(Medicare Benefit Policy Manual)

The ESRD PPS provides ESRD facilities a 4 -year transition per iod under which the ESRD facilities receive a blend of payments comprised of the ESRD PPS and the basic case- mix adjusted composite payment system.  For CY 2011 through 2013, CMS will continue to update the basic case -mix composite payment system for purpo ses of determining the composite rate portion of the blended payment amount, including adjusting payments for geographic differences in area wage levels.  CMS continues to apply the budget neutrality adjustment to the wage index values for the composite ra te portion of the ESRD PPS during the transition.    As of January 1, 2011, the blended amount consists of 25 percent based on the ESRD PPS payment and 75 percent of the basic case -mix adjusted composite payment system.    For CY 2012, payment will be based on 50 percent of the payment rate under the ESRD PPS and 50 percent of the payment rate under the basic case -mix adjusted composite payment system.    For CY 2013, payment will be based on 75 percent of the payment rate under the ESRD PPS and 25 percent of the  payment rate under the basic case -mix adjusted composite payment system.    For renal dialysis services furnished on or after January 1, 2014, payments to ESRD facilities will be based on 100 percent of the payment amount under the ESRD PPS.  See 60 of thi s chapter for examples of how the ESRD PPS payment amount is calculated and see 50 of this chapter for more information to the ESRD PPS base rate.   Calendar Year  ESRD PPS Portion  During Transition  Basic Case -Mix Adjusted  Composite Payment System Portion   During Transition  2011  25% 75% 2012  50% 50% 2013  75% 25% 2014 and beyond  100 0%  A.  ESRD PPS Portion of the Blended Payment   The ESRD PPS portion of the blended payment is comprised of the ESRD PPS base rate (which is adjusted by any applicable patient -level and facility -level case -mix adjusters and a wage index), any applicable training add- ons, and any applicable outlier payments.  See 10.F.1of this chapter for more on the ESRD PPS.   For CY 2011, the ESRD PPS base rate was adjusted by an ESRD market basket.  For CY 2012 and all subsequent years, the ESRD PPS base rate is updated by an ESRD market basket minus a productivity adjustment.  See 50.B of this chapter for more on the market basket.   The following table summarizes the features of the ESRD PPS portion of the blended payment rates for two different scenarios (adult and pediatric) in CY 2011.   Feature  Adult Scenario  Pediatric Scenario  ESRD PPS base rate  Yes Yes  Wage index adjustments  Yes, reflecting current wage data, including any applicable floor  Yes, reflecting current wage data, including any applicable floor  Patient -level case -mix adjustments  Yes, Adult  Yes, Pediatric  Low-volume adjustment  Yes, if applicable  No Training add -on Yes, if applicable  Yes, if applicable  Outlier payment  Yes, if applicable  Yes, if applicable   B.  Composite Rate Portion of the Blended Payment   Under the composite rate, hemodialysis is paid for at 3 treatments per week and peritoneal dialysis is paid based on hemodialysis equivalent sessions (see 50.A.1 and 50.A.4, respectively, of this chapter).  For per treatment unit of payment information for hemofiltration, ultrafiltration, and IPD, respectively, see 50.A.2, 50.A.3, and 50.A.5.  Additional composite rate payments may be made when they are m edically justified.  The FI or A/B MAC reviews the medical justification and is responsible for making the decision on the appropriateness of the extra treatment.  Additional information regarding home dialysis can be found in 30.  ESRD facilities furnishing dialysis in -facility or in a patients home  are paid for up to 13 treatments during a 30 day month and 14 treatments during a 31 day month unless there is medical justification for additional treatments.   The composite rate portion of the blended payment rate is based on the payment amount under the basic case -mix adjusted composite payment system.  It is comprised of the composite payment rate, which is adjusted by both the basic case -mix adjustments and a wage index.   The composite rate portion of the blended payment may include adjustments for:    A drug add- on amount,    Applicable home training add- ons for ESRD facilities going through the transition will continue to be paid the current training add- on rates of $12 for CAPD and $20 for CCPD and home hemodialysis for the portion of the blended payment that is based on the basic case -mix adjusted composite payment system.  For more information on training and retraining, see 60.C.    Payment amounts for renal dialysis services furnished to dialysis pa tients that were separately paid under Part B.    Under the blended payment rate, the composite rate includes a $0.49 per treatment amount to account for oral and other forms of injectable drugs that had previously been paid under Part D.  Beginning in CY 2012, the composite payment rate is updated annually by applying a market basket minus a productivity adjustment factor.    As of January 1, 2011, CMS will not accept any new applications for composite rate exceptions.  Those facilities with existing exception s will continue with those exceptions, which do not include any case -mix adjustments.  Any existing exceptions will terminate effective for ESRD treatments on or after January 1, 2014.  In the event that an ESRD facility elects to receive full payment on o r after January 1, 2011, any current exception will terminate.  In the event that an ESRD facility receives payment under the transition period, any exceptions would be recognized for purposes of the basic case -mix adjusted composite payment system portion of the blended payment through the transition.   The following table presents the features of the composite rate portion of the blended payment rates for three different scenarios (adult, pediatric, and exception), using CY 2011 as the timeframe.   Feature  Adult Scenario  Pediatric Scenario  Exception Scenario  Rate Type  Composite payment rate  Composite payment rate  Exception rate (type and dollar amount unique to the ESRD facility)  Rate updated by an ESRD market basket  Yes Yes No Drug add -on adjustment  Yes Yes No Case- mix adjustment(s)  Age, BSA, and BMI  Single pediatric adjustment factor  No Wage index adjustments  Yes, reflecting current wage data, including any applicable floor  Yes, reflecting current wage data, including any applicable floor  No Adjustment for ESRD -related drugs and biologicals previously paid under Part D  Yes Yes No Training add- ons Yes, if applicable  Yes, if applicable  Yes, but only applies to ESRD facilities that have exceptions for reasons other than training  Payment amounts for renal dialysis services furnished to dialysis patients that had been Yes Yes Yes  separately paid under Part B   C.  Transition Budget Neutrality Factor  An adjustment to payments for renal dialysis services provided by ESRD facilities d uring the transition will be made so that the estimated total amount of payments under the ESRD PPS, including payments under the transition, equals the estimated total amount of payments that would otherwise occur under the ESRD PPS without such a transition.  The transition budget neutrality adjustment factor is applied to the blended payment amount if the ESRD facility is going through the transition.  If the ESRD facility is not going through the transition, then the transition budget neutrality adjustm ent factor is applied to the ESRD PPS payment.  The adjustment factor is addressed in the ESRD PPS through rulemaking during the transition period.  After the transition period, the transition budget neutrality adjustment factor no longer applies.  80 - Bad Debt  (Rev. 171, Issued: 06 -07-13, Effective: 01-01-11, Implementation: 09-09-13)  Bad debt payments will continue to be made for the unpaid Medicare deductibles and co-insurance amounts for only those items and services associated with the composite rate.  For payments made under the ESRD PPS for items and services included in the composite rate and for drugs and laboratory tests, only the bad debt amounts associated with the composite rate portion of the single ESRD payment rate will be used to determine  an ESRD facilitys allowable bad debt payments.  A facility -specific composite cost percentage will be applied to the total bad debt amount associated with the ESRD PPS payment to compute the bad debt amount for only the composite rate services.   Bad debt payments for ESRD facilities will continue to be made in accordance with 42CFR413.89 and 413.178.  However, effective January 1, 2013, the cap on bad debt reimbursement is no longer applied.  General requirements and policies for payment of bad debts attributable to unpaid Medicare deductibles and co-insurance are found in chapter 3 of the Provider Reimbursement Manual, Part 1(PRM)(CMS Pub. 15-1) and cost reporting worksheets and instructions in the PRM Part 2 (CMS Pub. 15- 2).  90  Medicare as a Secondary Payer (MSP)  (Rev. 171, Issued: 06 -07-13, Effective: 01-01-11, Implementation: 09-09-13)  The implementation of the ESRD PPS does not have an effect on the 30 month coordination period and MSP rules.  See Pub. 100-05, Chapter 2, 20 for the MSP and coordination of benefit provisions that are applicable to ESRD beneficiaries.   100 - Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury (AKI)  (Rev. 240, Issued: 01- 19-18, Effective: 01- 01-17, Implement ation: 02-  20-18) On June 29, 2015, the Trade Preferences Extension Act of 2015 (TPEA) (Pub. L. 114- 27) was enacted. In the TPEA, Congress amended the Act to include coverage and provide for payment for dialysis furnished by an ESRD facility to an individual with AKI. Specifically, section 808(a) of the TPEA amended section 1861(s)(2)(F) of the Social Security Act (the Act by including coverage for renal dialysis services furnished on or after January 1, 2017 by a renal dialysis facility or provider of services currently paid under section 1881(b)(14) of the Act to an individual with AKI. In addition, section 808(b) of TPEA amended section 1834 of the Act by adding a new subsection (r). Subsection (r)(1) of section 1834 of the Act provides that in the case o f renal dialysis services (as defined in subparagraph (B) of section 1881(b)(14) of the Act) furnished under Part B by a renal dialysis facility or a provider of services paid under such section during a year (beginning with 2017) to an individual with AKI , the amount of payment under Part B for such services shall be the base rate for renal dialysis services determined for such year under such section, as adjusted by any applicable geographic adjustment applied under subparagraph (D)(iv)(II) of such section and may be adjusted by the Secretary (on a budget neutral basis for payments under section 1834(r) of the Act) by any other adjustment factor under subparagraph (D) of section 1881(b)(14) of the Act.   100.1 Definition of AKI  (Rev.  240, Issued: 01- 19-18, Effective: 01 -01-17, Implementation: 02-  20-18) Section 1834(r)(2) of the Act defines individual with acute kidney injury'' to mean an individual who has acute loss of renal function and does not receive renal dialysis services for which payment is made under section 1881(b)(14) of the Act.   100.2 Payment Rate for AKI Dialysis  (Rev.  240, Issued: 01- 19-18, Effective: 01- 01-17, Implementation: 02-  20-18) The payment rate for AKI Dialysis is the ESRD PPS per treatment base rate updated annually by the market  basket, less the productivity adjustment and adjusted by any other adjustment factor applied to the ESRD PPS base rate.