(Medicare Benefit Policy Manual)

Calculating the ESRD PPS Adjusted Payment   The following example demonstrates the calculation of the  ESRD PPS payment in an urban area with a wage index of 1.10. Before giving the particulars of the dialysis patient for the example, shown first is how to calculate the labor -adjusted base rate, which is the starting point for the computation of the case -mix adjusted base rate.    Base rate:  $230.39   Labor -related share of base rate: $230.39 * 0 .50673 =  $116.75   Wage index adjusted labor -related share: $116.75 * 1.1000 =  $128.42   Non labor -related share of base rate: $230.39 * (1 - .50673) =  $113.64   Wage index adjusted base rate: $128.42 + $113.64 =  $242.06  Provided next is the continuation of the example with the inclusion of the patient characteristics portion of the payment.   A 45 year old male Medicare beneficiary is 187.96 cm. (1.8796 m.) in height and weighs 95 kg.  He receives dialysis in an ESRD facility on January 1, 2016.  725 425 Using the formula for BMI, note that the patient is not underweight, having a BMI of  26.89 kg/m2, which is greater than the threshold value of 18.5 kg/m2.  BMI Patient = weight kg /height (m2) = 95/1.87962 = 95/3.5329 = 26.89  The formula for calculation of a patients BSA is:    0.007184 multiplied by height in meters 0.725 multiplied by weight in kg.  0.425  or BSA = 0.007184 * height cm * weight kg  The BSA for the patient in this example is calculated as:   BSA Patient = 0.007184 * 187.96.725 * 95.425 = 0.007184 * 44.5346 * 6.9268 = 2.2161  Using the adult case- mix adjusters table shown above, the BSA multiplier of 1.032 is used. The patients case -mix adjustment or payment multiplier (PM) based on his BSA of 2.2161 is computed as follows:   PM BSA = 1.032(2.2161 -1.90)/0.1  = 1.0323.161 = 1.1047  The example patients PM would reflect the applicable case- mix adjustments from the adult case- mix adjusters table above for both age and BSA and may be expressed as:   PM Patient = PM age * PM BSA  = 1.068 * 1.1047 = 1.1798  The example patients ESRD payment rate for treatments furnished in his ESRD facility would be:   $242.06* 1.1798 = $285.58  NOTE: This example is computed without regard to other adjustments (e.g., outlier payments, training add- on, low -volume adjustment, etc.).   2. Patient  Age  There are 5 age categories for adults (18 -44; 45- 59; 60- 69; 70- 79; and 80 and above) in the ESRD PPS and each category has a separate case- mix adjuster.  Note that, when a  beneficiary reaches a birthday that results in a different age category, the age change is effective from the first day of the birthday month, regardless of the date the birthday occurs in that month. The case -mix adjustment factor corresponding to the age of the dialysis patient is multiplied by the wage index adjusted base rate as a step in the calculation of the ESRD PPS per treatment payment amount. The examples shown below draw on values from the table  of the CY 2016 adult case -mix adjusters as well as the discussion of the wage adjusted ESRD PPS base rate found in the section above.   Example 1: Mr. Taylor is 38 years of age and is classified in the 18- 44 age group with an associated case- mix adjuster o f 1.257.  Applying the case -mix adjuster  of 1.257 to the wage index adjusted base rate of $242.06 yields the age adjusted base rate amount of $304.27 ($242.06 x 1.257 = $304.27).   Example 2: Mrs. Williams was born on July 4, 1936. On June 15, 2016, she is 79 years old and is classified in the 70 -79 age category with a case- mix adjustment of 1.000 (the reference group). However, beginning with dialysis treatments occurring on and after July 1, 2016, she will move into the 80+ age group with an associated cas e-mix multiplier of 1.109.   Example 3: Mr. Davis was born on September 29, 1971. For dialysis treatments occurring in August 2016, he is 44 years old and would be classified in the 18- 44 age group with an associated case- mix adjuster of 1.257. Beginning with dialysis treatments occurring on and after September 1, 2016, he is classified in the 45- 59 age category with a case -mix adjuster of 1.068 because he is considered to have attained age 45 on September  1.  3. Body Size: Low Body Mass Index (BMI) and/or Body Surface Area  (BSA)  Low BMI and BSA are two measures used to estimate body size. Both measures are strong predictors of variation in costs and are closely associated with the duration and intensity of dialysis necessary to achieve a therapeutic dialysis  target for ESRD patients. Both are objective measures that are computed using height and weight data located on the patient claim. The BMI and BSA are calculated for all beneficiaries. Low BMI is associated with higher costs due to additional resources that may be necessary to address malnutrition or frailty. BSA is associated with higher costs due to more time on the dialysis machine.   Although height and weight are taken at intervals throughout any given month of dialysis treatment, the measurements for the purpose of payment must be taken as follows:    The dry weight of the patient is measured and recorded in kilograms immediately following the last dialysis session of the  month.   The patient height is measured and recorded in centimeters during the last  dialysis session of the month. The measurement is required no less frequently than once per  year.  The formula for the calculation of the BMI is weight in kilograms divided by height in meters squared, or kg/m2.  As an example, the designated low BMI adjustment factor of  1.017 (see 60.A.1 of this chapter) is only applied for those beneficiaries with a BMI value that is less than 18.5kg/m2 which is a clinical measure of being underweight and an indicator of malnutrition.   The formula for the calcul ation of the BSA is BSA = w0.425 * h0.725 * 0.007184 where w and h represent weight in kilograms and height in centimeters. The BSA factor is defined as an exponent equal to the value of the patients BSA minus the reference BSA of 1.90 divided by 0.1.  Us ing the example of adult adjusters above, the BSA adjustment factor of  1.032 is then exponentiated based on the calculated BSA factor as 1.032(BSA -1.90)/0.1. The reference BSA used to calculate the BSA is the national average among Medicare dialysis patien ts.  4. Onset of  Dialysis   An ESRD facility may only receive the onset of dialysis adjustment for adult Medicare ESRD beneficiaries. The onset period is defined as the initial 120 days of outpatient maintenance dialysis, which is designated by the first date of when regular chronic dialysis began as reported on the CMS Form 2728. The onset of dialysis adjustment factor is a multiplier used in the calculation of the ESRD PPS per treatment payment amount for dialysis furnished in either an ESRD facility or home setting. For example, when a dialysis patient is not eligible for the Medicare ESRD benefit at the initiation of their maintenance dialysis, but is Medicare eligible at the end of 85 days, the onset of dialysis adjustment will be applied to the ESRD facilitys ESRD PPS base rate for each treatment furnished in the following 35 days. However, if the patient is not Medicare eligible at any time during the initial 120 days of receiving maintenance dialysis, the onset of dialysis adjustment will not apply.   The onset of dialysis adjustment is a one -time adjustment.  It is not applied when a patient changes ESRD facilities or after a failed transplant. If a patient changes or transfers to another ESRD facility during the initial 120 days, the new ESRD facility will only receive the onset of dialysis adjustment for the remaining time. In other words, the 120 day clock does not start over.   If the onset of dialysis adjustment is being applied to the ESRD PPS base rate, then those treatments would not be eligible f or the comorbidity adjustment nor any applicable training adjustment(s). However, those treatments are eligible for an outlier payment when appropriate.   5. Comorbidity  Categories   The two acute comorbidity categories are pericarditis and gastro -intestinal tr act bleeding with hemorrhage. The two chronic comorbidity categories are myelodysplastic syndrome and hereditary hemolytic anemia (including sickle cell anemia).  The related comorbidity  diagnosis codes can be found at the CMS ESRD Payment Web site located at  https://www.cms.gov/Medicare/Medicare -Fee-for-Service-Payment/ESRDpayment/Patient- Level -Adjustments.html   NOTE: Prior to the refinement of the ESRD PPS, effective January 1, 2016, the ESRD PPS included payment adjustments for the comorbidity categories of bacterial pneumonia and monoclonal gammopathy.   The ESRD facility is responsible for obtaining documentation of the presence of an acute or chronic comorbidity. If an ESRD facility is unaware of the existence of a comorbidity because it does not impact the facilitys costs, then the ESRD facility should not expect to receive a comorbidity adjustment.  The comorbidity payment adj ustment is only applied if the appropriate diagnosis code, specified under one of the categories above, is identified on the ESRD claim.  Comorbidities other than the two acute and the two chronic conditions identified above do not qualify for a comorbidit y adjustment. Even if an ESRD patient has or has had one of the four conditions that would qualify for a comorbidity payment adjustment, the condition must be currently active and have an effect on the cost of care for the ESRD facility to be eligible to r eceive the adjustment.   To qualify for the comorbidity adjustment there must be adherence to diagnosis coding requirements.  Diagnosis codes are updated annually as stated in Pub. 100- 04, Chapter 23, section 10, are posted at http://www.cms.gov/Medicare/Coding/ICD10/index.html , and are effective each October 1st.   For transfer patients, it is expected that ESRD facilities will work together on the appropriate transfer of information to faci litate appropriate billing for dialysis services. The counting of treatments for an acute comorbidity adjustment is based on the patient and not on the ESRD facility. Therefore, counting does not restart when a beneficiary moves to a new ESRD facility, but  rather continues for the remaining 4 months.  a. Duration of Acute Comorbidity  Adjustment   Payment for an acute comorbidity adjustment begins in the month in which the diagnosis is established, and lasts for the next 3 consecutive patient months. A patient month is any month in which a dialysis treatment is furnished, and an acute comorbidity applies.   The acute diagnosis comorbidity adjustment is applied to each dialysis treatment for 4 patient months. If a second comorbidity is diagnosed during that period (either acute or chronic), then the adjustment is made using the higher adjustment factor. At no time is an adjustment applied for more than one comorbidity.  When there is a recurrence of an acute comorbidity within the 4 patient month period, there will not be an extension of the 4 patient month adjustment. A recurrence is defined as a new episode of a comorbidity that was previously experienced by an individual beneficiary.  However, if the recurrence happens after the completion of the 4 month period, t hen a new comorbidity adjustment for 4 months would start.