(Medicare Benefit Policy Manual)

Brief History of ESRD Composite Payment Rates for Outpatient Maintenance Dialysis   Effective January 1, 2005, section 623 of the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA) amended section 1881(b)(7) of the Act to require a 1.6 percent increase to the ESRD composite payment rate.  The MMA also required a drug add- on adjustment to the composite payment rate to account for the difference between pre- MMA payments for separately billable drugs and payments based on revised drug pricing for 2005 which used average acquisition costs.  For CY 2005, CMS computed a drug add -on adjustment of 8.7 percent.  Effective January 1, 2006, section 5106 of the Deficit Reduction Act of 2005 amended section 1881(b)(12) of the Act to require a 1.6 percent increase to the ESRD composite payment rate.  In addition, because the drug add -on adjustment is determined as a percentage of the composite payment rate, CMS must adjust the drug add -on adjustment to account for the 1.6 percent increase to the composite payment rate in order to ensure that the total dollars allocated from the dru g add -on adjustment remains constant.  The growth update to the drug add -on adjustment of 1.4 percent was unchanged; therefore the total drug add -on adjustment to the composite payment rate for 2006 was 14.5 percent.   For dialysis services furnished on or after January 1, 2007 through March 31, 2007, the growth update to the drug add -on adjustment to the composite payment rate was 0.5 percent.  As a result, the drug add- on adjustment to the composite payment rate for 2007 increased from 14.5 percent to 15.1 percent.   For dialysis services furnished on or after April 1, 2007, section 103 of the Tax Relief and Health Care Act of 2006 amended section 1881(b)(12) of the Act to require a 1.6 percent increase to the ESRD composite payment rate.  The effect of the 1.6 percent increase to the composite payment rate was a reduction in the drug add- on adjustment from 15.1 percent to 14.9 percent.   Effective January 1, 2008, there was no increase to the composite payment rate however; the drug add- on adjustment to the c omposite payment rate was increased by a growth update of 0.5 percent.  As a result, the drug add -on adjustment to the composite payment rate for CY 2008 increased from 14.9 percent to 15.5 percent.   Effective January 1, 2009, section 153 of the Medicare Improvements for Patients and Providers Act of 2008 amended section 1881(b)(12) of the Social Security Act to require a 1 percent increase to the ESRD composite payment rate and that hospital -based ESRD facilities are paid the same composite payment rate as independent ESRD facilities.  The effect of the 1 percent increase in the composite payment rate is a reduction in the drug add-on adjustment from 15.5 percent to 15.2 percent.   Effective January 1, 2010, CMS continued to apply the growth update to the drug add -on adjustment to the composite payment rate, which was 0.percent.  As a result, the drug add-on adjustment to the composite payment rate for 2010 was reduced from 15.2 to 15.0 percent. Also, as required by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), CMS applied a 1.0 increase to the ESRD composite payment rate.   Section 153 of the MIPPA amended section 1881(b)(12) of the Social Security Act to require a 4 -year transition (phase -in) from the current composite payment sys tem to the ESRD Prospective Payment System (PPS).  Effective January 1, 2011, CMS continued to apply the growth update to the drug add- on adjustment to the composite payment rate portion of the blended payment rate, which was 0.percent.  As a result, the drug add- on adjustment to the composite payment rate portion of the blended payment for 2010 is reduced from 15.0 to 14.7 percent.  For a detailed description of the transition period, see 70 of this chapter.   For further information on the drug add on amounts for CY 2012 and 2013, see the respective ESRD final rules.   Effective 2014, the drug add- on will no longer be applied.  Future updates will be issued via Recurring Update Notifications.   140 - Transplantation  (Rev. 1, 10- 01-03)  A3-3178, PR 1- 2770, RD F-230  Introduction  Renal transplantation is a principal form of treatment for patients with ESRD.  Medicare has developed a method of reimbursement for the variety of medical services required to support a transplant program, including payment for Medica res share of the costs of organ procurement.   In addition, Medicare has developed coverage and reimbursement criteria for necessary medical services provided to potential donors and recipients.  In some situations, these services are provided before the e ffective date of Medicare entitlement for the potential transplant recipient.   Medicare pays for the covered services provided a Medicare patient who receives a living or cadaveric transplant.  A certified transplant centers (CTC) or organ procurement organizations (OPO) expenses in providing kidneys are included in the transplant providers living or cadaveric kidney acquisition cost center.  To participate in the Medicare program, any CTC or OPO must be a member of the Organ Procurement and Transplantat ion Network (OPTN).  The CTC is required to notify the OPO designated for  its service area of potential donors.  (See the Medicare Provider Reimbursement Manual, Part 1, 2771, for rules in developing a living and cadaveric acquisition charge.)   See the O PTN Web site at http://www.optn.org/members/search.asp  or a search facility for various transplant centers, including kidney transplant centers.   140.1 - Identifying Candidates for Transplantation  (Rev. 1, 10- 01-03)  A3-3178.1, RDF -231  After a patient is diagnosed as having ESRD, the physician should determine if the patient is suitable for transplantation.  If the patient is a suitable transplant candidate, a live donor transplant is considered fi rst because of the high success rate in comparison to a cadaveric transplant.  Whether one or multiple potential donors are available, the following sections provide a general description of the usual course of events in preparation for a live -donor transplant.   140.2 - Identifying Suitable Live Donors  (Rev. 1, 10- 01-03)  A3-3178.2, RDF -231  Those who are willing and medically able to donate a kidney are tested to determine whether they are of the same blood type as the recipient.  After blood typing, the r ecipient and the donors are tissue typed.  Only those candidates with blood and tissue types similar to the recipient are considered further.   After tissue typing, those medically suitable donors are evaluated on physical, psychological, and social factors .  Potential donors who remain after the above testing may be hospitalized for about two days for further evaluation using procedures not appropriately performed on outpatients.  These procedures may include intravenous urography and renal arteriography.   If the results of the above tests identify several suitable donors, the most suitable donor is selected, and arrangements are made for the transplant.  At such time, the donor and recipient will enter the hospital to undergo the excision and transplantatio n, respectively.   When tests do not identify an acceptable living donor, the patient is considered for a cadaveric transplant and placed on hemo - or peritoneal dialysis, if this has not already proved necessary.  If the ultimate goal is transplantation, the patient is registered with a kidney transplant registry.  140.3 - Pretransplant Outpatient Services  (Rev. 1, 10- 01-03)   A3-3178.3   All hospital outpatient services provided to live donors and recipients in anticipation of a transplant during the preentit lement period and after entitlement, but prior to admission to the hospital for transplantation, are covered.  Such services would include kidney recipient registration fees, laboratory tests (including tissue typing of recipient and donors), and general m edical evaluations of the recipient and the donor(s). Pretransplant physicians services are also covered.   140.4 - Pretransplant Inpatient Services  (Rev. 1, 10- 01-03)  A3-3178.4   The following rules apply to kidney transplant inpatient medical evaluations  when the kidney recipient has Medicare entitlement or is in the preentitlement period.  The preentitlement period is that period prior to the patients actual Medicare entitlement, during which services are furnished in anticipation of a transplant, after  the patient has been diagnosed to have end stage renal disease.  If the potential kidney recipient does not have entitlement, or is not in the preentitlement period, no services rendered to the kidney recipient or to the related living donor for kidney tr ansplant the Medicare program will cover medical evaluations.   140.5 - Living Donor Evaluation, Patient Has Entitlement or is in Preentitlement Period  (Rev. 1, 10- 01-03)  A3-3178.5, RDF -233.1   When a living donor is admitted to a hospital (before admission for excising the donor kidney) for a medical evaluation in anticipation of a kidney donation, all hospital and physicians services costs applicable to medical evaluation are considered kidney acquisition service costs.  As such, the hospital statistics ( charges, patient days, etc.) and the physicians charges should be treated in accordance with all other kidney acquisition service statistics and the related costs are included in Medicare costs.   When the live donor subsequently enters the hospital for the actual excision, the hospital costs of services rendered to the donor will continue to be treated as kidney acquisition service costs under Part A.  However, at that point physician services are no longer considered kidney acquisition services and are not reimbursable under Part A.  Instead, during the donors inpatient stay for the excision surgery and during any subsequent donor inpatient stays resulting from a direct complication of the organ donation, physician services are billed under Part B.  They are billed in the normal manner but on the account of the recipient at 100 percent of the fee schedule.  Note that services furnished to kidney donors are covered under the account of the recipient.   Services listed in the following sections are also cover ed.  However, they are not billed as such but become a part of the kidney acquisition costs.  140.6 - Kidney Recipient Admitted for Transplant Evaluation  (Rev. 1, 10- 01-03)  A3-3178.6, RDF -233, RDF -233.2   When a potential recipient is admitted to a hospita l (before admission for the actual transplant) solely for a medical evaluation for an anticipated kidney transplant, all hospital and physicians services costs applicable to the anticipated transplant are considered kidney acquisition service costs.   140.7 - Kidney Recipient Evaluated for Transplant During Inpatient Stay (Rev. 1, 10- 01-03)  A3-3178.7, RDF -233.3   When a recipient is admitted to a hospital for a medical reason other than in anticipation of a transplant, but during the stay, a medical evaluation for an anticipated kidney transplant is performed, all hospital and physicians services costs applicable to the medical evaluation are considered kidney acquisition service costs.  Accordingly, those services will be treated the same as the ser vices above.  However, all hospital and physicians services applicable to the nontransplant related services (i.e., related to the medical services for which the patient was actually admitted) must not be included with kidney acquisition services costs; i nstead such services must be billed in the same manner as any other inpatient service on the account of the recipient.  These latter services may be billed to the Medicare program only if the recipient has actual Medicare entitlement.   140.8 - Kidney Recip ient Admitted for Transplantation and Evaluation  (Rev. 1, 10- 01-03)  A3-3178.8, RDF -233.4   When the medical evaluation for a transplant is performed on the recipient or the living donor during the same inpatient stay in which the actual transplant occurs, all such services will be billed, and the costs will be accumulated in the normal manner.  For example, all hospital services rendered to the donor will be considered kidney acquisition services.  However, all physicians services rendered to the living donor and all hospital and physicians services rendered to the recipient will be billed in the same manner as any other inpatient services on the account of the recipient.