348 
described in paragraph (1)(A), there has been a period 
of 24 consecutive months during which the individual has 
not furnished dialysis-related services for monetary com-
pensation, such individual shall be required to complete 
a new training program or become recertified as described 
in paragraph (1)(B). 
‘‘(4) A provider of services or a renal dialysis facility 
shall provide such regular performance review and regular 
in-service education as assures that individuals serving as 
patient care dialysis technicians for the provider or facility 
are competent to perform dialysis-related services.’’. 
SEC. 634. MEDPAC REPORT ON TREATMENT MODALITIES 
FOR PATIENTS WITH KIDNEY FAILURE. 
(a) EVALUATION.— 
(1) IN
GENERAL.—Not later than March 1, 
2009, the Medicare Payment Advisory Commission 
(established under section 1805 of the Social Secu-
rity Act) shall submit to the Secretary and Congress 
a report evaluating the barriers that exist to increas-
ing the number of individuals with end-stage renal 
disease who elect to receive home dialysis services 
under the Medicare program under title XVIII of 
the Social Security Act (42 U.S.C. 1395 et seq.). 
(2) REPORT DETAILS.—The report shall include 
the following: 
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349 
(A) A review of Medicare home dialysis 
demonstration projects initiated before the date 
of the enactment of this Act, and the results of 
such demonstration projects and recommenda-
tions for future Medicare home dialysis dem-
onstration 
projects 
or 
Medicare 
program 
changes that will test models that can improve 
Medicare beneficiary access to home dialysis. 
(B) A comparison of current Medicare 
home dialysis costs and payments with current 
in-center and hospital dialysis costs and pay-
ments. 
(C) An analysis of the adequacy of Medi-
care reimbursement for patient training for 
home dialysis (including hemodialysis and peri-
toneal dialysis) and recommendations for ensur-
ing appropriate payment for such home dialysis 
training. 
(D) A catalogue and evaluation of the in-
centives and disincentives in the current reim-
bursement system that influence whether pa-
tients receive home dialysis services or other 
treatment modalities. 
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350 
(E) An evaluation of patient education 
services and how such services impact the treat-
ment choices made by patients. 
(F) Recommendations for implementing in-
centives to encourage patients to elect to receive 
home dialysis services or other treatment mo-
dalities under the Medicare program 
(3) SCOPE OF REVIEW.—In preparing the re-
port under paragraph (1), the Medicare Payment 
Advisory Commission shall consider a variety of per-
spectives, including the perspectives of physicians, 
other health care professionals, hospitals, dialysis fa-
cilities, health plans, purchasers, and patients. 
SEC. 635. ADJUSTMENT FOR ERYTHROPOIETIN STIMU-
LATING AGENTS (ESAS). 
(a) IN GENERAL.—Subsection (b)(13) of section 
1881 of the Social Security Act (42 U.S.C. 1395rr) is 
amended— 
(1) in subparagraph (A)(iii), by striking ‘‘For 
such drugs’’ and inserting ‘‘Subject to subparagraph 
(C), for such drugs’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(C)(i) The payment amounts under this title for 
erythropoietin furnished during 2008 or 2009 to an indi-
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351 
vidual with end stage renal disease by a large dialysis fa-
cility (as defined in subparagraph (D)) (whether to indi-
viduals in the facility or at home), in an amount equal 
to $8.75 per thousand units (rounded to the nearest 100 
units) or, if less, 102 percent of the average sales price 
(as determined under section 1847A) for such drug or bio-
logical. 
‘‘(ii) The payment amounts under this title for 
darbepoetin alfa furnished during 2008 or 2009 to an in-
dividual with end stage renal disease by a large dialysis 
facility (as defined in clause (iii)) (whether to individuals 
in the facility or at home), in an amount equal to $2.92 
per microgram or, if less, 102 percent of the average sales 
price (as determined under section 1847A) for such drug 
or biological. 
‘‘(iii) For purposes of this subparagraph, the term 
‘large dialysis facility’ means a provider of services or 
renal dialysis facility that is owned or managed by a cor-
porate entity that, as of July 24, 2007, owns or manages 
300 or more such providers or facilities, and includes a 
successor to such a corporate entity’’. 
(b) NO IMPACT
ON DRUG ADD-ON PAYMENT.— 
Nothing in the amendments made by subsection (a) shall 
be construed to affect the amount of any payment adjust-
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352 
ment made under section 1881(b)(12)(B)(ii) of the Social 
Security Act (42 U.S.C. 1395rr(b)(12)(B)(ii)). 
SEC. 636. SITE NEUTRAL COMPOSITE RATE. 
Subsection (b)(12)(A) of section 1881 of the Social 
Security Act (42 U.S.C. 1395rr) is amended by adding 
at the end the following new sentence: ‘‘Under such sys-
tem the payment rate for dialysis services furnished on 
or after January 1, 2008, by providers of such services 
for hospital-based facilities shall be the same as the pay-
ment rate (computed without regard to this sentence) for 
such services furnished by renal dialysis facilities that are 
not hospital-based, except that in applying the geographic 
index under subparagraph (D) to hospital-based facilities, 
the labor share shall be based on the labor share otherwise 
applied for such facilities.’’. 
SEC. 637. DEVELOPMENT OF ESRD BUNDLING SYSTEM AND 
QUALITY INCENTIVE PAYMENTS. 
(a) DEVELOPMENT OF ESRD BUNDLING SYSTEM.— 
Subsection (b) of section 1881 of the Social Security Act 
(42 U.S.C. 1395rr) is further amended— 
(1) in paragraph (12)(A), by striking ‘‘In lieu 
of payment’’ and inserting ‘‘Subject to paragraph 
(14), in lieu of payment’’; 
(2) in the second sentence of paragraph 
(12)(F)— 
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353 
(A) by inserting ‘‘or paragraph (14)’’ after 
‘‘this paragraph’’; and 
(B) by inserting ‘‘or under the system 
under paragraph (14)’’ after ‘‘subparagraph 
(B)’’; 
(3) in paragraph (12)(H)— 
(A) by inserting ‘‘or paragraph (14)’’ after 
‘‘under this paragraph’’ the first place it ap-
pears; and 
(B) by inserting before the period at the 
end the following: ‘‘or, under paragraph (14), 
the identification of renal dialysis services in-
cluded in the bundled payment, the adjustment 
for outliers, the identification of facilities to 
which the phase-in may apply, and the deter-
mination of payment amounts under subpara-
graph (A) under such paragraph, and the appli-
cation of paragraph (13)(C)(iii))’’; 
(4) in paragraph (13)— 
(A) in subparagraph (A), by striking ‘‘The 
payment amounts’’ and inserting ‘‘subject to 
paragraph (14), the payment amounts’’; and 
(B) in subparagraph (B)— 
(i) in clause (i), by striking ‘‘(i)’’ after 
‘‘(B)’’ and by inserting ‘‘, subject to para-
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354 
graph (14)’’ before the period at the end; 
and 
(ii) by striking clause (ii); and 
(5) by adding at the end the following new 
paragraph: 
‘‘(14)(A) Subject to subparagraph (E), for services 
furnished on or after January 1, 2010, the Secretary shall 
implement a payment system under which a single pay-
ment is made under this title for renal dialysis services 
(as defined in subparagraph (B)) in lieu of any other pay-
ment (including a payment adjustment under paragraph 
(12)(B)(ii)) for such services and items furnished pursu-
ant to paragraph (4). In implementing the system the Sec-
retary shall ensure that the estimated total amount of pay-
ments under this title for 2010 for renal dialysis services 
shall equal 96 percent of the estimated amount of pay-
ments for such services, including payments under para-
graph (12)(B)(ii), that would have been made if such sys-
tem had not been implemented. 
‘‘(B) For purposes of this paragraph, the term ‘renal 
dialysis services’ includes— 
‘‘(i) items and services included in the 
composite rate for renal dialysis services as of 
December 31, 2009; 
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355 
‘‘(ii) erythropoietin stimulating agents fur-
nished to individuals with end stage renal dis-
ease; 
‘‘(iii) other drugs and biologicals and diag-
nostic laboratory tests, that the Secretary iden-
tifies as commonly used in the treatment of 
such patients and for which payment was (be-
fore the application of this paragraph) made 
separately under this title, and any oral equiva-
lent form of such drugs and biologicals or of 
drugs and biologicals described in clause (ii); 
and 
‘‘(iv) home dialysis training for which pay-
ment was (before the application of this para-
graph) made separately under this section. 
Such term does not include vaccines. 
‘‘(C) The system under this paragraph may provide 
for payment on the basis of services furnished during a 
week or month or such other appropriate unit of payment 
as the Secretary specifies. 
‘‘(D) Such system— 
‘‘(i) shall include a payment adjustment based 
on case mix that may take into account patient 
weight, body mass index, comorbidities, length of 
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356 
time on dialysis, age, race, ethnicity, and other ap-
propriate factors; 
‘‘(ii) shall include a payment adjustment for 
high cost outliers due to unusual variations in the 
type or amount of medically necessary care, includ-
ing variations in the amount of erythropoietin stimu-
lating agents necessary for anemia management; and 
‘‘(iii) may include such other payment adjust-
ments as the Secretary determines appropriate, such 
as a payment adjustment— 
‘‘(I) by a geographic index, such as the 
index referred to in paragraph (12)(D), as the 
Secretary determines to be appropriate; 
‘‘(II) for pediatric providers of services and 
renal dialysis facilities; 
‘‘(III) for low volume providers of services 
and renal dialysis facilities; 
‘‘(IV) for providers of services or renal di-
alysis facilities located in rural areas; and 
‘‘(V) for providers of services or renal di-
alysis facilities that are not large dialysis facili-
ties. 
‘‘(E) The Secretary may provide for a phase-in of the 
payment system described in subparagraph (A) for serv-
ices furnished by a provider of services or renal dialysis 
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357 
facility described in any of subclauses (II) through (V) of 
subparagraph (D)(iii), but such payment system shall be 
fully implemented for services furnished in the case of any 
such provider or facility on or after January 1, 2013. 
‘‘(F) The Secretary shall apply the annual increase 
that would otherwise apply under subparagraph (F) of 
paragraph (12) to payment amounts established under 
such paragraph (if this paragraph did not apply) in an 
appropriate manner under this paragraph.’’. 
(6) PROHIBITION
OF
UNBUNDLING.—Section 
1862(a) of such Act (42 U.S.C. 1395y(a)) is amend-
ed— 
(A) by striking ‘‘or’’ at the end of para-
graph (21); 
(B) by striking the period at the end of 
paragraph (22) and inserting ‘‘; or’’; and 
(C) by inserting after paragraph (22) the 
following new paragraph: 
‘‘(23) where such expenses are for renal dialysis 
services (as defined in subparagraph (B) of section 
1881(b)(14)) for which payment is made under such 
section (other than under subparagraph (E) of such 
section) unless such payment is made under such 
section to a provider of services or a renal dialysis 
facility for such services.’’. 
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358 
(b) QUALITY INCENTIVE PAYMENTS.—Section 1881 
of such Act is amended by adding at the end the following 
new subsection: 
‘‘(i) QUALITY INCENTIVE PAYMENTS IN THE END- 
STAGE RENAL DISEASE PROGRAM.— 
‘‘(1) QUALITY
INCENTIVE
PAYMENTS
FOR 
SERVICES FURNISHED IN 2008, 2009, AND 2010.— 
‘‘(A) IN GENERAL.—With respect to renal 
dialysis services furnished during a performance 
period (as defined in subparagraph (B)) by a 
provider of services or renal dialysis facility that 
the Secretary determines meets the applicable 
performance standard for the period under sub-
paragraph (C) and reports on measures for 
2009 and 2010 under subparagraph (D) for 
such services, in addition to the amount other-
wise paid under this section, subject to sub-
paragraph (G), there also shall be paid to the 
provider or facility an amount equal to the ap-
plicable percentage (specified in subparagraph 
(E) for the period) of the Secretary’s estimate 
(based on claims submitted not later than two 
months after the end of the performance pe-
riod) of the amount specified in subparagraph 
(F) for such period. 
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359 
‘‘(B) PERFORMANCE
PERIOD.—In this 
paragraph, the term ‘performance period’ 
means each of the following: 
‘‘(i) The period beginning on July 1, 
2008, and ending on December 31, 2008. 
‘‘(ii) 2009. 
‘‘(iii) 2010. 
‘‘(C) PERFORMANCE STANDARD.— 
‘‘(i) 2008.—For the performance pe-
riod occurring in 2008, the applicable per-
formance standards for a provider or facil-
ity under this subparagraph are— 
‘‘(I) 92 percent or more of indi-
viduals with end stage renal disease 
receiving 
erythopoetin 
stimulating 
agents who have an average hemato-
crit of 33.0 percent or more; and 
‘‘(II) less than a percentage, 
specified by the Secretary, of individ-
uals with end stage renal disease re-
ceiving 
erythopoetin 
stimulating 
agents who have an average hemato-
crit of 39.0 percent or more. 
‘‘(ii) 2009 AND 2010.—For the 2009 
and 2010 performance periods, the appli-
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