(Medicare Benefit Policy Manual)

The ESRD PPS combines payment for what had previously been composite rate and separately billable outpatient renal dialysis items and services into a single base rate for both adult and pediatric patients.  The per dialysis treatment base rate is subsequen tly adjusted to reflect:    Patient -level adjustments for: o case- mix, (see 60.A.1 of this chapter for adult patient adjustments and 60.A.6 of this chapter for pediatric patient adjustments)   o An onset of dialysis adjustment for adult patients that have Medicare ESRD coverage during their initial 4 months of dialysis, (see 60.A.4 of this chapter)    Facility -level adjustments for: o A low- volume facility adjustment for ESRD facilities that meet certain criteria, (see 60.B.1 of this chapter)   o A wage index ad justment to reflect differences in wage levels among the urban and rural areas in which ESRD facilities are located, (see 60.B.2 of this chapter)   o A rural adjustment, effective January 1, 2016    Other adjustments: o A home or self -dialysis training add -on, (see 60.C of this chapter)  o An outlier payment , (see 60.D of this chapter)   The ESRD PPS implemented consolidated billing edits for certain renal dialysis laboratory services, drugs and biologicals, equipment, and supplies to ensure that payment for renal dialysis services is not made to providers other than the ESRD facility.  A service furnished by an ESRD facility that is not for the treatment of ESRD must be submitted with an AY modifier to allow for separate payment outside of the ESRD PPS.  The list of renal dialysis services identified for the ESRD PPS consolidated billing may be viewed at http://www.cms.gov/Medicare/Medicare -Fee-for-Service-Payment/ESRDpayment/Consolidated_Billing.html .  Note that this list is n ot an all -inclusive list, and ESRD facilities are responsible and reimbursed for furnishing all renal dialysis services under the ESRD PPS.   2.  Basic Case -Mix Adjusted Composite Rate Payment System   The basic case- mix adjusted composite rate payment syst em was implemented in CY 2005 and maintained until 2014 for purposes of the blended payment during the ESRD PPS transition period.  It applied patient -level case- mix adjusters, additional payment for home and self -dialysis training, and a drug add- on to the composite rate.   The drug add- on accounted for the difference between the methodologies of payment for separately billed drugs and biologicals prior to the enactment of the revised drug pricing specified in the Medicare Modernization Act of 2003 (MMA).  For more information on the history of the composite rate see Appendix C and for more information regarding the transition period see 70 of this chapter.   3.  Composite Rate  The composite rate was the first step Medicare made toward creating a bundled payment for renal dialysis items and services.  It covered routine laboratory testing, certain drugs, equipment and supplies, and support services furnished for outpatient maintenance dialysis in Medicare -certified ESRD facilities.  Under the composite rate methodology, separate payment was made to ESRD facilities for most drugs and biologicals furnished to ESRD patients.  For more information regarding composite rate items and services, see 20.1, for composite rate laboratory services, see 20.2.E, and for composite rate drugs, see 20.3.F of this chapter.   20 - Renal Dialysis Items and Services  (Rev. 200, Issued: 12- 02-14, Effective: 01- 01-15, Implementation: 01- 05-15)  Medicare provides payment under the ESRD PPS for all renal dialysis services for outpati ent maintenance dialysis when they are furnished to Medicare ESRD patients for the treatment of ESRD by a Medicare certified ESRD facility or a special purpose dialysis facility.  Renal dialysis services are the items and services included under the compos ite rate and the items and services that were separately paid as of December 31, 2010 that were used for the treatment of ESRD.  Renal dialysis services are furnished in various settings including hospital outpatient ESRD facilities, independent ESRD facil ities, or in the patients home.  Renal dialysis items and services furnished at ESRD facilities differ according to the types of patients being treated, the types of equipment and supplies used, the preferences of the treating physician, and the capabilit y and makeup of the staff.  Although not all facilities provide an identical range of services, the most common elements of dialysis treatment include:    Laboratory Tests;   Drugs and Biologicals;   Equipment and supplies -  dialysis machine use and maintenance;   Personnel services;   Administrative services;   Overhead costs;   Monitoring access and related declotting or referring the patient, and   Direct nursing services include registered nurses, licensed practical nurses, technicians, social workers, and dietitians.  20.1 - Composite Rate Items and Services  (Rev. 171, Issued: 06 -07-13, Effective: 01- 01-11, Implementation: 09- 09-13)  Beginning January 1, 2011, all renal dialysis services (defined at 10.C of this chapter) are included in the ESRD PPS.  Renal dialysis services include, but are not limited to, the items and services included under the composite rate as of December 31. 2010.   The composite payment rate (defined at 10.F.3 of this chapter) was a comprehensive payment for all modes of in-facility and Method  I home dialysis.  Most items and services related to the treatment of the patients end-stage renal disease were covered under the composite rate payment with the exception of physicians professional services, separately billable laboratory services, and  separately billable drugs.  If a facility failed to furnish, either directly or under an arrangement, any part of the items and services covered under the composite rate, then the ESRD facility could not be paid any amount for the service.  This payment w as subject to the normal Part B deductible and coinsurance requirements.   Below are examples of items and services included under the composite rate and furnished by the ESRD facility, either directly or under arrangement.    Dialysate;   Cardiac monitoring;   Catheter changes;   Suture removal;   Dressing changes;   Crash cart usage for cardiac arrest;   Declotting of shunt performed by ESRD facility staff in the dialysis unit;  All oxygen and its administration furnished in the dialysis unit;   Staff time to administer blood;   Staff time used to administer separately billable parenteral items; and   Staff time used to collect specimens for laboratory tests.   20.2 - Laboratory Services  (Rev. 224, Issued: 06- 03-16, Effective: 01- 01-16, Implementation: 09- 06-16)  All laboratory services furnished to individuals for the treatment of ESRD are included in the ESRD PPS as Part B services and are not paid separately as of January 1, 2011.  The laboratory services include but are not limited to:    Laboratory tests included under the composite rate as of December 31, 2010 (discussed below); and    Former separately billable Part B laboratory tests that were billed by ESRD facilities and independent laboratories for ESRD patients.  Composite rate laboratory tests are listed in 20.2.E of this chapter.  More information regarding composite rate laboratory tests can be found in Pub. 100- 04, Medicare Claims Processing Manual, chapter 8, 50.1, 60.1, and 80.  As discussed below, composite rate laboratory services should not be reported on cl aims.   To the extent a laboratory test is performed to monitor the levels or effects of any of the drugs that were specifically excluded from the ESRD PPS, these tests would be separately billable.  The following table lists the drug categories that were excluded from the ESRD PPS and the rationale for their exclusion.  Laboratory services furnished to monitor the medication levels or effects of drugs and biologicals that fall in those categories would not be considered to be furnished for the treatment of ESRD.     DRUG CATEGORIES EXCL UDED FROM THE ESRD P PS BASE RATE FOR THE PURPOSE OF R EPORTING LABS   Drug Category  Rationale for Exclusion  Anticoagulant  Drugs labeled for non -renal dialysis conditions and not for vascular access.  Antidiuretic  Used to prevent fluid loss.  Antiepileptic  Used to prevent seizures.  Drug Category  Rationale for Exclusion  Anti-inflammatory  May be used to treat kidney disease (glomerulonephritis) and other inflammatory conditions.  Antipsychotic  Used to treat psychosis.  Antiviral  Used to treat viral conditions such as shingles.  Cancer management  Includes oral, parenteral and infusions. Cancer drugs are covered under a separate benefit category.  Cardiac management  Drugs that manage blood pressure and cardiac conditions.  Cartilage  Used to replace synovial fluid  in a joint space.  Coagulants  Drugs that cause blood to clot after anti -coagulant overdose or factor VII deficiency.  Cytoprotective agents  Used after chemotherapy treatment.  Endocrine/metabolic management  Used for endocrine/metabolic disorders such as thyroid or endocrine deficiency, hypoglycemia, and hyperglycemia.  Erectile dysfunction management  Androgens were used prior to the development of ESAs for anemia management and currently are not recommended practice.  Also used for hypogonadism and erectile dysfunction.  Gastrointestinal management  Used to treat gastrointestinal conditions such as ulcers and gallbladder disease.  Immune system management  Anti-rejection drugs covered under a separate benefit category.  Migraine management  Used to treat migraine headaches and symptoms.  Musculoskeletal management  Used to treat muscular disorders such as prevent muscle spasms, relax muscles, improve muscle tone as in myasthenia gravis, relax muscles for intubation and induce uterine contractions.  Pharmacy handling for oral anti -cancer, anti -emetics and immunosuppressant drugs  Not a function performed by an ESRD facility.  Pulmonary system management  Used for respiratory/lung conditions such as opening airways and newborn apnea.  Radiopharmaceutical  procedures  Includes contrasts and procedure preparation.  Unclassified drugs  Should only be used for drugs that do not have a HCPCS code and therefore cannot be identified.  Vaccines  Covered under a separate benefit category.   The distinction of what is considered to be a renal dialysis laboratory test is a clinical decision determined by the ESRD patients ordering practitioner.  If a laboratory test is ordered for the treatment of ESRD, then the laboratory test is not paid separately.   Payment for all r enal dialysis laboratory tests furnished under the ESRD PPS is made directly to the ESRD facility responsible for the patients care.  The ESRD facility must furnish the laboratory tests directly or under arrangement and report renal dialysis laboratory tests on the ESRD facility claim (with the exception of composite rate laboratory services).   An ESRD facility must report renal dialysis laboratory services on its claims in order for the laboratory tests to be included in the outlier payment calculation.  Renal dialysis laboratory services that were or would have been paid separately under Medicare Part B prior to January 1, 2011, are priced for the outlier payment calculation using the Clinical Laboratory Fee Schedule.  Further information regarding the outlier policy can be found in 60.D of this chapter.   Certain laboratory services will be subject to Part B consolidated billing requirements and will no longer be separately payable when provided to ESRD beneficiaries by providers other than the ESRD facil ity.  The list below includes the renal dialysis laboratory tests that are routinely performed for the treatment of ESRD.  Payment for the laboratory tests identified on this list is included in the ESRD PPS.  The laboratory tests listed in the table are u sed to enforce consolidated billing edits to ensure that payment is not made for renal dialysis laboratory tests outside of the ESRD PPS.  The list of renal dialysis laboratory tests is not an all-inclusive list.  If any laboratory test is ordered for the treatment of ESRD, then the laboratory test is considered to be included in the ESRD PPS and is the responsibility of the ESRD facility.  Additional renal dialysis laboratory tests may be added through administrative issuances in the future.