 

received many comments regarding the 

difference between estimated outlier 

payments and the 1.0 percent outlier 

target. A national kidney organization 

and a large dialysis organization 

expressed support for CMS’ proposal to 

refine the outlier pool so that the dollars 

paid out more closely align with the 

estimated amount used to create the 

outlier pool. However, they expressed 

concern that CMS has not yet addressed 

the fact that the outlier pool is 

consistently paying out less than the 

amount removed from the base rate. 

Both organizations referenced an 

analysis that estimated the outlier pool 

underpaid $0.46 per treatment in 2016 

and that, cumulatively since 2011, $4.97 

has been removed by the underpayment 

of the outlier pool. They asked that CMS 

further refine the outlier policy so that 

it is more consistent with how outlier 

policies in other Medicare payment 

systems work. 

A patient advocacy organization 

expressed strong support for CMS 

having an outlier payment policy as the 

organization believes it is a helpful 

policy for ensuring that costlier patients 

receive the care they need. However, the 

organization recommended that CMS 

revisit the calculation and application of 

the outlier payment policy to ensure 

that total amount of payments withheld 

are paid back to facilities for patient 

care. 

An organization representing nonprofit facilities and a large dialysis 

organization urged CMS to reconsider 

the 1 percent outlier policy first 

implemented in 2011, stating that while 

an outlier adjustment is required under 

the statute, a 0.5 percent outlier target 

percentage would reduce the offset to 

the base payment and still provide for 

payment in the case of extraordinary 

costs. 

A large dialysis organization stated 

that despite CMS’s efforts to equalize 

payment made into and out of the 

outlier pool, limited progress toward 

that goal has been achieved. The 

commenter recommended that CMS 

should address this problem by paying 

out any remaining outlier pool dollars to 

providers in the subsequent year. A 

professional association agreed, 

expressing concern about the ongoing 

leakage of funds withheld, but not paid 

out as outlier payments. Although the 

professional association agreed the 

rationale provided for the anticipated 

increase in outlier payments may be 

accurate, it noted that in calculating 

these estimates, CMS is adjusting for 

input costs but not for changes in 

provider behavior, including a 

substantial shift to other ESAs that are 

similarly expensive. The commenter 

stated that in a fixed bundled payment 

environment, there is an incentive to 

continually find ways to reduce costly 

practices—an unaccounted-for factor 

that will likely contribute to the 

continued under-projection of outlier 

payouts. 

The professional association offered 

two alternate paths to addressing the 

gap between outlier withholds and 

outlier payments for CMS’ 

consideration: (1) Revise the withhold 

on an annual basis so that only the exact 

necessary amount is withheld to meet 

payouts (likely, retrospectively); or (2) 

reinvest the difference between actual 

outlier costs incurred and the funds 

withheld to support research and other 

patient-focused initiatives within CMS’ 

scope, such as: Analyzing data to better 

understand aspects of dialysis care 

related to improved patient outcomes; 

developing a demonstration project or 

pilot focused on covering the cost of 

care for vascular access payment in the 

first 90 days prior to new ESRD patient 

eligibility; or supporting other 

initiatives to improve the value of ESRD 

care provided, in partnership with the 

kidney community. 

Response: We appreciate the 

continued support for the outlier policy 

and the suggestions provided. We 

continue to believe that 1.0 percent is an 

appropriate target for outlier payments 

given that using more recent claims data 

to update the outlier MAP and FDL 

amounts for CY 2018 will increase 

outlier payments for ESRD beneficiaries. 

A 1.0 percent outlier target percentage is 

a modest amount in comparison to other 

Medicare prospective payment systems 

and helps to ensure that high cost 

patients receive the individualized 

services they need. We will, however, 

take the commenters’ views into 

consideration as we explore ways to 

enhance and update the outlier policy 

in future rulemaking. 

Comment: A professional association 

noted the decreases in the pediatric 

MAP and FDL amounts to reflect the 

utilization of services in 2016 and 

expressed concern about the greater 

than 25 percent decrease in the 

pediatric FDL amount. While the 

commenter recognizes that this is the 

first proposed decrease in several years, 

the commenter believes that it could 

negatively impact the delivery of care in 

pediatric facilities. 

Response: The reduction in the 

pediatric outlier threshold amounts 

indicates that the cost of caring for 

pediatric ESRD patients was lower in 

2016 than in 2015. The decrease in the 

pediatric FDL amount makes exceeding 

the amount for pediatric facilities easier 

to achieve. Therefore, we believe this 

update will improve payments to 

facilities serving pediatric patients and 

will not negatively impact the delivery 

of care. 

Final Rule Action: After considering 

the public comments, we are finalizing 

the updated outlier thresholds based on 

CY 2016 data. 

d. Final Impacts to the CY 2018 ESRD 

PPS Base Rate 

i. ESRD PPS Base Rate 

In the CY 2011 ESRD PPS final rule 

(75 FR 49071 through 49083), we 

discussed the development of the ESRD 

PPS per treatment base rate that is 

codified in the Medicare regulations at 

42 CFR 413.220 and 42 CFR 413.230. 

The CY 2011 ESRD PPS final rule also 

provides a detailed discussion of the 

methodology used to calculate the ESRD 

PPS base rate and the computation of 

factors used to adjust the ESRD PPS 

base rate for projected outlier payments 

and budget neutrality in accordance 

with sections 1881(b)(14)(D)(ii) and 

1881(b)(14)(A)(ii) of the Act, 


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respectively. Specifically, the ESRD PPS 

base rate was developed from CY 2007 

claims (that is, the lowest per patient 

utilization year as required by section 

1881(b)(14)(A)(ii) of the Act), updated to 

CY 2011, and represented the average 

per treatment MAP for composite rate 

and separately billable services. In 

accordance with section 1881(b)(14)(D) 

of the Act and regulations at § 413.230, 

the ESRD PPS base rate is adjusted for 

the patient specific case-mix 

adjustments, applicable facility 

adjustments, geographic differences in 

area wage levels using an area wage 

index, as well as applicable outlier 

payments, training add-on payments, 

and transitional drug add-on payment 

adjustments. 

ii. Annual Payment Rate Update for CY 

2018 

The ESRD PPS base rate for CY 2018 

is $232.37. This update reflects several 

factors, described in more detail as 

follows: 

• Wage Index Budget-Neutrality 

Adjustment Factor: We compute a wage 

index budget-neutrality adjustment 

factor that is applied to the ESRD PPS 

base rate. For CY 2018, we did not 

propose any changes to the 

methodology used to calculate this 

factor, which is described in detail in 

the CY 2014 ESRD PPS final rule (78 FR 

72174). The final CY 2018 wage index 

budget-neutrality adjustment factor is 

1.000531, based on the updated wage 

index data. Therefore, the final ESRD 

PPS base rate for CY 2018 before 

application of the payment rate update 

is $232.24 ($231.55 × 1.000531 = 

$231.67). 

• Market Basket Increase: Section 

1881(b)(14)(F)(i)(I) of the Act provides 

that, beginning in 2012, the ESRD PPS 

payment amounts are required to be 

annually increased by the ESRD market 

basket percentage increase factor. The 

latest CY 2018 projection for the ESRDB 

market basket is 1.9 percent. In CY 

2018, this amount must be reduced by 

1.0 percentage point as required by 

section 1881(b)(14)(F)(i)(I) of the Act, as 

amended by section 217(b)(2)(A) of 

PAMA, which is calculated as 1.9¥1.0 

= 0.9 percent. This amount is then 

reduced by the MFP adjustment 

described in section 1886(b)(3)(B)(xi)(II) 

of the Act, as required by section 

1881(b)(14)(F)(i)(II) of the Act. The final 

MFP adjustment for CY 2018 is 0.6 

percent, thus yielding a final update to 

the base rate of 0.3 percent for CY 2018 

(0.9¥0.6 = 0.3 percent). This 

application yields a CY 2018 ESRD PPS 

final base rate of $232.37 ($231.67 × 

1.003 = $232.37). 

The comments and our responses to 

the comments on our proposals to 

update the payment rate for CY 2018 are 

set forth below. 

Comment: One commenter expressed 

concern about the application of section 

1877 of the Act (the physician selfreferral law) to dialysis facilities that, 

under the TDAPA policy, would furnish 

and be reimbursed for outpatient 

dialysis-related drugs that are not yet 

considered ‘‘part of the bundle.’’ The 

commenter noted that outpatient 

prescription drugs are designated health 

services for purposes of the physician 

self-referral law and urged us to add 

outpatient dialysis-related drugs 

furnished by a dialysis facility under the 

TDAPA policy to the list of codes that 

are eligible for the exception for EPO 

and other dialysis-related drugs 

furnished by an ESRD facility (42 CFR 

411.355(g)), which would avoid the 

application of the physician self-referral 

law to the referral of and billing for such 

drugs. The commenter also urged us to 

confirm that any new drugs added to the 

‘‘bundle’’ (such as calcimimetics after 

the TDAPA period) would fall within 

the exclusion from the definition of 

‘‘designated health services’’ for 

outpatient prescription drugs 

reimbursed as part of a composite rate. 

The commenter suggested that these 

steps would help avoid confusion in the 

provider community and remove any 

potential barriers to beneficiary access 

to dialysis drugs that might otherwise 

occur in an environment in which there 

are perceived uncertainties about 

compliance with the physician selfreferral law. 

Response: As the commenter noted, 

under section 1877 of the Act and our 

regulations at 42 CFR 411.351, 

outpatient prescription drugs are 

designated health services. However, 

services that are reimbursed by 

Medicare as part of a ‘‘composite rate’’ 

are not included in the definition of 

‘‘designated health services’’ (unless the 

services are specifically identified in 

§ 411.351 and are themselves payable 

through a composite rate, such as 

inpatient and outpatient hospital 

services). For purposes of the physician 

self-referral law, ‘‘composite rate’’ refers 

to payments made under a distinct 

payment methodology (66 FR 868). With 

respect to ESRD services, for purposes 

of the physician self-referral law, we 

interpret the ‘‘composite rate’’ as the 

per-treatment payment amount. As 

described in our TDAPA 

implementation guidance issued August 

4, 2017, available on the CMS Web site 

at https://www.cms.gov/Regulationsand-Guidance/Guidance/Transmittals/

2017Downloads/R1889OTN.pdf, the 

methodology used to calculate the pertreatment payment amount incorporates 

the cost of the drugs that are paid for 

using a TDAPA. Thus, the commenter 

incorrectly presumes that outpatient 

prescription drugs furnished and 

reimbursed under the TDAPA policy are 

not considered part of the ESRD 

‘‘composite rate’’ for purposes of the 

physician self-referral law when, in fact, 

they are included in this ‘‘composite 

rate.’’ As requested by the commenter, 

we confirm that, after the TDAPA 

period under § 413.234(c)(2), 

calcimimetics will be part of the ESRD 

PPS ‘‘composite rate’’ for purposes of 

the physician self-referral law. 

We note that the payment 

methodology for calculating the ESRD 

PPS per-treatment amount is unique to 

ESRD services, and our determination 

regarding outpatient prescription drugs 

furnished and reimbursed under the 

TDAPA policy does not apply to 

ambulatory surgical center services, 

hospice services, skilled nursing facility 

Part A services, or any other services 

that are reimbursed by Medicare as part 

of a composite rate. We also note that 

our treatment of TDAPA drugs as part 

of the ESRD PPS ‘‘composite rate’’ is 

consistent with our treatment of EPO 

and other dialysis-related outpatient 

prescription drugs as excluded from the 

ESRD PPS ‘‘composite rate’’ prior to 

January 1, 2011. In our January 4, 2001 

rulemaking interpreting section 1877 of 

the Act (Phase I), we defined 

‘‘designated health services’’ to exclude 

services that are reimbursed by 

Medicare as part of a composite rate (66 

FR 924). In contrast to drugs that are 

paid for using a TDAPA, at the time of 

our Phase I rulemaking, EPO and other 

dialysis-related outpatient drugs were 

not included in the methodology used 

to calculate the per-treatment payment 

amount; that is, for purposes of the 

physician self-referral law, they were 

not paid as part of the ESRD PPS 

‘‘composite rate’’ and remained 

‘‘designated health services.’’ Therefore, 

a physician owner of an ESRD facility 

that did not qualify as a ‘‘rural 

provider’’ (for purposes of the physician 

self-referral law) would have been 

precluded from ordering EPO and other 

dialysis-related outpatient prescription 

drugs for his or her Medicare patients 

and the ESRD facility would have been 

precluded from submitting claims to 

Medicare for the drugs ordered by the 

physician owner. Because of our belief 

that the Congress did not intend to 

preclude physician ownership of ESRD 

facilities when enacting section 1877 of 

the Act, we established a separate 

exception to the physician self-referral 


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law at § 411.355(g) for EPO and other 

dialysis-related outpatient prescription 

drugs (66 FR 938). As of January 1, 

2011, EPO and other anemia 

management outpatient prescription 

drugs (as well as access management, 

bone and mineral metabolism, cellular 

management, antiemetic, anti-infectives, 

antipruritic, anxiolytic, excess fluid 

management, fluid and electrolyte 

management including volume 

expanders, and pain management 

outpatient prescription drugs) are 

included in the ESRD PPS ‘‘composite 

rate’’ (that is, the ESRD per-treatment 

payment amount) and no longer qualify 

as ‘‘designated health services’’ for 

purposes of the physician self-referral 

law. Because drugs that are paid for 

using a TDAPA are included in the 

ESRD PPS ‘‘composite rate’’ and not 

considered ‘‘designated health 

services,’’ they need not be included on 

the list of Current Procedural 

Terminology (CPT)/HCPCS codes that 

are eligible for use with the exception at 

§ 411.355(g). 

Comment: Several organizations 

expressed support for the proposed 

increase to the ESRD PPS base rate and 

for the consistent and the predictable 

approach to updating the base rate. 

An organization representing dialysis 

patients expressed appreciation that this 

year’s ESRD PPS rulemaking extends a 

period of relative stability in Federal 

support for dialysis; however, that 

organization and a large dialysis 

organization indicated that the success 

of the ESRD PPS depends, by design, on 

cross subsidization from private 

coverage and that any action that 

constrains private coverage for ESRD 

patients will exacerbate policies that 

have resulted in consistent ESRD PPS 

underpayments and destabilize the 

nation’s care delivery system for all 

ESRD patients. Given CMS’s role in 

overseeing the ESRD PPS and the Health 

Insurance Marketplaces, they urged 

CMS to work to preserve the longstanding public-private ESRD 

partnership and work with the kidney 

care community to address policies that 

have resulted in chronic underpayments 

through the ESRD PPS. 

A professional association noted 

MedPAC’s previous findings that the 

margins in Medicare dialysis care are 

extremely thin or negative and asked 

CMS to bear in mind, to the extent 

possible, when determining the overall 

base rate that many aspects of care that 

dialysis facilities provide are not 

covered by the elements used to 

calculate the base rate. The professional 

association stated that this means that 

any new unfunded mandates (for 

example, requirements to use pre-filled 

syringes and follow more timeconsuming disinfection processes) must 

be offset elsewhere in the context of the 

fixed payment environment. While 

these new mandates could have patient 

benefits, they also may come at the 

expense of other activities that also have 

patient benefits. The professional 

association urged CMS to move 

cautiously and transparently in 

implementing such new policies, both 

to promote community understanding 

and buy-in and to avoid the unintended 

consequence of effectively mandating 

new actions that might adversely impact 

care elsewhere. The professional 

association stated that any new 

requirements selected must provide the 

greatest value to patients in the context 

of a fixed, bundled payment 

environment. 

Response: We appreciate the 

commenters’ support for the increase to 

the ESRD PPS base rate and will take 

into consideration the concerns 

regarding ESRD facility profit margins. 

Final Rule Action: We are finalizing a 

CY 2018 ESRD PPS base rate of $232.37. 

C. Miscellaneous Comments 

We received many comments from 

beneficiaries, physicians, professional 

organizations, renal organizations, and 

manufacturers related to issues that 

were not specifically addressed in the 

CY 2018 ESRD PPS proposed rule. 

These comments are discussed below. 

Comment: A national kidney 

organization and a patient advocacy 

organization requested that the rate 

setting file released with each proposed 

and final ESRD PPS rule include 

specific flags for each payment adjuster 

that is applied and all modifiers on 

claims, particularly the ‘‘AY’’ modifier 

which is used for billing items and 

services that are not furnished for the 

treatment of ESRD and are therefore 

separately payable. They noted that the 

outpatient prospective payment system 

rate setting file format that is the 

template for the ESRD PPS rate setting 

file normally includes all modifiers, and 

there are a number of ways that adjuster 

variable flags could be added to that file. 

These data are necessary to engage in a 

timely discussion of the impact of the 

adjusters on accurate estimates of 

payment and impact analyses. 

Response: We appreciate the 

commenter’s thoughts with regard to the 

rate setting file and we will consider 

this suggestion for future updates. 

Comment: A national kidney 

organization and a national dialysis 

provider organization thanked CMS for 

eliminating the medical director fee 

limitation that had been a policy left 

over from before dialysis facilities were 

paid on a prospective payment system 

basis. However, they expressed concern 

that some of the contractors overseeing 

the cost report submissions are 

requiring facilities to submit detailed 

physician logs describing the hours 

worked and tasks performed and still 

applying the limitation. The 

commenters stated there may be 

confusion because the most recent 

edition of the Medicare Claims 

Processing Manual, Chapter 8, section 

40.6.C.2, updated November 10, 2016 

continues to include instructions that 

do not reflect the policy changes made 

in previous rulemakings. 

Therefore, they requested that CMS 

revise the instructions in the Medicare 

Claims Processing Manual to align with 

the policy finalized in previous 

rulemaking that eliminates the 

limitation on medical director fees. 

They also requested that we clarify that 

detailed physician logs not be required, 

consistent with the elimination of the 

limitation and the requirements (such as 

providing an invoice) applied to other 

health care providers and suppliers with 

regard to establishing medical director 

fees. 

A dialysis organization requested 

more information related to items 

included in the ESRD PPS bundle and 

requested that CMS create separate lists 

of what they can include on Medicare 

claims, which items and services are 

subject to consolidated billing and 

whether or not they can bill for these 

items and services, as well as what is 

not included in the bundle. 

Response: We appreciate the 

commenter’s suggestions regarding 

claims processing guidance and we will 

consider them for future updates. 

Comment: Although we did not 

include any proposals regarding the 

TDAPA, we received many comments 

from dialysis provider and patient 

advocacy organizations, professional 

associations and drug manufacturers 

covering payment, coverage, and 

clinical issues surrounding the 

implementation of the two new HCPCS 

J-codes for oral and IV calcimimetics 

that will become renal dialysis services 

and paid for using a TDAPA beginning 

on January 1, 2018. 

There were several comments 

regarding timing, including comments 

expressing that implementation on 

January 1, 2018 took CMS too long and 

other comments indicating that this is a 

complex change for ESRD facilities and 

they will need time after CMS issues 

guidance to incorporate that guidance 

into their billing systems and care 

planning. In addition, commenters 

urged us to coordinate with Medicare 

Advantage as well as Part D to ensure 


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a seamless conversion of calcimimetics 

from Part D to Part B. Commenters 

requested that we closely monitor 

patient access and outcomes related to 

calcimimetics, and expressed concern 

about coinsurance and the need to 

support innovation, especially for new 

drugs within the existing ESRD PPS 

functional categories. They also raised 

issues regarding refills, CMS 

reimbursing for shipping and 

dispensing costs, and reporting the drug 

dispensed rather than the amount used 

by patients. Lastly, a national dialysis 

provider association commented that 

nephrologists have voiced concerns 

about the potential implications of CMS 

reimbursement policies relating to 

calcimimetics under the physician selfreferral law. 

Response: We plan to issue guidance 

soon that will address the issues raised 

by commenters. We do not understand 

some of the commenters’ concerns 

because oral equivalents of IV 

medications currently in the ESRD PPS 

bundled payment and other oral 

medications used for the treatment of 

ESRD (that is, oral drugs that fit into the 

established ESRD PPS functional 

categories) have been covered under the 

ESRD PPS since 2011 when the ESRD 

PPS bundled system was first 

implemented. Because of this, we 

believe that ESRD facilities would have 

existing relationships with pharmacies 

that could provide oral drugs to ESRD 

patients and these pharmacies could 

also furnish the oral calcimimetics. 

Comment: MedPAC commented that 

section 217(e) of PAMA required the 

Secretary to conduct audits of Medicare 

cost reports beginning in 2012 for a 

representative sample of freestanding 

and hospital-based facilities furnishing 

dialysis services. To support this effort, 

the law authorized the Secretary to 

transfer $18 million (in fiscal year 2014) 

from the Federal Supplementary 

Medical Insurance Trust Fund to CMS’s 

program management. In September 

2015, CMS awarded a contract to 

conduct the audit. MedPAC strongly 

encouraged CMS to accelerate the 

audit’s completion and release its final 

results, and emphasized the importance 

of auditing the cost reports that dialysis 

facilities submit to CMS to ensure the 

data are accurate. 

An organization of small and 

independent dialysis facilities agreed, 

stating that standardized cost reports 

can improve payment accuracy in the 

ESRD PPS and thus the organization 

seeks to partner with CMS to develop 

standardized cost reports and reporting 

guidance for ESRD facilities. The 

organization indicated that the current 

reporting structure lacks the detail 

necessary to assist providers in proper 

cost allocation, and leads to significant 

inconsistency in cost reporting. 

In addition, a patient advocacy 

organization noted that CMS previously 

stated that it would review cost reports 

to better understand the costs of home 

dialysis training. The organization 

inquired about CMS’s progress towards 

this goal. 

Response: We appreciate the 

commenters’ thoughts and suggestions 

on the CMS cost reports and audits. The 

audit process is underway, but not 

complete at this time. We will take 

commenters’ views into consideration 

for future cost report updates. 

Comment: Although CMS did not 

propose any changes to the case-mix 

and facility-level adjustments under the 

ESRD PPS, we received many comments 

from national dialysis provider 

organizations, large dialysis 

organizations, and patient advocacy 

organizations expressing concern about 

the payment adjustments under the 

ESRD PPS, specifically the use of cost 

reports for patient-level adjustments. 

They recommended that CMS update 

the standardization factor using the 

most current data available. 

The commenters stated that they have 

recommended several steps that CMS 

should take to address shortcomings 

with the case-mix adjusters’ validity and 

accuracy. Until those steps are taken, 

the organizations asserted that CMS 

should not apply the case-mix 

adjustments and restore the dollars 

historically removed from the base rate 

to reflect the frequency and size of the 

revised adjusters. They also 

recommended that CMS have an 

independent, third-party perform a peer 

review of the research methodology 

employed within the ESRD PPS and 

asked that CMS consider the comments 

regarding methodology submitted by the 

public and provide substantive 

responses on the record to address 

concerns. Commenters also asked that 

CMS provide more detailed data to 

allow for a complete analysis of the 

ESRD PPS. For example, commenters 

requested a comprehensive list of 

variables, descriptions, and analyses 

that could resolve the variances 

identified in the dialysis industry’s 

analysis of the ESRD PPS methodology. 

They also stated that a more 

comprehensive list of data elements 

would clarify the CMS contractor’s 

conclusions and allow them to better 

address the underpayment of the ESRD 

PPS. 

Response: We appreciate the 

commenters’ thoughts with regard to the 

ESRD PPS case-mix adjustments and 

research methodology and will consider 

the suggestions for future updates. 

Comment: We received many other 

comments that were beyond the scope 

of the CY 2018 ESRD PPS proposed rule 

including the following suggestions: 

Develop a renal-specific productivity 

factor; require the sharing of dialysis 

patient information with the treating 

ESRD facility after a hospitalization to 

promote health information technology 

initiatives; allow ESRD facilities to 

include the 50 cents per treatment 

Network Fee on their cost reports; 

encourage home dialysis by consistently 

covering the costs of home training and 

more frequent treatments by home 

patients; and preserve the public-private 

partnership for ESRD care and ensure 

that private insurers are incentivized to 

cover 30 months of dialysis or 

transplantation services as well as 

preventive care for patients with 

diabetes and hypertension to slow the 

progression of chronic kidney disease to 

ESRD. 

Response: We appreciate receiving 

these comments so that we are aware of 

issues impacting ESRD facilities and 

beneficiaries. However, we did not 

include any proposals regarding these 

topics in the CY 2018 ESRD PPS 

proposed rule, and therefore we 

consider these suggestions to be beyond 

the scope of this rule. 

Comment: A national dialysis 

provider association and a national 

dialysis organization recommended 

clarification regarding patients with AKI 

who do not recover kidney function and 

transition to become ESRD patients. 

Specifically, these commenters 

requested guidance related to Medicare 

eligibility, transplant wait list, and 

incident patient modifier. 

Response: We appreciate the feedback 

on this issue and we will consider this 

topic for future guidance. 

III. Calendar Year (CY) 2018 Payment 

for Renal Dialysis Services Furnished 

to Individuals With Acute Kidney 

Injury (AKI) 

A. Background 

On June 29, 2015, the Trade 

Preferences Extension Act of 2015 

(TPEA) (Pub. L. 114–27) was enacted. In 

the TPEA, the Congress amended the 

Social Security Act (the Act) to include 

coverage and provide for payment for 

dialysis furnished by an ESRD facility to 

an individual with acute kidney injury 

(AKI). Specifically, section 808(a) of the 

TPEA amended section 1861(s)(2)(F) of 

the Act to provide coverage for renal 

dialysis services furnished on or after 

January 1, 2017, by a renal dialysis 

facility or a provider of services paid 


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under section 1881(b)(14) of the Act to 

an individual with AKI. Section 808(b) 

of the TPEA amended section 1834 of 

the Act by adding a new subsection (r) 

to the Act. Subsection (r)(1) of section 

1834 of the Act provides for payment, 

beginning January 1, 2017, for renal 

dialysis services furnished by renal 

dialysis facilities or providers of 

services paid under section 1881(b)(14) 

of the Act to individuals with AKI at the 

end-stage renal disease (ESRD) 

prospective payment system (PPS) base 

rate, as adjusted by any applicable 

geographic adjustment applied under 

section 1881(b)(14)(D)(iv)(II) of the Act 

and may be adjusted by the Secretary of 

the Department of Health and Human 

Services (the Secretary) (on a budget 

neutral basis for payments under section 

1834(r) of the Act) by any other 

adjustment factor under section 

1881(b)(14)(D) of the Act. 

In the calendar year (CY) 2017 ESRD 

PPS final rule, we finalized several 

coverage and payment policies in order 

to implement subsection (r) of section 

1834 of the Act and the amendments to 

section 1881(s)(2)(F) of the Act, 

including the payment rate for AKI 

dialysis (81 FR 77866 through 77872). 

We interpret section 1834(r)(1) of the 

Act to mean the amount of payment for 

AKI dialysis services is the base rate for 

renal dialysis services determined for 

such year under the ESRD base rate as 

set forth in 42 CFR 413.220, updated by 

the ESRD bundled market basket 

percentage increase factor minus a 

productivity adjustment as set forth in 

42 CFR 413.196(d)(1), adjusted for 

wages as set forth in 42 CFR 413.231, 

and adjusted by any other amounts 

deemed appropriate by the Secretary 

under 42 CFR 413.373. We codified this 

policy in § 413.372. 

B. Summary of the Proposed Provisions, 

Public Comments, and Responses to 

Comments on CY 2018 Payment for 

Renal Dialysis Services Furnished to 

Individuals With AKI 

The proposed rule, entitled ‘‘Medicare 

Program; End-Stage Renal Disease 

Prospective Payment System, Payment 

for Renal Dialysis Services Furnished to 

Individuals with Acute Kidney Injury, 

and End-Stage Renal Disease Quality 

Incentive Program’’ (82 FR 31190 

through 31233), hereinafter referred to 

as the CY 2018 ESRD PPS proposed 

rule, was published in the Federal 

Register on July 5, 2017, with a 

comment period that ended on August 

28, 2017. In that proposed rule, we 

proposed to update the AKI dialysis 

payment rate. We received 

approximately 9 public comments on 

our proposal, including comments from 

ESRD facilities; national renal groups, 

nephrologists and patient organizations; 

patients and care partners; 

manufacturers; health care systems; and 

nurses. 

In this final rule, we provide a 

summary of the proposed provision, a 

summary of the public comments 

received and our responses to them, and 

the policies we are finalizing for CY 

2018 payment for renal dialysis services 

furnished to individuals with AKI. 

1. Annual Payment Rate Update for CY 

2018 

a. CY 2018 AKI Dialysis Payment Rate 

The payment rate for AKI dialysis is 

the ESRD PPS base rate determined for 

a year under section 1881(b)(14) of the 

Act, which is the finalized ESRD PPS 

base rate. We note that ESRD facilities 

have the ability to bill Medicare for nonrenal dialysis items and services and 

receive separate payment in addition to 

the payment rate for AKI dialysis. 

As discussed in the CY 2018 ESRD 

PPS proposed rule (82 FR 31201), the 

CY 2018 proposed ESRD PPS base rate 

was $233.31, which reflected the 

proposed ESRD bundled market basket 

and multifactor productivity 

adjustment. Therefore, we proposed a 

CY 2018 per treatment payment rate of 

$233.31 for renal dialysis services 

furnished by ESRD facilities to 

individuals with AKI. 

b. Geographic Adjustment Factor 

Section 1834(r)(1) of the Act further 

provides that the amount of payment for 

AKI dialysis services shall be the base 

rate for renal dialysis services 

determined for a year under section 

1881(b)(14) of the Act, as adjusted by 

any applicable geographic adjustment 

factor applied under section 

1881(b)(14)(D)(iv)(II) of the Act. We 

interpret the reference to ‘‘any 

applicable geographic adjustment factor 

applied under subparagraph (D)(iv)(II) 

of such section’’ to mean the geographic 

adjustment factor that is actually 

applied to the ESRD PPS base rate for 

a particular facility. Accordingly, we 

apply the same wage index that is used 

under the ESRD PPS, as discussed in the 

CY 2018 ESRD PPS proposed rule (82 

FR 31201). In the CY 2017 ESRD PPS 

final rule (81 FR 77868), we finalized 

that the AKI dialysis payment rate will 

be adjusted for wage index for a 

particular ESRD facility in the same way 

that the ESRD PPS base rate is adjusted 

for wage index for that facility. 

Specifically, we apply the wage index to 

the labor-related share of the ESRD PPS 

base rate that we utilize for AKI dialysis 

to compute the wage adjusted pertreatment AKI dialysis payment rate. We 

proposed a CY 2018 AKI dialysis 

payment rate of $233.31, adjusted by the 

ESRD facility’s wage index. 

The comments and our responses to 

the comments on this AKI payment 

proposal are set forth below. 

Comment: We received a comment 

from MedPAC stating that the AKI 

payment policy should be site-neutral 

for all settings, including hospital 

outpatient departments and ESRD 

facilities. MedPAC stated that this 

policy would lower spending for 

beneficiaries and taxpayers and reduce 

incentives to provide service in a higher 

paid sector since payment rates should 

be based on the setting where 

beneficiaries have adequate access to 

good quality care at the lowest cost to 

beneficiaries and the program, adjusting 

for differences in patient severity. 

MedPAC suggested that the Centers for 

Medicare & Medicaid Services (CMS) 

should pursue legislative authority to 

implement such a policy. 

Response: We appreciate MedPAC’s 

comment with regard to site-neutrality 

and pursuing legislative authority. We 

did not propose any specific changes to 

our AKI payment policies in the CY 

2018 ESRD PPS proposed rule, and 

therefore we consider this comment to 

be outside the scope of this rule. As we 

noted in the CY 2017 ESRD PPS final 

rule (81 FR 77868), section 808(b) of 

TPEA did not address payments to 

hospital outpatient departments for 

dialysis services furnished to 

beneficiaries with AKI. 

Comment: Two national dialysis 

organizations and a large dialysis 

organization asked that we affirm the 

distinction between AKI patients and 

ESRD beneficiaries, ensure sufficient 

funds are available to meet the 

utilization of AKI services by Medicare 

beneficiaries since the Congress did not 

mandate that CMS implement the 

provisions of TPEA in a budget-neutral 

manner, and also affirm that the ESRD 

Network fee does not apply to AKI 

treatments. The commenters noted that 

the ESRD Networks are charged with 

focusing on patients with ESRD, and 

therefore, the Network fee should not be 

applied to AKI payments. 

A professional association, clinician’s 

group, and a national dialysis provider 

association commented that CMS did 

not fully reflect the nuances of the 

distinctly different needs of AKI 

patients from ESRD patients in the AKI 

coverage and payment policy 

implemented in the CY 2017 ESRD PPS 

final rule. Specifically, the association 

noted the time and cost of educating 

staff about AKI dialysis and extra 

attention required by AKI patients and 


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more frequent laboratory monitoring of 

blood and urine. The commenters urged 

CMS to closely track utilization of items 

and services that are included in the 

ESRD PPS bundled payment to ensure 

that payment is appropriate for AKI 

dialysis. 

The provider association also stated 

that as we learn more about the 

provision of services to these patients, it 

may become apparent that an AKI 

adjustment to the payment rate is 

necessary to address the differences in 

the services provided to AKI patients. 

The commenter was pleased that CMS 

recognized in the CY 2017 ESRD PPS 

final rule that adjustments may be 

necessary in the future, as well as the 

need to bill certain services separately. 

Response: We agree with the 

commenters that care for AKI patients is 

different from the care provided to 

individuals with ESRD. With respect to 

the comment about ensuring sufficient 

funds are available for AKI payments, 

we note that AKI treatments 

administered in an ESRD facility 

represent a shift in service from the 

hospital outpatient department to the 

ESRD facility and therefore represent a 

savings to the Medicare Trust Fund, 

since reimbursement for services 

provided in an ESRD facility is lower 

than services provided in a hospital 

setting. As we stated in the CY 2017 

ESRD PPS final rule (81 FR 77867), we 

believe the definition of an individual 

with AKI set forth in TPEA provides an 

appropriate way to distinguish patients 

with AKI from patients with ESRD. 

Additionally, the TPEA did not mandate 

implementation on a budget-neutral 

basis. 

As we discussed in the CY 2017 ESRD 

PPS final rule (81 FR 77868), we 

finalized a policy that the AKI dialysis 

payment rate is the final ESRD PPS base 

rate adjusted by the wage index that is 

used under the ESRD PPS. We stated 

that we are not adjusting the payment 

amount by any other factors at this time, 

but may do so in future years. To 

address the higher costs associated with 

AKI patients as compared to ESRD 

patients, we finalized a policy of paying 

for all AKI dialysis treatments provided 

to a patient, without applying the 

monthly treatment limits applicable 

under the ESRD PPS. We also finalized 

a policy to pay separately for all items 

and services that are not part of the 

ESRD PPS base rate. We have created 

the ability through our claims 

processing systems to identify 

individuals with AKI in order to track 

the utilization of services and their 

health outcomes to ensure these patients 

are receiving the care they require. Once 

we have substantial data related to the 

AKI population and its associated 

utilization, we will determine the 

appropriate steps toward further 

developing the AKI payment rate. 

Finally, regarding the comment about 

the applicability of the ESRD Network 

fee to AKI treatments, we note that we 

discussed that issue in detail in the CY 

2017 ESRD PPS final rule (81 FR 77867 

through 77678). We explained that after 

considering comments and reviewing 

the applicable statutory provision, we 

will not apply the ESRD Network fee to 

the AKI dialysis payment rate. 

Comment: We received comments 

from national provider organizations, 

large dialysis organizations, and a drug 

manufacturer providing evidence that 

the AKI utilization estimates included 

in the CY 2018 ESRD PPS proposed rule 

may be inaccurate. These organizations 

indicated that the outpatient data used 

to estimate the shift in services from the 

outpatient hospital setting to the ESRD 

facility may underestimate the number 

of beneficiaries that received treatment 

for AKI. The organizations stated this 

underestimation could be due to 

hospitals not consistently billing for 

dialysis treatments administered to 

beneficiaries with AKI. 

Response: We agree that the estimates 

used in the CY 2018 ESRD PPS 

proposed rule underestimated the 

number of beneficiaries receiving 

treatments for AKI. When the CY 2018 

ESRD PPS proposed rule was 

developed, we used the best available 

information, which was information 

regarding treatments provided in a 

hospital outpatient setting. In the time 

between the publication of the CY 2018 

ESRD PPS proposed rule and the CY 

2018 ESRD PPS final rule, data 

regarding actual ESRD facility 

utilization of treatments provided to 

beneficiaries with AKI has become 

available. As a result, CMS has revised 

the impact analysis for AKI payment 

from $2 million to $20 million for CY 

2018. 

Comment: National provider 

organizations, a large dialysis 

organization, and a patient advocacy 

organization requested that CMS 

explain the AKI monitoring program 

and the transparent provision of data 

related to the program. These 

commenters noted that historic 

utilization may not be representative of 

the actual prevalence of AKI patients 

requiring dialysis due to operational 

models used by hospital outpatient 

departments and suggested that current 

data be used to develop an AKI 

adjustment as necessary to address the 

differences in the services provided to 

AKI patients. 

Response: We appreciate the feedback 

on historic utilization and agree that 

current data is the most appropriate for 

use with regard to the AKI population. 

The AKI monitoring program will 

include current data and will be used to 

inform future payment policy, including 

any potential adjustments to the AKI 

payment rate. As we stated in the CY 

2017 ESRD PPS final rule (81 FR 77871), 

we will develop public use files for the 

utilization of these services, but we do 

not anticipate that this data will be 

available until we have at least 1 full 

year of claims data. If stakeholders have 

additional clinical data regarding 

utilization and the treatments 

administered to AKI patients, we would 

welcome the receipt of that data in deidentified form. 

Comment: National provider 

organizations suggested that an AKI 

specific modifier should be identified 

for laboratory tests and drugs used by 

AKI patients and should allow separate 

payment. Commenters suggested that 

CMS issue guidance defining the 

utilization of this modifier, for example, 

for laboratory tests repeated more 

frequently for AKI patients than for 

ESRD patients. These organizations also 

believe that the AY modifier should not 

be used on AKI claims. Rather, they 

recommended that CMS identify a new 

AKI-specific modifier, which would 

allow CMS and providers to track 

utilization of key products and services 

by AKI patients to better inform policy 

in future rulemaking. One commenter 

asked that such modifiers be 

appropriately flagged in both the rate 

setting and standard analytic data files 

to ensure transparency to the public for 

the purpose of analysis. 

Another dialysis organization stated 

that with regard to AKI and billing, it is 

still not clear which claim modifiers are 

required for Medicare claims for AKI 

patients. They requested that CMS 

provide specific clarification on this 

issue. 

Response: We appreciate the feedback 

on the operationalization of AKI claim 

submission. As we noted in the CY 2017 

ESRD PPS final rule (81 FR 77867), the 

TPEA requires that we pay ESRD 

facilities for renal dialysis services 

furnished to beneficiaries with AKI in 

the amount of the wage-adjusted ESRD 

PPS base rate. In addition, we stated 

there is no weekly limit on the number 

of treatments that will be paid. ESRD 

facilities will receive payment based on 

the applicable Part B fee schedules for 

other items and services that are not 

considered to be renal dialysis services. 

As we stated in the CY 2017 ESRD PPS 

final rule, we continue to believe that 

these payment considerations are 


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sufficient for Medicare payment of renal 

dialysis services furnished to 

beneficiaries with AKI. As these 

services evolve in ESRD facilities, we 

can address any changes in future 

rulemaking. We will also provide billing 

guidance as necessary to address 

updates to modifier rules and claims 

submission. 

Comment: A software vendor 

requested that we clarify whether the 

TDAPA applies to AKI services. 

Response: We will issue additional 

program guidance that will address the 

application of the TDAPA to AKI 

services and other billing guidance. If 

we determine that it is appropriate for 

the TDAPA to apply to AKI services, we 

would consider that to be a substantive 

payment policy which would be 

established through notice and 

comment rulemaking. 

Comment: A health system and a 

provider organization commented that 

including AKI treatments in the count to 

determine eligibility for the low-volume 

payment adjustment (LVPA) is 

inappropriate. The commenters believe 

that including these treatments in that 

count could discourage facilities from 

accepting AKI patients if their treatment 

jeopardizes their low volume status. The 

commenters also believe that including 

AKI treatments in the LVPA count, but 

not applying the LVPA to those 

treatments, is an inconsistent 

application of the LVPA policy. 

An industry organization urged CMS 

to include the rural adjustment in the 

AKI payment to reflect the increased 

cost necessary to provide high-quality 

care since rural facilities face all of the 

same challenges in the providing 

dialysis treatment to AKI patients as 

they do to ESRD patients. 

Response: We appreciate the 

commenters’ feedback on the 

application of the LVPA to AKI dialysis 

treatments as well as their inclusion 

toward a facility’s eligibility. Since the 

policy regarding eligibility for the LVPA 

is based on all treatments provided by 

a facility, including non-Medicare 

treatments, we determined that the 

policy should also include AKI dialysis 

treatments, not just ESRD treatments at 

this time (81 FR 77869). In the CY 2017 

ESRD PPS final rule (81 FR 77868), we 

discussed not applying the case-mix 

adjusters to the payment for AKI 

treatments because those adjusters were 

developed based on ESRD treatments, 

and we continue to believe this is the 

most appropriate policy. As we 

continue to monitor data, we will 

review the efficacy of our LVPA and 

rural policies to determine if 

modification is required. 

Comment: A patient advocacy 

organization expressed support for our 

proposal to adjust the AKI payment rate 

by only the geographic and wage 

indices. This commenter further noted 

that, for some patients, peritoneal 

dialysis (PD) is the most appropriate 

modality. Additionally, some AKI 

patients can safely dialyze at home and 

have their urine and blood tests 

performed for the assessment of kidney 

function in a location closer to home. 

The commenter recommended that 

home training be paid separately, 

without dollars removed from the base 

rate. 

Response: We appreciate the 

commenter’s support for our AKI 

payment rate proposal. With regard to 

PD, we agree that it is an appropriate 

modality for some beneficiaries, 

however, in the CY 2017 ESRD PPS 

final rule, we stated that we do not 

expect that AKI beneficiaries will 

dialyze at home (81 FR 77870 through 

77871). We continue to believe that this 

is a population that requires close 

medical supervision by qualified staff 

during their dialysis treatment. We 

affirm in this final rule that payment 

will only be made for in-center PD or 

hemodialysis treatments for AKI 

beneficiaries. We will monitor this 

policy to determine if changes are 

necessary in the future, understanding 

that there may be a subset of patients for 

whom AKI dialysis at home is an 

appropriate treatment. We appreciate 

the commenter’s insight on the home 

training add-on payment. 

Comment: One industry organization 

urged CMS to adopt a pediatric 

adjustment for facilities that treat 

pediatric AKI patients, while another 

industry organization recognized that 

pediatric patients are only covered for 

ESRD and expressed support for our 

payment policy and appreciation that 

CMS recognizes the treatment 

differences in the ESRD and AKI 

populations. 

Response: We appreciate the support 

and comments with regard to our AKI 

payment policy, especially for pediatric 

patients. As we evaluate and monitor 

the payments for AKI treatments, we 

will continue to evaluate the 

appropriateness of the ESRD case-mix 

adjustments, including the pediatric 

adjustment. The current clinical 

literature (Walters, Scott & Porter, Craig 

& Brophy, Patrick. (2008). Dialysis and 

pediatric acute kidney injury: Choice of 

renal support Modality. Pediatric 

nephrology (Berlin, Germany). 24. 37– 

48. 10.1007/s00467–008–0826–x) 

indicates that pediatric treatment for 

AKI is most commonly done in an 

intensive care unit, not an ESRD facility 

due to access site difficulties and fluid 

overload. In a review of data, we have 

found very few claims for pediatric AKI 

patients. 

Comment: A national dialysis 

provider association and a national 

dialysis organization recommended 

modifying cost reports to separately 

capture certain AKI costs. Specifically, 

they recommended that new rows 

should be added to Worksheet D for AKI 

hemodialysis treatments and PD 

treatments. They stated the instructions 

should explain that AKI treatments are 

to be reported separately from all other 

ESRD dialysis treatments. 

Response: We agree that updates will 

need to be made to the dialysis facility 

cost report in order to differentiate costs 

of AKI dialysis treatments from 

treatments provided for the treatment of 

ESRD. We are currently developing the 

transmittal that will update the cost 

report to allow for the differentiation 

between AKI treatments and treatments 

for ESRD. 

Final Rule Action: We are finalizing 

the AKI payment rate as proposed, that 

is, based on the finalized ESRD PPS 

base rate. Specifically, the final CY 2018 

ESRD PPS base rate is $232.37. 

Accordingly, we are finalizing a CY 

2018 payment rate for renal dialysis 

services furnished by ESRD facilities to 

individuals with AKI as $232.37. 

IV. End-Stage Renal Disease (ESRD) 

Quality Incentive Program (QIP) for 

Payment Year (PY) 2021 

A. Background 

For over 30 years, monitoring the 

quality of care provided to end-stage 

renal disease (ESRD) patients by dialysis 

providers or facilities (hereinafter 

referred to collectively as ‘‘facility’’ or 

‘‘facilities’’) has been an important 

component of the Medicare ESRD 

payment system. The ESRD quality 

incentive program (QIP) is the most 

recent step in fostering improved 

patient outcomes by establishing 

incentives for dialysis facilities to meet 

or exceed performance standards 

established by the Centers for Medicare 

& Medicaid Services (CMS). 

Under the ESRD QIP, payments made 

to a dialysis facility by Medicare under 

section 1881(b)(14) of the Social 

Security Act (the Act) for a year are 

reduced by up to 2 percent if the facility 

does not meet or exceed the total 

performance score (TPS) with respect to 

performance standards established by 

the Secretary of the Department of 

Health and Human Services (the 

Secretary) with respect to certain 

specified measures. 


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1Office of the Assistant Secretary for Planning 

and Evaluation. 2016. Report to Congress: Social 

Risk Factors and Performance Under Medicare’s 

Value-Based Purchasing Programs. Available at: 

https://aspe.hhs.gov/pdf-report/report-congresssocial-risk-factors-and-performance-undermedicares-value-based-purchasing-programs. 

2Office of the Assistant Secretary for Planning 

and Evaluation. 2016. Report to Congress: Social 

Risk Factors and Performance Under Medicare’s 

Value-Based Purchasing Programs. Available at: 

https://aspe.hhs.gov/pdf-report/report-congresssocial-risk-factors-and-performance-undermedicares-value-based-purchasing-programs. 

3National Academies of Sciences, Engineering, 

and Medicine. 2017. Accounting for social risk 

factors in Medicare payment. Washington, DC: The 

National Academies Press. 

In the calendar year (CY) 2012 ESRD 

PPS final rule (76 FR 70228), published 

in the Federal Register on November 10, 

2011, we set forth certain requirements 

for the ESRD QIP for payment years 

(PYs) 2013 and 2014. 

In the CY 2013 ESRD PPS final rule 

(77 FR 67450), published in the Federal 

Register on November 9, 2012, we set 

forth requirements for the ESRD QIP, 

including for payment year 2015 and 

beyond. In that rule, we added several 

new measures to the ESRD QIP’s 

measure set and expanded the scope of 

some of the existing measures. We also 

established CY 2013 as the performance 

period for the PY 2015 ESRD QIP, 

established performance standards and 

adopted scoring and payment 

methodologies similar to those finalized 

for the PY 2014 ESRD QIP. 

In the CY 2014 ESRD PPS final rule 

(78 FR 72156), published in the Federal 

Register on December 2, 2013, we set 

forth requirements for the ESRD QIP, 

including for PY 2016 and beyond. In 

that rule, we added several new 

measures to the ESRD QIP’s measure 

set, established the performance period 

for the PY 2016 ESRD QIP, established 

performance standards for the PY 2016 

measures, and adopted scoring and 

payment reduction methodologies that 

were similar to those finalized for the 

PY 2015 ESRD QIP. 

In the CY 2015 ESRD PPS final rule 

(79 FR 66120), published in the Federal 

Register on November 6, 2014, we 

finalized requirements for the ESRD 

QIP, including for PYs 2017 and 2018. 

In that rule, we finalized the measure 

set for both PY 2017 and PY 2018, 

revised the In-Center Hemodialysis 

Consumer Assessment of Healthcare 

Providers System (ICH CAHPS) 

Reporting Measure, revised the Mineral 

Metabolism Reporting Measure, 

finalized the Extraordinary 

Circumstances Exemption (ECE) policy, 

and finalized a new scoring 

methodology beginning with PY 2018. 

In the CY 2016 ESRD PPS final rule 

(80 FR 68968), published in the Federal 

Register on November 6, 2015, we set 

forth requirements for the ESRD QIP, 

including for PY 2017 through PY 2019. 

In that rule, we finalized the PY 2019 

measure set, reinstated the ICH CAHPS 

Reporting Measure attestation beginning 

with PY 2017, and revised the small 

facility adjuster (SFA) beginning with 

PY 2017. 

In the CY 2017 ESRD PPS final rule 

(81 FR 77834), published in the Federal 

Register on November 4, 2016, we set 

forth new requirements for the ESRD 

QIP, including new quality measures 

beginning with PY 2019 and PY 2020, 

and updated other policies for the 

program. 

The ESRD QIP is authorized by 

section 1881(h) of the Act, which was 

added by section 153(c) of Medicare 

Improvements for Patients and 

Providers Act of 2008 (MIPPA). Section 

1881(h) of the Act requires the Secretary 

to establish an ESRD QIP by (1) 

selecting measures; (2) establishing the 

performance standards that apply to the 

individual measures; (3) specifying a 

performance period with respect to a 

year; (4) developing a methodology for 

assessing the total performance of each 

facility based on the performance 

standards with respect to the measures 

for a performance period; and (5) 

applying an appropriate payment 

reduction to facilities that do not meet 

or exceed the established Total 

Performance Score (TPS). 

B. Summary of the Proposed Provisions, 

Public Comments, Responses to 

Comments, and Newly Finalized 

Policies for the End-Stage Renal Disease 

(ESRD) Quality Incentive Program (QIP) 

The proposed rule, entitled ‘‘Medicare 

Program; End-Stage Renal Disease 

Prospective Payment System, Payment 

for Renal Dialysis Services Furnished to 

Individuals with Acute Kidney Injury, 

and End-Stage Renal Disease Quality 

Incentive Program’’ (82 FR 31190 

through 31233), hereinafter referred to 

as the CY 2018 ESRD PPS proposed 

rule, was published in the Federal 

Register on July 5, 2017, with a 

comment period that ended on August 

28, 2017. In that proposed rule, we 

proposed updates to the ESRD QIP, 

including for PY 2019 through PY 2021. 

We received approximately 58 public 

comments on our proposals, including 

comments from large dialysis 

organizations, renal dialysis facilities, 

national renal groups, nephrologists, 

patient organizations, patients and care 

partners, manufacturers, health care 

systems; nurses, and other stakeholders. 

In this final rule, we provide a 

summary of each proposed provision, a 

summary of the public comments 

received and our responses to them, and 

the policies we are finalizing for the 

ESRD QIP, including for PYs 2019 

through 2021. 

1. Accounting for Social Risk Factors in 

the ESRD QIP. 

In the CY 2018 ESRD PPS proposed 

rule (82 FR 31202), we discussed the 

issue of accounting for social risk factors 

in the ESRD QIP. We understand that 

social risk factors such as income, 

education, race and ethnicity, 

employment, disability, community 

resources, and social support (certain 

factors of which are also sometimes 

referred to as socioeconomic status 

factors or socio-demographic status 

factors), play a major role in health. One 

of our core objectives is to improve 

beneficiary outcomes, including 

reducing health disparities, and we 

want to ensure that all beneficiaries, 

including those with social risk factors, 

receive high quality care. In addition, 

we seek to ensure that the quality of 

care furnished by facilities is assessed as 

fairly as possible under our programs 

while ensuring that beneficiaries have 

adequate access to high quality care. 

We have reviewed reports prepared 

by the Office of the Assistant Secretary 

for Planning and Evaluation (ASPE) 1

and the National Academies of 

Sciences, Engineering, and Medicine on 

the issue of accounting for social risk 

factors in CMS’ value-based purchasing 

and quality reporting programs, and 

considered options on how to address 

the issue in these programs. On 

December 21, 2016, ASPE submitted a 

Report to Congress on a study it was 

required to conduct under section 2(d) 

of the Improving Medicare Post-Acute 

Care Transformation (IMPACT) Act of 

2014. The study analyzed the effects of 

certain social risk factors in Medicare 

beneficiaries on quality measures and 

measures of resource use that are used 

in one or more of nine Medicare valuebased purchasing programs, including 

the ESRD QIP.2 The report also included 

considerations for strategies to account 

for social risk factors in these programs. 

In a January 10, 2017 report released by 

The National Academies of Sciences, 

Engineering, and Medicine, that body 

provided various potential methods for 

measuring and accounting for social risk 

factors, including stratified public 

reporting.3

As noted in the fiscal year (FY) 2017 

Inpatient Prospective Payment System/ 

Long-Term Care Hospital Prospective 

Payment System (IPPS/LTCH PPS) final 

rule (81 FR 56762 through 57345), the 

National Quality Forum (NQF) 

undertook a 2-year trial period in which 


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certain new measures, measures 

undergoing maintenance review, and 

measures endorsed with the condition 

that they enter the trial period could be 

assessed to determine whether risk 

adjustment for selected social risk 

factors would be appropriate for these 

measures. This trial entailed 

temporarily allowing inclusion of social 

risk factors in the risk-adjustment 

approach for these measures. Recently, 

the NQF concluded this trial (http://

www.qualityforum.org/Publications/

2017/07/Social_Risk_Trial_Final_

Report.aspx), and based on its findings, 

the NQF will continue its work to 

evaluate the impact of social risk factor 

adjustment on intermediate outcome 

and outcome measures for an additional 

3 years. The extension of this work will 

allow the NQF to determine further how 

to effectively account for social risk 

factors through risk adjustment and 

other strategies in quality measurement. 

As we consider the analyses and 

recommendations from the ASPE report 

and the NQF trial on risk adjustment for 

quality measures, we are continuing to 

work with stakeholders. As we have 

previously communicated, we are 

concerned about holding facilities to 

different standards for the outcomes of 

their patients with social risk factors 

because we do not want to mask 

potential disparities or minimize 

incentives to improve the outcomes for 

disadvantaged populations. Keeping 

this concern in mind, we will continue 

to seek public comment on whether we 

should account for social risk factors in 

the ESRD QIP, and if so, what method 

or combination of methods would be 

most appropriate for accounting for 

social risk factors. Examples of potential 

methods include: Adjustment of the 

payment adjustment methodology under 

the ESRD QIP; adjustment of provider 

performance scores (for instance, 

stratifying facilities based on the 

proportion of their patients who are 

dual eligible); confidential reporting of 

stratified measure rates to facilities; 

public reporting of stratified measure 

rates; risk adjustment of a particular 

measure as appropriate based on data 

and evidence; and redesigning payment 

incentives (for instance, rewarding 

improvement for facilities caring for 

patients with social risk factors or 

incentivizing facilities to achieve health 

equity). In the CY 2018 ESRD PPS 

proposed rule (82 FR 31202 through 

31203), we requested comment on 

whether any of these methods should be 

considered, and if so, which of these 

methods or combination of methods 

would best account for social risk 

factors in the ESRD QIP. 

We note that in section V.I.9 of the FY 

2018 IPPS/LTCH PPS final rule (82 FR 

38229 through 38231), we finalized an 

approach for stratifying hospitals into 

peer groups for purposes of assessing 

payment adjustments under the 

Hospital Readmissions Reduction 

Program, as required under the 21st 

Century Cures Act of 2016 (Pub. L. 114– 

255). We refer readers to that section for 

a detailed discussion of the final policy; 

while this discussion is specific to the 

Hospital Readmissions Reduction 

Program, it reflects the level of analysis 

we would undertake when evaluating 

methods and combinations of methods 

for accounting for social risk factors in 

CMS’ other value-based purchasing 

programs, such as ESRD QIP. In 

addition, in the CY 2018 ESRD PPS 

proposed rule (82 FR 31202), we 

requested public comment on which 

social risk factors might be most 

appropriate for stratifying measure 

scores and/or potential risk-adjustment 

of a particular measure. Examples of 

social risk factors include, but are not 

limited to, dual eligibility/low-income 

subsidy, race and ethnicity, and 

geographic area of residence. We also 

requested comments on which of these 

factors, including current data sources 

where this information would be 

available, could be used alone or in 

combination, and whether other data 

should be collected to better capture the 

effects of social risk. We will take 

commenters’ input into consideration as 

we continue to assess the 

appropriateness and feasibility of 

accounting for social risk factors in the 

ESRD QIP. We note that any such 

changes would be proposed through 

future notice-and-comment rulemaking. 

We look forward to working with 

stakeholders as we consider the issue of 

accounting for social risk factors and 

reducing health disparities in CMS 

programs. Of note, implementing any of 

the above methods would be taken into 

consideration in the context of how this 

and other CMS programs operate (for 

example, data submission methods, 

availability of data, statistical 

considerations relating to reliability of 

data calculations, among others), so we 

also welcomed comment on operational 

considerations. CMS is committed to 

ensuring beneficiaries have access to 

and receive high quality care, and the 

quality of care furnished by providers 

and suppliers is assessed fairly in CMS 

programs. 

We requested comments on 

accounting for social risk factors in the 

ESRD QIP. The comments and our 

responses are set forth below. 

Comment: Many commenters 

expressed appreciation to CMS for 

requesting comments on how to account 

for social risk factors in the ESRD QIP. 

They argued that beneficiaries with 

ESRD are disproportionately affected by 

social risk factors and stressed that in 

considering factors, CMS must strike the 

correct balance to ensure it meets the 

goals of assessing providers and 

suppliers in a fair manner while not 

masking disparities or dis-incentivizing 

the provision of care to more medically 

complex patients. Commenters added 

that CMS should continue to support 

further research to examine the costs of 

caring for beneficiaries with social risk 

factors and to determine whether 

current payments adequately account 

for these differences in care needs. 

Some of the factors commenters 

recommended for consideration by CMS 

include: (1) Functional status, because 

there is evidence that those from lower 

socioeconomic and minority groups 

have poorer functional status and that 

this affects both their medical care and 

quality of life; (2) poverty and 

education, because dialysis facilities 

take care of a higher number of patients 

in poverty with lower levels of 

education and these patients tend to be 

less adherent to medications, diet and 

fluid restrictions; (3) geography, because 

regional variation in transplantation 

access is significant, as is regional 

differences in waitlist times, which 

ultimately could change the percentage 

of patients on the waitlist and impact a 

performance measure score; (4) family 

support; (5) ability to adhere to 

medication regimens; (6) capacity for 

follow-up; (7) insurance status; (8) 

income; (9) race and ethnicity; (10) 

disability; and (11) community 

resources. 

One commenter pointed out the 

importance of accounting for risk factors 

that affect both pediatric patients and 

those caring for pediatric patients 

because some of these risk factors, in 

particular those present among the 

parents and caregivers of pediatric 

patients, may affect their ability to 

properly care for those patients. 

Commenters urged CMS to consider a 

more robust set of social risk factors to 

meet the needs of the pediatric patient 

population. They added that there must 

be an accounting not only of race and 

ethnicity, insurance status, and other 

socioeconomic factors, but also their 

school attendance and performance, and 

peer interactions. Factors to consider for 

parents and other primary caregivers 

include their employment status, 

fatigue, and financial strains among 

others. One commenter argued that 

dual-eligible status is the most 

consistent of all social risk factors in 


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4 ‘‘Executive Summary of the December 13 DFC– 

ESRD QIP Patient Listening Session at the CMS 

Quality Conference,’’ December 20, 2016. 

‘‘Dialysis Facility Compare Patient Engagement 

Session Debrief,’’ April 3, 2017, NORC at the 

University of Chicago. 

predicting which patients will have the 

worst outcomes. 

A few commenters expressed 

concerns with our desire to look at 

social risk factor adjustments. One 

commenter expressed concerns that 

there is already an issue with small 

sample sizes in the QIP, which would 

likely be aggravated by dividing the 

measure population into smaller 

subsets. The same commenter stated 

that small sample sizes 

disproportionately affect facilities that 

only furnish ESRD care to patients in 

their homes or those that care for a 

small number of pediatric ESRD 

patients because those facilities tend to 

be small and are often scored only on 

a few measures. To collect this data, one 

commenter argued that it should be 

straightforward for CMS to use its data 

to identify dual eligibility/low-income 

subsidy data, as well as geographic area 

of residence. Another commenter added 

that it could be difficult to collect race/ 

ethnicity data but that patient selfreporting may be the most appropriate 

way to collect such data. 

Response: We appreciate all the 

comments and interest in this topic. As 

we have previously stated, we are 

concerned about holding providers to 

different standards for the outcomes of 

their patients with social risk factors, 

because we do not want to mask 

potential disparities or minimize 

incentives to improve outcomes for 

disadvantaged populations. We believe 

that the path forward should incentivize 

improvements in health outcomes for 

disadvantaged populations while 

ensuring that beneficiaries have access 

to excellent care. We intend to consider 

all suggestions as we continue to assess 

each measure and the overall program. 

We appreciate that some commenters 

recommended risk adjustment as a 

strategy to account for social risk 

factors, while others stated a concern 

that risk adjustment could minimize 

incentives and reduce efforts to address 

disparities for patients with social risk 

factors. We intend to conduct further 

analyses on the impact of strategies such 

as measure-level risk adjustment and 

stratifying performance scoring to 

account for social risk factors. In 

addition, we appreciate the 

recommendations from the commenters 

about consideration of specific social 

risk factor variables and will examine 

these variables and the feasibility of 

collecting one or more of these patientlevel variables. As we consider the 

feasibility of collecting patient-level 

data and the impact of strategies to 

account for social risk factors through 

further analysis, we will continue to 

evaluate the reporting burden on 

providers. Future proposals would 

follow further research and continued 

stakeholder engagement. 

2. Changes to the Performance Score 

Certificate (PSC) Beginning With the PY 

2019 ESRD QIP 

In the ESRD QIP final rule, which 

published in the Federal Register on 

January 5, 2011 (76 FR 628 through 

646), we finalized a policy for informing 

the public of facility performance 

through facility-posted certificates (76 

FR 637). Specifically, we finalized that 

these PSCs would include the following 

information: (1) The TPS achieved by 

the facility under the ESRD QIP with 

respect to the payment year involved; 

(2) comparative data that shows how 

well the facility’s TPS compares to the 

national TPS; (3) the performance result 

that the facility achieved on each 

individual measure with respect to the 

year involved; and (4) comparative data 

that shows how well the facility’s 

individual quality measure performance 

scores compare to the national 

performance result for each quality 

measure (76 FR 637). As the ESRD QIP 

has become more complex over the 

years and as new measures have been 

added to the program, the PSC has 

become a lengthy document that 

facilities are required to print and post 

in both English and Spanish for their 

patients to view (77 FR 67517). We have 

received feedback from the community 

about the difficulty patients and their 

families have with interpreting and 

understanding the information 

contained on the PSC due to its sheer 

volume and complexity. 

Section 1881(h)(6)(c) of the Act only 

requires that the PSC indicate the TPS 

achieved by the facility with respect to 

a program year. Therefore, to make the 

PSC a more effective and 

understandable document for the 

community, we proposed to shorten the 

PSC by removing some of the 

information that is currently included 

on it. We proposed that beginning in PY 

2019, and continuing in future years, 

the PSC would indicate the facility’s 

TPS, as required under section 

1881(h)(6)(C) of the Act, as well as 

information sufficient to identify the 

facility (for example, name, address, 

etc.). Additionally, we proposed to 

include information showing how the 

facility’s TPS compared to the national 

average TPS for that specific payment 

year. We did not propose any other 

changes to the requirements we 

previously finalized for the PSC. 

We requested comments on this 

proposal, and were particularly 

interested in comments on whether the 

reduced amount of information on the 

PSC would both benefit facilities and 

enhance the public’s understanding of 

the TPS. 

Comment: Several commenters 

supported CMS’s proposed 

simplification of the PSC and agreed 

that the changes would make it easier 

for patients to understand the facility’s 

performance score. One commenter 

recommended that CMS review the 

white papers commissioned by Agency 

for Healthcare Research and Quality on 

‘‘Best Practices in Public Reporting,’’ 

which the commenter believes provide 

a good overview of principles for 

presenting health care quality 

information to consumers. 

Response: We thank the commenters 

for their support. Our proposal was 

intended, in part, to address feedback 

we obtained during two patient 

engagement sessions that were open to 

the public.4 The majority of patients 

who took part in these sessions reported 

that they felt overwhelmed by the 

amount of information that we currently 

include on the PSC, did not understand 

all of the information, and that they 

focused mainly on specific data such as 

the facility scores or the comparison of 

facility scores with the national median. 

Patients also requested that the 

information be simplified and translated 

into plain language. We believe that our 

changes to the PSC will make it easier 

for patients and their caregivers to 

understand how facilities perform under 

the ESRD QIP. 

We will review the recommended 

reports and determine the feasibility of 

incorporating some of these suggestions. 

Comment: Several commenters did 

not support CMS’s proposals to simplify 

the PSC, stating that the PSC should 

provide more rather than fewer details 

and that the current PSC helps patients 

make informed decisions about their 

care. One commenter pointed out that 

section 1881(h)(6)(C) of the Act only 

refers to the TPS, but that section 

1881(h)(6)(A) of the Act calls upon the 

Secretary to make information available 

to the public including the total score, 

comparisons to the national average, 

and performance on individual 

measures. 

Response: We thank commenters for 

sharing their concerns. Our proposal 

was intended to make the PSC easier to 

understand while still conveying 

important information about facility 

performance under the ESRD QIP. 

However, we agree that the data we are 


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removing, as well as other ESRD QIP 

related data, should continue to be 

publicly available. We intend to report 

these data on Dialysis Facility Compare 

(DFC) and cms.gov. 

Comment: A patient advocacy 

organization recommended that the PSC 

be simplified by including just a simple 

cumulative number, such as the TPS, 

because it believed that this number 

would be most useful, and would be 

something that most people would 

likely look at. This organization also 

believed that it is potentially confusing 

to have the national average presented 

along with the national median given 

that very few people understand what a 

median is. The organization 

additionally thought that the phrases for 

each row would be more 

understandable and helpful if they were 

worded in a simpler manner, decimals 

and percentages should be presented 

consistently, and that the language 

around scores could be simplified. 

Response: We thank the commenter 

for sharing these recommendations for 

ways to improve the PSC. We believe 

the revised PSC will address the 

commenter’s recommendations. The 

revised PSC contains a more simply 

displayed TPS for each facility as well 

as the national average, but no national 

median. We are excluding the national 

median because it does not increase 

understanding of facility performance 

and may cause unnecessary confusion. 

The new PSC also does not contain 

decimals or percentages unless the 

average is a decimal, and it directs those 

viewing the document to review 

additional information on the CMS.gov 

Web site and on Dialysis Facility 

Compare. We are still considering the 

best format for display and we intend to 

make the explanations on the PSC as 

plan language as possible to increase 

understanding of the document. 

Final Rule Action: After careful 

consideration of the comments received, 

we are finalizing our proposal, as 

proposed, to update the PSC. We believe 

these changes will help make the 

document more easily readable and 

understandable by the community. The 

information being removed from the 

PSC will still be available in other 

locations and we encourage 

beneficiaries and their families to use all 

the resources currently available to 

them to make informed decisions about 

the care they receive. 

3. Requirements Beginning With the PY 

2020 ESRD QIP 

a. Clarification of the Minimum Data 

Policy for Scoring Measures Finalized 

for the PY 2020 ESRD QIP 

Under our current policy, we begin 

counting the number of months in 

which a facility is open on the first day 

of the month after the facility’s CMS 

certification number (CCN) Open Date. 

In the CY 2017 ESRD PPS final rule (81 

FR 77926), we inadvertently made 

errors in finalizing how we intended 

this policy to apply to a number of 

measures in the PY 2020 ESRD QIP. 

Table 19 finalized in the CY 2017 

ESRD PPS final rule (81 FR 77926) has 

been duplicated here, as Table 2(a): 

TABLE 2(a)—PREVIOUSLY FINALIZED MINIMUM DATA REQUIREMENTS FOR THE PY 2020 ESRD QIP 

Measure Minimum data requirements CCN open date Small facility adjuster 

Dialysis Adequacy (Clinical).11 qualifying patients .................................................... N/A ..................................... 11–25 qualifying patients. 

Vascular Access Type: 

Catheter (Clinical).

11 qualifying patients .................................................... N/A ..................................... 11–25 qualifying patients. 

Vascular Access Type: Fistula (Clinical).11 qualifying patients .................................................... N/A ..................................... 11–25 qualifying patients. 

Hypercalcemia (Clinical) .... 11 qualifying patients .................................................... N/A ..................................... 11–25 qualifying patients. 

NHSN Bloodstream Infection (Clinical).11 qualifying patients .................................................... On or before January 1, 

2018.

11–25 qualifying patients. 

NHSN Dialysis Event (Reporting).11 qualifying patients .................................................... On or before January 1, 

2018.

N/A. 

SRR (Clinical) .................... 11 index discharges ...................................................... N/A ..................................... 11–41 index discharges. 

STrR (Clinical) ................... 10 patient-years at risk .................................................. N/A ..................................... 10–21 patient-years at risk. 

SHR (Clinical) .................... 5 patient-years at risk .................................................... N/A ..................................... 5–14 patient-years at risk. 

ICH CAHPS (Clinical) ........ Facilities with 30 or more survey-eligible patients during the calendar year preceding the performance 

period must submit survey results. Facilities will not 

receive a score if they do not obtain a total of at 

least 30 completed surveys during the performance 

period.

On or before January 1, 

2018.

N/A. 

Anemia Management (Reporting).11 qualifying patients .................................................... Before July 1, 2018 ............ N/A. 

Serum Phosphorus (Reporting).11 qualifying patients .................................................... Before July 1, 2018 ............ N/A. 

Depression Screening and 

Follow-Up (Reporting).

11 qualifying patients .................................................... Before July 1, 2018 ............ N/A. 

Pain Assessment and Follow-Up (Reporting).11 qualifying patients .................................................... Before July 1, 2017 ............ N/A. 

NHSN Healthcare Personnel Influenza Vaccination (Reporting).N/A ................................................................................. Before January 1, 2018 ..... N/A. 

Ultrafiltration Rate (Reporting).11 qualifying patients .................................................... Before July 1, 2018 ............ N/A. 

In the CY 2018 ESRD PPS proposed 

rule (82 FR 31203), we proposed the 

intended application of this policy for 

PY 2020. We did not propose to make 

any changes to the methodology we use 

to count the number of months for 

which a facility is open for purposes of 

scoring facilities on clinical and 

reporting measures, or to the minimum 

number of cases (qualifying patients, 

survey-eligible patients, index 

discharges, or patient-years at risk) that 


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applies to each measure. Table 2(b) 

displays the proposed revised patient 

minimum requirements for each of the 

measures finalized for PY 2020, as well 

as the proposed revised CCN Open 

Dates after which a facility would not be 

eligible to receive a score on a reporting 

measure. 

TABLE 2(b)—PROPOSED REVISED MINIMUM DATA REQUIREMENTS FOR THE PY 2020 ESRD QIP 

Measure Minimum data requirements CCN open date Small facility adjuster 

Dialysis Adequacy (Clinical).11 qualifying patients .................................................... N/A ..................................... 11–25 qualifying patients. 

Vascular Access Type: 

Catheter (Clinical).

11 qualifying patients .................................................... N/A ..................................... 11–25 qualifying patients. 

Vascular Access Type: Fistula (Clinical).11 qualifying patients .................................................... N/A ..................................... 11–25 qualifying patients. 

Hypercalcemia (Clinical) .... 11 qualifying patients .................................................... N/A ..................................... 11–25 qualifying patients. 

NHSN Bloodstream Infection (Clinical).11 qualifying patients .................................................... Before January 1, 2018 ..... 11–25 qualifying patients.

NHSN Dialysis Event (Reporting).11 qualifying patients .................................................... Before January 1, 2018 ..... N/A. 

SRR (Clinical) .................... 11 index discharges ...................................................... N/A ..................................... 11–41 index discharges. 

STrR (Clinical) ................... 10 patient-years at risk .................................................. N/A ..................................... 10–21 patient years at risk. 

SHR (Clinical) .................... 5 patient-years at risk .................................................... N/A ..................................... 5–14 patient-years at risk. 

ICH CAHPS (Clinical) ........ Facilities with 30 or more survey-eligible patients during the calendar year preceding the performance 

period must submit survey results. Facilities will not 

receive a score if they do not obtain a total of at 

least 30 completed surveys during the performance 

period.

Before January 1, 2018 ..... N/A. 

Anemia Management (Reporting).11 qualifying patients .................................................... Before July 1, 2018 ............ N/A. 

Serum Phosphorus (Reporting).11 qualifying patients .................................................... Before July 1, 2018 ............ N/A. 

Depression Screening and 

Follow-Up (Reporting).

11 qualifying patients .................................................... Before July 1, 2018 ............ N/A. 

Pain Assessment and Follow-Up (Reporting).11 qualifying patients .................................................... Before July 1, 2018 ............ N/A. 

NHSN Healthcare Personnel Influenza Vaccination (Reporting).N/A ................................................................................. Before January 1, 2018 ..... N/A. 

Ultrafiltration Rate (Reporting).11 qualifying patients .................................................... Before July 1, 2018 ............ N/A. 

We requested comments on this 

proposal. 

Comment: Commenters were 

appreciative of the clarification CMS 

provided on the minimum number of 

cases. 

Response: We thank commenters for 

their support. 

Comment: Several commenters 

expressed concern with using sample 

sizes as small as 11 and argued that the 

small sample size exposes the ESRD QIP 

scores to random results that are not 

fully compensated by the SFA. One 

commenter urged CMS to adopt a 

minimum sample size of 26 patients and 

to eliminate the SFA altogether. The 

commenters suggested that there are 

many ways in which small facilities can 

be included while avoiding random 

results. 

Response: We appreciate the 

commenters’ concerns. However, 

because we did not propose to change 

the minimum number of cases that 

apply to each measure, or to revisit the 

SFA, we consider these comments to be 

outside the scope of the proposed rule 

and are not addressing them in this final 

rule. 

Final Rule Action: Based on the 

comments received, we are finalizing 

the proposed minimum data 

requirements for the PY 2020 ESRD QIP, 

as described in Table 2(b) above. 

b. Changes to the Extraordinary 

Circumstances Exception (ECE) Policy 

Many of our quality reporting and 

value-based purchasing programs share 

a common process for requesting an 

exception from program reporting due 

to an extraordinary circumstance not 

within a facility’s control. The Hospital 

Inpatient Quality Reporting, Hospital 

Outpatient Quality Reporting, Inpatient 

Psychiatric Facility Quality Reporting, 

Ambulatory Surgical Center Quality 

Reporting, PPS-Exempt Cancer Hospital 

Quality Reporting, the Hospital 

Acquired Condition Reduction Program, 

and the Hospital Readmissions 

Reduction Program all share common 

processes for Extraordinary 

Circumstances Exception (ECE) 

requests. In reviewing the policies for 

these programs, we recognized that 

there are five areas in which these 

programs have variance in comparison 

to the policy within the ESRD QIP 

regarding ECE requests. These are: (1) 

Allowing the facilities or hospitals to 

submit a form signed by the facility’s or 

hospital’s chief executive officer (CEO) 

versus CEO or designated personnel; (2) 

requiring the form be submitted within 

30 days following the date that the 

extraordinary circumstance occurred, 

versus within 90 days following the date 

the extraordinary circumstance 

occurred; (3) inconsistency regarding 

specification of a timeline for us to 

provide our response notifying the 

facility or hospital of our decision; (4) 

inconsistency regarding whether we 

would grant ECEs based on a facility’s 

inability to timely and completely 

report data due to CMS data system 

issues; and (5) referring to this policy as 

‘‘extraordinary extensions/exemptions’’ 

versus as ‘‘extraordinary circumstances 

exceptions’’. We believe that aligning 

the way the ECE policy is implemented 

in our program, with the way it is 

implemented in the programs listed 


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above, can improve the overall 

administrative efficiencies for affected 

facilities or hospitals. 

In the CY 2015 ESRD PPS final rule 

(79 FR 66120 through 66265), we 

finalized that to receive consideration 

for an exception from the ESRD QIP 

requirements in effect during the time 

period that a facility is affected by an 

extraordinary circumstance, facilities 

would need to be closed and provide 

CMS with a CMS Disaster Extension/

Exception Request Form within 90 

calendar days of the date of the disaster 

or extraordinary circumstance (79 FR 

66190). We finalized that the facility 

would need to provide the following 

information on the form: 

• Facility CCN. 

• Facility name. 

• CEO name and contact information. 

• Additional contact name and 

contact information. 

• Reason for requesting an exception. 

• Dates affected. 

• Date facility will start submitting 

data again, with justification for this 

date. 

• Evidence of the impact of the 

extraordinary circumstances, including 

but not limited to photographs, 

newspaper, and other media articles. 

We also finalized that we would 

consider granting an ECE to facilities 

absent a request, if we determine that an 

extraordinary circumstance affected an 

entire region or locale (79 FR 66190). 

We proposed to update these policies 

by: (1) Allowing the facility to submit a 

form signed by the facility’s CEO or 

designated personnel; (2) expanding the 

reasons for which an ECE can be 

requested to include an unresolved 

issue with a CMS data system, which 

affected the ability of the facility to 

submit data (an unresolved data system 

issue would be one which did not allow 

the facility to submit data by the data 

submission deadline and which was 

unable to be resolved with a workaround), and (3) specifying that a 

facility does not need to be closed in 

order to request and receive 

consideration for an ECE, as long as the 

facility can demonstrate that its normal 

operations have been significantly 

affected by an extraordinary 

circumstance outside of its control. We 

stated that these proposed policies 

generally align with policies in the 

Hospital Inpatient Quality Reporting 

Program (76 FR 51651 through 51652), 

(78 FR 50836 through 50837) and (81 FR 

57181 through 57182), Hospital 

Outpatient Quality Reporting Program 

(77 FR 68489 and 81 FR 79795), as well 

as ECE policies we have finalized for 

other quality reporting and value-based 

purchasing programs. We proposed that 

these policies would apply beginning 

with the PY 2020 ESRD QIP, as related 

to extraordinary circumstance events 

that occur on or after January 1, 2018. 

We also noted that there may be 

circumstances in which it is not feasible 

for a facility’s CEO to sign the ECE 

request form. In these circumstances, we 

believe that facilities affected by such 

circumstances should be able to submit 

an ECE request regardless of the CEO’s 

availability to sign. This proposed 

change would allow facilities to 

designate an appropriate, non-CEO 

contact for this purpose. We would 

accept ECE forms which have been 

signed by designated personnel. 

Although we do not anticipate that 

unresolved issues with CMS data 

systems will happen on a regular basis, 

we also stated that we recognized that 

there may be times when CMS 

experiences issues with its data systems 

that inhibits facilities’ ability to submit 

data. We are often able to resolve such 

issues and allow facilities an extended 

period of time to report the data. 

However, in the case that the issue 

inhibits the complete reporting of data 

(even under an extended deadline), we 

stated that we believed it would be 

inequitable to take the absence of such 

unreported data into account when 

computing a facility’s TPS for a 

payment year. Therefore, we proposed 

to address these situations in one of two 

ways. In some cases, CMS would issue 

a blanket exception to facilities that 

have been affected by an unresolved 

technical issue. In such cases, facilities 

would not be required to submit an ECE 

request to CMS, and CMS would send 

communications about the blanket 

exception to the affected facilities using 

routine communication channels. In 

other cases, CMS would not issue a 

blanket exception to facilities. In these 

cases, facilities would be required to 

submit an ECE request to CMS using the 

regular ECE request process, and would 

need to indicate how they were directly 

affected by the technical issue. 

Furthermore, we stated our belief that 

it is important for facilities to receive 

timely feedback regarding the status of 

ECE requests. We strive to complete our 

review of each ECE request as quickly 

as possible. However, we recognize that 

the number of requests we receive, and 

the complexity of the information 

provided impacts the actual timeframe 

to make ECE determinations. To 

improve the transparency of our 

process, we stated that we would strive 

to complete our review of each request 

within 90 days of receipt. 

We requested comments on these 

proposals. 

Comment: Commenters supported 

CMS’s proposed modifications to the 

ECE policy in the ESRD QIP, and urged 

CMS to finalize the proposal. One 

commenter requested that CMS issue 

clear guidance on the criteria used to 

deny or approve an ECE to ensure that 

approvals and denials are made 

consistently, uniformly, and in a 

manner that ensures that dialysis 

facilities can rely on such guidance from 

CMS as they make determinations about 

whether to submit an ECE request. 

Response: We thank commenters for 

their support of our proposals to update 

the ECE policy in the ESRD QIP. When 

considering ECE requests that we 

receive from facilities, we consider all 

information provided by the facility. We 

consider whether the facility submitted 

the request in a timely manner and 

included all required information on its 

ECE request form. We consider the 

reason for the closure and the strength 

of the supporting documentation 

provided. We take each request under 

consideration and decide based on all 

the evidence provided. 

Comment: One commenter 

recommended that CMS add a separate 

exclusion for dialysis camps, given their 

very limited operating schedules. 

Another commenter recommended that 

CMS grant ECEs to camps that request 

them. According to these commenters, 

these camps, which operate for short, 

well-defined periods during the year, 

make it possible for ESRD pediatric 

patients to have a traditional camp 

experience but are often penalized 

under the ESRD QIP. 

Response: We appreciate commenter’s 

concerns. However, the camps referred 

to by the commenters furnish renal 

dialysis services (as defined in section 

1881(b)(14)(B)) and, for that reason, we 

have no discretion to exclude them from 

the ESRD QIP, if they otherwise meet 

the program’s eligibility requirements 

(such as the minimum data 

requirements, CCN open date, etc.). We 

also see no basis to grant ECEs to 

facilities that otherwise meet the 

program’s eligibility requirements 

simply because they are not open for the 

entire year. The ECE policy was 

designed to provide relief to renal 

dialysis facilities that experience 

extraordinary circumstances outside of 

their control. Although we recognize the 

role that these camps may play in 

improving the quality of life for 

pediatric ESRD patients, we do not view 

their partial year operating status as a 

circumstance outside of their control. 

We also see no reason for not holding 

these facilities accountable to the same 

quality standards of care that apply to 

other facilities under the ESRD QIP. 


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5To the extent that the CDC requests facilities to 

report AKI patient data under its own, separate, 

statutory authority, data on these patients are not 

shared with CMS or used in the calculation of any 

ESRD QIP measures, including the NHSN Clinical 

and Reporting Measures. 

Comment: One commenter requested 

clarification of the term ‘‘designated 

personnel’’, and asked for information 

about how someone would be 

designated as such. 

Response: We expect that each facility 

will have its own process for 

designating personnel with appropriate 

authority to sign an ECE request on 

behalf of the facility, and we will accept 

an ECE request signed either by the 

facility’s CEO or such designated 

personnel. 

Final Rule Action: After careful 

consideration of the comments received, 

we are finalizing the updates to the ECE 

policy as proposed. 

c. Solicitation of Comments on the 

Inclusion of Acute Kidney Injury (AKI) 

Patients in the ESRD QIP 

The services for which quality is 

measured under the ESRD QIP are renal 

dialysis services defined in section 

1881(b)(14)(B) of the Act. Prior to 

January 1, 2017, these services could 

only be covered and reimbursed under 

Medicare if they were furnished to 

individuals with ESRD, but they are 

now also covered and reimbursed if 

they are furnished by renal dialysis 

facilities or providers of services paid 

under section 1881(b)(14) of the Act to 

individuals with acute kidney injury 

(AKI) (see sections 1861(s)(2)(F) and 

1834(r) of the Act). 

We currently do not require facilities 

to report AKI patient data for any of our 

measures in the ESRD QIP, including 

the National Healthcare Safety Network 

(NHSN) Bloodstream infection (BSI) 

Clinical and Reporting Measures.5

However, we now have the authority to 

collect data on this patient population 

and believe that it is vitally important 

to monitor and measure the quality of 

care furnished to these patients. 

In the future, we intend to require 

facilities to report data on AKI patients 

under the ESRD QIP. We requested 

comments on whether and how to adapt 

any of our current measures to include 

this population, as well as the type of 

measures that might be appropriate to 

develop for future inclusion in the 

program that would address the unique 

needs of beneficiaries with AKI. 

Comment: Several commenters 

supported the inclusion of those with 

AKI into the ESRD QIP. One commenter 

stated that because the incidence of AKI 

is increasing, and is estimated to double 

over the next decade, it’s important to 

collect data on this population and to 

include them in performance 

calculations. 

Response: We agree that the quality of 

care afforded to AKI patients by dialysis 

facilities is an emergent issue in dialysis 

care, and collecting data on that care is 

important. Including AKI patients in the 

ESRD QIP will require careful 

consideration of the clinical 

appropriateness of including them in 

each measure. 

Comment: Many commenters did not 

support the inclusion of AKI patients in 

the ESRD QIP. They stressed that CMS 

should continue to gather and evaluate 

AKI data before proposing to include 

AKI patient outcomes in any QIP 

measure and expressed concerns 

regarding the appropriateness of 

including AKI patients in any of the 

measures currently included in the 

program. Several commenters made 

measure-specific recommendations 

about why AKI patients should not be 

included in the NHSN BSI measures, 

the Vascular Access measures, and the 

Dialysis Adequacy measures. Many 

commenters stressed that if AKI patients 

are included in the QIP, then the 

program should use quality measures 

based solely on data from AKI patients, 

which are supported by AKI care 

guidelines. 

Response: We thank the commenters 

for sharing their concerns regarding the 

inclusion of AKI patients in the ESRD 

QIP generally, and for their 

recommendations regarding the 

inclusion of AKI patients in specific 

quality measures. We intend to 

systematically evaluate the 

appropriateness of including AKI 

patients in our existing quality measures 

through our measure maintenance 

process, and in new measures that could 

be focused specifically on that subset of 

patients treated by facilities. In 

considering the inclusion of AKI 

patients in our measures, we intend to 

apply the same standards that we use to 

determine the applicability of our 

measures to specific patient 

populations, which include seeking 

input from clinical experts and other 

stakeholders. We would also consider 

the clinical differences between ESRD 

dialysis patients and AKI patients, as 

well as the relatively small number of 

AKI patients currently being treated by 

dialysis facilities. 

Comment: A few commenters argued 

that while monitoring AKI patients is 

important and supported CMS’ efforts to 

do so, CMS only has statutory authority 

to apply the QIP to beneficiaries with 

ESRD. Commenters argued that the 

statute establishing and governing the 

ESRD QIP is limited to ‘‘individuals 

who have been determined to have endstage renal disease as determined in 

section 226A of the Act,’’ and that this 

limitation excludes AKI patients from 

the ESRD benefit and programs. 

Commenters pointed out that the ESRD 

QIP statutory language further defines 

the quality incentive as avoiding a 

payment reduction to the rates paid 

under section 1881(b)(14) of the Act and 

noted that facilities that provide 

services to AKI patients are paid under 

section 1834(r) of the Act. 

Response: We continue to believe that 

we have authority to collect data on the 

AKI patient population from facilities 

under the ESRD QIP and that it is 

important to hold facilities accountable 

for the quality of renal dialysis services 

furnished to those patients. We 

appreciate the feedback we received on 

this issue and we will take it into 

account as we consider whether to make 

proposals related to this population in 

future rulemaking. 

d. Estimated Performance Standards, 

Achievement Thresholds, and 

Benchmarks for the Clinical Measures 

Finalized for the PY 2020 ESRD QIP 

In the CY 2017 ESRD PPS final rule 

(81 FR 77834 through 77969), we 

finalized that for PY 2020, the 

performance standards, achievement 

thresholds, and benchmarks for the 

clinical measures would be set at the 

50th, 15th and 90th percentile, 

respectively, of national performance in 

CY 2016, because this will give us 

enough time to calculate and assign 

numerical values to the proposed 

performance standards for the PY 2020 

program prior to the beginning of the 

performance period (81 FR 77915). We 

stated in the CY 2018 ESRD PPS 

proposed rule that we did not have the 

necessary data to assign numerical 

values to those performance standards, 

achievement thresholds, and 

benchmarks because we did not yet 

have complete data from CY 2016. 

Nevertheless, we could estimate these 

numerical values based on the most 

recent data available at the time we 

issued the CY 2018 ESRD PPS proposed 

rule, and we have since updated those 

values based on more recently available 

data. For the vascular access type 

(VAT), Hypercalcemia, NHSN BSI, InCenter Hemodialysis Consumer 

Assessment of Healthcare Providers and 

Systems (ICH CAHPS), Standardized 

Readmission Ratio (SRR), Standardized 

Hospitalization Ratio (SHR), Kt/V 

Dialysis Adequacy, and Standardized 

Transfusion Ratio (STrR) clinical 

measures, this data came from the 

period of January through December 

2015. In Table 3, we provided the 


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estimated numerical values for all 

finalized PY 2020 ESRD QIP clinical 

measures (these are the values we 

estimated in the proposed rule). In 

Table 4, we have provided updated 

values for the clinical measures, using 

data from the first part of CY 2017. 

TABLE 3—ESTIMATED NUMERICAL VALUES FOR THE PERFORMANCE STANDARDS FOR THE PY 2020 ESRD QIP CLINICAL

MEASURES

Measure Achievement 

threshold Benchmark Performance standard 

VAT: ........................ ........................ ........................

%Fistula ................................................................................................................................ 53.66% 79.62% 65.93% 

%Catheter ............................................................................................................................. 17.20% 2.95% 9.19% 

Kt/V Dialysis Adequacy Comprehensive ..................................................................................... 87.37% 97.74% 93.20% 

Hypercalcemia ............................................................................................................................. 4.24% 0.32% 1.85% 

STrR ............................................................................................................................................. 1.488 0.421 0.901 

SRR ............................................................................................................................................. 1.271 0.624 0.998 

NHSN BSI .................................................................................................................................... 1.738 0 0.797 

Standardized Hospitalization Ratio measure (SHR) ................................................................... 1.244 0.672 0.970 

ICH CAHPS: Nephrologists’ Communication and Caring ........................................................... 56.41% 77.06% 65.89% 

ICH CAHPS: Quality of Dialysis Center Care and Operations ................................................... 52.88% 71.21% 60.75% 

ICH CAHPS: Providing Information to Patients .......................................................................... 72.09% 85.55% 78.59% 

ICH CAHPS: Overall Rating of Nephrologists ............................................................................. 49.33% 76.57% 62.22% 

ICH CAHPS: Overall Rating of Dialysis Center Staff .................................................................. 48.84% 77.42% 62.26% 

ICH CAHPS: Overall Rating of the Dialysis Facility .................................................................... 51.18% 80.58% 65.13% 

Data sources: VAT measures: 2015 CROWNWeb; SRR, STrR, SHR: 2015 Medicare claims; Kt/V: 2015 CROWNWeb; Hypercalcemia: 2015 

CROWNWeb; NHSN: 2015 CDC, ICH CAHPS: CMS 2015. 

Our current policy generally is that if 

final numerical values for the 

performance standard, achievement 

threshold, and/or benchmark are worse 

than they were for that measure in the 

previous year of the ESRD QIP, then we 

will substitute the previous year’s 

performance standard, achievement 

threshold, and/or benchmark for that 

measure. We adopted this policy 

because we believe that the ESRD QIP 

should not have lower performance 

standards than in previous years. In the 

CY 2017 ESRD PPS final rule, we 

finalized an update to that policy 

because in certain cases, it may be 

appropriate to re-baseline the NHSN BSI 

Clinical Measure, such that expected 

infection rates are calculated based on a 

more recent year’s data (81 FR 77886). 

In such cases, numerical values 

assigned to performance standards may 

appear to decline, even though they 

represent higher standards for infection 

prevention. For PY 2020 and future 

payment years, we proposed to continue 

use of this policy for the reasons 

explained above. Under that policy, 

except for the NHSN BSI Clinical 

Measure, we would substitute the PY 

2019 performance standard, 

achievement threshold, and/or 

benchmark for any measure that has a 

final numerical value for a performance 

standard, achievement threshold, and/or 

benchmark that is worse than it was for 

that measure in the PY 2019 ESRD QIP. 

We would also substitute the PY 2019 

values for two CAHPS measures: (1) ICH 

CAHPS: Overall Rating of Nephrologists 

and (2) ICH CAHPS: Overall Rating of 

Dialysis Center Staff because the final 

numerical values for those measures 

were worse for PY 2020 than they were 

for PY 2019. 

Final Rule Action: We did not receive 

comments on our proposal to continue 

our policies for substituting the 

performance standard, achievement 

threshold and benchmark in appropriate 

cases. We are therefore, finalizing our 

proposal to continue use of these 

policies for PY 2020 and future payment 

years, as proposed. We are also updating 

the performance standards, achievement 

thresholds, and benchmarks for the 

finalized PY 2020 ESRD QIP clinical 

measures as shown in Table 4, using the 

most recently available data. 

TABLE 4—FINALIZED PERFORMANCE STANDARDS FOR THE PY 2020 ESRD QIP CLINICAL MEASURES USING THE MOST

RECENTLY AVAILABLE DATA

Measure Achievement 

threshold Benchmark Performance standard 

Vascular Access Type (VAT): 

%Fistula ................................................................................................................................ 53.95% 79.90% 65.98% 

%Catheter ............................................................................................................................. 17.22% 3.11% 9.40% 

Kt/V Dialysis Adequacy Comprehensive ..................................................................................... 91.09% 98.56% 95.64% 

Hypercalcemia ............................................................................................................................. 2.41% 0.00% 0.86% 

Standardized Transfusion Ratio (STrR) ...................................................................................... 1.444 0.429 0.889 

Standardized Readmission Ratio (SRR) ..................................................................................... 1.273 0.629 0.998 

NHSN Bloodstream Infection ....................................................................................................... 1.598 0 0.740 

Standardized Hospitalization Ratio measure (SHR) ................................................................... 1.249 0.670 0.967 

ICH CAHPS: Nephrologists’ Communication and Caring ........................................................... 57.36% 78.09% 67.04% 

ICH CAHPS: Quality of Dialysis Center Care and Operations ................................................... 53.14% 71.52% 61.22% 

ICH CAHPS: Providing Information to Patients .......................................................................... 73.31% 86.83% 79.79% 

ICH CAHPS: Overall Rating of Nephrologists ............................................................................. 49.33% 76.57% 62.22% 

ICH CAHPS: Overall Rating of Dialysis Center Staff .................................................................. 48.84% 77.42% 62.26% 


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TABLE 4—FINALIZED PERFORMANCE STANDARDS FOR THE PY 2020 ESRD QIP CLINICAL MEASURES USING THE MOST

RECENTLY AVAILABLE DATA—Continued 

Measure Achievement 

threshold Benchmark Performance standard 

ICH CAHPS: Overall Rating of the Dialysis Facility .................................................................... 52.24% 82.48% 66.82% 

Data sources: VAT measures: 2016 CROWNWeb; SRR, STrR, SHR: 2016 Medicare claims; Kt/V: 2016 CROWNWeb; Hypercalcemia: 2016 

CROWNWeb; NHSN: 2016 CDC, ICH CAHPS: CMS 2016. 

e. Policy for Weighting the Clinical 

Measure Domain for PY 2020 

In the CY 2017 ESRD PPS final rule, 

we finalized our policy for weighting 

the Clinical Measure Domain for PY 

2020. With the addition of the Safety 

Measure Domain to the ESRD QIP, we 

finalized that the Clinical Measure 

Domain would comprise 75 percent of 

the TPS, the Safety Measure Domain 

would comprise 15 percent of the TPS 

and the Reporting Measure Domain 

would comprise 10 percent of the TPS. 

Table 5 shows the weights finalized for 

PY 2020 for the Clinical Measure 

Domain. 

TABLE 5—FINALIZED CLINICAL MEASURE DOMAIN WEIGHTING FOR THE PY 2020 ESRD QIP 

Measures/measure topics by subdomain 

Measure weight in the clinical domain 

score 

(percent) 

Measure weight as percent of TPS 

(updated) 

Patient and Family Engagement/Care Coordination Subdomain.40 ..........................................................

ICH CAHPS measure ...................................................... 25 .......................................................... 18.75 

SRR Measure .................................................................. 15 .......................................................... 11.25 

Clinical Care Subdomain ........................................................ 60 ..........................................................

STrR measure .................................................................. 11 .......................................................... 8.25 

Dialysis Adequacy measure ............................................ 18 .......................................................... 13.5 

VAT measure topic .......................................................... 18 .......................................................... 13.5 

Hypercalcemia measure .................................................. 2 ............................................................ 1.5 

SHR measure .................................................................. 11 .......................................................... 8.25 

Total .......................................................................... 100% (of Clinical Measure Domain) ..... 75% (of TPS) 

Note: The percentages listed in this Table represent the measure weight as a percent of the Clinical Domain Score for PY 2020. 

We did not propose any changes to 

these weights, but we received a few 

comments. 

Comment: Some commenters 

recommended that we increase the 

weight of the VAT Catheter Measure 

and decrease the weight of the VAT 

Fistula Measure to emphasize the 

clinical benefits of eliminating 

catheters. Additionally, a commenter 

recommended that CMS adopt a set of 

global exclusions that would 

consistently apply to all measures, 

which would be automatically applied 

unless there is a specific clinical or 

operational reason they should not be. 

Response: We appreciate the 

commenters’ recommendations. 

However, because we did not make any 

proposals related to these specific 

policy areas, we consider these 

comments to be out of the scope of the 

proposed rule. Therefore, we have not 

addressed them in this final rule. 

f. Payment Reductions for the PY 2020 

ESRD QIP 

Section 1881(h)(3)(A)(ii) of the Act 

requires the Secretary to ensure that the 

application of the ESRD QIP scoring 

methodology results in an appropriate 

distribution of payment reductions 

across facilities, such that facilities 

achieving the lowest TPS receive the 

largest payment reductions. In the CY 

2017 ESRD PPS final rule, we finalized 

our proposal for calculating the 

minimum TPS for PY 2020 and future 

payment years (81 FR 77927). Under our 

current policy, a facility will not receive 

a payment reduction if it achieves a 

minimum TPS that is equal to or greater 

than the total of the points it would 

have received if: (1) It performs at the 

performance standard for each clinical 

measure; and (2) it receives the number 

of points for each reporting measure that 

corresponds to the 50th percentile of 

facility performance on each of the PY 

2018 reporting measures (81 FR 77927). 

We were unable to calculate a 

minimum TPS for PY 2020 in the CY 

2017 ESRD PPS final rule because we 

did not yet have the data to calculate the 

performance standards for each of the 

clinical measures. We therefore stated 

that we would publish the minimum 

TPS for the PY 2020 ESRD QIP in the 

CY 2018 ESRD PPS final rule (81 FR 

77927). We estimated the minimum TPS 

for PY 2020, along with the updated 

payment reduction scale, in Table 5 in 

the proposed rule (renumbered as Table 

6 in this final rule). Based on the 

estimated performance standards which 

we provided in the CY 2018 ESRD PPS 

proposed rule (82 FR 31207) and listed 

above, we estimated that a facility 

would need to meet or exceed a 

minimum TPS of 61 for PY 2020. For all 

the clinical measures, these data came 

from CY 2015. We proposed that a 

facility failing to meet the minimum 

TPS, would receive a payment 

reduction based on the estimated TPS 

ranges indicated in Table 6. 

TABLE 6—ESTIMATED PAYMENT

REDUCTION SCALE FOR PY 2020 

Total performance score Reduction 

(%) 

100–61 ........................................ 0 

60–51 .......................................... 0.5 

50–41 .......................................... 1.0 

40–31 .......................................... 1.5 

30–21 .......................................... 2.0 

The comments and our responses to 

the comments on our proposal are set 

forth below. 

Comment: One commenter asked 

CMS to fix an error in the CY 2018 

ESRD PPS proposed rule, Table 5 (Table 


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6 in this final rule), titled ‘‘Estimated 

Payment Reduction Scale for PY 2020 

Based on the Most Recently Available 

Data,’’ stating that the last line should 

be corrected to read ‘‘30–0’’. The 

commenter stated that the table, as 

published in the proposed rule, does not 

include the TPS range between 0 and 

20. 

Response: We thank the commenter 

for pointing out this error. We 

inadvertently neglected to include in 

Table 5 (Table 6 in this final rule) of the 

proposed rule that the payment 

reduction would be 2.0 percent for 

facilities that achieve a TPS between 

30–0. We have included the final TPS 

ranges in Table 7 based on the most 

recently available data. 

Final Rule Action: After consideration 

of the comments received and an 

analysis of the most recently available 

data, we are finalizing that the 

minimum TPS for PY 2020 will be 59. 

We are also finalizing the payment 

reduction scale shown in Table 7. 

TABLE 7—FINALIZED PAYMENT REDUCTION SCALE FOR PY 2020 BASED

ON THE MOST RECENTLY AVAILABLE

DATA

Total performance score Reduction 

(%) 

100–59 ........................................ 0 

58–49 .......................................... 0.5 

48–39 .......................................... 1.0 

38–29 .......................................... 1.5 

28–0 ............................................ 2.0 

g. Data Validation 

One of the critical elements of the 

ESRD QIP’s success is ensuring that the 

data submitted to calculate measure 

scores and TPSs are accurate. We began 

a pilot data validation program in CY 

2013 for the ESRD QIP, and procured 

the services of a data validation 

contractor that was tasked with 

validating a national sample of facilities’ 

records as reported to CROWNWeb. For 

validation of CY 2014 data, our priority 

was to develop a methodology for 

validating data submitted to 

Consolidated Renal Operations in a 

Web-Enabled Network (CROWNWeb) 

under the pilot data validation program. 

In the CY 2014 ESRD PPS final rule (78 

FR 72223 through 72224), we finalized 

a requirement to sample approximately 

10 records from 300 randomly selected 

facilities; these facilities had 60 days to 

comply once they received requests for 

records. We continued this pilot for the 

PY 2017, PY 2018 and PY 2019 ESRD 

QIP, and proposed to continue doing so 

for the PY 2020 ESRD QIP. Using the 

data collected thus far, we are exploring 

options for refining the methodology 

used to improve the effectiveness and 

reliability of the data collected. For 

future payment years, we will consider 

whether this validation effort should 

continue in pilot status or as a 

permanent feature of the ESRD QIP. 

Under the continued validation study, 

we will sample the same number of 

records (approximately 10 per facility) 

from the same number of facilities, 

which totaled 300 facilities during CY 

2018. If a facility is randomly selected 

to participate in the pilot validation 

study but does not provide us with the 

requisite medical records within 60 

calendar days of receiving a request, 

then we proposed to deduct 10 points 

from the facility’s TPS. 

In the CY 2015 ESRD PPS final rule 

(79 FR 66120 through 66265), we 

finalized a feasibility study for 

validating data reported to the CDC’s 

NHSN Dialysis Event Module for the 

NHSN BSI Clinical Measure (OMB 

#0938–NEW). Healthcare-acquired 

infections are relatively rare, and we 

finalized that the feasibility study 

would target records with a higher 

probability of including a dialysis event, 

because this would enrich the 

validation sample while reducing the 

burden on facilities. This methodology 

resembles the methodology we use in 

the Hospital Inpatient Quality Reporting 

Program to validate the central lineassociated BSI measure, the catheterassociated urinary tract infection 

measure, and the surgical site infection 

measure (77 FR 53539 through 53553). 

For the PY 2020 ESRD QIP, we 

proposed to continue conducting the 

same NHSN dialysis event validation 

study, that we finalized in the CY 2017 

ESRD PPS final rule for PY 2019 (81 FR 

77894). For PY 2020, we would 

continue to select 35 facilities to 

participate in an NHSN dialysis event 

validation study by submitting 10 

patient records covering two quarters of 

data reported in CY 2018. However, for 

PY 2020, the sampling method used to 

select the 35 facilities would be adjusted 

such that a more representative sample 

of facility data can be analyzed, 

including data from high performing 

facilities as well as facilities identified 

as being at risk of underreporting. A 

CMS contractor would send these 

facilities requests for medical records 

for all patients with ‘‘candidate events’’ 

during the evaluation period; that is, 

patients who had any positive blood 

cultures; received any intravenous 

antimicrobials; had any pus, redness, or 

increased swelling at a vascular access 

site; and/or were admitted to a hospital 

during the evaluation period. Facilities 

would have 60 calendar days to respond 

to the request for medical records based 

on candidate events either electronically 

or on paper. If the contractor determines 

that additional medical records are 

needed to reach the 10-record threshold 

from a facility to validate whether the 

facility accurately reported the dialysis 

events, then the contractor would send 

a request for additional, randomly 

selected patient records from the 

facility. The facility would have 60 

calendar days from the date of the letter 

to respond to the request. With input 

from the CDC, the CMS contractor 

would use a methodology for reviewing 

and validating records from selected 

patients, to determine whether the 

facility reported dialysis events for 

those patients in accordance with the 

NHSN Dialysis Event Protocol. If a 

facility is selected to participate in the 

validation study but does not provide 

CMS with the requisite lists of 

information or medical records within 

60 calendar days of receiving a request, 

then we proposed to deduct 10 points 

from the facility’s TPS. We stated that 

information from the validation study 

may be used in future years of the 

program to inform our consideration of 

future policies that would incorporate 

NHSN data accuracy into the scoring 

process. In future years of the program 

we may also look to improve the NHSN 

dialysis event validation study by 

validating records from a greater 

number of facilities or by validating a 

larger sample of records from each 

facility participating in the study. 

The comments and our responses to 

the comments on our proposals are set 

forth below. 

Comment: Several commenters 

supported CMS’s efforts to continue the 

NHSN BSI Data Validation Study and 

supported the efforts of CDC around BSI 

prevention. One commenter specifically 

supported CMS’s efforts to include both 

high performing facilities and those at 

risk of under-reporting. Another 

commenter expressed that a larger, more 

representative sample is needed for 

validation. A few commenters 

applauded CMS for working with CDC 

on the proposed methodology for data 

validation and recommended that the 

sample size of facilities be increased to 

5 percent, consistent with the dialysis 

facility validation sample size for 

CROWNWeb data. One commenter 

pointed out that CMS should include a 

diverse group of facilities to ensure that 

the major providers are not overrepresented in the sample. The 

commenter encouraged CMS to use 

lessons learned from the CY 2017 data 

validation study when conducting the 

CY 2018 validation survey. 


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Response: We thank the commenters 

for sharing their recommendations, and 

we appreciate their support. We agree 

that it’s important to monitor and 

prevent infections and that it’s 

important to continue conducting 

validation to ensure that the data 

received on infections is accurate and 

complete so that CMS and CDC can 

continue in their efforts to help facilities 

with infection prevention. We also agree 

that an increase in the sample size of the 

NHSN validation study will allow us to 

more comprehensively validate the BSI 

data. We are currently working closely 

with CDC to determine whether we 

should propose in future rulemaking to 

change the current sample size, and as 

part of that analysis, we are considering 

how to best ensure that the sample size 

includes a diverse group of facilities 

that does not over or under-represent 

any particular type of facilities. 

Comment: One commenter expressed 

concerns with the accuracy of NHSN 

Data and recommended that CMS 

mandate reporting of culture results to 

NHSN by the lab processing the 

specimen, and when Regional Health 

Information Exchanges become 

operational in all communities, mandate 

participation in an Exchange by all 

laboratories processing blood cultures. 

The commenter also recommended that 

there should be an ongoing auditing of 

at least 10 percent of facilities to 

provide an incentive for diligent data 

collection and honest and accurate 

reporting. Additionally, the commenter 

recommended that the NHSN BSI 

Clinical Measure remain in the program 

as a reporting measure only until such 

an ongoing audit can be put in place. 

Response: We thank the commenter 

for their recommendations and will 

continue working with CDC to identify 

ways to assess and strengthen the 

overall accuracy of NSHN BSI data. We 

remind commenters that the overall 

purpose of the validation under the 

ESRD QIP is to ensure that renal dialysis 

facilities are reporting accurate and 

complete information to CMS for 

purposes of calculating their TPSs. 

While we agree that one way to 

encourage all facilities to report accurate 

BSI data would be to require a larger 

number of facilities to participate in a 

given year, we are also examining 

whether we can achieve the same goal 

of accurate reporting in other ways that 

may be less burdensome and more costefficient. 

Comment: One commenter requested 

that CMS make the results of the 

CROWNWeb validation publicly 

available. Another commenter 

questioned whether CMS has not 

released any validation results because 

those results would show that 

CROWNWeb is not a reliable data 

collection tool and that the NHSN BSI 

Measure is not valid. 

Response: We thank the commenter 

for sharing this recommendation. 

However, one of our main goals for 

validation is to give feedback that the 

selected facility can use to make 

internal improvements to its reporting 

processes, and we do not think it would 

be beneficial to make this feedback 

public. Further, given the small sample 

size, we are concerned that publicly 

releasing the information would 

threaten the confidentiality and privacy 

of facilities that are chosen to 

participate in the validation study. To 

date, our validation studies have not 

shown any concerns with the reliability 

of data reported to CROWNWeb or 

NHSN. In fact, our most recent 

CROWNWeb Validation Study found an 

overall error rate of 3.4 percent (95 

percent confidence interval of 1.3 

percent to 5.5 percent) for the 

CROWNWeb system. Given 

stakeholders continued concerns, we 

will consider providing a national 

summary report, validation fact sheet, or 

similar document that summarizes highlevel aggregate results from each 

validation study. 

Comment: Several commenters 

expressed concerns that the Data 

Validation Study is actually an audit 

and suggested that a true audit process 

would provide appropriate due process, 

including the right to appeal adverse 

decisions. One commenter argued that 

the timeframe for response is inadequate 

and that the penalty for failing to 

comply with it is disproportionately 

severe when compared to the problem 

being identified. The same commenter 

also recommended that while the 

validation ‘‘study’’ is taking place, CMS 

should not reduce a facility’s ESRD QIP 

score because the purpose of the study 

is to assess future policies to ensure the 

accuracy of NHSN data. One commenter 

asked CMS to clearly state in the final 

rule the reason why the validation 

studies are necessary and, if the purpose 

is to audit facilities, the commenter 

asked that CMS provide appropriate due 

process. Another commenter 

acknowledged that CMS has an interest 

in auditing quality data submissions to 

ensure their accuracy at the individual 

facility level, but questioned why CMS 

continues to refer in the ESRD QIP to a 

‘‘validation study’’ rather than an audit 

program of CROWNWeb data 

submissions and the NHSN BSI Clinical 

Measure. 

Response: We thank commenters for 

sharing their concerns. As we stated in 

the CY 2016 ESRD PPS final rule (80 FR 

69049), the data validation studies are 

not designed to be an audit, but rather 

to assess the capacity of renal dialysis 

facilities to provide accurate and 

complete data on performance 

measures, and to find ways to assist 

them in improving their data reporting. 

It is meant to be a collaborative effort 

between CMS and the facilities selected 

for validation with the goal of 

determining ways to improve the 

process for all facilities. An audit, by 

contrast, would be a more directed 

search for errors and punitive in nature. 

We are also using the validation data to 

improve the integrity of data reported to 

CROWNWeb and NHSN; whereas we 

would use the data collected through an 

audit to detect inaccuracies in reported 

data and reconcile those differences. 

Additionally, information gathered from 

the validation studies is used to develop 

training and/or education modules to 

assist facilities that may be having 

trouble with reporting complete and 

accurate data to CROWNWeb or NHSN. 

Final Rule Action: After carefully 

considering the comments received, we 

are finalizing our data validation studies 

for PY 2020 as proposed. 

4. Requirements for the PY 2021 ESRD 

QIP 

a. Measures for the PY 2021 ESRD QIP 

We previously finalized 16 measures 

in the CY 2017 ESRD PPS final rule for 

the PY 2020 ESRD QIP. Our policy is to 

continue using measures unless we 

propose to remove or replace them, (77 

FR 67477), therefore, we will continue 

to use all but two of these measures in 

the PY 2021 ESRD QIP. In the CY 2018 

ESRD PPS proposed rule, we proposed 

to replace the two VAT Clinical 

Measures with the Hemodialysis 

Vascular Access: Standardized Fistula 

Rate Clinical Measure and the 

Hemodialysis Vascular Access: LongTerm Catheter Rate Clinical Measure 

beginning with PY 2021. The measures 

being continued in PY 2021 are 

summarized in Table 8. 


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TABLE 8—PY 2020 ESRD QIP MEASURES BEING CONTINUED IN PY 2021 

NQF Number Measure title and description 

0258 ................................................ ICH CAHPS Survey Administration, a clinical measure. Measure assesses patients’ self-reported experience of care through percentage of patient responses to multiple testing tools. 

2496 ................................................ SRR, a clinical measure. Ratio of the number of observed unplanned 30-day hospital readmissions to the 

number of expected unplanned 30-day readmissions. 

2979 ................................................ STrR, a clinical measure. Risk-adjusted standardized transfusion ratio for all adult Medicare dialysis patients. Number of observed eligible red blood cell transfusion events occurring in patients dialyzing at a 

facility to the number of eligible transfusions that would be expected. 

N/A .................................................. Kt/V Dialysis Adequacy Comprehensive, a clinical measure. Percentage of all patient months for patients 

whose delivered dose of dialysis (either hemodialysis or peritoneal dialysis) met the specified threshold 

during the reporting period. 

1454 ................................................ Hypercalcemia, a clinical measure. Proportion of patient-months with 3-month rolling average of total uncorrected serum or plasma calcium greater than 10.2 mg/dL. 

1463* ............................................... SHR, a clinical measure. Risk-adjusted SHR of the number of observed hospitalizations to the number of 

expected hospitalizations. 

0255 ................................................ Serum Phosphorus, a reporting measure. Percentage of all adult (≥18 years of age) peritoneal dialysis and 

hemodialysis patients included in the sample for analysis with serum or plasma phosphorus measured at 

least once within month. 

N/A .................................................. Anemia Management Reporting, a reporting measure. Number of months for which facility reports 

erythropoiesis-stimulating agent (ESA) dosage (as applicable) and hemoglobin/hematocrit for each Medicare patient, at least once per month. 

Based on NQF #0420 ..................... Pain Assessment and Follow-Up, a reporting measure. Facility reports in CROWNWeb one of six conditions for each qualifying patient once before August 1 of the performance period and once before February 1 of the year following the performance period. 

Based on NQF #0418 ..................... Clinical Depression Screening and Follow-Up, a reporting measure. Facility reports in CROWNWeb one of 

six conditions for each qualifying patient once before February 1 of the year following the performance 

period. 

Based on NQF #0431 ..................... NHSN Healthcare Personnel Influenza Vaccination, a reporting measure. Facility submits Healthcare Personnel Influenza Vaccination Summary Report to CDC’s NHSN system, according to the specifications 

of the Healthcare Personnel Safety Component Protocol, by May 15 of the performance period. 

N/A .................................................. Ultrafiltration Rate, a reporting measure. Number of months for which a facility reports elements required 

for ultrafiltration rates for each qualifying patient. 

Based on NQF #1460 ..................... NHSN BSI in Hemodialysis Patients, a clinical measure. The Standardized Infection Ratio (SIR) of BSIs 

will be calculated among patients receiving hemodialysis at outpatient hemodialysis centers. 

N/A .................................................. NHSN Dialysis Event Reporting Measure. Number of months for which facility reports NHSN Dialysis 

Event data to CDC. 

* We note that the complete lists of ICD–10 codes associated with the Standardized Readmission Ratio Clinical Measure and the Standardized 

Hospitalization Ratio Clinical Measure included in the ESRD QIP for PY 2020 are included in the Measure Technical Reports, available here: 

https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html. 

We did not propose any changes to 

the measures previously finalized and 

continuing for PY 2021, however we 

received two comments requesting 

clarification on measures continuing in 

PY2021 and a number of comments on 

ways to improve those measures in the 

ESRD QIP. Those comments and our 

responses are set forth below. 

Comment: One commenter asked why 

CMS removed transient patients from 

the set of exclusions for the Serum 

Phosphorus Reporting Measure. 

Response: The measure specification 

language was changed from excluding 

transient patients to needing to be in the 

facility for the entire month as an 

inclusion criterion. This was done to 

clarify how we identify eligible patients 

for the measure, and aligns the measure 

more closely with how CROWNWeb 

(the data source) attributes patients to a 

facility. There is essentially no 

difference in application between the 

previous and updated specification. The 

updated specification also makes the 

Serum Phosphorus Reporting Measure 

that we use in the ESRD QIP more 

consistent with the specifications for the 

Serum Phosphorus Reporting Measure 

that is endorsed by the NQF (NQF 

#0255), and which evaluates the extent 

to which facilities monitor and report 

patient phosphorus levels. 

Comment: One commenter asked 

about the Standardized Readmission 

Ratio (SRR) Clinical Measure, inquiring 

why CMS removed amputation status 

and added functional disability to the 

list of past-year comorbidity 

adjustments in the risk model. 

Response: We used the term 

‘‘functional disability’’ in a measure 

methodology report that lists the 

coefficients for the past year 

comorbidity adjustments but defined 

that term to mean hierarchical condition 

groupers (177 and 178) which describe 

amputation status (the measure 

Methodology report is available here: 

https://www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/ESRDQIP/061_

TechnicalSpecifications.html). Moving 

forward, we will use the term 

‘‘Amputation,’’ because that term more 

correctly describes the comorbidity 

being risk adjusted under the measure. 

Comment: Regarding the Serum 

Phosphorus Reporting Measure, one 

commenter expressed concerns that 

requiring facilities to report phosphorus 

results from the first month that a 

patient is on home hemodialysis 

represents a barrier to home dialysis. 

We understood this to be a reference to 

concerns about the complexity of 

transitioning into home hemodialysis as 

a treatment modality, and the timing of 

obtaining the blood draw necessary for 

the data. 

Regarding the Comprehensive 

Dialysis Adequacy measure, 

commenters expressed concerns that Kt/ 

V is an outdated measure of dialysis 

adequacy and shared that there are other 

tests which would indicate optimal 

dialysis such as the Beta-2 

microglobulin or a 24-hour urine test. 

One commenter stressed that it’s 

important to include a measure of 

residual kidney function, particularly 

for peritoneal dialysis patients. 


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Regarding the ICH CAHPS measure, 

commenters argued that the measure 

should be included in the program as a 

reporting measure rather than as a 

clinical measure, that the survey should 

only be conducted once a year because 

twice-yearly administration leads to 

patient fatigue, limiting feedback on 

patient experiences, and that the survey 

should be split into three separate and 

independently tested sections rather 

than requiring the entire survey twice a 

year. Commenters also stressed the need 

for a separate survey for home 

hemodialysis patients. 

Regarding the NHSN BSI Clinical and 

Reporting Measures, commenters 

pointed out flaws with the measures, 

including the fact that dialysis facilities 

cannot report information if they are not 

receiving infection information from 

hospitals. Several commenters urged 

CMS to include only the NHSN Dialysis 

Event reporting measure and to remove 

the NHSN BSI clinical measure from the 

program. Two other concerns were that 

blood cultures obtained in hospitals are 

not systematically captured in the 

Reporting Measure and that there is 

incomplete antibiotic susceptibility data 

in NHSN. 

Regarding the Standardized 

Hospitalization Ratio Clinical Measure, 

one commenter argued that the SHR 

should not be included in the program 

until its reliability at the facility size 

used in the measure has been 

demonstrated because for small 

facilities, more than half of a facility’s 

score is due to random noise and is not 

an accurate signal of quality. Another 

commenter asked CMS to include an 

exclusion in the measure for 

hospitalizations that occur within 29 

days of the index discharge because this 

would avoid a readmission being 

captured as a hospitalization by the SHR 

but it would still be captured as a 

readmission by the SRR. 

Regarding the Ultrafiltration Rate 

(UFR) Reporting measure, several 

commenters recommended that CMS 

require January 2018 UFR rates to be 

reported on or before March 31, 2018 

rather than February 28, 2018, to align 

with the reporting of other clinical 

values for January 2018. Another 

commenter recommended that CMS 

define ‘‘treatment week’’ or ‘‘collection 

period’’ for the UFR measure in a way 

that takes into consideration operational 

details such as lab draws early in the 

month or the unavailability of a UFR 

prior to the Kt/V draw for other reasons. 

Alternatively, the commenter suggested 

that any three contiguous UFRs should 

provide an accurate estimate of UFR to 

accomplish the measure goals and asked 

CMS to adopt this position and define 

the collection period as ‘‘any three 

contiguous UFRs during a calendar 

month.’’ Several commenters expressed 

concerns about the measure 

specifications for the measure, 

including that a treatment preceding the 

Kt/V but that falls within the prior 

calendar month may not meet the 

reporting requirement. These 

commenters requested that CMS revise 

the measure specifications so that the 

UFR reporting requirement can be 

independent of the Kt/V measurement 

because, they argued, there is no 

rationale for tying the two measures to 

one another. 

Regarding the Anemia Management 

Measure, one commenter urged CMS to 

restore a measure establishing a 

minimal standard for anemia 

management and another requested a 

separate anemia management measure 

for home dialysis patients. 

One commenter requested that CMS 

differentiate within the Pain Measure 

between chronic and immediate pain, 

and another commenter requested that a 

pain assessment be required at every 

treatment rather than merely twice a 

year. A few commenters recommended 

that CMS develop a standardized ESRDspecific tool for depression. 

Regarding the Hypercalcemia Clinical 

measure, one commenter asked CMS to 

remove the measure from the program 

entirely because it’s challenging for 

patients who continue to experience 

difficulties with access to medications 

and the health outcomes related to 

surgery for hyperparathyroidism and 

hypercalcemia. 

Response: We appreciate commenters’ 

thoughtful comments about the 

measures continuing for PY 2021. 

However, as we did not propose any 

changes to these measures which were 

previously finalized and are continuing 

into PY 2021, we consider these 

comments to be outside the scope of the 

CY 2018 ESRD PPS proposed rule. We 

continue to believe that the measures 

previously finalized for inclusion in the 

program represent the most appropriate 

way to assess quality of care in dialysis 

facilities. As we continue to assess the 

existing measures in the program, we 

will take these recommendations into 

consideration. However as mentioned 

above, we are not making updates to 

these measures at this time. For a more 

thorough discussion of the concerns 

raised at the time we introduced each of 

these measures into the ESRD QIP, 

please review the following rules where 

each of these measures was finalized: 

ICH CAHPS (77 FR 67480 through 

67481, and 78 FR 72193), NHSN 

Dialysis Event Reporting Measure (77 

FR 67484), NHSN BSI Clinical Measure 

(78 FR 72204), Anemia Management 

Reporting Measure (77 FR 67491 

through 67495, and 78 FR 72198), 

Comprehensive Dialysis Adequacy 

Clinical Measure (80 FR 69043–69057), 

Ultrafiltration Rate Reporting Measure 

(81 FR 77912 through 77915), 

Standardized Hospitalization Rate 

Reporting Measure (81 FR 77906 

through 77911), Serum Phosphorus 

Reporting Measure (81 FR 77911 

through 77912), Mineral Metabolism 

Reporting Measure (78 FR 72197), 

Hypercalcemia Clinical Measure (78 FR 

72203). 

Comment: Commenters made several 

recommendations regarding measures 

we should consider for future inclusion 

in the program. Commenters 

recommended a measure for referrals for 

transplantation, more measures that 

focus on pediatric patients, an advanced 

care planning measure, and a 

standardized mortality ratio measure. 

Response: We thank commenters for 

these recommendations and we will 

consider them as we continue to assess 

measures for future inclusion in the 

ESRD QIP. 

b. Replacement of the Vascular Access 

Type (VAT) Clinical Measures 

Beginning With the PY 2021 Program 

Year 

We consider a quality measure for 

removal or replacement if: (1) Measure 

performance among the majority of 

ESRD facilities is so high and unvarying 

that meaningful distinctions in 

improvements or performance can no 

longer be made (in other words, the 

measure is topped-out); (2) performance 

or improvement on a measure does not 

result in better or the intended patient 

outcomes; (3) a measure no longer aligns 

with current clinical guidelines or 

practice; (4) a more broadly applicable 

(across settings, populations, or 

conditions) measure for the topic 

becomes available; (5) a measure that is 

more proximal in time to desired patient 

outcomes for the particular topic 

becomes available; (6) a measure that is 

more strongly associated with desired 

patient outcomes for the particular topic 

becomes available; or (7) collection or 

public reporting of a measure leads to 

negative or unintended consequences 

(77 FR 67475). In the CY 2015 ESRD 

PPS final rule, we adopted statistical 

criteria for determining whether a 

clinical measure is topped out, and 

adopted a policy under which we could 

retain an otherwise topped-out measure 

if we determined that its continued 

inclusion in the ESRD QIP measure set 

would address the unique needs of a 

specific subset of the ESRD population 

(79 FR 66174). 


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After publication of the CY 2017 

ESRD PPS final rule (81 FR 77834 

through 77969), we evaluated the 

finalized PY 2020 ESRD QIP measures 

that would be continued in PY 2021 

against these criteria. We determined 

that none of these measures met 

criterion (1), (2), (3), (4), (5) or (7). As 

part of this evaluation for criterion one, 

we performed a statistical analysis of 

the PY 2020 measures we plan to 

continue using for PY 2021 and future 

payment years to determine whether 

any measures were ‘‘topped out.’’ The 

full results of this analysis can be found 

at https://www.cms.gov/Medicare/

Quality-Initiatives-Patient-AssessmentInstruments/ESRDQIP/061_

TechnicalSpecifications.html and a 

summary of our topped-out analysis 

results appears in Table 9. 

As Table 9 illustrates, the 

distributions of the PY 2020 clinical 

measures were assessed to determine if 

any measures were ‘‘topped out.’’ For a 

measure to be considered topped out, 

two conditions had to be met. First, a 

measure was considered topped out if 

the 75th percentile, or 25th percentile 

for measures where lower percentiles 

indicate better performance, was 

statistically indistinguishable from the 

90th (or 10th) percentile, and second, 

the truncated coefficient of variation 

(TCV) was less than or equal to 10 

percent, or 0.10. We note that the 

percentiles were considered statistically 

indistinguishable if the 75th/25th 

percentile was within two standard 

errors of the 90th/10th percentile. 

Additionally, for each measure the TCV 

was calculated by first removing the 

lower and upper 5th percentiles, then 

dividing the standard deviation by the 

mean of this truncated distribution 

(SDtruncated/Meantruncated). The TCV was 

then converted to a decimal by dividing 

the TCV by 100. 

The measures we evaluated were the 

comprehensive Dialysis Adequacy 

measure, Hypercalcemia (referred to in 

the table as ‘‘Serum Calcium >10.2’’), 

NHSN Standardized Infection Ratio 

(SIR), SRR, STrR, and SHR clinical 

measures, and 6 individual components 

of the CAHPS clinical measure. The 

Vascular Access measures were not 

included in this evaluation because they 

will not be continuing from PY 2020 to 

PY 2021. CROWNWeb data from 2015 

were used for Hypercalcemia, the 

combination of 2015 CROWNWeb data 

and 2015 Medicare claims data were 

used for Kt/V measure, and the SRR, 

STrR, and SHR measures were based on 

both combination of 2014 CROWNWeb 

data and 2014 Medicare claims data. 

The NHSN BSI Clinical Measure was 

calculated using the CY 2015 NHSN 

data from the CDC, and the six 

components of the ICH–CAHPS measure 

were calculated using the CY 2015 ICH– 

CAHPS data. 

Table 9 presents the percentiles, 

standard error, and TCV for each 

measure. In this analysis, all facilities 

with the minimum eligible patient 

requirement per measure were included. 

The results indicate none of the PY 2020 

clinical measures met both ‘‘topped 

out’’ conditions. Therefore, we did not 

propose to remove any of these 

measures from the ESRD QIP for PY 

2021 for being topped out. 

TABLE 9—PY 2020 CLINICAL MEASURES CONTINUING IN PY 2021 INCLUDING FACILITIES WITH MINIMUM ELIGIBLE

PATIENT REQUIREMENT PER MEASURE

Measure N 75th/25th 

percentile 

90th/10th 

percentile Std error 

Statistically 

indistinguishable 

Truncated mean Truncated 

SD TCV TCV ≤0.10 

Kt/V delivered dose above minimum (%) ................................... 6101 96.0 97.7 0.084 No 92.6 3.88 0.04 Yes 

Serum Calcium >10.2 ................... 6258 0.91 0.32 0.050 No a 97.8 1.49 <0.01 Yes 

ICH–CAHPS: Nephrologists Communication and Caring (%) ........ 3349 71.8 77.1 0.159 No 65.7 7.11 0.11 No 

ICH–CAHPS: Quality of Dialysis 

Center Care and Operations 

(%) ............................................. 3349 66.2 71.2 0.134 No 60.9 6.20 0.10 No 

ICH–CAHPS: Providing Information to Patients (%) .................... 3349 82.4 85.6 0.101 No 78.4 4.61 0.06 Yes 

ICH–CAHPS: Percent, Rating of 

Nephrologist ............................... 3349 69.9 76.6 0.204 No 62.0 9.29 0.15 No 

ICH–CAHPS: Percent, Rating of 

Dialysis Facility Staff ................. 3349 70.9 77.4 0.215 No 62.0 9.92 0.16 No 

ICH–CAHPS: Percent, Rating of 

Dialysis Center .......................... 3349 73.8 80.6 0.221 No 64.8 10.18 0.16 No 

NHSN-SIR ..................................... 5805 0.40 0.00 0.011 No 0.964 0.57 <0.01 Yes 

SRR ............................................... 6178 0.78 0.63 0.003 No 0.969 0.21 <0.01 Yes 

STrR .............................................. 5742 0.63 0.42 0.007 No 0.955 0.39 <0.01 Yes 

SHR ............................................... 6298 0.81 0.67 0.004 No 0.978 0.20 <0.01 Yes 

aTruncated mean for percentage is reversed (100 percent-truncated mean) for measures where lower score = better performance. 

Over the past few years, we have 

received numerous public comments 

regarding the two VAT measures 

included in the ESRD QIP’s measure set. 

Specifically, commenters have 

recommended that CMS adjust the 

weights of the VAT measures to place 

more emphasis on reducing catheters to 

encourage the use of fistulas and grafts 

(81 FR 77904). Another commenter 

specifically supported CMS’ submission 

of new VAT Measures to the NQF Renal 

Standing Committee to address the 

small number of patients for whom a 

catheter may be the most appropriate 

vascular access type when life 

expectancy is limited (81 FR 77905). We 

also note that the VAT measures 

currently used in the ESRD QIP measure 

set are calculated using claims data. 

This limits the applicability of the 

measures to Medicare Fee-For-Service 

(FFS) patients, while excluding all 

others. 

Although there is no evidence to 

suggest that the current VAT measures 

are leading to negative or unintended 

consequences, we proposed to remove 

both from the ESRD QIP measure set 

beginning with the PY 2021 program 

based on criterion (6) listed earlier 

because measures that are more strongly 

associated with desired patient 

outcomes for the particular topic are 

now available. We proposed to replace 

the VAT measures with the 

Hemodialysis Vascular Access: 

Standardized Fistula Rate Clinical 

Measure (NQF #2977) and the 

Hemodialysis Vascular Access: LongTerm Catheter Rate Clinical Measure 

(NQF #2978). We believe these 


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Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 50771 

6FDA Drug Safety Communication: Modified 

dosing recommendations to improve the safe use of 

Erythropoiesis-Stimulating Agents (ESAs) in 

chronic kidney disease. http://www.fda.gov/Drugs/ 

DrugSafety/ucm259639.htm. 

Kidney Disease: Improving Global Outcome 

(KDIGO) Anemia Work Group. KDIGO Clinical 

Practice Guideline for Anemia in Chronic Kidney 

Disease. Kidney inter., Suppl. 2012; 2: 279–335. 

http://www.kdigo.org/clinical_practice_guidelines/

pdf/KDIGO-Anemia%20GL.pdf. 

Obrador and Macdougall. Effect of Red Cell 

Transfusions on Future Kidney Transplantation. 

Clin J Am Soc Nephrol 8: 852–860, 2013. 

Ibrahim, et al. Blood transfusions in kidney 

transplant candidates are common and associated 

with adverse outcomes. Clin Transplant 2011: 25: 

653–659. 

7https://www.fda.gov/Drugs/DrugSafety/

ucm259639.htm. 

8http://www.qualityforum.org/WorkArea/

linkit.aspx?LinkIdentifier=id&ItemID=84452. 

measures will address the 

methodological concerns the 

community has shared regarding the 

existing measures. Additionally, both 

measures have been endorsed by the 

NQF, are supported by the Measures 

Application Partnership, and can be 

calculated using data that facilities are 

already required to report in 

CROWNWeb to meet 42 CFR 494.180(h) 

of the Conditions for Coverage for ESRD 

Dialysis Facilities. Because CROWNWeb 

collects data on all patients, we believe 

that the adoption of these measures will 

enable us to more accurately assess the 

quality of care furnished by facilities. 

We requested comments on our 

proposal to remove the current VAT 

measures from the ESRD QIP measure 

set beginning with the PY 2021 program 

year. The comments and our responses 

are set forth below. 

Comment: Commenters were 

generally supportive of CMS’s proposed 

replacement of the VAT measures with 

the proposed Hemodialysis Vascular 

Access measures, pointing out that the 

new fistula measure adds adjustment for 

factors associated with illness severity 

and comorbid conditions, while the 

catheter measure excludes patients who 

may be more appropriately treated with 

a catheter. Commenters also appreciated 

efforts made by CMS over the last few 

years to convene a Technical Expert 

Panel (TEP) and to assess best practices 

in Vascular Access. They added that 

CMS should continue reviewing and 

revisiting these measures when 

necessary to account for factors that may 

warrant further refinement. 

Response: We appreciate commenters’ 

support for our efforts to ensure our 

measures reflect best practices in 

providing quality care to ESRD dialysis 

patients. We believe that the new 

Hemodialysis Vascular Access measures 

have several advantages: (1) They 

address long-standing concerns with the 

previous VAT measures that were 

included in the program, (2) they take 

into consideration the important clinical 

differences between patients, and (3) 

they are reflective of the importance of 

patient choice in their own clinical care. 

c. Revision of the Standardized 

Transfusion Ratio (STrR) Clinical 

Measure Beginning With the PY 2021 

Program Year 

We believe that changes during the 

past several years to the way ESRD 

services are reimbursed under Medicare, 

as well as changes to how ESRD care is 

measured under the ESRD QIP and 

through other quality reporting 

initiatives, may have impacted how 

anemia is clinically managed. Some of 

these changes include the identification 

of safety concerns associated with 

aggressive erythropoiesis-stimulating 

agent (ESA) use, the expansion of the 

ESRD PPS bundled payment 

methodology to include ESAs, and the 

continued growth and expansion of the 

ESRD QIP. There are concerns that these 

changes could result in the 

underutilization of ESAs, with lower 

achieved hemoglobin values that may 

increase the frequency of red blood cell 

transfusion in the United States chronic 

dialysis population. 

Excessive rates of blood transfusion 

may be an indicator for underutilization 

of clinical treatments to increase 

endogenous red blood cell production 

(for example, ESA and iron). Dialysis 

patients who are eligible for kidney 

transplant and have received 

transfusions are at increased risk of 

becoming sensitized to the donor pool 

thereby making transplant more difficult 

to accomplish. Blood transfusions carry 

a small risk of transmitting blood borne 

infections and/or the development of a 

transfusion reaction, and using infusion 

centers or hospitals to transfuse patients 

is expensive, inconvenient, and could 

compromise future vascular access.6

Monitoring the risk-adjusted 

transfusion rate at the dialysis facility 

level, relative to national standards, 

allows for detection of treatment 

patterns in dialysis-related anemia 

management. This is of importance due 

to recommendations by the Food and 

Drug Administration regarding more 

conservative ESA dosing.7 As providers 

use less ESAs in an effort to minimize 

the risks associated with aggressive 

anemia treatment, it becomes more 

important to monitor for an overreliance 

on transfusions. Beginning with PY 

2017, we adopted the STrR to address 

gaps in the quality of anemia 

management. We also submitted that 

measure to the NQF for consensus 

endorsement, but the Renal Standing 

Committee did not recommend it for 

endorsement, in part due to concerns 

that variability in hospital coding 

practices with respect to the use of 038 

and 039 revenue codes might unduly 

bias the measure rates. Upon reviewing 

the committee’s feedback, we revised 

the STrR measure to address these 

concerns. Following this revision, we 

resubmitted the STrR (NQF #2979) to 

NQF for consensus endorsement, and 

the NQF endorsed it in 2016. The 

proposed change to the STrR beginning 

with the PY 2021 ESRD QIP will align 

the measure specifications we use for 

the ESRD QIP with the measure 

specifications that the NQF endorsed in 

2016 (NQF #2979). 

Summary of Change 

The proposed updated specifications 

to the STrR measure contain a more 

restricted definition of transfusion 

events than is used in the current STrR 

measure. Specifically, the revised 

definition excludes inpatient 

transfusion events for claims that 

include only 038 or 039 revenue codes 

without an accompanying International 

Classification of Diseases–9 (ICD–9) or 

ICD–10 procedure code or value code. 

As a result of requiring that all inpatient 

transfusion events include an 

appropriate ICD–9 or ICD–10 procedure 

code or value code, the measure will 

identify transfusion events more 

specifically and with less bias related to 

regional coding variation. As a result, it 

will assess a smaller number of events 

as well as a smaller range of total events. 

2016 Measures Application Partnership 

Review 

We determined that the proposed 

revision to the STrR (NQF #2979) 

constituted a substantive change to the 

measure, and we submitted that revision 

to the Measures Application Partnership 

for consideration as part of the prerulemaking process. The Measures 

Application Partnership recommended 

that this measure be refined and 

resubmitted due to concerns that 

measuring transfusions in dialysis 

facilities may not be feasible.8 The 

Measures Application Partnership also 

expressed concern that the decision to 

administer a blood transfusion may be 

outside of the dialysis facility’s control 

because in general, clinicians in 

hospitals make the decisions about 

blood transfusions. The Measures 

Application Partnership also expressed 

concern that variability in blood 

transfusion coding practices could 

inadvertently affect a dialysis facility’s 

performance on this measure. 


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9Hirth, Turenne, Wilk et al. Blood transfusion 

practices in dialysis patients in a dynamic 

regulatory environment. Am J Kidney Dis. 2014 

Oct;64(4):616–21. Doi: 10.1053/j.ajkd.2014.01.011. 

Epub 2014 Feb 19. 

Gilbertson, Monda, Bradbury & Collins. RBC 

Transfusions Among Hemodialysis Patients (1999– 

2010): Influence of Hemoglobin Concentrations 

Below 10 g/dL. Am J Kidney Dis. 2013; Volume 62, 

Issue 5, 919–928. 

Collins et al. Effect of Facility-Level Hemoglobin 

Concentration on Dialysis Patient Risk of 

Transfusion. Am J Kidney Dis. 2014; 63(6):997– 

1006. 

Cappell et al. Red blood cell (RBC) transfusion 

rates among US chronic dialysis patients during 

changes to Medicare end-stage renal disease (ESRD) 

reimbursement systems and erythropoiesis 

stimulating agent (ESA) labels. BMC Nephrology 

2014, 15:116. 

Ibrahim, et al. Blood transfusions in kidney 

transplant candidates are common and associated 

with adverse outcomes. Clin Transplant 2011: 25: 

653–659. 

Molony, et al. Effects of epoetin alfa titration 

practices, implemented after changes to product 

labeling, on hemoglobin levels, transfusion use, and 

hospitalization rates. Am J Kidney Dis 2016: epub 

before print (published online March 12, 2016). 

Although we acknowledge that the 

Measures Application Partnership 

recommended that we refine and 

resubmit the updated version of the 

STrR measure, we note that the 

Measures Application Partnership’s 

recommendation is at odds with the 

earlier conclusion of the NQF to endorse 

this change. On the issue of whether it 

is feasible to measure transfusions in 

dialysis facilities, the NQF concluded 

that these events can be identified using 

the same Medicare claims code 

algorithm that we use to identify 

transfusion events in other outpatient 

settings. The STrR measure identifies 

transfusion events during at-risk periods 

for patients cared for in a dialysis 

facility. 

With respect to the Measures 

Application Partnership’s concern that 

the decision to administer a blood 

transfusion might be outside of the 

dialysis facility’s control, we note that 

the issue of whether anemia 

management practices in a dialysis 

facility can be linked to transfusion risk 

was specifically considered by the NQF 

during the endorsement process. 

The NQF Renal Standing Committee 

concluded that this transfusion 

avoidance measure would incentivize 

facilities to properly manage anemia, 

with the result of lowering the patient’s 

transfusion risk. The NQF Renal 

Standing Committee also found that 

although the decision to transfuse might 

ultimately be made by a hospital, the 

need to do so is dictated not only by 

clinical circumstances observed by the 

hospital, but also by the way the 

patient’s anemia was managed by the 

facility. 

Although the Measures Application 

Partnership was concerned that 

variability in blood transfusion coding 

practices could inadvertently affect a 

dialysis facility’s performance on this 

measure, we note that the definition of 

transfusion events used in the revised 

STrR measure is consistent with the 

definition used in numerous scientific 

publications, including several peer 

reviewed publications.9 Under this 

definition, transfusion events are 

included in the measure only if they are 

coded with specific transfusion 

procedure or value codes. We believe 

this coding requirement reduces the 

potential for inadvertently capturing 

non-transfusion events in the measure. 

In addition, the exclusion of revenue 

code only transfusion events from the 

measure decreases the potential that the 

measure results would be influenced by 

differences in hospital coding practices. 

We agree with the NQF Standing 

Committee’s assessment that the STrR 

(NQF #2979) is an appropriate measure 

of quality for dialysis facilities. We 

further believe that the measure is 

appropriate for the ESRD QIP because 

the measure (1) Demonstrates variation 

in performance among facilities, (2) is 

an outcome of care that is modifiable by 

dialysis providers through effective 

management of anemia in patients, and 

(3) is a valid and reliable indicator of 

quality at the facility level. Proper 

management of anemia is an important 

quality of care issue for dialysis 

patients, and a topic for which the ESRD 

QIP must include measures (see section 

1881(h)(2)(A)(i)). 

For these reasons, we proposed the 

revision to the STrR measure be 

reflected in the ESRD QIP, and 

beginning with the PY 2021 program 

year, we proposed to use the updated 

version of the STrR (NQF #2979). Full 

measure specifications and testing data 

are available at https://www.cms.gov/

Medicare/Quality-Initiatives-PatientAssessment-Instruments/ESRDQIP/061_

TechnicalSpecifications.html. The 

complete list of ICD–10 codes that 

would be included in the measure is 

included in the Technical Report for the 

measure and can also be found in that 

link. 

We requested comments on this 

proposal. The comments received and 

our responses are set forth below. 

Comment: Several commenters 

supported CMS’s proposal to update the 

STrR measure because they support 

CMS’s efforts to ensure that the QIP 

measures remain current with NQF 

standards. 

Response: We thank the commenters 

for their support and we agree that in 

general it is best to maintain the QIP 

measures current with NQF standards. 

Comment: One commenter generally 

supported the concept of a transfusion 

measure, but suggested possible 

adjustments, which the commenter 

believes will improve the proposed 

standardized transfusion ratio measure. 

The commenter added that the goal of 

comparing transfusion rates across 

facilities is to identify those facilities 

that are systematically allowing 

hemoglobin values to fall, presumably 

by limiting ESA administration. 

However, transfusions occur in two 

situations: (1) In the setting of 

chronically low hemoglobin values 

which the facility could arguably have 

influenced, and (2) in the setting of an 

acutely low hemoglobin value, over 

which the facility has little control. To 

distinguish these two situations, the 

commenter recommended that CMS 

look at the last outpatient hemoglobin 

value reported on an ESRD claim before 

the transfusion, or at the 3-month 

rolling average. According to the 

commenter, if the hemoglobin value was 

greater than a set cutoff value, the 

transfusion would be included in the 

measure. In addition, the commenter 

stated that the measure could exclude 

conditions other than cancers not 

amenable to ESA based anemia 

treatment correction. 

Response: We thank the commenter 

for these suggested improvements to the 

STrR. The STrR measure evaluates riskadjusted blood transfusion ratios at the 

dialysis facility level, comparing 

dialysis facilities’ relative success in 

transfusion avoidance. Its goal is not 

limited to reducing transfusion risk 

associated with chronic severe anemia 

as suggested by the commenter. Several 

dialysis facility practices can influence 

patient risk for transfusion, including 

anemia management decisions, as well 

as dialysis prescription and delivery 

practices. Furthermore, the 

consequences of these practices can 

result in acute increased transfusion risk 

or chronic increased risk for transfusion, 

depending on the clinical situation. 

Limiting identification of transfusion 

events to only those scenarios 

associated with chronic anemia and 

transfusion risk would inappropriately 

result in a less impactful transfusion 

avoidance measure. For these reasons, 

we believe that it is appropriate not to 

limit our assessment of transfusions to 

those with a prior hemoglobin level 

reported to CROWNWeb. 

Comment: One commenter expressed 

concern that the STrR measure has 

inappropriately low reliability and 

pointed out that when the measure was 

considered for NQF endorsement, it was 


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found to have very low reliability, 

particularly for small facilities. Another 

commenter pointed to an analysis, 

which suggested that longer look-back 

periods would result in a significant 

increase in reliability for both the SHR 

and the STrR measures. The commenter 

stated that for small facilities, the interunit reliability (IUR) for the 1-year 

measures is low, and that for small 

facilities in the STrR measure, the 1- 

year IUR for 0.36 means that nearly twothirds of the variance in the measure is 

due to random noise rather than real 

differences between facilities. 

Commenter added that with a 4-year 

look-back period, the IURs for small 

facilities are similar to the IURs for large 

facilities in the 1-year look-back period. 

According to the commenter, these 

results suggest, that with a 4-year lookback period, a minimum of two-thirds of 

the variance in both measures in all 

three subgroups would be due to actual 

differences between facilities. 

Additionally, the commenter believed 

that using a 4-year look-back period 

would align these measures with the 

Standardized Mortality Ratio measure 

used in the DFC program, creating 

consistency across the measures used in 

the ESRD QIP and DFC. 

Another commenter pointed out that 

the IUR for facilities with sample sizes 

below 46 patients was about 0.4, 

suggesting that 60 percent of interfacility difference was due to random 

noise and not underlying performance. 

The commenter stated that IURs 

increase as a function of sample size. 

Therefore, commenter argued, smaller 

samples would be associated with lower 

IURs. Based on the NQF documentation 

submitted by CMS, the commenter 

stated that one would expect the vast 

majority of STrR variation to be due to 

random variation across the 10–21 

patient-years at risk that CMS has 

proposed for the small facility 

adjustment for STrR. While the small 

facility adjustment would raise scores 

for small facilities, the commenter 

argued that it would not adequately 

offset the substantial effect of random 

variation for small sample sizes. The 

commenter recommended that CMS set 

the minimum data requirement for each 

measure at the sample size at which the 

IUR reaches 0.70, the value commonly 

used at NQF. That is, the minimum 

sample size would be set at the point 

where at least 70 percent of the 

observed result would be driven by 

actual performance. Anything below 

that, commenter argued, means that too 

high a proportion of the observed result 

is simply due to chance. 

Response: We thank commenters for 

sharing these concerns regarding the 

reliability of the STrR. Given the 

established effect of sample size on IUR 

calculations, we generally expect, based 

on statistical modeling, that large 

facilities will have higher IUR values 

and small facilities will have lower IUR 

values for any given measure. Reliability 

is fundamentally associated with the 

size of a facility: A larger denominator 

leads to more precise assessments. 

Regardless of a measure’s IUR, it will be 

higher for larger facilities and lower for 

smaller facilities. The dependence of 

reliability on facility size is understood 

when IUR is considered as a standard of 

reliability by NQF. 

In response to commenter’s 

suggestion above about requiring an IUR 

of 0.70, we are not aware of any formal 

and prescriptive NQF guideline or 

standard that sets or requires this test 

result value as a minimum threshold for 

passing reliability. Additionally, there is 

no formal required threshold set by 

NQF, as demonstrated in the 

endorsement of other quality metrics 

that have a range of reliability statistics, 

several of which are below the threshold 

of 0.7. The STrR and SHR reliability 

results are comparable to the reliability 

test results for other NQF-endorsed risk 

adjusted outcome measures used in 

public reporting, for example, four NQF 

endorsed cause-specific hospital 

mortality measures demonstrated 

similar levels of reliability (#0229 Heart 

failure measure, ICC: 0.55; #0468 

Pneumonia mortality measure, 

Intraclass Correlation Coefficient: 0.79; 

#1893 Chronic Obstructive Pulmonary 

Disease mortality measure, ICC: 0.51; 

#2558 Coronary Artery Bypass Grafting 

mortality measure, ICC: 0.32). The 2013 

NQF Task Force on Evaluating Evidence 

and Testing also acknowledged that 

although the ‘‘Consensus Standards 

Approval Committee and subcommittee 

would like to have provided some 

guidance regarding minimum 

thresholds, they repeatedly noted the 

difficulties in determining such 

thresholds and the need for steering 

committees to have flexibility to make 

judgments.’’ (Page 13; Review and 

Update of Guidance for Evaluating 

Evidence and Measure Testing. 

Technical Report. Approved by CSAC 

on October 8, 2013: http://

www.qualityforum.org/Publications/

2013/10/Review_and_Update_of_

Guidance_for_Evaluating_Evidence_

and_Measure_Testing_-_Technical_

Report.aspx). 

Aside from considering the 

appropriateness of limiting assessment 

as the commenters suggested, we 

believe setting a sample size threshold 

to reach 0.7 IUR for each measure is not 

feasible. As has been shown, large 

facilities tend to obtain IUR of 0.7 or 

greater. Setting the range for the SFA 

based on this approach would result in: 

(1) Applying the SFA for a larger 

portion of facilities, depending on the 

measure; or (2) potentially excluding 

those facilities, and limiting the value of 

the measure to the program. Finally, 

setting consistent minimum data 

requirements and ranges would be 

challenging because the frequency of 

events varies in these measures (for 

example, hospitalizations are more 

frequent than transfusion events). 

Incorporating multiple years of data also 

has potential consequences for 

implementation. As a practical matter, it 

would be difficult to provide 

performance standards in advance of 4- 

year performance period. Doing so 

would also limit the degree to which 

providers could be assessed on 

improvement from year to year, since 

only one quarter of the data would 

change from payment year to payment 

year. 

Comment: One commenter did not 

support the proposed modifications to 

the STrR measure because it differs from 

the NQF-endorsed version (#2979). 

Commenter argued that since the statute 

requires CMS to use NQF-endorsed 

measures if available, CMS should 

comply with the statutory requirement 

and use the actual NQF-endorsed 

measure. 

Response: The modifications to the 

STrR proposed for PY 2021 of the ERSD 

QIP will align the measure used in the 

ESRD QIP with the NQF-endorsed 

version of that measure. 

Comment: One commenter 

recommended that CMS adopt true riskstandardized rate measures, which 

would be more transparent and useable 

by all stakeholders. The commenter 

added that risk standardized rates are 

easier to understand and that the 

current ratio measures have a wide 

range of uncertainty that does not 

provide an accurate view of a facility’s 

performance when the ratio is reduced 

to a single number. Rather than 

continuing to use a confusing set of 

measures, the commenter urged CMS to 

replace the standardized ratio measures 

with the year-over-year difference 

between normalized (per 100 patient 

years) rates (for example, for 

hospitalization) currently available from 

Dialysis Facility Reports until they can 

be replaced by true risk-standardized 

rate measures. 

Another commenter noted that 

moving to rates, while an important step 

forward, would also create issues that 

CMS would need to carefully address. 

The commenter believed that choosing 

a methodology to convert ratios to rates 


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10Fistula First Catheter Last Dashboard August 

2015 http://fistulafirst.esrdncc.org/ffcl/for-ffclprofessionals/archive/. 

would be a challenge and did not 

believe that a conversion approach 

would produce a true risk-standardized 

rate measure. The commenter believed 

that under a conversion approach, the 

use of the national median rate as the 

conversion factor for ratios may be 

misleading in regions of the country 

where typical performance varies 

significantly from the national rate. 

According to this commenter, the goal 

of using rates instead of ratios is to make 

the measure results more meaningful to 

patients, providers, and other 

stakeholders by expressing measure 

results in terms that are both valid and 

have intrinsic meaning, rather than the 

abstract meaning expressed by ratios. 

Response: The risk-adjustment 

approach currently used for the StrR 

measure is based on indirect 

standardization which also forms the 

basis of many measures implemented in 

the ESRD QIP and other CMS quality 

reporting and value-based purchasing 

programs, and we believe that this 

approach leads naturally to a 

standardized ratio. This ratio compares 

the rate for this facility with the national 

rate, having adjusted for the patient mix 

and as such is relatively straightforward. 

We are unclear on why the commenter 

believes that rates are more easily 

understood than ratios. Similarly to 

ratios, risk-adjusted rates are not the 

same as actual rates and require a 

consideration of the patient mix 

adjustment for interpretation. We do 

agree that any conversion to rates would 

require careful consideration of the 

measure methodology and implications 

for assessing facility performance prior 

to implementation. 

Final Rule Action: After carefully 

considering the comments received, we 

are finalizing the changes to the 

Standardized Transfusion Ratio Clinical 

Measure as proposed. 

d. New Vascular Access Measures 

Beginning With the PY 2021 ESRD QIP 

As discussed in the CY 2018 ESRD 

PPS proposed rule (82 FR 31212), for PY 

2021, we proposed to remove the two 

VAT measures from the ESRD QIP and 

to replace them with two Vascular 

Access measures that were recently 

endorsed by the NQF. We proposed to 

score these measures the same way that 

we score the current VAT measures, and 

to include them within the Vascular 

Access Measure Topic. 

Background 

Beginning with the PY 2015 ESRD 

QIP, we adopted the Minimizing 

Catheter Use as Chronic Dialysis Access 

(NQF #0256) and Maximizing 

Placement of Arterial Venous (AV) 

Fistula (NQF #0257) measures, which 

are paired measures of the rate of 

catheter and fistula placement for 

chronic dialysis access, respectively, for 

the ESRD QIP (77 FR 67479). These 

measures were developed in accordance 

with the National Kidney Foundation 

Kidney Disease Outcomes Quality 

Initiative Guidelines that state the 

following: (1) AV fistulas have the 

lowest rate of thrombosis and require 

the fewest interventions, (2) cost of AV 

fistula use and maintenance is the 

lowest, (3) fistulas have the lowest rates 

of infection, and (4) fistulas are 

associated with the highest survival and 

lowest hospitalization rates. Several 

epidemiologic studies consistently 

demonstrate the reduced morbidity and 

mortality associated with greater use of 

AV fistulas for vascular access in 

maintenance hemodialysis. 

Based upon data we collected during 

the CMS Fistula First/Catheter Last 

Initiative,10 a gradual trend towards 

lower catheter use has been observed 

among prevalent maintenance 

hemodialysis patients in the United 

States, declining from approximately 28 

percent in 2006 to approximately 18 

percent by August 2015. Furthermore, 

the percentage of maintenance HD 

patients using a catheter for at least 3 

months has declined during this time 

period from nearly 12 percent to 10.8 

percent. Continued monitoring of 

chronic catheter use is needed to sustain 

this trend. 

Since the Maximizing Placement of 

AV Fistula Measure (NQF #0257) was 

first implemented, we have received 

public comments expressing concerns 

that in certain cases, such as patients 

with a low life expectancy, placement of 

a fistula may not be appropriate. A 

growing number of studies report that 

creating AV fistulas in some patients is 

less likely to be successful in the 

presence of certain comorbidities. In 

addition, certain patient groups may 

have less incremental benefit from an 

AV fistula relative to an AV graft. 

Since the implementation of 

Minimizing Catheter Use as Chronic 

Dialysis Access Measure (NQF #0256), 

we have received comments from 

stakeholders raising concerns about its 

inability to account for patients with a 

limited life expectancy, for whom a 

fistula, with its extended maturation 

period, may not represent an improved 

quality of life. 

In 2015, we convened a TEP to review 

the existing vascular access measures to 

consider how best to address these 

concerns. A copy of the summary TEP 

report is available at https://

www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/ESRDQIP/061_Technical

Specifications.html. The TEP made the 

following recommendations: 

• The fistula measure should be riskadjusted for factors that are associated 

with decreased likelihood of AV fistula 

success, including: 

++ Diabetes. 

++ Heart diseases. 

++ Peripheral vascular disease. 

++ Cerebrovascular disease. 

++ Chronic obstructive pulmonary 

disease. 

++ Anemia (unrelated to ESRD/

Chronic Kidney Disease). 

++ Non-Vascular Access-Related 

Infections. 

++ Drug Dependence. 

• The measures should include all 

eligible hemodialysis patients, not just 

Medicare beneficiaries. 

• The measures should include 

patients in the first 90 days of dialysis 

because this is a critical time for access 

planning/placement. 

• The measures should include in the 

numerator only patients with an AV 

fistula using 2 needles (or an approved 

single needle device). 

• The measures should exclude 

conditions associated with a limited life 

expectancy where an AV fistula may not 

be the appropriate choice for access (for 

example, hospice, metastatic cancer, 

end stage liver disease, and coma/brain 

injury). 

We responded to the TEP’s 

recommendations by developing two 

new VAT measures intended to be 

jointly reported to assess the placement 

of vascular access among ESRD dialysis 

patients. These two vascular access 

quality measures, when used together, 

consider AV fistula use as a positive 

outcome and prolonged use of a 

tunneled catheter as a negative outcome. 

With the growing recognition that some 

patients have exhausted options for an 

AV fistula or have comorbidities that 

may limit the success of AV fistula 

creation, joint reporting of the measures 

accounts for all three vascular access 

options. This paired incentive structure 

that relies on both measures 

(standardized fistula rate and long-term 

catheter rate) reflects consensus-based 

best practice, and supports maintenance 

of the gains in vascular access success 

achieved via the Fistula First/Catheter 

Last Project over the last decade. 

We received general comments on our 

proposal to include two new Vascular 

Access measures in the ESRD QIP 

beginning in PY 2021. The comments 

and our responses are set forth below: 


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Comment: Several commenters 

recommended that CMS combine the 

fistula and catheter rates into a single 

quality measure to avoid double 

counting. Specifically, these 

commenters argued that if fistulas and 

grafts are both counted, then using the 

catheter rate as a quality measure is 

virtually a duplication of the fistula/

graft rate as a quality measure since the 

catheter percentage would equal 100 

percent less the total of fistulas and 

grafts. Even if grafts are not included, 

commenters argued, there is still a large 

overlap of the fistula and catheter rates, 

giving a double penalizing effect of 

using both the fistula and catheter rates 

as two quality measures. 

Response: The two vascular access 

measures, when used together, consider 

AV fistula use as a positive outcome and 

prolonged use of a tunneled catheter as 

a negative outcome. With the growing 

recognition that some patients have 

exhausted options for an arteriovenous 

fistula, or have comorbidities that may 

limit the success of AV fistula creation, 

pairing the measures accounts for all 

three vascular access options. The 

standardized fistula rate measure 

includes risk adjustment for patient 

factors where fistula placement may be 

either more difficult or not appropriate 

and acknowledges that in certain 

circumstances an AV graft may be the 

best access option. This paired incentive 

structure that relies on both measures 

reflects consensus best practice, and 

supports maintenance of the gains in 

vascular access success achieved via the 

Fistula First/Catheter Last Project over 

the last decade. Additionally, the fistula 

and catheter measures apply exclusions 

for certain conditions recognizing that 

catheter placement may be the only 

means of vascular access for these 

patient sub-populations. Specifically, 

both measures exclude patients with a 

catheter that have limited life 

expectancy defined as being under 

hospice care in the current reporting 

month, or with metastatic cancer, end 

stage liver disease, coma or anoxic brain 

injury in the past 12 months. In this 

way, the combination of risk adjustment 

for the standardized fistula rate measure 

and the application of the exclusions to 

both measures does not result in doubly 

penalizing facilities and instead is 

intended to incentivize best practices 

for vascular access. Finally, the 

standardized fistula rate measure is a 

risk adjusted standardized rate, and 

contains exclusions, therefore the 

standardized fistula rate cannot be 

directly added/subtracted from a raw 

percentage of grafts and catheters. 

Comment: One commenter expressed 

concerns about CMS’s proposal to use 

CROWNWeb as the data source for the 

proposed Vascular Access measures and 

added that it is not clear how ‘‘life 

expectancy’’ will be calculated. 

Commenter recommended that based on 

the proposal to use CROWNWeb as the 

primary data source for numerator and 

denominator, CMS should consider 

delaying the implementation of these 

two measures until CROWNWeb can be 

shown to be a reliable data source. 

Another commenter noted that for the 

two vascular access measures, there are 

patient-level exclusions for patients 

with a catheter but with limited life 

expectancy, and asked for clarification 

regarding the 4 criteria used to 

determine limited life expectancy and 

how this information is intended to be 

documented. 

Response: Collection of vascular 

access data through CROWNWeb has 

been ongoing for 5 years. When 

analyzing the concordance of 

CROWNWeb vascular access data with 

that of Medicare claims, which have 

been used in the ESRD QIP VAT 

measures since PY 2015, we found a 

high level of agreement for the AV 

fistula (kappa = .89) and catheter (kappa 

= .73) data. We believe the data fidelity 

is sufficient to merit the use of 

CROWNWeb data for measurement in 

the ESRD QIP. 

Regarding life expectancy, both the 

standardized fistula rate and the 

catheter measures exclude patients with 

a catheter as their vascular access and 

who meet one of the following 

conditions below that are identified 

through Medicare claims. No additional 

documentation (that is, attestation) is 

required from the facility. Specifically, 

limited life expectancy is defined as 

follows: 

• Patients under hospice care in the 

current reporting month. 

• Patients with metastatic cancer in 

the past 12 months. 

• Patients with end-stage liver disease 

in the past 12 months. 

• Patients with coma or anoxic brain 

injury in the past 12 months. 

These conditions were reviewed and 

supported by the 2015 Vascular Access 

TEP and all of them are associated with 

a very high mortality rate in the 6- 

month period after they first appear in 

Medicare claims. 

Comment: Many commenters 

supported the inclusion of the new 

Vascular Access measures as endorsed 

by NQF in the QIP because this ensures 

patient safety while recognizing the 

needs of the individual patient. One 

commenter noted that CMS indicated in 

the proposed rule that it concurred with 

the recommendation of the 2015 

Vascular Access TEP that the fistula 

measure under development specify 

that the AV fistula must use 2 needles 

(or an approved single-needle device). 

The commenter noted that this revision 

is reflected in the methodology report, 

but not in the specifications. Another 

commenter was pleased to see that the 

flowchart in the methodology report 

specifies AV fistula only with 2 needles 

or an approved single-needle device, but 

recommended that the numerator 

specifications should also explicitly 

state that the patient must be on 

maintenance HD ‘‘using an AV fistula 

with 2 needles and without a dialysis 

catheter present’’ to emphasize clarity 

and avoid ambiguity. The commenter 

also recommended that the 

specifications address how a patient 

with a co-existing AV graft should be 

handled. Given that removal of an AV 

graft is complex and not without risk of 

complications, the commenter stated 

that the presence of a graft is acceptable 

even when using a fistula. As this is not 

the case when a catheter is present, the 

commenter agreed that the continued 

presence of a catheter when a fistula is 

being used should not constitute 

success on the measure. Finally, a 

commenter recommended that CMS 

redefine the denominator as it 

mistakenly uses the construction 

‘‘patients’’ when it should use the term 

‘‘patient-months’’ to be consistent with 

the numerator. 

Response: Both the flowchart and the 

numerator details in the NQF measure 

specifications include language for the 

use of 2 needles or an approved singleneedle device. We intend to provide 

clarifying language in the published 

technical specifications to make this 

clear. Regarding the revision 

recommended by commenter to specify 

in the measure technical specifications 

how a patient with a co-existing AV 

graft should be handled, we thank 

commenter for their recommendation 

and we will make any necessary 

updates to the measure technical 

specifications as necessary to ensure 

clarity. With regard to the 

recommendation that the technical 

specifications explicitly state that the 

patient must be on maintenance HD 

‘‘using an AV fistula with 2 needles and 

without a dialysis catheter present’’ to 

emphasize clarity and avoid ambiguity, 

CROWNWeb did not support this level 

of granularity during the development 

of this measure, and so it is not reflected 

in the NQF-endorsed measure 

specifications. We agree that this is an 

appropriate enhancement to consider 

for future measure maintenance and 

system development. We confirm that 


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the denominator is constructed using 

patient-months, which is consistent 

with the NQF-endorsed specifications. 

Comment: One commenter agreed 

with the proposed exclusion from the 

Vascular Measures of conditions 

associated with a limited life 

expectancy where an AV fistula may not 

be the appropriate choice for access, but 

argued that any exclusions or riskadjustments that are calculated based on 

Medicare claims will not capture 

patients who do not have Medicare. 

These commenters urged CMS to clarify 

whether the proposed new vascular 

access measures would accurately 

measure the care furnished to the 

facility’s total ESRD population 

(including Medicare beneficiaries and 

patients with other payers). 

Response: We will calculate the 

comorbidity risk adjustment using ICD 

diagnostic codes reported on Medicare 

claims or, if the patient is not a 

Medicare beneficiary, information in 

incident comorbidities reported on the 

CMS Form 2728. This provides a 

method for application of comorbidity 

risk adjustment to patients that do not 

have Medicare claims and allows the 

measure to be applied to all patients 

regardless of payer type. 

The additional exclusion criteria for 

the proposed vascular access measures 

are captured using Medicare claims data 

only. These measures were 

recommended by the Vascular Access 

TEP in 2015 with the expectation that 

considering the exclusions is 

appropriate. We conducted sensitivity 

analyses regarding the application of 

these measures and found that the 

exclusions are relatively rare and do not 

substantially bias the measure 

assessment. 

Comment: Commenter recommended 

that rather than using fistulas alone, 

CMS should consider including 

arteriovenous grafts with AV fistula for 

several reasons: (1) While overall 

fistulas are slightly superior to grafts, 

there is virtually no difference in the 

elderly, (2) grafts are as long-lasting as 

fistulas if primary failures are included, 

(3) grafts may be placed shortly before 

dialysis to avoid unnecessary fistulas 

that aren’t used, (4) grafts are more 

successful than fistulas as a second 

access, (5) grafts help avoid catheters, 

and (6) inclusion of both fistulas and 

grafts may minimize or eliminate the 

need for a complex adjustment in the 

fistula rate as is proposed. 

Response: We thank the commenter 

for its comments on the vascular access 

measures. The two vascular access 

measures, when used together, consider 

AV fistula use as a positive outcome and 

prolonged use of a tunneled catheter as 

a negative outcome. With the growing 

recognition that some patients have 

exhausted options for an arteriovenous 

fistula, or have comorbidities that may 

limit the success of AV fistula creation, 

pairing the measures accounts for all 

three vascular access options. The 

standardized fistula rate measure 

includes risk adjustment for patient 

factors where fistula placement may be 

either more difficult or not appropriate 

and acknowledges that in certain 

circumstances an AV graft may be the 

best access option. This paired incentive 

structure that relies on both measures 

reflects consensus best practice, and 

supports maintenance of the gains in 

vascular access success achieved via the 

Fistula First/Catheter Last Project over 

the last decade. Additionally, the fistula 

and catheter measures apply exclusions 

for certain conditions recognizing 

catheter may be the only means of 

vascular access for these patient subpopulations. Specifically, both measures 

exclude patients with a catheter that 

have limited life expectancy defined as 

being under hospice care in the current 

reporting month, or with metastatic 

cancer, end stage liver disease, coma or 

anoxic brain injury in the past 12 

months. 

i. New Hemodialysis Vascular Access: 

Standardized Fistula Rate Clinical 

Measure (NQF #2977) 

Summary of Changes 

This proposed measure replaces NQF 

#0257, Maximizing Placement of AV 

fistula, and it incorporates changes that 

reflect input from the 2015 Vascular 

Access TEP: 

• Risk Adjustment for the following 

conditions that affect the success of 

fistula placement: 

++ Diabetes. 

++ Heart diseases. 

++ Peripheral vascular disease. 

++ Cerebrovascular disease. 

++ Chronic obstructive pulmonary 

disease. 

++ Anemia (unrelated to ESRD/ 

Chronic Kidney Disease). 

++ Non-Vascular Access-Related 

Infections. 

++ Drug Dependence. 

• Inclusion of all eligible 

hemodialysis patients, not just Medicare 

beneficiaries. 

• Inclusion of patients in the first 90 

days of dialysis because this is a critical 

time for access planning/placement. 

• Inclusion in the numerator of only 

patients with an AV fistula using 2 

needles (or an approved single needle 

device). 

• Exclusion of conditions associated 

with a limited life expectancy where an 

AV fistula may not be the appropriate 

choice for access (for example, hospice, 

metastatic cancer, end-stage liver 

disease, and coma/brain injury). 

Data Sources 

CROWNWeb, Medicare claims and 

the CMS Medical Evidence form 2728 

(OMB No. 0938–0046) are used as the 

data sources for establishing the 

denominator. CROWNWeb is the data 

source for establishing the numerator. 

Medicare claims and the CMS Medical 

Evidence form 2728 are data sources for 

the risk adjustment factors. Medicare 

claims and CROWNWeb are used for the 

exclusion criteria. Using CROWNWeb as 

the primary data source allows us to 

expand the Standardized Fistula Rate to 

include all ESRD dialysis patients, 

rather than only Medicare FFS patients, 

providing a more complete quality 

assessment for dialysis facilities. This 

was a key consideration by the TEP that 

recommended the development of this 

measure. 

Outcome 

The outcome of the Standardized 

Fistula Rate is the use of an AV fistula 

as the sole means of vascular access as 

of the last hemodialysis treatment 

session of the month. 

Cohort 

The cohort includes adult ESRD 

dialysis patients who are determined to 

be maintenance hemodialysis patients 

(in-center or home) for the entire 

reporting month at the same facility. 

Inclusion and Exclusion Criteria 

The Standardized Fistula Rate 

excludes pediatric patients (<18 years 

old), patients on peritoneal dialysis, and 

patient-months where the patient was 

not on hemodialysis (in-center or home) 

at the same facility for the entire 

reporting month. The measure 

additionally excludes patients with a 

catheter who have a limited life 

expectancy. 

Risk Adjustment 

The Standardized Fistula Rate is a 

directly standardized percentage, with 

each facility’s percentage of fistula use 

adjusted by a series of risk factors, 

including patient demographic and 

clinical characteristics based on a 

logistic regression model. The 

demographic and clinical characteristics 

were chosen in order to adjust for 

factors outside the control of a facility 

that are associated with a decreased 

likelihood of AV fistula success. 

We submitted the measure to NQF, 

where the Renal Standing Committee 

recommended it for consensus 


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endorsement, and the NQF endorsed the 

measure in December 2016. The 

Standardized Fistula Rate (NQF #2977) 

was submitted to the Measure 

Applications Partnership in 2016, 

which supported the measure for 

implementation in the ESRD QIP. 

We proposed implementing 

Hemodialysis Vascular Access: 

Standardized Fistula Rate (NQF #2977) 

beginning with the PY 2021 program 

year. Detailed measure specifications 

and testing data are available at https:// 

www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/ESRDQIP/061_

TechnicalSpecifications.html. We 

requested comments on these proposals. 

Comment: One commenter 

recommended that CMS expand the 

exclusion criteria for the Vascular 

Access measures to include the 

following: (1) Steal syndrome that 

required ligation of AV fistula or 

arteriovenous graft, (2) Patients who 

have had multiple failed AV fistula or 

arteriovenous graft attempts and have 

no suitable sites left to create AV fistula 

or arteriovenous graft, and (3) Patients 

who have medical contraindications to 

AV fistula surgery including severe 

congestive heart failure, and high output 

cardiac failure from previous AV fistula. 

Commenter also recommended that if 

patients choose to have neither a fistula 

nor a graft placed, after adequate 

education by their physician, then the 

patients should be excluded from the 

denominator. Commenter added that 

while overall, fistulas are slightly 

superior to grafts, there is virtually no 

difference in the elderly. The 

commenter also added that some of the 

benefits of grafts are that they are as 

long-lasting as fistulas if primary 

failures are included, they may be 

placed shortly before dialysis to avoid 

unnecessary fistulas that aren’t used, 

they are more successful than fistulas as 

a second access, they help to avoid 

central venous catheters, and they may 

minimize or eliminate the need for a 

complex risk adjustment in the fistula 

rate as is proposed. 

Response: The TEP that developed 

this measure in 2015 discussed at length 

the proposed exclusion for patients who 

have exhausted anatomic options for 

permanent access. The TEP agreed that 

this was an important exclusion, but 

they also recognized that it would be 

difficult to implement. A major concern 

was also that there are not currently 

data sources or infrastructure in place 

that would allow identification of 

patients who have no further surgical 

options for vascular access. There 

would also need to be strong consensus 

on what determines whether patients do 

not meet criteria for successful fistula 

placement. We intend to evaluate this 

criterion and data availability to 

determine feasibility of adding this 

exclusion in a future iteration of this 

measure. 

Many of the exclusion criteria based 

on comorbidities suggested by 

commenters are either associated with 

shortened life expectancy or low 

likelihood of successful fistula 

placement. In some situations, the 

severity of the underlying diagnosis is 

difficult to ascertain from claims data, 

although like heart failure, we anticipate 

this will improve over time with the 

change to and availability of ICD–10 

codes. Therefore, other comorbidities 

will be evaluated as part of future 

measure maintenance. Lastly, multiple 

prior failed vascular access attempts 

were considered by the TEP as an 

exclusion criterion to address the 

exhaustion of vascular sites or failed 

attempts to create a fistula or graft, 

however consensus was not reached 

within the TEP on how best to 

implement this exclusion. At the 

present time, historical vascular access 

data in CROWNWeb are limited, but 

this exclusion criterion will be 

evaluated when more historical vascular 

access data are available. 

The two vascular access measures, 

when used together, consider AV fistula 

use as a positive outcome and prolonged 

use of a tunneled catheter as a negative 

outcome. With the growing recognition 

that some patients have exhausted 

options for an arteriovenous fistula, or 

have comorbidities that may limit the 

success of AV fistula creation, pairing 

the measures accounts for all three 

vascular access options. The 

standardized fistula measure adjusts for 

patient factors where fistula placement 

may be either more difficult or not 

appropriate and acknowledges that in 

certain circumstances an AV graft may 

be the best access option. This paired 

incentive structure that relies on both 

measures reflects consensus best 

practice, and supports maintenance of 

the gains in vascular access success 

achieved via the Fistula First/Catheter 

Last Project over the last decade. 

Finally, it would be difficult to ascertain 

what constitutes adequate education by 

a nephrologist from the patient’s 

perspective as well as how to validate 

informed patient choice not to have an 

AV fistula or arteriovenous graft, and 

this may be particularly a concern for 

vulnerable patients. 

Final Rule Action: After consideration 

of the comments received, we are 

finalizing our proposal to include the 

Hemodialysis Vascular Access: 

Standardized Fistula Rate Clinical 

Measure in the ESRD QIP measure set 

beginning with the PY 2021 program. 

ii. New Hemodialysis Vascular Access: 

Long-Term Catheter Rate (NQF #2978) 

Beginning With the PY 2021 ESRD QIP 

Summary of Changes 

This proposed measure replaces NQF 

#0256, Minimizing Use of Catheters as 

Chronic Dialysis Access, and it 

incorporates the following changes that 

reflect input from the 2015 Vascular 

Access TEP: 

• Inclusion of all eligible 

hemodialysis patients, not just Medicare 

beneficiaries, since the measure is now 

specified to be calculated from 

CROWNWeb. 

• Patients using a catheter 

continuously for 3 months or longer, 

even if combined with an AV fistula (or 

graft), are now counted in the 

numerator. The current measure does 

not count patients in the numerator if 

they have a catheter combined with an 

AV fistula or graft. 

• Patients with missing VAT are 

counted in both the denominator and 

the numerator. That is, ‘‘missing’’ access 

type is considered a ‘‘failure’’ and 

therefore counts against the facility. 

• Exclusion criteria have been added 

to the measure for conditions associated 

with a limited life expectancy where a 

catheter may be an appropriate choice 

for access. These are the same 

exclusions applied to the Standardized 

Fistula Rate measure (for example, 

hospice, metastatic cancer, end stage 

liver disease, and coma/brain injury). 

Data Sources 

CROWNWeb, Medicare Claims and 

the CMS Medical Evidence form 2728 

are used as the data sources for 

establishing the denominator. 

CROWNWeb is the data source for 

establishing the numerator. Medicare 

claims and CROWNWeb are used for the 

exclusion criteria. Medicare claims and 

the CMS Medical Evidence Form 2728 

are used for risk adjustment. Using 

CROWNWeb as the primary data source 

allows us to expand the Long-Term 

Catheter Rate to include all ESRD 

dialysis patients, rather than only 

Medicare FFS patients, providing a 

more complete quality assessment for 

dialysis facilities. This was a key 

consideration by the TEP that 

recommended the development of this 

measure. 

Outcome 

The outcome of the Long-Term 

Catheter Rate is the use of a catheter 

continuously for 3 months or longer as 

of the last hemodialysis treatment 

session of the month. 


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Cohort 

The cohort includes adult ESRD 

dialysis patients who are determined to 

be maintenance hemodialysis patients 

(in-center or home) for the entire 

reporting month at the same facility. 

Inclusion and Exclusion Criteria 

The Long-Term Catheter Rate 

excludes pediatric patients (<18 years 

old), patients on peritoneal dialysis, and 

patient-months not on hemodialysis (incenter or home) for the entire reporting 

month at the same facility. The measure 

additionally excludes patients with a 

catheter who have a limited life 

expectancy. 

We submitted the Long-Term Catheter 

Rate (NQF #2978) to NQF, where the 

Renal Standing Committee 

recommended it for consensus 

endorsement, and the NQF endorsed the 

measure in December 2016. The 

measure was submitted to the Measure 

Application Partnership in 2016, which 

supported it for implementation in the 

ESRD QIP. 

We proposed to introduce the LongTerm Catheter Rate (NQF #2978) into 

the ESRD QIP beginning with the PY 

2021 program year. Full measure 

specifications and testing data are 

available at https://www.cms.gov/

Medicare/Quality-Initiatives-PatientAssessment-Instruments/ESRDQIP/061_

TechnicalSpecifications.html. 

We requested comments on this 

proposal. 

Comment: One commenter supported 

the inclusion of the NQF-endorsed 

catheter measure in the program but 

asked that CMS provide some additional 

clarifications. The commenter asked 

that CMS clarify how data with missing 

access type will be handled. 

Response: We thank commenter for its 

support. The NQF-endorsed measure 

specifications we have adopted for the 

measure state that the measure counts 

patient-months with missing vascular 

access type in both the denominator and 

the numerator. Therefore, missing 

vascular access type is counted as a 

catheter. 

Comment: Two commenters 

recommended that the catheter rate be 

adjusted for the following: (1) Arterial 

steal syndromes or other medical 

contraindications to a fistula or graft, for 

example, severe congestive heart failure; 

(2) extensive arm swilling from a fistula 

or graft; (3) co-morbidities with short 

predicted survivals and patients over 90 

years old; (4) exhausted vascular sites or 

multiple failed attempts to create a 

fistula or graft; (5) prolonged access 

hemorrhaging post-dialysis from a 

fistula or graft (over 30 minutes on 

average) that decreases patient quality of 

life enough for access ligation; and (6) 

patient preference. If patient preference 

cannot be fully considered by CMS, 

commenter recommended that an 

adjustment be included at least for those 

patients on hemodialysis 4–6 times per 

week or with needle phobia. A patient 

preference adjustment or exception, the 

commenter suggested, could be 

evaluated by signed patient forms and 

statistics with inspections of outlier 

facilities. Commenter further argued 

that for most of the patients with these 

conditions, a catheter is the appropriate 

vascular access and facilities should not 

be penalized for those patients. The 

commenter stated that there are some 

dialysis facilities that don’t accept 

patients with catheters in an effort to 

avoid CMS penalties and this ‘‘cherrypicking’’ concern would be eliminated 

by including an exception for patient 

preferences. 

Commenter suggested that while these 

additional exclusion criteria could open 

the door to gaming the system, signed 

patient forms and statistics with 

inspections of outlier facilities could 

handle that issue. If a patient chooses to 

have long-term catheter after adequate 

education from their Nephrologist and 

care team, then the commenter believes 

that the patient should be excluded. 

Commenter added that most patients 

with these conditions have a catheter 

that is clinically appropriate. If the 

catheter is the best medical access for 

that patient, then the commenter 

believes that the facility should not be 

penalized. 

Response: Many of the comorbidities 

suggested by commenters are either 

associated with shortened life 

expectancy or low likelihood of 

successful fistula placement. In some 

situations, the severity of the underlying 

diagnosis is difficult to ascertain from 

claims data, although like heart failure, 

we anticipate this will improve over 

time with the change to and availability 

of ICD–10 codes. Therefore, we 

anticipate other comorbidities will be 

evaluated as part of future measure 

maintenance. Regarding the 4th 

suggestion of commenter, regarding 

‘‘exhausted vascular sites or multiple 

failed attempts to create a fistula or 

graft,’’ multiple prior failed vascular 

access attempts were considered by the 

TEP as an exclusion criterion, however 

consensus was not reached within the 

TEP on how best to implement this 

exclusion. At the present time, 

historical vascular access data in 

CROWNWeb are limited, but we 

anticipate evaluating this exclusion 

criterion when more historical vascular 

access data are available. Finally, as the 

commenter stated, applying patient 

consent could be subject to gaming and 

would be difficult to validate, 

particularly for vulnerable patients. 

Comment: One commenter argued 

that without including AV Grafts in the 

measure, there’s a portion of the patient 

population being excluded. Also, if the 

facility does not meet the AV fistula 

threshold, then the commenter believes 

that the long-term catheter rate is 

directly impacted and facilities are at 

risk for losing points in two measures. 

The proposed risk adjustments for the 

standardized fistula rate, commenter 

argued, should also be applied to the 

long-term catheter rate. Also, the 

commenter stated that the exclusion 

criteria for this measure should be 

expanded to incorporate patient choice, 

and those appropriate medical and 

surgical exclusions, so that this measure 

reflects the quality of care being 

delivered at the facility. Even with the 

addition of the proposed exclusion 

criteria, the commenter stated that it’s 

still possible for the QIP score to 

penalize facilities for recommending the 

most clinically appropriate access for 

their patients. 

Response: The fistula and catheter 

measures apply exclusions for certain 

conditions recognizing that catheter 

placement may be the only means of 

vascular access for these patient subpopulations. Specifically, both measures 

exclude patients with a catheter that 

have limited life expectancy defined as 

being under hospice care in the current 

reporting month, or with metastatic 

cancer, end stage liver disease, coma or 

anoxic brain injury in the past 12 

months. In this way, the combination of 

risk adjustment for the SFR and the 

application of the exclusions to both 

measures does not result in doubly 

penalizing facilities and instead is 

intended to incentivize best practices 

for vascular access. 

Final Rule Action: After consideration 

of the comments received, we are 

finalizing our proposal to include the 

Hemodialysis Vascular Access: LongTerm Catheter Rate Clinical Measure in 

the ESRD QIP measure set beginning 

with the PY 2021 program. 

e. Performance Period for the PY 2021 

ESRD QIP 

We proposed to establish CY 2019 as 

the performance period for the PY 2021 

ESRD QIP for all but the NHSN 

Healthcare Personnel Influenza 

Vaccination reporting measure because 

it is consistent with the performance 

periods we have historically used for 

these measures and accounts for 

seasonal variations that might affect a 

facility’s measure score. 


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We proposed that the performance 

period for the NHSN Healthcare 

Personnel Influenza Vaccination 

reporting measure will be from October 

1, 2018 through March 31, 2019, 

because this period spans the length of 

the 2018–2019 influenza season. 

We requested comments on these 

proposals. 

Comment: Two commenters 

supported setting CY 2019 as the 

performance period for PY 2021 

generally but did not support the 

proposed performance period for the 

NHSN Healthcare Personnel Influenza 

Vaccination Reporting Measure as being 

from October 1, 2018 through March 31, 

2019. They argued that the dates of 

vaccine availability do not coincide 

with the dates for the measure and 

encouraged CMS to modify the measure 

to align with the CDC’s guidelines for 

immunization, which define the 

performance period as October 1 or 

‘‘whenever the vaccine became 

available.’’ 

Response: We thank the commenters 

for sharing their concerns, however as 

we have explained in previous rules, the 

performance period for this measure 

defines the flu season during which 

healthcare personnel must be protected 

against influenza. The performance 

period is only used to identify 

personnel who have physically worked 

at the facility for at least 1 day between 

October 1 and March 31. These are 

employees that are considered eligible 

for inclusion in the measure 

denominator. The performance period 

does not indicate when the influenza 

vaccination should be administered. 

Therefore, any personnel who are 

employed for at least 1 day during the 

flu season, may be vaccinated as soon as 

the vaccine becomes available for that 

respective season. Facilities should 

report influenza vaccinations given to 

all healthcare personnel whether they 

are vaccinated prior to or during the 

denominator reporting period to receive 

full credit for the measure; therefore, 

there is no penalty for early vaccination 

built into the NHSN measure (81 FR 

77901). 

Comment: One commenter supported 

the influenza vaccination reporting 

measure performance period of October 

1 through March 31 because it is 

consistent with other quality reporting 

and value-based purchasing programs. 

Response: We thank commenter for 

their support of the proposed 

performance period for the Healthcare 

Personnel Influenza Vaccination 

Reporting Measure. 

Final Rule Action: After consideration 

of the comments received, we are 

finalizing the performance period for 

the PY 2021 ESRD QIP as proposed. 

f. Performance Standards, Achievement 

Thresholds, and Benchmarks for the PY 

2021 ESRD QIP 

Section 1881(h)(4)(A) of the Act 

provides that ‘‘the Secretary shall 

establish performance standards with 

respect to measures selected... for a 

performance period with respect to a 

year.’’ Section 1881(h)(4)(B) of the Act 

further provides that the ‘‘performance 

standards... shall include levels of 

achievement and improvement, as 

determined appropriate by the 

Secretary.’’ We use the performance 

standards to establish the minimum 

score a facility must achieve to avoid a 

Medicare payment reduction. 

i. Performance Standards, Achievement 

Thresholds, and Benchmarks for the 

Clinical Measures in the PY 2021 ESRD 

QIP 

For the same reasons stated in the CY 

2013 ESRD PPS final rule (77 FR 67500 

through 76502), we proposed for PY 

2021 to set the performance standards, 

achievement thresholds, and 

benchmarks for the clinical measures at 

the 50th, 15th, and 90th percentile, 

respectively, of national performance in 

CY 2017, because this will give us 

enough time to calculate and assign 

numerical values to the proposed 

performance standards for the PY 2021 

program prior to the beginning of the 

performance period. We continue to 

believe these standards will provide an 

incentive for facilities to continuously 

improve their performance, while not 

reducing incentives to facilities that 

score at or above the national 

performance rate for the clinical 

measures. 

We requested comments on our 

proposal to continue this policy for PY 

2021. The comments and our responses 

are set forth below. 

Comment: One commenter stated that 

it supports CMS’s reliance on the same 

basic methodology year-over-year for 

the ESRD QIP and therefore supports 

the continuation of the previous policy 

of setting the performance standard, 

achievement threshold, and benchmark 

at the 50th, 15th, and 90th percentiles 

respectively, in PY 2021. The 

commenter also stated that it supports 

the policy for determining payment 

reductions, including the process for 

setting the minimum TPS. 

Response: We thank the commenter 

for their support and we agree that 

consistency in program implementation 

is an important consideration in 

selecting a methodology for scoring 

performance under the ESRD QIP. 

Final Rule Action: After consideration 

of the comments received, we are 

finalizing our proposal to continue our 

methodology for setting the performance 

standards, achievement thresholds, and 

benchmarks for the PY 2021 ESRD QIP. 

ii. Performance Standards, Achievement 

Thresholds, and Benchmarks for the 

Clinical Measures Proposed for the PY 

2021 ESRD QIP 

We do not currently have the 

necessary data to assign numerical 

values to the proposed performance 

standards for the clinical measures, 

because we do not yet have data from 

CY 2017 or the first portion of CY 2018. 

We will publish values for the clinical 

measures, using data from CY 2017 and 

the first portion of CY 2018 in the CY 

2019 ESRD PPS final rule. 

iii. Performance Standards for the PY 

2021 Reporting Measures 

In the CY 2014 ESRD PPS final rule, 

we finalized performance standards for 

the Anemia Management and Mineral 

Metabolism reporting measures (78 FR 

72213). In the CY 2016 ESRD PPS final 

rule, we finalized performance 

standards for the Screening for Clinical 

Depression and Follow-Up, Pain 

Assessment and Follow-Up, and NHSN 

Healthcare Provider Influenza 

Vaccination reporting measures (79 FR 

66209). In the CY 2017 ESRD PPS final 

rule, we finalized performance 

standards for the Ultrafiltration Rate 

Reporting Measure (81 FR 77916), the 

Serum Phosphorus Reporting measure 

(81 FR 77916), and the NHSN Dialysis 

Event Reporting measure (81 FR 77916). 

We proposed to continue use of these 

performance standards for the Reporting 

Measures included in the PY 2021 ESRD 

QIP. 

We did not receive any comments on 

our proposed use of these performance 

standards for the Reporting Measures 

included in the PY 2021 ESRD QIP and 

we are therefore finalizing these 

standards as proposed. 

g. Scoring the PY 2021 ESRD QIP 

i. Scoring Facility Performance on 

Clinical Measures Based on 

Achievement 

In the CY 2014 ESRD PPS final rule, 

we finalized a policy for scoring 

performance on clinical measures based 

on achievement (78 FR 72215). Under 

this methodology, facilities receive 

points along an achievement range 

based on their performance during the 

performance period for each measure, 

which we define as a scale between the 

achievement threshold and the 

benchmark. In determining a facility’s 

achievement score for each clinical 


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measure under the PY 2021 ESRD QIP, 

we proposed to continue using this 

methodology for all clinical measures. 

We also proposed to use this same 

methodology for scoring the two new 

Vascular Access measures. 

Aside from the proposed addition of 

the two Vascular Access measures, we 

did not propose any changes to this 

policy. We proposed to continue use of 

this policy for the PY 2021 ESRD QIP. 

We did not receive any comments on 

our continued use of this policy for PY 

2021. Accordingly, we are finalizing this 

policy as proposed. 

ii. Scoring Facility Performance on 

Clinical Measures Based on 

Improvement 

In the CY 2014 ESRD PPS final rule, 

we finalized a policy for scoring 

performance on clinical measures based 

on improvement (78 FR 72215 through 

72216). In determining a facility’s 

improvement score for each measure 

under the PY 2021 ESRD QIP, we 

proposed to continue using this 

methodology for all clinical measures. 

Under this methodology, facilities 

receive points along an improvement 

range, defined as a scale running 

between the improvement threshold and 

the benchmark. We proposed to define 

the improvement threshold as the 

facility’s performance on the measure 

during CY 2018. The facility’s 

improvement score would be calculated 

by comparing its performance on the 

measure during CY 2019 (the 

performance period) to the 

improvement threshold and benchmark. 

We also proposed to use this same 

methodology for scoring the two new 

Vascular Access measures. 

Aside from the proposed addition of 

the two new Vascular Access measures, 

we did not propose any other changes 

to this policy. We proposed to continue 

use of this policy for the PY 2021 ESRD 

QIP. 

The comments and our responses to 

the comments on our proposals are set 

forth below. 

Comment: Commenters expressed 

concerns with the current policy for 

scoring the ESRD QIP and suggested 

that it could be a barrier to home 

dialysis uptake at small facilities or 

stand-alone ‘‘home only’’ programs 

because a small sample size can put a 

facility at risk for a payment reduction 

due to one or two low scores on a 

measure. 

Regarding the clinical measure 

domain score, which is worth 75 

percent of the TPS and only comprises 

2–3 measures for most home programs, 

commenter suggested that one way to 

mitigate this effect would be to apply 

the current low volume scoring 

adjustment to a facility’s home dialysis 

population, should they meet the rest of 

the criteria. The commenter stated that 

this adjustment was originally designed 

to be applied facility-wide to facilities 

having only 11–25 eligible cases for a 

given clinical measure, and the 

commenter was unsure whether this 

approach would adequately compensate 

for the disadvantage of being scored on 

a small number of measures. 

Another commenter argued that the 

measures should reflect the unique 

nature of each modality and should be 

developed based on data specific to that 

modality, recommending that CMS 

improve Peritoneal Dialysis adequacy 

scoring within the scoring methodology 

because PD therapy is inherently 

different from Hemodialysis and 

outcomes should be measured 

accordingly. According to the 

commenter, many PD patients 

experience residual renal function, 

which is not captured by the QIP and 

this is a particularly significant scoring 

limitation with respect to the pediatric 

PD population. Commenter urged CMS 

to revise the dialysis adequacy targets 

downward to more accurately capture 

and reflect the actual experiences of PD 

patients. 

Response: We thank commenters for 

sharing their concerns. While we 

recognize there are differences in the 

achievement of adequate dialysis by 

modality and age, all ESRD dialysis 

patients require adequate dialysis, and it 

is reasonable to expect providers to 

provide adequate dialysis to all patients, 

regardless of modality or age. CMS 

continues to believe that facilities 

should strive to provide the best quality 

care, regardless of a patient’s modality 

or age. We will consider these concerns 

and evaluate the issue further. 

Comment: One commenter supported 

the proposal to use the existing 

methodology for scoring in PY 2021. 

Response: We appreciate the support. 

Final Rule Action: After consideration 

of the comments received, we are 

finalizing our proposals for scoring 

facilities on clinical measures based on 

the improvement and achievement 

methodologies as proposed for the PY 

2021 ESRD QIP. 

iii. Scoring the ICH CAHPS Clinical 

Measure 

In the CY 2015 ESRD PPS final rule, 

we finalized a policy for scoring 

performance on the ICH CAHPS clinical 

measure based on both achievement and 

improvement (79 FR 66209 through 

66210). We proposed to use this scoring 

methodology for the PY 2021 ESRD QIP. 

Under this methodology, facilities will 

receive an achievement score and an 

improvement score for each of the three 

composite measures and three global 

ratings in the ICH CAHPS survey 

instrument. A facility’s ICH CAHPS 

score will be based on the higher of the 

facility’s achievement or improvement 

score for each of the composite 

measures and global ratings, and the 

resulting scores on each of the 

composite measures and global ratings 

will be averaged together to yield an 

overall score on the ICH CAHPS clinical 

measure. For PY 2021, the facility’s 

achievement score would be calculated 

by comparing where its performance, on 

each of the three composite measures 

and three global ratings during CY 2019 

falls, relative to the achievement 

threshold and benchmark for that 

measure and rating based on CY 2017 

data. The facility’s improvement score 

would be calculated by comparing its 

performance on each of the three 

composite measures and three global 

ratings during CY 2019 to its 

performance rates on these items during 

CY 2018. 

We requested comments on this 

proposal. We did not receive any 

comments on this proposal. We are 

therefore finalizing this policy as 

proposed. 

iv. Scoring the Proposed Hemodialysis 

Vascular Access: Standardized Fistula 

Rate and Long-Term Catheter Rate 

Measures and the Vascular Access 

Measure Topic 

In the CY 2013 ESRD PPS final rule 

we established a methodology for 

deriving the overall scores for measure 

topics (77 FR 67507). We proposed to 

use the same methodology described in 

the CY 2013 ESRD PPS to calculate the 

VAT Measure Topic Score. 

We requested comments on this 

proposal. We did not receive any 

comments on this proposal. We are 

therefore finalizing this policy as 

proposed. 

v. Calculating Facility Performance on 

Reporting Measures 

In the CY 2013 ESRD PPS final rule, 

we finalized policies for scoring 

performance on the Anemia 

Management and Mineral Metabolism 

reporting measures in the ESRD QIP (77 

FR 67506). In the CY 2015 ESRD PPS 

final rule, we finalized policies for 

scoring performance on the Clinical 

Depression Screening and Follow-Up, 

Pain Assessment and Follow-Up, and 

NHSN Healthcare Provider Influenza 

Vaccination reporting measures (79 FR 

66210 through 66211). In the CY 2017 

ESRD PPS final rule, we finalized 

policies for scoring performance on the 


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Ultrafiltration Rate, Serum Phosphorus, 

and NHSN Dialysis Event reporting 

measures (81 FR 77917). 

We proposed to continue use of these 

policies for the PY 2021 ESRD QIP. 

We did not receive any comments on 

this proposal. We are therefore 

finalizing these policies as proposed. 

h. Weighting the Measure Domains, and 

Weighting the TPS for PY 2021 

In the CY 2017 ESRD PPS final rule, 

we discussed our policy priorities for 

quality improvement for patients with 

ESRD (81 FR 77887). These priorities 

have not changed since that time. 

Accordingly, in an effort to remain 

consistent in the weighting of measures 

included in the program, we proposed 

to weight the following measures in the 

following subdomains of the three 

individual measure domains (see Table 

10): 

TABLE 10—PROPOSED MEASURE DOMAIN WEIGHTING FOR THE PY 2021 ESRD QIP 

Measures/measure topics by subdomain 

Measure weight within 

the domain 

(proposed for PY 2021) 

Measure weight as 

percent of TPS 

(proposed for PY 2021) 

Clinical Measure Domain 

Patient and Family Engagement/Care Coordination Subdomain .......................................... 40% ................................ 30. 

ICH CAHPS Measure ...................................................................................................... 25% ................................ 18.75. 

SRR Measure .................................................................................................................. 15% ................................ 11.25. 

Clinical Care Subdomain ........................................................................................................ 60% ................................ 45. 

STrR measure ................................................................................................................. 11% ................................ 8.25. 

Kt/V Dialysis Adequacy Comprehensive Measure .......................................................... 18% ................................ 13.5. 

Vascular Access Type Measure Topic ............................................................................ 18% ................................ 13.5. 

Hypercalcemia measure .................................................................................................. 2% .................................. 1.5. 

SHR Measure .................................................................................................................. 11% ................................ 8.25. 

Total: Clinical Measure Domain ............................................................................... 100% of Clinical Measure Domain.75% of Total Performance Score. 

Reporting Measure Domain 

Serum Phosphorus reporting measure .................................................................................. 20% ................................ 2. 

Anemia Management reporting measure ............................................................................... 20% ................................ 2. 

Pain Assessment and Follow-Up reporting measure ............................................................. 20% ................................ 2. 

Clinical Depression Screening and Follow-Up reporting measure ........................................ 20% ................................ 2. 

Healthcare Personnel Influenza Vaccination reporting measure ........................................... 20% ................................ 2. 

Total: Reporting Measure Domain .................................................................................. 100% of Reporting 

Measure Domain.

10% of Total Performance Score. 

Safety Measure Domain 

NHSN BSI Clinical Measure ................................................................................................... 60% ................................ 9. 

NHSN Dialysis Event Reporting Measure .............................................................................. 40% ................................ 6. 

Total: Safety Measure Domain ........................................................................................ 100% of Safety Measure 

Domain.

15% of Total Performance Score. 

For PY 2021 we proposed to maintain 

the weight of the Safety Measure 

Domain at 15 percent of a facility’s TPS 

without raising it further, in light of 

validation concerns discussed in the CY 

2017 ESRD PPS final rule (81 FR 77887). 

Specifically, we identified two distinct 

types of accidental or intentional underreporting. First, there is a belief that 

many facilities do not consistently 

report monthly dialysis event data for 

the full 12-month performance period. 

Second, even with respect to the 

facilities that do report monthly dialysis 

event data, there is a concern that many 

of those facilities do not consistently 

report all of the dialysis events that they 

should be reporting (81 FR 77879). 

Although we did not propose to change 

the total number of measures in the 

ESRD QIP’s measure set for PY 2021, we 

proposed to replace the existing 

Vascular Access measures with the 

proposed Standardized Fistula and 

Catheter Clinical measures. We believe 

these measures hold the same 

importance and value as the measures 

they are replacing and therefore did not 

propose any changes to the weights 

finalized for PY 2020 in the CY 2017 

ESRD PPS final rule (81 FR 77887). We 

stated that we may, in future years of 

the program, consider increasing the 

weight of the NHSN BSI Clinical 

Measure and/or the NHSN BSI Measure 

Topic once we see that facilities are 

completely and accurately reporting to 

NHSN and once we have analyzed the 

data from the recently updated NHSN 

Data Validation Study. 

We continue to believe that while the 

reporting measures are valuable, the 

clinical measures assess facility 

performance on actual patient care 

processes and outcomes, and therefore, 

justify a higher combined weight (78 FR 

72217). In the CY 2017 ESRD PPS final 

rule, we finalized that for PY 2020, the 

weight of the Safety Measure Domain 

would be 15 percent of a facility’s TPS, 

the weight of the Clinical Measure 

Domain would be 75 percent of a 

facility’s TPS and the weight of the 

Reporting Measure Domain would be 10 

percent of a facility’s TPS. We did not 

propose any changes to the weights 

assigned to these domains and proposed 

to apply the same weights to the three 

scoring domains for the PY 2021 

program year. 

In the CY 2017 ESRD PPS final rule, 

we also finalized that, to be eligible to 

receive a TPS, a facility must be eligible 

to be scored on at least one measure in 

the Clinical Measure Domain and at 

least one measure in the Reporting 

Measure Domain. We did not propose 


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any changes to this policy for the PY 

2021 ESRD QIP. 

We requested comments on these 

proposals. 

Comment: Commenters urged CMS to 

re-weight the Vascular Access measures 

within the Clinical Measure Domain, 

assigning 2⁄3 of the weight of that 

measure topic to the Catheter Measure 

and 1⁄3 to the Fistula. Commenters 

argued that with a differential weighting 

of the two measures, a facility that 

scores especially well on the catheter 

measure (that is, low numbers of 

catheters) compared to the fistula 

measure could achieve an increase of 

about 2 points in its TPS. Conversely, 

these commenters stated that a facility 

that scores especially well on the fistula 

measure but still has high numbers of 

catheters could see its TPS decrease by 

approximately 2 points. Commenters 

argued that these differences could be 

meaningful for facilities that are near 

the TPS cut-off points for payment 

reduction levels. Commenters also 

stated that facilities that score about the 

same on the two measures would not 

see a notable change in their TPS. 

Response: We conducted an analysis 

to determine how the Vascular Access 

Measure Topic Scores, TPS, and 

estimated payment reductions would be 

impacted if we were to assign 2⁄3 of the 

weight of the measure topic to the 

Catheter Measure, and 1⁄3 of the weight 

of the measure topic to the Fistula 

Measure. Results (shown in Table 11), 

suggest that although some facilities 

would benefit from this policy change, 

a larger percentage would not. 

TABLE 11—ANALYSIS OF THE EFFECTS

OF RE-WEIGHTING THE VASCULAR

ACCESS MEASURES

N % 

Difference in Payment Reduction 

Lower Payment Reduction 328 5.82 

Higher Payment Reduction 417 7.40 

No Change ....................... 4890 86.78 

Difference in TPS 

Lower TPS ........................ 2373 42.10 

Higher TPS ....................... 2004 35.56 

No Change ....................... 1258 22.30 

As shown in Table 11, under this reweighting approach for the Vascular 

Access Measures, approximately 36 

percent of facilities would receive a 

higher VAT Topic Score and TPS, but 

42 percent would receive lower scores. 

Additionally, under this weighting 

policy recommended by commenters, 

5.8 percent would receive a lower 

payment reduction, but 7.4 percent 

would receive a higher payment 

reduction. While the recommendation 

to re-weight the VAT Measure topic fits 

with the overall goal of the ESRD QIP 

to increase performance on the catheter 

measure, we believe that some facilities 

would be adversely impacted were we 

to adopt this weighting structure. 

Comment: One commenter requested 

clarification on the weight of the 

Ultrafiltration Rate Reporting Measure 

for PY 2021 because no weight was 

included for that measure in the 

proposed rule. 

Response: We thank the commenter 

for pointing out the error. Although we 

inadvertently did not include the 

proposed numerical weight for the UFR 

Reporting Measure for PY 2021 in Table 

8 of the proposed rule, we proposed to 

weight the reporting measures and the 

Reporting Measure Domain consistent 

with how we have weighted them in 

previous years of the program (79 FR 

66217, 79 FR 66219). Under that 

weighting scheme, which is reflected in 

Table 8 of the proposed rule, each 

reporting measure is weighted equally 

within the Reporting Domain, and the 

Reporting Domain, as a whole, 

comprises 10 percent of the TPS. 

Application of that policy to the PY 

2021 reporting measures, which 

includes the UFR Reporting Measure, 

results in each measure being weighted 

at 16.66 percent of the Reporting 

Measure Domain, or 1.66 percent of the 

TPS. Table 12 reflects these values. 

Final Rule Action: After considering 

the comments we received, we are 

finalizing our domain weighting policy 

for PY 2021. The final weights are 

reflected in Table 12. 

TABLE 12—FINALIZED MEASURE DOMAIN WEIGHTING FOR THE PY 2021 ESRD QIP 

Measures/measure topics by subdomain 

Measure weight within 

the domain 

(proposed for PY 2021) 

Measure weight as 

percent of TPS 

(proposed for PY 2021) 

Clinical Measure Domain 

Patient and Family Engagement/Care Coordination Subdomain .......................................... 40% ................................ 30. 

ICH CAHPS Measure ...................................................................................................... 25% ................................ 18.75. 

SRR Measure .................................................................................................................. 15% ................................ 11.25. 

Clinical Care Subdomain ........................................................................................................ 60% ................................ 45. 

STrR measure ................................................................................................................. 11% ................................ 8.25. 

Kt/V Dialysis Adequacy Comprehensive Measure .......................................................... 18% ................................ 13.5. 

Vascular Access Type Measure Topic ............................................................................ 18% ................................ 13.5. 

Hypercalcemia measure .................................................................................................. 2% .................................. 1.5. 

SHR Measure .................................................................................................................. 11% ................................ 8.25. 

Total: Clinical Measure Domain ............................................................................... 100% of Clinical Measure Domain.75% of Total Performance Score. 

Reporting Measure Domain 

Serum Phosphorus reporting measure .................................................................................. 16.66% ........................... 1.66. 

Anemia Management reporting measure ............................................................................... 16.66% ........................... 1.66. 

Pain Assessment and Follow-Up reporting measure ............................................................. 16.66% ........................... 1.66. 

Clinical Depression Screening and Follow-Up reporting measure ........................................ 16.66% ........................... 1.66. 

Healthcare Personnel Influenza Vaccination reporting measure ........................................... 16.66% ........................... 1.66. 

Ultrafiltration Rate Reporting Measures ................................................................................. 16.66% ........................... 1.66. 

Total: Reporting Measure Domain .................................................................................. 100% of Reporting 

Measure Domain.

10% of Total Performance Score. 


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TABLE 12—FINALIZED MEASURE DOMAIN WEIGHTING FOR THE PY 2021 ESRD QIP—Continued 

Measures/measure topics by subdomain 

Measure weight within 

the domain 

(proposed for PY 2021) 

Measure weight as 

percent of TPS 

(proposed for PY 2021) 

Safety Measure Domain 

NHSN BSI Clinical Measure ................................................................................................... 60% ................................ 9. 

NHSN Dialysis Event Reporting Measure .............................................................................. 40% ................................ 6. 

Total: Safety Measure Domain ........................................................................................ 100% of Safety Measure 

Domain.

15% of Total Performance Score. 

i. Example of the PY 2021 ESRD QIP 

Scoring Methodology 

In this section, we provide an 

example to illustrate the scoring 

methodology for PY 2021. Figures 1 

through 4 illustrate how to calculate the 

Clinical Measure Domain score, the 

Reporting Measure Domain score, the 

Safety Measure Domain score, and the 

TPS. Figure 5 illustrates the full scoring 

methodology for PY 2021. Note that for 

this example, Facility A, a hypothetical 

facility, has performed very well. 

BILLING CODE 4120–01–P 


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Figure 2 illustrates the general methodology for calculating the Reporting Measure 

Domain score for Facility A. 

FIGURE2: 

Reporting Measure Domain: Facility A 

Reporting Measure 

Serum Phosphorus 

Anemia Management 

Pain Assessment and Follow-Up 

Measure Score 

8 

8 

Clinical Depression Screening and Follow-Up 

NHSN Healthcare Personnel Influenza IJacclnatlon 

Ultrafiltration Rate 

10 

10 

10 _ .. ---~·--· ---··-··--··-· 

8 

I Reporting Measure Scoring Domain = 90 I 

.. :;;.1667 x [Anemia Manaaermmt score) 

+ 

____ ;.ltiti7x [Pain Assessment score] 

+ 

__ .. ;.1667 x [Depression Screenint sccra] 

+ .. ______ __,,, .1667 x [NHSN HCP score] 

+ 

: ltiti7x[UFR) 

.1667x8 

+ 

.1667x8 

+ 

.1667xl0 

+ 

.1667xl0 

+ 

.ltiti7xl0 

+ 

.1667x8 

Figure 3 illustrates the methodology used for calculating the Safety Measure Domain 

score for Facility A. 

FIGURE3: 

Safety Measure Domain: Facility A 

Measure 

NHSN BSI Clinical Measure 

NHSN Reporting Measure 

I Safety Measure Scoring Domain = 941 

NHSN BSI Measure Topic 

XlO 

XlO 
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Figure 4 illustrates the methodology used to calculate the TPS for Facility A. 

FIGURE 4: 

Total Performance Score: Facility A 

Domain Domain Score 

Clinical Measure Domain 

safety Measure Domain 

Reporting Measure Domain 

: ~---_--------~----------------------- --("""(.75x[Cii":<tl0omain)) J 

90 ------------------------------L ---:J;. (.15 X {Safety Domain)) 

-- > (.10Jt [Repo;na Domain]} 

Total Performance Score= 92 ( (.10x90) 

(.7Sx92) 

+ 

(.1Sx94) 

+ J 

Figure 5 illustrates the full scoring methodology for PY 2021. 

FIGURES: 

100 pts. 

--@ 

Clinical Care No 

(60%) + Reduction 

mln.TPS 

=® \ I 

~-

r-5% Reduction 

+ mill. TPS·10 

} 1.11% 

Reduction 

=® mill. TPS·20 11.5% 

mill. TPS-30 J Reduction 

}~ Reduction 

Opts. 
50786 Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 

BILLING CODE 4120–01–C 

j. Minimum Data for Scoring Measures 

for the PY 2021 ESRD QIP 

Our policy is to score facilities on 

clinical and reporting measures for 

which they have a minimum number of 

qualifying patients during the 

performance period. With the exception 

of the Standardized Readmission Ratio, 

Standardized Hospitalization Ratio, 

Standardized Transfusion Ratio, NHSN 

Healthcare Personnel Influenza 

Vaccination, and ICH CAHPS clinical 

measures, a facility must treat at least 11 

qualifying cases during the performance 

period in order to be scored on a clinical 

or reporting measure. A facility must 

have at least 11 index discharges to be 

eligible to receive a score on the SRR 

clinical measure, 10 patient-years at risk 

to be eligible to receive a score on the 

STrR clinical measure, and 5 patientyears at risk to be eligible to receive a 

score on the SHR clinical measure. The 

NHSN Healthcare Personnel Influenza 

Vaccination measure does not assess 

patient-level data and therefore does not 

have a minimum qualifying patient 

count. In order to receive a score on the 

ICH CAHPS clinical measure, a facility 

must have treated at least 30 surveyeligible patients during the eligibility 

period and receive 30 completed 

surveys during the performance period. 

We proposed to continue use of these 

minimum data policies for the measures 

that we proposed to continue including 

in the PY 2021 ESRD QIP measure set. 

We also proposed to use these same 

minimum data policies for the proposed 

Vascular Access Measures. 

Under our current policy, we begin 

counting the number of months for 

which a facility is open on the first day 

of the month after the facility’s CMS 

Certification Number (CCN) Open Date. 

In the CY 2018 ESRD PPS proposed rule 

(81 FR 31203), we discussed our 

proposed clarifications, which we are 

finalizing in this final rule (see Table 

2b), to our CCN open date policy and to 

the patient minimum requirements for 

each of the measures finalized for the 

PY 2020 ESRD QIP. Similarly, for the 

PY 2021 ESRD QIP, only facilities with 

a CCN Open Date before July 1, 2019 

would be eligible to be scored on the 

Anemia Management, Serum 

Phosphorous, Ultrafiltration Rate, Pain 

Assessment and Follow-Up, Clinical 

Depression Screening and Follow-Up 

reporting measures, and only facilities 

with a CCN Open Date before January 1, 

2019 would be eligible to be scored on 

the NHSN BSI Clinical and Reporting 

Measures, the ICH CAHPS Clinical 

Measure, and the NHSN Healthcare 

Personnel Influenza Vaccination 

reporting measure. We proposed to 

continue applying these CCN open date 

policies to the measures proposed for 

PY 2021. 

Table 13 displays the proposed 

patient minimum requirements for each 

of the measures, as well as the proposed 

CCN Open Dates after which a facility 

would not be eligible to receive a score 

on a reporting measure. We note that the 

11 qualifying patient minimum used for 

most of the measures shown in the 

Table 13 is a long-standing policy in the 

ERSD QIP. 

TABLE 13—PROPOSED MINIMUM DATA REQUIREMENTS FOR THE PY 2021 ESRD QIP 

Measure Minimum data 

requirements CCN open date Small facility adjuster 

Dialysis Adequacy (Clinical) ........... 11 qualifying patients ........................................ N/A ..................................... 11–25 qualifying patients. 

Hemodialysis Vascular Access: 

Standardized Fistula Rate (Clinical).

11 qualifying patients ........................................ N/A ..................................... 11–25 qualifying patients. 

Hemodialysis Vascular Access: 

Long-Term Catheter Rate (Clinical).

11 qualifying patients ........................................ N/A ..................................... 11–25 qualifying patients. 

Hypercalcemia (Clinical) ................. 11 qualifying patients ........................................ N/A ..................................... 11–25 qualifying patients. 

NHSN BSI (Clinical) ....................... 11 qualifying patients * ...................................... Before January 1, 2019 ..... 11–25 qualifying patients. 

NHSN Dialysis Event (Reporting) .. 11 qualifying patients * ...................................... Before January 1, 2019 ..... N/A. 

SRR (Clinical) ................................. 11 index discharges .......................................... N/A ..................................... 11–41 index discharges. 

STrR (Clinical) ................................ 10 patient-years at risk ..................................... N/A ..................................... 10–21 patient-years at risk. 

SHR (Clinical) ................................. 5 patient-years at risk ....................................... N/A ..................................... 5–14 patient-years at risk. 

ICH CAHPS (Clinical) ..................... Facilities with 30 or more survey-eligible patients during the CY preceding the performance period must submit survey results. Facilities will not receive a score if they do not 

obtain a total of at least 30 completed surveys during the performance period.

Before January 1, 2019 ..... N/A. 

Anemia Management (Reporting) .. 11 qualifying patients ........................................ Before July 1, 2019 ............ N/A. 

Serum Phosphorus (Reporting) ..... 11 qualifying patients ........................................ Before July 1, 2019 ............ N/A. 

Depression Screening and FollowUp (Reporting).11 qualifying patients ........................................ Before July 1, 2019 ............ N/A. 

Pain Assessment and Follow-Up 

(Reporting).

11 qualifying patients ........................................ Before July 1, 2019 ............ N/A. 

NHSN Healthcare Personnel Influenza Vaccination (Reporting).N/A .................................................................... Before January 1, 2019 ..... N/A. 

Ultrafiltration Rate (Reporting) ....... 11 qualifying patients ........................................ Before July 1, 2019 ............ N/A. 

* For the NHSN BSI Clinical Measure and the NHSN Dialysis Event Reporting Measure, qualifying patients include only in-center hemodialysis 

patients. Inpatient hemodialysis patients and home hemodialysis or peritoneal dialysis patients are excluded from this measure.

The comments and our responses to 

the comments on our proposals are set 

forth below. 

Comment: One commenter argued 

that the use of the 11-case minimum, 

while meant to ensure the privacy of 

individuals, is not ensuring the integrity 

of the data being reported. The 

commenter believes that CMS has 

introduced randomness into the process 

of scoring quality measures and that this 

randomness leads to facilities being 

unable to predict how their actions will 

impact outcomes and therefore makes 

measures meaningless in terms of 

improving quality. The commenter 

added that the minimum data threshold 

makes the outcome of these measures 


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meaningless to patients because the 

small number of patients drives the 

outcome rather than the actual care 

being provided. The commenter 

recommended that CMS eliminate the 

small facility adjuster and adopt instead 

a minimum sample size of 26 patients 

for scoring measures. 

Response: We thank the commenter 

for their comments. While it is true that 

smaller facilities will most likely have 

more variability in measure scores, our 

analysis of the PY 2017 results suggest 

smaller facilities received fewer 

payment reductions (see figure 6 below). 

Reliability analyses have been used to 

determine upper thresholds for the 

small facility adjustment. These 

reliability analyses were published 

when the small facility adjuster was first 

introduced into the ESRD QIP (78 FR 

72222), and are available here: https:// 

www.cms.gov/Medicare/QualityInitiatives-Patient-AssessmentInstruments/ESRDQIP/Downloads/

Small-Facility-Adjustment-Proposal-forthe-ESRD-QIP.pdf. 

These reliability analyses were 

performed for all measures, including 

the ratio measures (which have different 

thresholds). 

Final Rule Action: After considering 

the comments received, we are 

finalizing the minimum data policy for 

the PY 20201 ESRD QIP as proposed. 

k. Payment Reductions for the PY 2021 

ESRD QIP 

Section 1881(h)(3)(A)(ii) of the Act 

requires the Secretary to ensure that the 

application of the scoring methodology 

results in an appropriate distribution of 

payment reductions across facilities, 

such that facilities achieving the lowest 

TPSs receive the largest payment 

reductions. We proposed that, for the 

PY 2021 ESRD QIP, a facility will not 

receive a payment reduction if it 

achieves a minimum TPS that is equal 

to or greater than the total of the points 

it would have received if: 

• It performed at the performance 

standard for each clinical measure. 

• It received the number of points for 

each reporting measure that corresponds 

to the 50th percentile of facility 

performance on each of the PY 2019 

reporting measures. 

We noted in the proposed rule that 

this proposed policy for PY 2021 is 

identical to the policy finalized for PY 

2020. 

We stated in the proposed rule that 

we were not proposing a policy 

regarding the inclusion of measures for 

which we were not able to establish a 

numerical value for the performance 

standard through the rulemaking 

process before the beginning of the 

performance period for PY 2020. We did 

not propose such a policy because no 

measures in the proposed PY 2021 

measure set meet this criterion. 

However, should we choose to adopt a 

clinical measure in future rulemaking 

without the baseline data required to 

calculate a performance standard before 

the beginning of the performance 

period, we will propose a criterion 

accounting for that measure in the 

minimum TPS for the applicable 

payment year at that time. 

The PY 2019 program is the most 

recent year for which we will have 

calculated final measure scores before 

the beginning of the proposed 

performance period for PY 2021 (that is, 

CY 2019). Because we have not yet 

calculated final measure scores, we are 

unable to determine the 50th percentile 

of facility performance on the PY 2019 

reporting measures. We will propose 

that value in the CY 2019 ESRD PPS 

proposed rule once we have calculated 

final measure scores for the PY 2019 

program, and will finalize those values 

in the CY 2019 ESRD PPS final rule 

using the most updated data available at 

the time of publication. 

Section 1881(h)(3)(A)(ii) of the Act 

requires that facilities achieving the 

lowest TPSs receive the largest payment 

reductions. In the CY 2014 ESRD PPS 

final rule (78 FR 72223 through 72224), 

we finalized a payment reduction scale 

for PY 2016 and future payment years: 

For every 10 points a facility falls below 

the minimum TPS, the facility would 

receive an additional 0.5 percent 

reduction on its ESRD PPS payments for 

PY 2016 and future payment years, with 

a maximum reduction of 2.0 percent. 

We did not propose any changes to this 

policy for the PY 2021 ESRD QIP. 

Because we are not yet able to 

calculate the performance standards for 

each of the clinical measures, we are 

also not able to calculate a proposed 


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minimum TPS at this time. We will 

propose a minimum TPS, based on data 

from CY 2017 and the first part of CY 

2018, in the CY 2019 ESRD PPS 

proposed rule. 

The comments and our responses to 

the comments on our proposal are set 

forth below. 

Comment: Several commenters 

expressed concerns with the significant 

increase in the number of facilities 

projected to receive a payment 

reduction from PY 2017 to PYs 2020 

and 2021. They found no changes in the 

methodology or measures that would 

explain such a substantial fluctuation. 

One commenter stated that changes in 

the minimum TPS do not predict the 

change that the addition of any single 

measure is unlikely to drive a major 

shift in payment reductions and there 

are no significant changes in the 

measure thresholds that would explain 

the large shift. The commenter therefore 

urged CMS to adjust the QIP payment 

reduction parameters to maintain more 

consistent payment levels from one year 

to the next and asked that CMS work 

with the community to consider a 

policy to adjust the payment reduction 

thresholds to generate more predictable 

payment outcomes. Another commenter 

asked CMS to explain how it 

determined the percentage of penalties 

and why there appears to be such a 

significant change, to provide for greater 

transparency. 

Response: Though we did not propose 

a minimum TPS for PY 2021, we were 

able to provide simulations. We 

estimated the minimum TPS for PY 

2021 for the analyses provided in the 

CY 2018 ESRD PPS proposed rule using 

the available data. For simulations, we 

use the performance standards from the 

prior year to calculate the minimum 

TPS. We do this so that we are 

simulating what is actually done when 

we calculate final sores. However, we 

have found that it does not make a big 

difference which performance standards 

are used to conduct our simulations— 

results do not change drastically. 

Our policies for determining payment 

reductions have not changed from year 

to year and are consistent with the 

methodology described in several of our 

previous rules (see for example, 80 FR 

69046 and 81 FR 77893). We believe the 

increases in simulated payment 

reductions are due to the inclusion of 

the ICH CAHPS and SHR measures in 

the PY 2020 simulation, whereas they 

were not included in the PY 2019 

simulation because data was not 

available at that time. It is also due to 

a decrease in performance for the SRR, 

STrR, VAT, and Hypercalcemia 

measures among a subset of facilities. 

Finally, we note that as the ESRD QIP 

increases the number of measures 

included in the TPS, this also increases 

the chance that a facility will score 

poorly on one or more measures, which 

can result in increased payment 

reductions. 

Final Rule Action: After consideration 

of the comments received, we are 

finalizing our policy for determining 

payment reductions for the PY 2021 

ESRD QIP as proposed. 

C. Miscellaneous Comments 

We received several general 

comments on the ESRD QIP. The 

comments and our responses are set 

forth below. 

Comment: Several commenters 

supported the general goals of the ESRD 

QIP and supported our efforts to 

develop a quality incentive program that 

promotes high quality patient care for 

patients with ESRD. 

Response: We appreciate commenters’ 

support of the ESRD QIP and welcome 

the opportunity to collaborate with the 

community to ensure that the program 

continues to promote high quality 

patient care in renal dialysis facilities. 

Comment: Several commenters 

expressed concerns about the burden 

associated with the program, arguing 

that adding new measures to the 

program only increases the burden for 

providers and for CMS. 

Response: We thank commenters for 

sharing their concerns. We are 

constantly reviewing our program and 

are always looking for ways to balance 

minimizing burden with employing a 

comprehensive quality performance 

assessment. One way in which we try to 

achieve this balance is, when feasible, to 

calculate measures using Medicare 

claims and other administrative data so 

that facilities do not need to report 

additional data. Doing so allows us to 

assess key clinical care outcomes while 

minimizing additional burden on 

dialysis facilities. 

Comment: Several commenters 

encouraged CMS to abstain from 

creating new measures and to instead 

focus on ensuring that the current set of 

measures is evidence-based, promotes 

the delivery of high-quality care, and 

improves patient outcomes. One 

commenter recommended a detailed set 

of criteria for prioritizing ESRD quality 

measures. In addition to more closely 

examining the measures that are added 

to the program, several commenters also 

recommended that CMS look carefully 

at the existing measures to determine 

whether any can be retired, especially as 

they become ‘‘topped out.’’ Commenters 

expressed concern that having too large 

a number of measures in the measure set 

dilutes the impact of individual 

measures. 

Response: We thank commenters for 

sharing their concerns. We are 

constantly re-examining the measures 

that are included in the program to 

ensure that they are capturing a wide 

variety of information about the care 

that patients receive, and we carefully 

consider whether measures should be 

retired from the program using a set of 

criteria previously finalized through 

rulemaking (81 FR 77896 through 

77897). We agree that new measures 

implemented in the QIP should be 

evidence-based, promote the delivery of 

high-quality care, and improve patient 

outcomes. We also consider how our 

measures are weighted within the TPS 

in an effort to ensure that measures with 

greater clinical significance receive 

greater weight and emphasis. 

Additionally, through our measurement 

development process and consideration 

of which measures to include in the 

program, we seek to implement NQFendorsed outcomes-based measures to 

the extent feasible and, as part of that 

analysis, examine the reporting burden 

associated with those measures. 

V. Advancing Health Information 

Exchange 

HHS has a number of initiatives 

designed to improve health and health 

care quality through the adoption of 

health information technology (health 

IT) and nationwide health information 

exchange. Health IT facilitates the 

secure, efficient, and effective sharing 

and use of health-related information 

when and where it is needed, and is an 

important tool for settings across the 

continuum of care, including ESRD 

facilities. Health IT plays an important 

role in developing care plans to manage 

dialysis related care and co-morbid 

conditions for patients with ESRD, as 

well as enabling electronic coordination 

and communication among 

multidisciplinary teams. Such tools can 

promote quality improvement, improve 

efficiencies and reduce unnecessary 

costs. 

HHS continues to make important 

strides promoting the availability of 

technology tools to support providers, 

including those in ESRD settings. For 

instance, in 2015 the Office of the 

National Coordinator for Health 

Information Technology (ONC) released 

a document entitled ‘‘Connecting Health 

and Care for the Nation: A Shared 

Nationwide Interoperability Roadmap 

Version 1.0 (Roadmap) (available at 

https://www.healthit.gov/sites/default/

files/hie-interoperability/nationwideinteroperability-roadmap-final-version1.0.pdf), which describes barriers to 


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11https://www.bls.gov/oes/current/

oes292071.htm. 

12https://www.bls.gov/oes/current/

oes291141.htm. 

interoperability across the current 

health IT landscape, the desired future 

state that the industry believes will be 

necessary to enable a learning health 

system, and a suggested path for moving 

from the current state to the desired 

future state. In the near term, the 

Roadmap focuses on actions that will 

enable a majority of individuals and 

providers across the care continuum to 

send, receive, find and use priority data 

domains at the nationwide level by the 

end of 2017. Moreover, the vision 

described in the Roadmap significantly 

expands the types of electronic health 

information, information sources, and 

information users well beyond clinical 

information derived from electronic 

health records. 

In addition, ONC has released the 

2017 Interoperability Standards 

Advisory (available at https://

www.healthit.gov/standards-advisory), a 

coordinated catalog of standards and 

implementation specifications to enable 

priority health information exchange 

functions. Providers, payers, and 

vendors are encouraged to take these 

health IT standards into account as they 

implement interoperable health 

information exchange across the 

continuum of care. 

We encourage stakeholders to utilize 

health information exchange and 

certified health IT to effectively and 

efficiently help providers improve 

internal care delivery practices, support 

management of care across the 

continuum, enable the reporting of 

electronically specified clinical quality 

measures, and improve efficiencies and 

reduce unnecessary costs. As adoption 

of certified health IT increases and 

interoperability standards continue to 

mature, HHS will seek to reinforce 

standards through relevant policies and 

programs. 

The comments and our responses to 

the comments on this proposal are set 

forth below. 

Comment: Several commenters noted 

the recent focus on leveraging health IT 

to improve provider communication but 

noted that dialysis facilities often do not 

receive discharge information needed 

for continuity of care. Commenters 

indicated that patients often do not 

disclose information about recent 

hospitalizations and dialysis facilities 

face challenges when requesting 

discharge instructions and summaries 

on behalf of the patient. Commenters 

recommended that CMS require 

hospitals, particularly those using 

certified health IT, to send the following 

information to providers involved in the 

patient’s care: (1) The discharge 

instructions and discharge summary 

within 48 hours; (2) pending test results 

within 72 hours of their availability; and 

(3) all other necessary information 

specified in the ‘‘transfer to another 

facility’’ requirements. 

Response: We agree with commenters’ 

support for the use of health IT to 

facilitate improved communication and 

coordination across care settings. We 

appreciate commenters’ concerns that 

discharge information is often not sent 

to dialysis facilities following a 

hospitalization or may not be sent in a 

timely manner for continuity of care. 

While out of scope for this rulemaking, 

several policies currently address this 

issue. Under Medicare’s Conditions of 

Participation in 42 CFR 482.43(d), 

hospitals transferring or referring a 

patient are already required to send 

necessary medical information to 

appropriate facilities and outpatient 

services as needed for follow-up care. 

We also note that eligible hospitals and 

critical access hospitals participating in 

Stage 2 and Stage 3 of the Medicare and 

Medicaid Electronic Health Record 

Incentives Programs are measured on 

their ability to electronically send 

summary of care information for 

transitions of care or referrals to another 

setting or provider of care, which may 

include dialysis facilities. With respect 

to recommendations regarding timing 

requirements for the sending of 

discharge information, we will take 

these comments under consideration as 

we continue to revise and build on these 

policies in the future. 

VI. Collection of Information 

Requirements 

A. Legislative Requirement for 

Solicitation of Comments 

Under the Paperwork Reduction Act 

of 1995, we are required to provide 30- 

day notice in the Federal Register and 

solicit public comment before a 

collection of information requirement is 

submitted to the Office of Management 

and Budget (OMB) for review and 

approval. We solicited comments in the 

notice of proposed rulemaking that 

published in the Federal Register on 

July 5, 2017 (82 FR 31190). For the 

purpose of transparency, we are 

republishing the discussion of the 

information collection requirements. All 

of the requirements discussed in this 

section are already accounted for in 

OMB approved information collection 

requests. 

B. Requirements in Regulation Text 

We are not finalizing changes to the 

regulatory text for the ESRD PPS or for 

AKI dialysis payment in CY 2018. 

C. Additional Information Collection 

Requirements 

This final rule does not impose any 

new information collection 

requirements in the regulation text, as 

specified above. However, this final rule 

does make reference to several 

associated information collections that 

are not discussed in the regulation text 

contained in this document. The 

following is a discussion of these 

information collections. 

1. ESRD QIP 

a. Wage Estimates 

To derive wage estimates, we used 

data from the U.S. Bureau of Labor 

Statistics’ May 2016 National 

Occupational Employment and Wage 

Estimates. In the CY 2016 ESRD PPS 

final rule (80 FR 69069), we stated that 

it was reasonable to assume that 

Medical Records and Health 

Information Technicians, who are 

responsible for organizing and managing 

health information data,11 are the 

individuals tasked with submitting 

measure data to CROWNWeb and NHSN 

for purposes of the data validation 

studies rather than a Registered Nurse, 

whose duties are centered on providing 

and coordinating care for patients.12

The mean hourly wage of a Medical 

Records and Health Information 

Technician is $19.93 per hour. Fringe 

benefit is calculated at 100 percent. 

Therefore, using these assumptions, we 

estimate an hourly labor cost of $39.86 

as the basis of the wage estimates for all 

collection of information calculations in 

the ESRD QIP. We have adjusted these 

employee hourly wage estimates by a 

factor of 100 percent to reflect current 

HHS department-wide guidance on 

estimating the cost of fringe benefits and 

overhead. These are necessarily rough 

adjustments, both because fringe 

benefits and overhead costs vary 

significantly from employer to employer 

and because methods of estimating 

these costs vary widely from study to 

study. Nonetheless, there is no practical 

alternative and we believe that these are 

reasonable estimation methods. 

b. Time Required To Submit Data Based 

on Reporting Requirements for PY 2020 

In the CY 2016 ESRD PPS final rule 

(80 FR 69070), we estimated that the 

time required to submit measure data 

for Payment Year 2019 using 

CROWNWeb is 2.5 minutes per data 

element submitted, which takes into 

account the small percentage of data 


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13We note that the aggregate impact of the PY 

2020 ESRD QIP was included in the CY 2017 ESRD 

PPS final rule (81 FR 77834 through 77969). The 

previously finalized aggregate impact of $113 

million reflects the PY 2020 estimated payment 

reductions and the collection of information 

requirements for the Ultrafiltration Rate Reporting 

Measure, finalized in the CY 2017 ESRD PPS final 

rule (81 FR 77915). 

that is manually reported, as well as the 

human interventions required to modify 

batch submission files such that they 

meet CROWNWeb’s internal data 

validation requirements. Since then, 

these estimates of the time required to 

submit data have not changed and we 

are therefore continuing to rely upon 

them in our burden calculations for PY 

2020 and future payment years. 

c. Data Validation Requirements for the 

PY 2020 ESRD QIP 

Section IV.B.3.g of this final rule 

outlines our data validation policies for 

PY 2020. Specifically, for the 

CROWNWeb validation, we will 

continue randomly sampling records 

from 300 facilities as part of our 

continuing pilot data validation 

program. Each sampled facility will be 

required to produce approximately 10 

records, and the sampled facilities will 

be reimbursed by our validation 

contractor for the costs associated with 

copying and mailing the requested 

records. The burden associated with 

these validation requirements is the 

time and effort necessary to submit the 

requested records to a CMS contractor. 

We estimate that it will take each 

facility approximately 2.5 hours to 

comply with this requirement. If 300 

facilities are asked to submit records, we 

estimate that the total combined annual 

burden for these facilities will be 750 

hours (300 facilities × 2.5 hours). Since 

we anticipate that Medical Records and 

Health Information Technicians or 

similar administrative staff would 

submit this data, we estimate that the 

aggregate cost of the CROWNWeb data 

validation would be approximately 

$29,895 (750 hours × $39.86/hour), or a 

total of approximately $93 ($29,895/300 

facilities) per facility in the sample. The 

burden associated with these 

requirements is captured in an 

information collection request (OMB 

control number 0938–1289). 

Under the continuing data validation 

study for validating data reported to the 

NHSN Dialysis Event Module, we will 

continue using the methodology 

finalized in the CY 2017 ESRD PPS final 

rule, however we are adopting a 

modification to our sampling 

methodology, which we described at 

section IV.B.3.g of this final rule. A CMS 

contractor will send these facilities 

requests for medical records for all 

patients with ‘‘candidate events’’ during 

the evaluation period. Overall, we 

estimate that, on average, quarterly lists 

would include two positive blood 

cultures per facility, but we recognize 

these estimates may vary considerably 

from facility to facility. We estimate that 

it will take each facility approximately 

60 minutes to comply with this 

requirement (30 minutes from each of 

the two quarters in the evaluation 

period). If 35 facilities are asked to 

submit records, we estimate that the 

total combined annual burden for these 

facilities will be 35 hours (35 facilities 

× 1 hour). Since we anticipate that 

Medical Records and Health 

Information Technicians or similar 

administrative staff will submit this 

data, we estimate that the aggregate cost 

of the NHSN data validation will be 

$1,395.10 (35 hours × $39.86/hour), or 

a total of $39.86 ($1,395.10/35 facilities) 

per facility in the sample. The burden 

associated with these requirements is 

captured in an information collection 

request (OMB control number 0938– 

1340). 

To determine the burden associated 

with the collection of information 

requirements, we look at each of these 

elements together: The total number of 

patients nationally, the number of 

elements per patient-year required for 

each measure, the amount of time 

required for data entry, and the 

estimated wage plus benefits of the 

individuals within facilities who are 

most likely to be entering data into 

CROWNWeb. Therefore, based on this 

methodology, in the CY 2017 ESRD PPS 

final rule, we anticipated the burden 

associated with the new collection of 

information requirements was 

approximately $91 million for the PY 

2020 ESRD QIP (81 FR 77957).13 We are 

not changing our data collection 

methodology for PY 2021; however, we 

are replacing two existing measures for 

PY 2021. We believe replacing the two 

existing measures will have a de 

minimis effect on the overall burden 

associated with collection of 

information requirements in PY 2021. 

Accordingly, the PY 2021 burden 

estimate remains the same at $91 

million. The net incremental burden 

from PY 2020 to PY 2021 is $0. 

VII. Economic Analyses 

A. Regulatory Impact Analysis 

1. Introduction 

We have examined the impacts of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulation 

and Regulatory Review (January 18, 

2011), the Regulatory Flexibility Act 

(RFA) (September 19, 1980, Pub. L. 96– 

354), section 1102(b) of the Social 

Security Act, section 202 of the 

Unfunded Mandates Reform Act of 1995 

(March 22, 1995; Pub. L. 104–4), 

Executive Order 13132 on Federalism 

(August 4, 1999), the Congressional 

Review Act (5 U.S.C. 804(2)), and 

Executive Order 13771 on Reducing 

Regulation and Controlling Regulatory 

Costs (January 30, 2017). 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Section 3(f) of Executive Order 

12866 defines a ‘‘significant regulatory 

action’’ as an action that is likely to 

result in a rule: (1) Having an annual 

effect on the economy of $100 million 

or more in any 1 year, or adversely and 

materially affecting a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or state, local or tribal 

governments or communities (also 

referred to as economically significant); 

(2) creating a serious inconsistency or 

otherwise interfering with an action 

taken or planned by another agency; (3) 

materially altering the budgetary 

impacts of entitlement grants, user fees, 

or loan programs or the rights and 

obligations of recipients thereof; or (4) 

raising novel legal or policy issues 

arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in the Executive Order. 

A regulatory impact analysis (RIA) 

must be prepared for major rules with 

economically significant effects ($100 

million or more in any 1 year). This rule 

is not economically significant within 

the meaning of section 3(f)(1) of the 

Executive Order. However, OMB has 

determined that the actions are 

significant within the meaning of 

section 3(f)(4) and 3(f)(3) of the 

Executive Order. Therefore, OMB has 

reviewed this final rule, and the 

Departments have provided the 

following assessment of their impact. 

We solicited comments on the 

regulatory impact analysis provided and 

no comments were received. 

2. Statement of Need 

This rule finalizes a number of 

routine updates and one policy change 

to the ESRD PPS in CY 2018. The 

finalized routine updates include the 

CY 2018 wage index values, the wage 


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index budget-neutrality adjustment 

factor, and outlier payment threshold 

amounts. The finalized policy change 

involves an update to the outlier pricing 

policy. Failure to publish this final rule 

would result in ESRD facilities not 

receiving appropriate payments in CY 

2018 for renal dialysis services 

furnished to ESRD patients. 

This rule finalizes routine updates to 

the payment for renal dialysis services 

furnished by ESRD facilities to 

individuals with AKI. Failure to publish 

this final rule would result in ESRD 

facilities not receiving appropriate 

payments in CY 2018 for renal dialysis 

services furnished to patients with AKI 

in accordance with section 1834(r) of 

the Act. 

This rule finalizes requirements for 

the ESRD QIP, including the adoption of 

a measure set for the PY 2021 program, 

as directed by section 1881(h) of the 

Act. Failure to finalize requirements for 

the PY 2021 ESRD QIP would prevent 

continuation of the ESRD QIP beyond 

PY 2020. In addition, finalizing 

requirements for the PY 2021 ESRD QIP 

provides facilities with more time to 

review and fully understand new 

measures before they are scored on them 

in the ESRD QIP. 

3. Overall Impact 

We estimate that the final revisions to 

the ESRD PPS will result in an increase 

of approximately $60 million in 

payments to ESRD facilities in CY 2018, 

which includes the amount associated 

with updates to the outlier thresholds, 

outlier policy, and updates to the wage 

index. We are estimating approximately 

$20 million that would now be paid to 

ESRD facilities for dialysis treatments 

provided to AKI beneficiaries. 

We note that the impacts for the ESRD 

PPS and AKI payments in the proposed 

rule are substantially different from 

what we are finalizing. The proposed 

ESRD PPS impact was $100 million 

based on the proposed update factor of 

0.7. The final update factor was 

calculated as 0.3 percent, and that 

change resulted in the lower impact 

amount included in this final rule. 

The proposed impact for AKI 

payments was $2 million. The increase 

from the proposed rule to the final rule 

is based on actual preliminary claims 

data that became available after 

publication of the proposed rule, which 

allowed us to make a more accurate 

estimation of the utilization of services. 

For PY 2021, we estimate that the 

final revisions to the ESRD QIP will 

result in a savings of $29 million, which 

includes a zero incremental burden due 

to collection of information 

requirements and $29 million in 

estimated payment reductions across all 

facilities. 

If regulations impose administrative 

costs on private entities, such as the 

time needed to read and interpret this 

final rule, we estimate the cost 

associated with regulatory review. Due 

to the uncertainty involved with 

accurately quantifying the number of 

entities that will review the rule, we 

assume that the total number of unique 

commenters on last year’s proposed rule 

will be the number of reviewers of this 

final rule. We acknowledge that this 

assumption may understate or overstate 

the costs of reviewing this rule. It is 

possible that not all commenters 

reviewed last year’s rule in detail, and 

it is also possible that some reviewers 

chose not to comment on the proposed 

rule. For these reasons we thought that 

the number of past commenters would 

be a fair estimate of the number of 

reviewers of this rule. We requested 

comments on the approach in 

estimating the number of entities which 

will review the proposed rule and no 

comments were received. 

We also recognize that different types 

of entities are in many cases affected by 

mutually exclusive sections of this final 

rule, and therefore for the purposes of 

our estimate we assume that each 

reviewer reads approximately 50 

percent of the rule. We requested 

comments on this assumption, however, 

no comments were received. 

Using the wage information from the 

BLS (https://www.bls.gov/oes/2015/

may/naics4_621100.htm) for medical 

and health service managers (Code 11– 

9111), we estimate that the cost of 

reviewing this rule is $105.00 per hour, 

including overhead and fringe benefits. 

Assuming an average reading speed, we 

estimate that it would take 

approximately 1.25 hours for the staff to 

review half of this final rule. For each 

ESRD facility that reviews the rule, the 

estimated cost is $131.25 (1.25 hours × 

$105.00). Therefore, we estimated that 

the total cost of reviewing this 

regulation is $19,162.50 ($131.25 × 146 

reviewers). 

B. Detailed Economic Analysis 

1. CY 2018 End-Stage Renal Disease 

Prospective Payment System 

a. Effects on ESRD Facilities 

To understand the impact of the 

changes affecting payments to different 

categories of ESRD facilities, it is 

necessary to compare estimated 

payments in CY 2017 to estimated 

payments in CY 2018. To estimate the 

impact among various types of ESRD 

facilities, it is imperative that the 

estimates of payments in CY 2017 and 

CY 2018 contain similar inputs. 

Therefore, we simulated payments only 

for those ESRD facilities for which we 

are able to calculate both current 

payments and new payments. 

For this final rule, we used CY 2016 

data from the Part A and B Common 

Working Files, as of August 4, 2017, as 

a basis for Medicare dialysis treatments 

and payments under the ESRD PPS. We 

updated the 2016 claims to 2017 and 

2018 using various updates. The 

updates to the ESRD PPS base rate are 

described in section II.B.2.d of this final 

rule. Table 14 shows the impact of the 

estimated CY 2018 ESRD payments 

compared to estimated payments to 

ESRD facilities in CY 2017. 

TABLE 14—IMPACT OF CHANGES IN PAYMENT TO ESRD FACILITIES FOR CY 2018 FINAL RULE 1

Facility type Number of 

facilities 

Number of 

treatments 

(in millions) 

Effect of 

2018 changes 

in outlier 

policy 

Effect of 

2018 changes 

in wage 

indexes 

Effect of 

2018 changes 

in payment 

rate update 

Effect of 

total 2018 

proposed 

changes 

(outlier, wage 

indexes, 

routine 

updates to 

the payment 

rate) 

A B C(%) D(%) E(%) F(%) 

All Facilities .............................................. 6,814 45.1 0.2 0.0 0.3 0.5 


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TABLE 14—IMPACT OF CHANGES IN PAYMENT TO ESRD FACILITIES FOR CY 2018 FINAL RULE 1—Continued 

Facility type Number of 

facilities 

Number of 

treatments 

(in millions) 

Effect of 

2018 changes 

in outlier 

policy 

Effect of 

2018 changes 

in wage 

indexes 

Effect of 

2018 changes 

in payment 

rate update 

Effect of 

total 2018 

proposed 

changes 

(outlier, wage 

indexes, 

routine 

updates to 

the payment 

rate) 

A B C(%) D(%) E(%) F(%) 

Type 

Freestanding ..................................... 6,383 42.7 0.2 0.0 0.3 0.5 

Hospital based .................................. 431 2.4 0.3 0.1 0.3 0.7 

Ownership Type 

Large dialysis organization ............... 5,110 34.3 0.2 0.0 0.3 0.4 

Regional chain .................................. 871 5.8 0.2 0.1 0.3 0.6 

Independent ...................................... 487 3.1 0.2 0.0 0.3 0.5 

Hospital based 2 ................................ 341 1.8 0.3 0.1 0.3 0.8 

Unknown ........................................... 5 0.0 0.0 0.2 0.3 0.5 

Geographic Location 

Rural ................................................. 1,243 6.5 0.2 -0.2 0.3 0.3 

Urban ................................................ 5,571 38.6 0.2 0.0 0.3 0.5 

Census Region 

East North Central ............................ 1,109 6.4 0.2 0.0 0.3 0.4 

East South Central ........................... 551 3.4 0.2 ¥0.1 0.3 0.4 

Middle Atlantic .................................. 742 5.5 0.2 0.1 0.3 0.6 

Mountain ........................................... 382 2.2 0.1 ¥0.1 0.3 0.3 

New England .................................... 191 1.5 0.2 ¥0.1 0.3 0.4 

Pacific 3 ............................................. 808 6.4 0.2 0.0 0.3 0.5 

Puerto Rico and Virgin Islands ......... 50 0.4 0.1 0.0 0.3 0.5 

South Atlantic .................................... 1,572 10.5 0.2 ¥0.1 0.3 0.4 

West North Central ........................... 484 2.3 0.2 0.2 0.3 0.7 

West South Central .......................... 925 6.5 0.2 0.2 0.3 0.7 

Facility Size 

Less than 4,000 treatments .............. 1,158 2.0 0.2 0.0 0.3 0.4 

4,000 to 9,999 treatments ................ 2,542 11.7 0.2 ¥0.1 0.3 0.4 

10,000 or more treatments ............... 3,036 31.0 0.2 0.0 0.3 0.5 

Unknown ........................................... 78 0.4 0.3 0.5 0.3 1.1 

Percentage of Pediatric Patients 

Less than 2% ........................................... 6,706 44.7 0.2 0.0 0.3 0.5 

Between 2% and19% ....................... 43 0.3 0.2 0.2 0.3 0.8 

Between 20% and 49% .................... 11 0.0 0.3 ¥0.6 0.3 0.0 

More than 50% ................................. 54 0.1 0.3 0.2 0.3 0.9 

1Sensipar will be paid under the transitional drug add-on payment adjustment for CY 2018. In CY 2016 there was approximately $840 million 

in spending for Sensipar under Part D. 2 Includes hospital-based ESRD facilities not reported to have large dialysis organization or regional chain ownership. 

3 Includes ESRD facilities located in Guam, American Samoa, and the Northern Mariana Island. 

Note: Totals do not necessarily equal the sum of rounded parts, as percentages are multiplicative, not additive. 

Column A of the impact table 

indicates the number of ESRD facilities 

for each impact category and column B 

indicates the number of dialysis 

treatments (in millions). The overall 

effect of the final changes to the outlier 

payment policy described in section 

II.B.2.c of this rule is shown in column 

C. For CY 2018, the impact on all ESRD 

facilities as a result of the changes to the 

outlier payment policy would be a 0.2 

percent increase in estimated payments. 

Nearly all ESRD facilities are 

anticipated to experience a positive 

effect in their estimated CY 2018 

payments as a result of the finalized 

outlier policy changes. 

Column D shows the effect of the 

finalized CY 2018 wage indices and the 

wage index floor of 0.4000. The 

categories of types of facilities in the 

impact table show changes in estimated 

payments ranging from a ¥0.6 percent 

decrease to a 0.5 percent increase due to 

these finalized updates in the wage 

indices. 

Column E shows the effect of the 

finalized CY 2018 ESRD PPS payment 

rate update. The finalized ESRD PPS 

payment rate update is 0.3 percent, 


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which reflects the finalized ESRDB 

market basket percentage increase factor 

for CY 2018 of 1.9 percent, the 1.0 

percent reduction as required by the 

section 1881(b)(14)(F)(i)(I) of the Act, 

and the MFP adjustment of 0.6 percent. 

Column F reflects the overall impact, 

that is, the effects of the finalized outlier 

policy changes, the finalized wage index 

floor, and payment rate update. We 

expect that overall ESRD facilities 

would experience a 0.5 percent increase 

in estimated payments in CY 2018. The 

categories of types of facilities in the 

impact table show impacts ranging from 

0.0 percent to an increase of 1.1 percent 

in their CY 2018 estimated payments. 

b. Effects on Other Providers 

Under the ESRD PPS, Medicare pays 

ESRD facilities a single bundled 

payment for renal dialysis services, 

which may have been separately paid to 

other providers (for example, 

laboratories, durable medical equipment 

suppliers, and pharmacies) by Medicare 

prior to the implementation of the ESRD 

PPS. Therefore, in CY 2018, we estimate 

that the finalized ESRD PPS would have 

zero impact on these other providers. 

c. Effects on the Medicare Program 

We estimate that Medicare spending 

(total Medicare program payments) for 

ESRD facilities in CY 2018 would be 

approximately $9.8 billion. This 

estimate takes into account a projected 

increase in fee-for-service Medicare 

dialysis beneficiary enrollment of 1.6 

percent in CY 2018. 

d. Effects on Medicare Beneficiaries 

Under the ESRD PPS, beneficiaries are 

responsible for paying 20 percent of the 

ESRD PPS payment amount. As a result 

of the projected 0.5 percent overall 

increase in the finalized CY 2018 ESRD 

PPS payment amounts, we estimate that 

there will be an increase in beneficiary 

co-insurance payments of 0.5 percent in 

CY 2018, which translates to 

approximately $10 million a figure 

which is rounded to the nearest $10 

million. The rounded $10 million is 

based on 20 percent of CY 2018 

estimated total payment increase of $60 

million. There are roughly 400,000 

ESRD beneficiaries, so this increase 

represents a $25 increase per 

beneficiary. 

e. Alternatives Considered 

In section II.B.1.d of this final rule, we 

finalized a policy to price eligible 

outlier drugs and biologicals that were 

or would have been, prior to January 1, 

2011, separately billable under 

Medicare Part B using any of the 

methodologies available under section 

1847A of the Act. We considered not 

making any change to the outlier pricing 

policy and also potentially requiring 

manufacturers to submit ASP data in 

order to be eligible for outlier payment 

or payment under the TDAPA. 

2. CY 2018 Payment for Renal Dialysis 

Services Furnished to Individuals With 

AKI 

a. Effects on ESRD Facilities 

We analyzed CY 2017 hospital 

outpatient claims to identify the number 

of treatments furnished historically for 

AKI patients. We identified 32,433 AKI 

dialysis treatments that were furnished 

in the first four months of CY 2017. We 

then inflated the 32,433 treatments to 

account for the whole year of 2017. We 

further inflated to 2018 values using 

estimated population growth for fee-for 

service non-ESRD beneficiaries. This 

results in an estimated 98,900 

treatments that would now be paid to 

ESRD facilities for furnishing dialysis to 

beneficiaries with AKI. Using the CY 

2018 final ESRD base rate of $232.37 

and an average wage index multiplier, 

we are estimating approximately $20 

million that would now be paid to ESRD 

facilities for dialysis treatments 

provided to AKI beneficiaries. 

Ordinarily, we would provide a table 

showing the impact of this provision on 

various categories of ESRD facilities. 

However, because we have no way to 

project how many patients with AKI 

requiring dialysis will choose to have 

dialysis treatments at an ESRD facility, 

we are unable to provide a table at this 

time. 

b. Effects on Other Providers 

Under section 1834(r) of the Act, as 

added by section 808(b) of TPEA, we are 

finalizing a payment rate for renal 

dialysis services furnished by ESRD 

facilities to beneficiaries with AKI. The 

only two Medicare providers authorized 

to provide these outpatient renal 

dialysis services are hospital outpatient 

departments and ESRD facilities. The 

decision about where the renal dialysis 

services are furnished is made by the 

patient and their physician. Therefore, 

this provision will have zero impact on 

other Medicare providers. 

c. Effects on the Medicare Program 

We anticipate paying an estimated 

$20 million to ESRD facilities in CY 

2018 as a result of AKI patients 

receiving renal dialysis services in the 

ESRD facility. 

d. Effects on Medicare Beneficiaries 

Currently, beneficiaries have a 20 

percent coinsurance obligation when 

they receive AKI dialysis in the hospital 

outpatient setting. When these services 

are furnished in an ESRD facility, the 

patients would continue to be 

responsible for a 20 percent 

coinsurance. Because the AKI dialysis 

payment rate paid to ESRD facilities is 

lower than the outpatient prospective 

payment system’s payment amount, we 

would expect beneficiaries to pay $50 

less coinsurance when AKI dialysis is 

furnished by ESRD facilities. 

e. Alternatives Considered 

As we discussed in the CY 2017 ESRD 

PPS proposed rule (81 FR 42870), we 

considered adjusting the AKI payment 

rate by including the ESRD PPS casemix adjustments, and other adjustments 

at section 1881(b)(14)(D) of the Act, as 

well as not paying separately for AKI 

specific drugs and laboratory tests. We 

ultimately determined that treatment for 

AKI is substantially different from 

treatment for ESRD and the case-mix 

adjustments applied to ESRD patients 

may not be applicable to AKI patients 

and as such, including those policies 

and adjustment would be inappropriate. 

3. ESRD QIP 

a. Effects of the PY 2021 ESRD QIP on 

ESRD Facilities 

The ESRD QIP provisions are 

intended to prevent possible reductions 

in the quality of renal dialysis services 

provided to beneficiaries. The 

methodology that we are using to 

determine a facility’s TPS for the PY 

2021 ESRD QIP is described in section 

IV.B.4.g of this final rule. Any 

reductions in ESRD PPS payments as a 

result of a facility’s performance under 

the PY 2021 ESRD QIP would apply to 

ESRD PPS payments made to the facility 

in CY 2021. 

For the PY 2021 ESRD QIP, we 

estimate that, of the 6,453 dialysis 

facilities (including those not receiving 

a TPS) enrolled in Medicare, 

approximately 40 percent or 2,551 of the 

facilities would receive a payment 

reduction in PY 2021. The total 

payment reduction for all of the 2,551 

facilities expected to receive a reduction 

is approximately $29 million 

($29,017,218). Facilities that do not 

receive a TPS are not eligible for a 

payment reduction. 

Table 15 shows the overall estimated 

distribution of payment reductions 

resulting from the PY 2021 ESRD QIP. 


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50794 Federal Register / Vol. 82, No. 210 / Wednesday, November 1, 2017 / Rules and Regulations 

TABLE 15—ESTIMATED DISTRIBUTION OF PY 2021 ESRD QIP PAYMENT REDUCTIONS

Payment Reduction 

(%) 

Number of 

facilities 

Percent of 

facilities 

0.0 ............................................................................................................................................ 3,469 57.6 

0.5 ............................................................................................................................................ 1,507 25.0 

1.0 ............................................................................................................................................ 754 12.5 

1.5 ............................................................................................................................................ 228 3.8 

2.0 ............................................................................................................................................ 62 1.0 

Note: This table excludes 433 facilities that we estimate will not receive a payment reduction because they will not report enough data to receive a TPS. 

To estimate whether or not a facility 

would receive a payment reduction in 

PY 2021, we scored each facility on 

achievement and improvement on 

several measures we have previously 

finalized and for which there were 

available data from CROWNWeb and 

Medicare claims. Measures used for the 

simulation are shown in Table 16. 

TABLE 16—DATA USED TO ESTIMATE PY 2021 ESRD QIP PAYMENT REDUCTIONS

Measure 

Period of time used to 

calculate achievement 

thresholds, performance 

standards, benchmarks, 

and improvement 

thresholds 

Performance period 

VAT 

Standardized Fistula Ratio ..................................................................................................... Jan 2014–Dec 2014 ...... Jan 2015–Dec 2015. 

%Catheter ............................................................................................................................... Jan 2014–Dec 2014 ...... Jan 2015–Dec 2015. 

Kt/V Dialysis Adequacy Comprehensive ................................................................................ Jan 2014–Dec 2014 ...... Jan 2015–Dec 2015. 

Hypercalcemia ........................................................................................................................ Jan 2014–Dec 2014 ...... Jan 2015–Dec 2015. 

STrR ........................................................................................................................................ Jan 2014–Dec 2014 ...... Jan 2014–Dec 2014. 

ICH CAHPS Survey ................................................................................................................ Jan 2015–Dec 2015 ...... Jan 2015–Dec 2015. 

SRR ........................................................................................................................................ Jan 2014–Dec 2014 ...... Jan 2015–Dec 2015. 

NHSN BSI ............................................................................................................................... Jan 2014–Dec 2014 ...... Jan 2015–Dec 2015. 

SHR ........................................................................................................................................ Jan 2014–Dec 2014 ...... Jan 2015–Dec 2015. 

For all measures except STrR and 

SHR, clinical measure topic areas with 

less than 11 cases for a facility were not 

included in that facility’s TPS. For SHR 

and STrR, facilities were required to 

have at least 5 and 10 patient-years at 

risk, respectively, in order to be 

included in the facility’s TPS. Each 

facility’s TPS was compared to an 

estimated minimum TPS and an 

estimated payment reduction table that 

were consistent with the final policies 

outlined in section IV.B.4.g of this final 

rule. Facility reporting measure scores 

were estimated using available data 

from CY 2014 and 2015. Facilities were 

required to have a score on at least one 

clinical and one reporting measure to 

receive a TPS. 

To estimate the total payment 

reductions in PY 2021 for each facility 

resulting from this proposed rule, we 

multiplied the total Medicare payments 

to the facility during the 1-year period 

between January 2015 and December 

2015 by the facility’s estimated payment 

reduction percentage expected under 

the ESRD QIP, yielding a total payment 

reduction amount for each facility: Total 

ESRD payment in January 2015 through 

December 2015 times the estimated 

payment reduction percentage. 

Table 17 shows the estimated impact 

of the finalized ESRD QIP payment 

reductions to all facilities for PY 2021. 

The table details the distribution of 

facilities by facility size (both among 

facilities considered to be small entities 

and by number of treatments per 

facility), geography (both urban/rural 

and by region), and by facility type 

(hospital based/freestanding facilities). 

Given that the time periods used for 

these calculations differ from those we 

are using for the PY 2021 ESRD QIP, the 

actual impact of the PY 2021 ESRD QIP 

may vary significantly from the values 

provided here. 

TABLE 17—ESTIMATED IMPACT OF QIP PAYMENT REDUCTIONS TO FACILITIES FOR PY 2021 

Number of 

facilities 

Number of 

treatments 

2015 

(in millions) 

Number of 

facilities 

with QIP 

score 

Number of 

facilities 

expected to 

receive a 

payment 

reduction 

Payment 

reduction 

(percent 

change in 

total 

ESRD 

payments) 

(%) 

All Facilities .......................................................................... 6,453 40.0 6,020 2,551 ¥0.32 

Facility Type: 

Freestanding ................................................................. 6,022 37.8 5,852 2,502 ¥0.33 

Hospital-based .............................................................. 431 2.2 168 49 ¥0.20 


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TABLE 17—ESTIMATED IMPACT OF QIP PAYMENT REDUCTIONS TO FACILITIES FOR PY 2021—Continued 

Number of 

facilities 

Number of 

treatments 

2015 

(in millions) 

Number of 

facilities 

with QIP 

score 

Number of 

facilities 

expected to 

receive a 

payment 

reduction 

Payment 

reduction 

(percent 

change in 

total 

ESRD 

payments) 

(%) 

Ownership Type: 

Large Dialysis ............................................................... 4,541 28.6 4,432 1,910 ¥0.32 

Regional Chain ............................................................. 989 6.2 929 316 ¥0.26 

Independent .................................................................. 568 3.5 536 282 ¥0.50 

Hospital-based (non-chain) ........................................... 354 1.8 123 43 ¥0.25 

Unknown ....................................................................... 1 0.0 0 0 ........................

Facility Size: 

Large Entities ................................................................ 5,530 34.8 5,361 2,226 ¥0.31 

Small Entities 1 .............................................................. 922 5.2 659 325 ¥0.45 

Unknown ....................................................................... 1 0.0 0 0 ........................

Rural Status: 

(1) Yes .......................................................................... 1,260 6.0 1,146 325 ¥0.19 

(2) No ............................................................................ 5,193 34.0 4,874 2,226 ¥0.35 

Census Region: 

Northeast ...................................................................... 879 6.2 786 340 ¥0.32 

Midwest ......................................................................... 1,511 7.6 1,356 557 ¥0.31 

South ............................................................................. 2,852 18.2 2,743 1,276 ¥0.36 

West .............................................................................. 1,142 7.6 1,084 341 ¥0.22 

US Territories 2 ............................................................. 69 0.4 51 37 ¥0.56 

Census Division: 

Unknown ....................................................................... 1 0.0 0 0 ........................

East North Central ........................................................ 1,045 5.5 951 443 ¥0.36 

East South Central ....................................................... 522 3.0 515 202 ¥0.30 

Middle Atlantic .............................................................. 702 4.9 623 300 ¥0.37 

Mountain ....................................................................... 368 2.0 336 86 ¥0.17 

New England ................................................................ 182 1.3 164 40 ¥0.14 

Pacific ........................................................................... 782 5.7 753 257 ¥0.24 

South Atlantic ................................................................ 1,458 9.4 1,388 719 ¥0.41 

West North Central ....................................................... 469 2.1 406 115 ¥0.19 

West South Central ...................................................... 875 5.8 841 355 ¥0.33 

US Territories 2 ............................................................. 49 0.3 43 34 ¥0.62 

Facility Size (# of total treatments) 

Less than 4,000 treatments .......................................... 1,211 2.7 1,006 357 ¥0.30 

4,000–9,999 treatments ................................................ 2,401 11.0 2,324 880 ¥0.29 

Over 10,000 treatments ................................................ 2,680 26.1 2,603 1,256 ¥0.35 

Unknown ....................................................................... 161 0.2 87 58 ¥0.66 

b. Effects on Other Providers 

The ESRD QIP is applicable to 

dialysis facilities. We are aware that 

several of our measures finalized for PY 

2021 may impact other Medicare 

providers. For example, with the 

introduction of the Standardized 

Readmission Ratio Clinical measure in 

PY 2017 and the Standardized 

Hospitalization Ratio Clinical Measure 

in PY 2020, we anticipate that hospitals 

may experience financial savings as 

dialysis facilities work to reduce the 

number of unplanned readmissions and 

hospitalizations. We are actively 

exploring various methods to assess the 

impact these measures have on 

hospitals and other types of providers 

and facilities. 

c. Effects on the Medicare Program 

For PY 2021, we estimate that ESRD 

QIP will contribute approximately $29 

million ($29,017,218) in Medicare 

savings. For comparison, Table 18 

shows the payment reductions achieved 

by the ESRD QIP program for PYs 2016 

through 2021 totals nearly $115 million 

($114,736,974). 

TABLE 18—PAYMENT REDUCTIONS

PAYMENT YEAR 2016 THROUGH 2021 

Payment year Estimated payment reductions 

(citation) 

PY 2021 ....... $29,017,218. 

PY 2020 ....... $31,581,441 (81 FR 77960). 

PY 2019 ....... $15,470,309 (80 FR 69074). 

PY 2018 ....... $11,576,214 (79 FR 66257). 

PY 2017 ....... $11,954,631 (79 FR 66255). 

PY 2016 ....... $15,137,161 (78 FR 72247). 

d. Effects on Medicare Beneficiaries 

The ESRD QIP is applicable to 

dialysis facilities. Since the program’s 

inception, there is evidence of improved 

performance on ESRD QIP measures. As 

we stated in the CY 2017 ESRD PPS 

final rule, one objective measure we can 

examine to demonstrate the improved 

quality of care over time is the 

improvement of performance standards 

(81 FR 77873). As the ESRD QIP has 

refined its measure set and as facilities 

have gained experience with the 

measures included in the program, 

performance standards have generally 

continued to rise. We view this as 

evidence that facility performance (and 

therefore the quality of care provided to 

Medicare beneficiaries) is objectively 

improving. To date we have been unable 

to examine the impact of the ESRD QIP 

on Medicare beneficiaries including the 

financial impact of the program or the 

impact on the health outcomes of 

beneficiaries. However, in future years 

we are interested in examining these 

impacts through the analysis of 

available data from our existing 

measures. 


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14Flythe JE, Kimmel SE, Brunelli SM. Rapid fluid 

removal during dialysis is associated with 

cardiovascular morbidity and mortality. Kidney 

International (2011) Jan; 79(2):250–7. PMID: 

20927040. 

Flythe JE, Curhan GC, Brunelli SM. Disentangling 

the Ultrafiltration Rate–Mortality Association: The 

Respective Roles of Session Length and Weight 

Gain. Clin J Am Soc Nephrol. 2013 Jul;8(7):1151– 

61. 

Movilli, Ezio, et al. ‘‘Association between high 

ultrafiltration rates and mortality in uraemic 

patients on regular haemodialysis. A 5-year 

prospective observational multicenter study.’’ 

Nephrology Dialysis Transplantation 22.12(2007): 

3547–3552. 

e. Alternatives Considered 

In an effort to reduce administrative 

and financial burden on dialysis 

facilities, we considered the burden 

associated with each of the measures 

included in the ESRD QIP to determine 

whether any of the measures could 

feasibly be removed from the program at 

this time. The Ultrafiltration Rate 

Reporting measure, finalized for 

inclusion in the program beginning with 

PY 2020, adds a significant burden to 

facilities because of the number of data 

elements required to be entered for each 

patient treated by the facility. We 

carefully considered whether this 

measure could be removed from the 

program in an effort to reduce burden 

for facilities, but as we noted in the CY 

2017 ESRD PPS final rule, this measure 

is extremely valuable from a clinical 

perspective. Studies 14 suggest that 

higher ultrafiltration rates are associated 

with higher mortality and higher odds 

of an ‘‘unstable’’ dialysis session, and 

that rapid rates of fluid removal at 

dialysis can precipitate events such as 

intradialytic hypotension, subclinical, 

yet significantly decreased organ 

perfusion, and in some cases myocardial 

damage and heart failure (81 FR 77912). 

Therefore we continue to believe that, 

despite the high burden associated with 

this measure, it is clinically valuable 

and important to continue including 

this measure in the ESRD QIP’s measure 

set and that the clinical benefits 

outweigh the burden associated with the 

measure. 

C. Accounting Statement 

As required by OMB Circular A–4 

(available at http:// 

www.whitehouse.gov/omb/ 

circulars_a004_a-4), in Table 19 below, 

we have prepared an accounting 

statement showing the classification of 

the transfers and costs associated with 

the various provisions of this final rule. 

TABLE 19—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED TRANSFERS AND COSTS/SAVINGS

Category Transfers 

ESRD PPS and AKI 

Annualized Monetized Transfers .............................................................. $70 million. 

From Whom to Whom .............................................................................. Federal government to ESRD providers. 

Increased Beneficiary Co-insurance Payments ....................................... $10 million. 

From Whom to Whom .............................................................................. Beneficiaries to ESRD providers.

ESRD QIP for PY 2021 

Annualized Monetized Transfers .............................................................. $-29 million. 

From Whom to Whom .............................................................................. Federal government to ESRD providers (payment reductions). 

Category Costs 

Annualized Monetized ESRD Provider Costs .......................................... $0. 

In accordance with the provisions of 

Executive Order 12866, this final rule 

was reviewed by the Office of 

Management and Budget. 

VIII. Regulatory Flexibility Act 

Analysis 

The Regulatory Flexibility Act 

(September 19, 1980, Pub. L. 96–354) 

(RFA) requires agencies to analyze 

options for regulatory relief of small 

entities, if a rule has a significant impact 

on a substantial number of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. 

Approximately 12 percent of ESRD 

dialysis facilities are considered small 

entities according to the Small Business 

Administration’s (SBA) size standards, 

which classifies small businesses as 

those dialysis facilities having total 

revenues of less than $38.5 million in 

any 1 year. Individuals and States are 

not included in the definitions of a 

small entity. For more information on 

SBA’s size standards, see the Small 

Business Administration’s Web site at 

http://www.sba.gov/content/smallbusiness-size-standards (Kidney 

Dialysis Centers are listed as 621492 

with a size standard of $38.5 million). 

We do not believe ESRD facilities are 

operated by small government entities 

such as counties or towns with 

populations of 50,000 or less, and 

therefore, they are not enumerated or 

included in this estimated RFA analysis. 

Individuals and States are not included 

in the definition of a small entity. 

For purposes of the RFA, we estimate 

that approximately 12 percent of ESRD 

facilities are small entities as that term 

is used in the RFA (which includes 

small businesses, nonprofit 

organizations, and small governmental 

jurisdictions). This amount is based on 

the number of ESRD facilities shown in 

the ownership category in Table 14. 

Using the definitions in this ownership 

category, we consider the 487 facilities 

that are independent and the 341 

facilities that are shown as hospitalbased to be small entities. The ESRD 

facilities that are owned and operated 

by large dialysis organizations (LDOs) 

and regional chains will have total 

revenues of more than $38.5 million in 

any year when the total revenues for all 

locations are combined for each 

business (individual LDO or regional 

chain), and are not, therefore, included 

as small entities. 

For the ESRD PPS updates finalized 

in this rule, a hospital-based ESRD 

facility (as defined by type of 

ownership, not by type of dialysis 

facility) is estimated to receive a 0.8 

percent increase in payments for CY 

2018. An independent facility (as 

defined by ownership type) is also 

estimated to receive a 0.5 percent 

increase in payments for CY 2018. 


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For AKI dialysis, we are unable to 

estimate whether patients will go to 

ESRD facilities, however, we have 

estimated there is a potential for $20 

million in payment for AKI dialysis 

treatments that could potentially be 

furnished in ESRD facilities. 

We estimate that of the 2,551 ESRD 

facilities expected to receive a payment 

reduction in the PY 2021 ESRD QIP, 325 

are ESRD small entity facilities. We 

present these findings in Table 15 

(‘‘Estimated Distribution of PY 2021 

ESRD QIP Payment Reductions’’) and 

Table 17 (‘‘Impact of Proposed QIP 

Payment Reductions to ESRD Facilities 

for PY 2021’’) above. We estimate that 

the payment reductions will average 

approximately $11,375 per facility 

across the 2,551 facilities receiving a 

payment reduction, and $13,885 for 

each small entity facility. Using our 

estimates of facility performance, we 

also estimated the impact of payment 

reductions on ESRD small entity 

facilities by comparing the total 

estimated payment reductions for 922 

small entity facilities with the aggregate 

ESRD payments to all small entity 

facilities. We estimate that there are a 

total of 922 small entity facilities, and 

that the aggregate ESRD PPS payments 

to these facilities would decrease 0.45 

percent in PY 2021. 

The Secretary has determined that 

this final rule will not have a significant 

economic impact on a substantial 

number of small entities. The economic 

impact assessment is based on estimated 

Medicare payments (revenues) and 

HHS’s practice in interpreting the RFA 

is to consider effects economically 

‘‘significant’’ only if greater than 5 

percent of providers reach a threshold of 

3 to 5 percent or more of total revenue 

or total costs. 

In addition, section 1102(b) of the Act 

requires us to prepare a regulatory 

impact analysis if a rule may have a 

significant impact on the operations of 

a substantial number of small rural 

hospitals. Any such regulatory impact 

analysis must 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 100 

beds. We do not believe this final rule 

will have a significant impact on 

operations of a substantial number of 

small rural hospitals because most 

dialysis facilities are freestanding. 

While there are 132 rural hospital-based 

dialysis facilities, we do not know how 

many of them are based at hospitals 

with fewer than 100 beds. However, 

overall, the 132 rural hospital-based 

dialysis facilities will experience an 

estimated 0.4 percent increase in 

payments. As a result, this final rule is 

not estimated to have a significant 

impact on small rural hospitals. 

Therefore, the Secretary has 

determined that this final rule will not 

have a significant impact on the 

operations of a substantial number of 

small rural hospitals. 

IX. Unfunded Mandates Reform Act 

Analysis 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

also requires that agencies assess 

anticipated costs and benefits before 

issuing any rule whose mandates 

require spending in any 1 year of $100 

million in 1995 dollars, updated 

annually for inflation. In 2017, that is 

approximately $148 million. This final 

rule does not include any mandates that 

would impose spending costs on State, 

local, or Tribal governments in the 

aggregate, or by the private sector, of 

$148 million. Moreover, HHS interprets 

UMRA as applying only to unfunded 

mandates. We do not interpret Medicare 

payment rules as being unfunded 

mandates, but simply as conditions for 

the receipt of payments from the Federal 

government for providing services that 

meet federal standards. This 

interpretation applies whether the 

facilities or providers are private, State, 

local, or tribal. 

X. Federalism Analysis 

Executive Order 13132 on Federalism 

(August 4, 1999) establishes certain 

requirements that an agency must meet 

when it promulgates a proposed rule 

(and subsequent final rule) that imposes 

substantial direct requirement costs on 

State and local governments, preempts 

State law, or otherwise has Federalism 

implications. We have reviewed this 

final rule under the threshold criteria of 

Executive Order 13132, Federalism, and 

have determined that it will not have 

substantial direct effects on the rights, 

roles, and responsibilities of States, 

local or Tribal governments. 

XI. Reducing Regulation and 

Controlling Regulatory Costs 

Executive Order 13771, entitled 

Reducing Regulation and Controlling 

Regulatory Costs (82 FR 9339), was 

issued on January 30, 2017. This final 

rule is not expected to be subject to the 

requirements of Executive Order 13771 

because it is expected to result in no 

more than de minimis costs. 

XII. Congressional Review Act 

This final rule is subject to the 

Congressional Review Act provisions of 

the Small Business Regulatory 

Enforcement Fairness Act of 1996 (5 

U.S.C. 801 et seq.) and has been 

transmitted to the Congress and the 

Comptroller General for review. 

XIII. Files Available to the Public via 

the Internet 

The Addenda for the annual ESRD 

PPS proposed and final rulemakings 

will no longer appear in the Federal 

Register. Instead, the Addenda will be 

available only through the Internet and 

is posted on the CMS Web site at http:// 

www.cms.gov/ESRDPayment/PAY/ 

list.asp. In addition to the Addenda, 

limited data set (LDS) files are available 

for purchase at http://www.cms.gov/ 

Research-Statistics-Data-and-Systems/ 

Files-for-Order/LimitedDataSets/ 

EndStageRenalDiseaseSystemFile.html. 

Readers who experience any problems 

accessing the Addenda or LDS files, 

should contact ESRDPayment@

cms.hhs.gov. 

Dated: October 23, 2017. 

Seema Verma, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Dated: October 24, 2017. 

Eric D. Hargan, 

Acting Secretary, Department of Health and 

Human Services. 

[FR Doc. 2017–23671 Filed 10–27–17; 4:15 pm] 

BILLING CODE 4120–01–P 


sradovich on DSK3GMQ082PROD with RULES2