[Federal Register Volume 82, Number 210 (Wednesday, November 1, 2017)]
[Rules and Regulations]
[Pages 50738-50797]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-23671]



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Vol. 82

Wednesday,

No. 210

November 1, 2017

Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 413 and 414





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; 
Final Rule

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

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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.

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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: 
    <a href="/cdn-cgi/l/email-protection#541107061004352d39313a20143739277a3c3c277a333b22"><span class="__cf_email__" data-cfemail="541107061004352d39313a20143739277a3c3c277a333b22">[email protected]</span></a>, 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 <a href="/cdn-cgi/l/email-protection#753026273125140c18101b01351618065b1d1d065b121a03"><span class="__cf_email__" data-cfemail="2a6f79786e7a4b53474f445e6a49475904424259044d455c">[email protected]</span></a>.

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,

[[Page 50740]]

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
    <bullet> 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 x 1.003 x 
1.000531 = $232.37).
    <bullet> 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.
    <bullet> 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.
    <bullet> 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:
    <bullet> 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.
    <bullet> 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.
    <bullet> 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 NQF-endorsed 
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.
    <bullet> 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. 
Hospital-based 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 ESRD-related 
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 oral-only 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, per-treatment 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 
(Sec. Sec.  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 (Sec.  413.232). The second adjustment 
reflects differences in area wage levels developed from Core Based 
Statistical Areas (CBSAs) (Sec.  413.231). The third payment adjustment 
accounts for ESRD facilities furnishing renal dialysis services in a 
rural area (Sec.  413.233).
    The ESRD PPS allows for a training add-on for home and self-
dialysis modalities (Sec.  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 (Sec.  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

[[Page 50742]]

which there is not an existing ESRD PPS functional category (Sec.  
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 (Sec.  
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 Sec.  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 Sec.  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-Fee-for-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-and-Guidance/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 ESRD-related 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 ESRD-related 
drugs and biologicals under the

[[Page 50743]]

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 Sec.  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 WAC-based 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 ASP-based 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

[[Page 50744]]

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 (Sec.  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

[[Page 50745]]

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.

[[Page 50746]]

    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 labor-related 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 pre-floor 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-Fee-for-Service-Payment/ESRDpayment/End-Stage-Renal-Disease-ESRD-Payment-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

[[Page 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) ESRD-related 
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

[[Page 50748]]

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 Sec.  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 longer-acting 
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 inflation-adjusted to 
reflect projected 2018 prices for outlier services.

[[Page 50749]]



               TABLE 1--Outlier Policy: Impact of Using Updated Data To Define the Outlier Policy
----------------------------------------------------------------------------------------------------------------
                                                   Column I final outlier policy  Column II final outlier policy
                                                    for CY 2017 (based on 2015      for CY 2018 (based on 2016
                                                   data, price inflated to 2017)   data, price inflated to 2018)
                                                                 *               -------------------------------
                                                 --------------------------------
                                                     Age < 18        Age >= 18       Age < 18        Age >= 18
----------------------------------------------------------------------------------------------------------------
Average outlier services MAP amount per                   $38.77          $47.00          $37.41          $44.27
 treatment......................................
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             $68.49          $82.92          $47.79          $77.54
 predicted MAP to determine the outlier
 threshold......................................
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 Sec.  
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 Sec.  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 longer-acting 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

[[Page 50750]]

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 non-profit 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,

[[Page 50751]]

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 Sec.  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:
    <bullet> 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 x 1.000531 = $231.67).
    <bullet> 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 x 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 self-referral 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 self-referral 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 Sec.  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/Regulations-and-Guidance/Guidance/Transmittals/2017Downloads/R1889OTN.pdf, the methodology used to calculate the per-
treatment 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 Sec.  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

[[Page 50752]]

law at Sec.  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 Sec.  
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 long-standing 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 time-consuming 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

[[Page 50753]]

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 self-referral 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

[[Page 50754]]

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 Sec.  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 non-renal 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 per-treatment 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

[[Page 50755]]

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 de-identified 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

[[Page 50756]]

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.

[[Page 50757]]

    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 value-based 
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\
---------------------------------------------------------------------------

    \1\ Office 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-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
    \2\ Office 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-congress-social-risk-factors-and-performance-under-medicares-value-based-purchasing-programs.
    \3\ National Academies of Sciences, Engineering, and Medicine. 
2017. Accounting for social risk factors in Medicare payment. 
Washington, DC: The National Academies Press.
---------------------------------------------------------------------------

    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

[[Page 50758]]

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

[[Page 50759]]

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 self-
reporting 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 patient-level 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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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

[[Page 50760]]

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        11 qualifying patients......  N/A......................................  11-25 qualifying patients.
 (Clinical).
Vascular Access Type: Fistula         11 qualifying patients......  N/A......................................  11-25 qualifying patients.
 (Clinical).
Hypercalcemia (Clinical)............  11 qualifying patients......  N/A......................................  11-25 qualifying patients.
NHSN Bloodstream Infection            11 qualifying patients......  On or before January 1, 2018.............  11-25 qualifying patients.
 (Clinical).
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    On or before January 1, 2018.............  N/A.
                                       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.
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    11 qualifying patients......  Before July 1, 2018......................  N/A.
 (Reporting).
Pain Assessment and Follow-Up         11 qualifying patients......  Before July 1, 2017......................  N/A.
 (Reporting).
NHSN Healthcare Personnel Influenza   N/A.........................  Before January 1, 2018...................  N/A.
 Vaccination (Reporting).
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

[[Page 50761]]

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        11 qualifying patients......  N/A......................................  11-25 qualifying patients.
 (Clinical).
Vascular Access Type: Fistula         11 qualifying patients......  N/A......................................  11-25 qualifying patients.
 (Clinical).
Hypercalcemia (Clinical)............  11 qualifying patients......  N/A......................................  11-25 qualifying patients.
NHSN Bloodstream Infection            11 qualifying patients......  Before January 1, 2018...................  11-25 qualifying patients.
 (Clinical).
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    Before January 1, 2018...................  N/A.
                                       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.
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    11 qualifying patients......  Before July 1, 2018......................  N/A.
 (Reporting).
Pain Assessment and Follow-Up         11 qualifying patients......  Before July 1, 2018......................  N/A.
 (Reporting).
NHSN Healthcare Personnel Influenza   N/A.........................  Before January 1, 2018...................  N/A.
 Vaccination (Reporting).
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

[[Page 50762]]

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:
    <bullet> Facility CCN.
    <bullet> Facility name.
    <bullet> CEO name and contact information.
    <bullet> Additional contact name and contact information.
    <bullet> Reason for requesting an exception.
    <bullet> Dates affected.
    <bullet> Date facility will start submitting data again, with 
justification for this date.
    <bullet> 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 work-
around), 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.

[[Page 50763]]

    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.
---------------------------------------------------------------------------

    \5\ To 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.
---------------------------------------------------------------------------

    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 end-
stage 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, In-Center 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

[[Page 50764]]

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
----------------------------------------------------------------------------------------------------------------
                                                                    Achievement                     Performance
                             Measure                                 threshold       Benchmark       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
----------------------------------------------------------------------------------------------------------------
                                                                    Achievement                     Performance
                             Measure                                 threshold       Benchmark       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%

[[Page 50765]]

 
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
----------------------------------------------------------------------------------------------------------------
                                     Measure weight in the
    Measures/measure topics by       clinical domain score       Measure weight as percent of TPS  (updated)
             subdomain                     (percent)
----------------------------------------------------------------------------------------------------------------
Patient and Family Engagement/Care  40.....................  ...................................................
 Coordination Subdomain.
    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        75% (of TPS)
                                     Measure Domain).
----------------------------------------------------------------------------------------------------------------
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
------------------------------------------------------------------------
                                                               Reduction
                   Total performance score                        (%)
------------------------------------------------------------------------
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

[[Page 50766]]

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
------------------------------------------------------------------------
                                                               Reduction
                   Total performance score                        (%)
------------------------------------------------------------------------
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 line-associated BSI 
measure, the catheter-associated 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 over-represented 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.

[[Page 50767]]

    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 cost-efficient.
    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 high-level 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: Long-Term Catheter Rate Clinical Measure beginning 
with PY 2021. The measures being continued in PY 2021 are summarized in 
Table 8.

[[Page 50768]]



      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/Quality-Initiatives-Patient-Assessment-Instruments/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.

[[Page 50769]]

    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 ESRD-specific 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).

[[Page 50770]]

    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-Assessment-Instruments/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 
(SD<INF>truncated/</INF>Mean<INF>truncated</INF>). 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      Statistically
              Measure                   N       75th/25th    90th/10th    Std error     indistin-     Truncated    Truncated       TCV       TCV <=0.10
                                                percentile   percentile                 guishable        mean          SD
--------------------------------------------------------------------------------------------------------------------------------------------------------
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                 3349         71.8         77.1        0.159            No          65.7         7.11         0.11           No
 Communication and Caring (%).....
ICH-CAHPS: Quality of Dialysis           3349         66.2         71.2        0.134            No          60.9         6.20         0.10           No
 Center Care and Operations (%)...
ICH-CAHPS: Providing Information         3349         82.4         85.6        0.101            No          78.4         4.61         0.06          Yes
 to Patients (%)..................
ICH-CAHPS: Percent, Rating of            3349         69.9         76.6        0.204            No          62.0         9.29         0.15           No
 Nephrologist.....................
ICH-CAHPS: Percent, Rating of            3349         70.9         77.4        0.215            No          62.0         9.92         0.16           No
 Dialysis Facility Staff..........
ICH-CAHPS: Percent, Rating of            3349         73.8         80.6        0.221            No          64.8        10.18         0.16           No
 Dialysis Center..................
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
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Truncated 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: Long-Term Catheter Rate Clinical Measure 
(NQF #2978). We believe these

[[Page 50771]]

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\
---------------------------------------------------------------------------

    \6\ FDA 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.
---------------------------------------------------------------------------

    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).
---------------------------------------------------------------------------

    \7\ https://www.fda.gov/Drugs/DrugSafety/ucm259639.htm.
---------------------------------------------------------------------------

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 pre-rulemaking 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.
---------------------------------------------------------------------------

    \8\ http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=84452.

---------------------------------------------------------------------------

[[Page 50772]]

    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.
---------------------------------------------------------------------------

    \9\ Hirth, 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).
---------------------------------------------------------------------------

    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-Patient-Assessment-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 risk-adjusted 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

[[Page 50773]]

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 inter-unit 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 two-thirds 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 look-back 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 inter-facility 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 risk-
standardized 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

[[Page 50774]]

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.
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    \10\ Fistula First Catheter Last Dashboard August 2015 http://fistulafirst.esrdncc.org/ffcl/for-ffcl-professionals/archive/.
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    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/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/061_TechnicalSpecifications.html. The TEP made the following 
recommendations:
    <bullet> The fistula measure should be risk-adjusted 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.
    <bullet> The measures should include all eligible hemodialysis 
patients, not just Medicare beneficiaries.
    <bullet> The measures should include patients in the first 90 days 
of dialysis because this is a critical time for access planning/
placement.
    <bullet> The measures should include in the numerator only patients 
with an AV fistula using 2 needles (or an approved single needle 
device).
    <bullet> 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:

[[Page 50775]]

    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:
    <bullet> Patients under hospice care in the current reporting 
month.
    <bullet> Patients with metastatic cancer in the past 12 months.
    <bullet> Patients with end-stage liver disease in the past 12 
months.
    <bullet> 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 single-needle 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

[[Page 50776]]

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 risk-adjustments 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 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.
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:
    <bullet> 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.
    <bullet> Inclusion of all eligible hemodialysis patients, not just 
Medicare beneficiaries.
    <bullet> Inclusion of patients in the first 90 days of dialysis 
because this is a critical time for access planning/placement.
    <bullet> Inclusion in the numerator of only patients with an AV 
fistula using 2 needles (or an approved single needle device).
    <bullet> 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

[[Page 50777]]

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/Quality-Initiatives-Patient-Assessment-Instruments/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:
    <bullet> Inclusion of all eligible hemodialysis patients, not just 
Medicare beneficiaries, since the measure is now specified to be 
calculated from CROWNWeb.
    <bullet> 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.
    <bullet> 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.
    <bullet> 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.

[[Page 50778]]

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 (in-center 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 Long-Term 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-Patient-Assessment-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 ``cherry-picking'' 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 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 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: Long-Term 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.

[[Page 50779]]

    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

[[Page 50780]]

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

[[Page 50781]]

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    Measure weight within the domain  Measure weight as percent of TPS
           subdomain                 (proposed for PY 2021)            (proposed for PY 2021)
--------------------------------------------------------------------------------------------------
                                      Clinical Measure Domain
----------------------------------------------------------------------------------------------------------------
Patient and Family Engagement/  40%.............................  30.
 Care Coordination Subdomain.
    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      18%.............................  13.5.
     Comprehensive Measure.
    Vascular Access Type        18%.............................  13.5.
     Measure Topic.
    Hypercalcemia measure.....  2%..............................  1.5.
    SHR Measure...............  11%.............................  8.25.
                               ---------------------------------------------------------------------------------
        Total: Clinical         100% of Clinical Measure Domain.  75% of Total Performance Score.
         Measure Domain.
----------------------------------------------------------------------------------------------------------------
                                     Reporting Measure Domain
----------------------------------------------------------------------------------------------------------------
Serum Phosphorus reporting      20%.............................  2.
 measure.
Anemia Management reporting     20%.............................  2.
 measure.
Pain Assessment and Follow-Up   20%.............................  2.
 reporting measure.
Clinical Depression Screening   20%.............................  2.
 and Follow-Up reporting
 measure.
Healthcare Personnel Influenza  20%.............................  2.
 Vaccination reporting measure.
                               ---------------------------------------------------------------------------------
    Total: Reporting Measure    100% of Reporting Measure Domain  10% of Total Performance Score.
     Domain.
----------------------------------------------------------------------------------------------------------------
                                       Safety Measure Domain
----------------------------------------------------------------------------------------------------------------
NHSN BSI Clinical Measure.....  60%.............................  9.
NHSN Dialysis Event Reporting   40%.............................  6.
 Measure.
                               ---------------------------------------------------------------------------------
    Total: Safety Measure       100% of Safety Measure Domain...  15% of Total Performance Score.
     Domain.
----------------------------------------------------------------------------------------------------------------

    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 under-reporting. 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

[[Page 50782]]

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 re-weighting 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         Measure weight within the domain      Measure weight as percent of TPS
             subdomain                       (proposed for PY 2021)                (proposed for PY 2021)
----------------------------------------------------------------------------------------------------------------
                                             Clinical Measure Domain
----------------------------------------------------------------------------------------------------------------
Patient and Family Engagement/Care   40%..................................  30.
 Coordination Subdomain.
    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           18%..................................  13.5.
     Comprehensive Measure.
    Vascular Access Type Measure     18%..................................  13.5.
     Topic.
    Hypercalcemia measure..........  2%...................................  1.5.
    SHR Measure....................  11%..................................  8.25.
                                    ----------------------------------------------------------------------------
        Total: Clinical Measure      100% of Clinical Measure Domain......  75% of Total Performance Score.
         Domain.
----------------------------------------------------------------------------------------------------------------
                                            Reporting Measure Domain
----------------------------------------------------------------------------------------------------------------
Serum Phosphorus reporting measure.  16.66%...............................  1.66.
Anemia Management reporting measure  16.66%...............................  1.66.
Pain Assessment and Follow-Up        16.66%...............................  1.66.
 reporting measure.
Clinical Depression Screening and    16.66%...............................  1.66.
 Follow-Up reporting measure.
Healthcare Personnel Influenza       16.66%...............................  1.66.
 Vaccination reporting measure.
Ultrafiltration Rate Reporting       16.66%...............................  1.66.
 Measures.
                                    ----------------------------------------------------------------------------
    Total: Reporting Measure Domain  100% of Reporting Measure Domain.....  10% of Total Performance Score.
----------------------------------------------------------------------------------------------------------------

[[Page 50783]]

 
                                              Safety Measure Domain
----------------------------------------------------------------------------------------------------------------
NHSN BSI Clinical Measure..........  60%..................................  9.
NHSN Dialysis Event Reporting        40%..................................  6.
 Measure.
                                    ----------------------------------------------------------------------------
    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.

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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 patient-years 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 survey-eligible 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:         11 qualifying patients......  N/A......................................  11-25 qualifying patients.
 Standardized Fistula Rate
 (Clinical).
Hemodialysis Vascular Access: Long-   11 qualifying patients......  N/A......................................  11-25 qualifying patients.
 Term Catheter Rate (Clinical).
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    Before January 1, 2019...................  N/A.
                                       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.
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 Follow-Up    11 qualifying patients......  Before July 1, 2019......................  N/A.
 (Reporting).
Pain Assessment and Follow-Up         11 qualifying patients......  Before July 1, 2019......................  N/A.
 (Reporting).
NHSN Healthcare Personnel Influenza   N/A.........................  Before January 1, 2019...................  N/A.
 Vaccination (Reporting).
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

[[Page 50787]]

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/Quality-Initiatives-Patient-Assessment-Instruments/ESRDQIP/Downloads/Small-Facility-Adjustment-Proposal-for-the-ESRD-QIP.pdf.
    These reliability analyses were performed for all measures, 
including the ratio measures (which have different thresholds).
[GRAPHIC] [TIFF OMITTED] TR01NO17.008

    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:
    <bullet> It performed at the performance standard for each clinical 
measure.
    <bullet> 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

[[Page 50788]]

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 NQF-endorsed 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/nationwide-interoperability-roadmap-final-version-1.0.pdf), which describes 
barriers to

[[Page 50789]]

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.
---------------------------------------------------------------------------

    \11\ https://www.bls.gov/oes/current/oes292071.htm.
    \12\ https://www.bls.gov/oes/current/oes291141.htm.
---------------------------------------------------------------------------

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

[[Page 50790]]

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 x 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 x $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 x 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 x $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.
---------------------------------------------------------------------------

    \13\ We 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).
---------------------------------------------------------------------------

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

[[Page 50791]]

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 x $105.00). Therefore, we estimated that the total cost of 
reviewing this regulation is $19,162.50 ($131.25 x 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\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                             Effect of
                                                                                                                                            total 2018
                                                                                                                                             proposed
                                                                             Number of    Effect of 2018  Effect of 2018  Effect of 2018      changes
                      Facility type                          Number of    treatments (in    changes in      changes in      changes in    (outlier, wage
                                                            facilities       millions)    outlier policy   wage indexes    payment rate      indexes,
                                                                                                                              update          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
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 50792]]

 
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
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Sensipar 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,

[[Page 50793]]

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 case-mix 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.

[[Page 50794]]



                     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
----------------------------------------------------------------------------------------------------------------
                                        Period of time used to calculate
                                      achievement thresholds, performance
              Measure                      standards, benchmarks, and                Performance period
                                             improvement thresholds
----------------------------------------------------------------------------------------------------------------
                                                       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               Jan 2014-Dec 2014....................  Jan 2015-Dec 2015.
 Comprehensive.
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        Payment
                                                     Number of                      facilities       reduction
                                     Number of      treatments       Number of      expected to      (percent
                                    facilities       2015 (in       facilities       receive a       change in
                                                     millions)    with QIP score      payment       total ESRD
                                                                                     reduction     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

[[Page 50795]]

 
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
------------------------------------------------------------------------
                                         Estimated payment reductions
            Payment year                          (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.

[[Page 50796]]

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.
---------------------------------------------------------------------------

    \14\ Flythe 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.
---------------------------------------------------------------------------

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       $10 million.
 Payments.
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       $0.
 Costs.
------------------------------------------------------------------------

    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/small-business-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 hospital-
based 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.

[[Page 50797]]

    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 <a href="/cdn-cgi/l/email-protection#da9f89889e8abba3b7bfb4ae9ab9b7a9f4b2b2a9f4bdb5ac"><span class="__cf_email__" data-cfemail="8fcadcddcbdfeef6e2eae1fbcfece2fca1e7e7fca1e8e0f9">[email protected]</span></a>.

    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


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