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CMS Finalizes 2014 End-Stage Renal Disease Policy and Payment Rate Changes

Posted in Healthcare Services Investing

Investors in the dialysis industry have been awaiting the final rule on the End-Stage Renal Disease (ESRD) Prospective Payment System, which was finally released on November 22.

The rule sets a base reimbursement rate of $239.02 per dialysis treatment for renal dialysis services provided in calendar year 2014. The current base rate is $240.36.

The rule also sets in motion a rate adjustment that will result in an overall 12 percent reduction in Medicare payments to be phased in over a period of 3-4 years. This news received a mixed reaction, with the National Kidney Foundation (NKF)  saying the final rule is an improvement over the proposed rule because average Medicare payments for dialysis in 2014 and 2015 will remain relatively unchanged, and a phased-in approach to the cuts may help minimize any immediate impact on patient access, but NKF expressed concern about the long-term effects of the cuts.

In addition, the rule finalized a 50 percent increase beginning Jan. 1, 2014, to the self-dialysis and home dialysis training add-on payment adjustment that is made for both peritoneal dialysis and home hemodialysis training treatments furnished.

Other provisions included an update to the outlier policy and changes to the requirements for the ESRD Quality Incentive Program.

To view the final rule, click here (pdf).

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