[Federal Register Volume 85, Number 217 (Monday, November 9, 2020)]
[Rules and Regulations]
[Pages 71398-71487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-24485]
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Vol. 85
Monday,
No. 217
November 9, 2020
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 413
Medicare Program; End-Stage Renal Disease Prospective Payment System,
Payment for Renal Dialysis Services Furnished to Individuals With Acute
Kidney Injury, and End-Stage Renal Disease Quality Incentive Program;
Final Rule
Federal Register / Vol. 85 , No. 217 / Monday, November 9, 2020 /
Rules and Regulations
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 413
[CMS-1732-F]
RIN 0938-AU08
Medicare Program; End-Stage Renal Disease Prospective Payment
System, Payment for Renal Dialysis Services Furnished to Individuals
With Acute Kidney Injury, and End-Stage Renal Disease Quality Incentive
Program
AGENCY: Centers for Medicare & Medicaid Services (CMS), Health and
Human Services (HHS).
ACTION: Final rule.
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SUMMARY: This final rule updates and makes revisions to the End-Stage
Renal Disease (ESRD) Prospective Payment System (PPS) for calendar year
(CY) 2021. This rule also updates the payment rate for renal dialysis
services furnished by an ESRD facility to individuals with acute kidney
injury (AKI). In addition, this rule updates requirements for the ESRD
Quality Incentive Program (QIP).
DATES: These regulations are effective on January 1, 2021.
FOR FURTHER INFORMATION CONTACT: [email protected], for issues
related to the ESRD PPS and coverage and payment for renal dialysis
services furnished to individuals with AKI.
Delia Houseal, (410) 786-2724, for issues related to the ESRD QIP.
SUPPLEMENTARY INFORMATION:
Table of Contents
To assist readers in referencing sections contained in this
preamble, we are providing a Table of Contents.
I. Executive Summary
A. Purpose
B. Summary of the Major Provisions
C. Summary of Cost and Benefits
II. Calendar Year (CY) 2021 End-Stage Renal Disease (ESRD)
Prospective Payment System (PPS)
A. Background
B. Summary of the Proposed Provisions, Public Comments, and
Responses to Comments on the Calendar Year (CY) 2021 ESRD PPS
C. Transitional Add-On Payment Adjustment for New and Innovative
Equipment and Supplies (TPNIES) for CY 2021 Payment
III. Calendar Year (CY) 2021 Payment for Renal Dialysis Services
Furnished to Individuals With Acute Kidney Injury (AKI)
A. Background
B. Summary of the Proposed Provisions, Public Comments, and
Responses to Comments on the Annual Payment Rate Update for CY 2021
IV. End-Stage Renal Disease Quality Incentive Program (ESRD QIP)
A. Background
B. Summary of the Proposed Provisions, Public Comments,
Responses to Comments, and Finalized Policies for the ESRD QIP
C. Updates to Requirements Beginning With the PY 2023 ESRD QIP
D. Updates for the PY 2024 ESRD QIP
V. Collection of Information Requirements
A. Legislative Requirement for Solicitation of Comments
Requirements in Regulation Text
C. Additional Information Collection Requirements
VI. Economic Analyses
A. Regulatory Impact Analysis
B. Detailed Economic Analysis
C. Accounting Statement
D. Regulatory Flexibility Act Analysis (RFA)
E. Unfunded Mandates Reform Act Analysis (UMRA)
F. Federalism
G. Regulatory Reform Under Executive Order 13771
H. Congressional Review Act
VII. Files Available to the Public via the Internet
I. Executive Summary
A. Purpose
This final rule finalizes changes related to the End-Stage Renal
Disease (ESRD) Prospective Payment System (PPS), payment for renal
dialysis services furnished to individuals with acute kidney injury
(AKI), and the ESRD Quality Incentive Program (QIP).
1. End-Stage Renal Disease (ESRD) Prospective Payment System (PPS)
On January 1, 2011, we implemented the ESRD PPS, a case-mix
adjusted, bundled PPS for renal dialysis services furnished by ESRD
facilities as required by section 1881(b)(14) of the Social Security
Act (the Act), as added by section 153(b) of the Medicare Improvements
for Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110-275).
Section 1881(b)(14)(F) of the Act, as added by section 153(b) of MIPPA,
and amended by section 3401(h) of the Patient Protection and Affordable
Care Act (the Affordable Care Act) (Pub. L. 111-148), established that
beginning calendar year (CY) 2012, and each subsequent year, the
Secretary of the Department of Health and Human Services (the
Secretary) shall annually increase payment amounts by an ESRD market
basket increase factor, reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act. This rule
updates and makes revisions to the ESRD PPS for CY 2021.
2. Coverage and Payment for Renal Dialysis Services Furnished to
Individuals With Acute Kidney Injury (AKI)
On June 29, 2015, the President signed the Trade Preferences
Extension Act of 2015 (TPEA) (Pub. L. 114-27). Section 808(a) of the
TPEA amended section 1861(s)(2)(F) of the Act to provide coverage for
renal dialysis services furnished on or after January 1, 2017, by a
renal dialysis facility or a provider of services paid under section
1881(b)(14) of the Act to an individual with acute kidney injury (AKI).
Section 808(b) of the TPEA amended section 1834 of the Act by adding a
new subsection (r) that provides for payment for renal dialysis
services furnished by renal dialysis facilities or providers of
services paid under section 1881(b)(14) of the Act to individuals with
AKI at the ESRD PPS base rate beginning January 1, 2017. This rule
updates the AKI payment rate for CY 2021.
3. End-Stage Renal Disease Quality Incentive Program (ESRD QIP)
The End-Stage Renal Disease Quality Incentive Program (ESRD QIP) is
authorized by section 1881(h) of the Act. The Program fosters improved
patient outcomes by establishing incentives for dialysis facilities to
meet or exceed performance standards established by the Centers for
Medicare & Medicaid Services (CMS). This final rule finalizes several
updates for the payment year (PY) 2023. Although no new requirements
were proposed for the PY 2024 ESRD QIP, this final rule includes
policies continuing for PY 2024.
B. Summary of the Major Provisions
1. ESRD PPS
Update to the ESRD PPS base rate for CY 2021: The final CY
2021 ESRD PPS base rate is $253.13. This amount reflects the
application of the wage index budget-neutrality adjustment factor
(.999485), the addition to the base rate of $9.93 to include
calcimimetics, and a productivity-adjusted market basket increase as
required by section 1881(b)(14)(F)(i)(I) of the Act (1.6 percent),
equaling $253.13 (($239.33 x .999485) + $9.93) x 1.016 = $253.13).
Annual update to the wage index: We adjust wage indices on
an annual basis using the most current hospital wage data and the
latest core-based statistical area (CBSA) delineations to account for
differing wage levels in areas in which ESRD facilities are located.
For CY 2021, we are updating the wage index values based on the latest
available data.
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2018 Office of Management and Budget (OMB) delineations
and 2-year transition policy: We are updating the Office of Management
and Budget (OMB) delineations as described in the September 14, 2018
OMB Bulletin No. 18-04, beginning with the CY 2021 ESRD PPS wage index.
In addition, we are finalizing the application of a 5 percent cap on
any decrease in an ESRD facility's wage index from the ESRD facility's
wage index from the prior CY. This transition will be phased in over 2
years, such that the reduction in an ESRD facility's wage index will be
capped at 5 percent in CY 2021, and no cap will be applied to the
reduction in the wage index for the second year, CY 2022.
Update to the outlier policy: We are updating the outlier
policy using the most current data, as well as updating the outlier
services fixed-dollar loss (FDL) amounts for adult and pediatric
patients and Medicare allowable payment (MAP) amounts for adult and
pediatric patients for CY 2021 using CY 2019 claims data. Based on the
use of the latest available data, the final FDL amount for pediatric
beneficiaries will increase from $41.04 to $44.78, and the MAP amount
will decrease from $32.32 to $30.88, as compared to CY 2020 values. For
adult beneficiaries, the final FDL amount will increase from $48.33 to
$122.49, and the MAP amount will increase from $35.78 to $50.92. The
1.0 percent target for outlier payments was not achieved in CY 2019.
Outlier payments represented approximately 0.5 percent of total
payments rather than 1.0 percent.
Inclusion of calcimimetics in the ESRD PPS base rate: We
are finalizing the methodology for modifying the ESRD PPS base rate to
include calcimimetics in the ESRD PPS bundled payment. Using the final
methodology based on the latest available data, we are adding $9.93 to
the CY 2021 ESRD PPS base rate.
Changes to the eligibility criteria for the transitional
add-on payment adjustment for new and innovative equipment and supplies
(TPNIES): For CY 2021, we are finalizing the proposed changes to the
TPNIES eligibility criteria in light of the changes implemented in CY
2020 to provide a biannual coding cycle for code applications for new
Healthcare Common Procedure Coding System (HCPCS) codes for durable
medical equipment, orthotics, prosthetics and supplies (DMEPOS) items
and services. We are finalizing that for purposes of eligibility for
the TPNIES, a complete HCPCS code application must be submitted by the
HCPCS Level II code application deadline for biannual Coding Cycle 2
for DMEPOS items and services as specified in the HCPCS Level II coding
guidance on the CMS website. In addition, a copy of the applicable Food
and Drug Administration (FDA) marketing authorization must be submitted
to CMS by the HCPCS Level II code application deadline for biannual
Coding Cycle 2 for DMEPOS items and services as specified in the HCPCS
Level II coding guidance on the CMS website in order for the equipment
or supply to be eligible for the TPNIES the following year. We are also
finalizing the proposed definition of ``new'' for purposes of the
TPNIES policy as within 3 years beginning on the date of the FDA
marketing authorization.
Expansion of the TPNIES to include new and innovative
capital-related assets that are home dialysis machines when used in the
home for a single patient: We are expanding eligibility for the TPNIES
to include certain capital-related assets that are home dialysis
machines when used in the home for a single patient. As with other
renal dialysis equipment and supplies potentially eligible for the
TPNIES, CMS will evaluate the application to determine whether the home
dialysis machine represents an advance that substantially improves,
relative to renal dialysis services previously available, the diagnosis
or treatment of Medicare beneficiaries, and meets the other
requirements under 42 CFR 413.236(b). We are finalizing the additional
steps that the Medicare Administrative Contractors (MACs) must follow
to establish the basis of payment of the TPNIES for these capital-
related assets that are home dialysis machines when used in the home,
including an offset to the pre-adjusted per treatment amount to account
for the cost of the home dialysis machine that is already in the ESRD
PPS base rate. We will pay 65 percent of the MAC-determined pre-
adjusted per treatment amount reduced by an offset for 2-calendar
years. We are finalizing that after the 2-year TPNIES period, the home
dialysis machines will not become outlier services and that no change
will be made to the ESRD PPS base rate.
Low-Volume Payment Adjustment (LVPA): We are finalizing
our proposal to hold harmless ESRD facilities that would otherwise
qualify for the LVPA but for a temporary increase in dialysis
treatments furnished in 2020 due to the Public Health Emergency (PHE)
for the coronavirus disease 2019 (COVID-19) pandemic. For purposes of
determining LVPA eligibility for payment years 2021, 2022, and 2023, we
will only consider total dialysis treatments furnished for any 6 months
of a facility's cost-reporting period ending in 2020; ESRD facilities
will select those 6 months (consecutive or non-consecutive) during
which treatments will be counted for purposes of the LVPA
determination. We are finalizing that ESRD facilities will attest that
their total dialysis treatments for those 6 months of their cost-
reporting period ending in 2020 are less than 2,000 and that, although
the total number of treatments furnished in the entire year otherwise
exceeded the LVPA threshold, the excess treatments furnished were due
to temporary patient shifting resulting from the COVID-19 PHE. MACs
will annualize the total dialysis treatments for the total treatments
reported in those 6 months by multiplying by 2. ESRD facilities will be
expected to provide supporting documentation to the MACs upon request.
2. Payment for Renal Dialysis Services Furnished to Individuals With
AKI
We are updating the AKI payment rate for CY 2021. The final CY 2021
payment rate is $253.13, which is the same as the base rate finalized
under the ESRD PPS for CY 2021.
3. ESRD QIP
We are finalizing our proposal to update the scoring methodology
used to calculate the Ultrafiltration Rate reporting measure so that
facilities are scored based on the number of eligible patient-months,
instead of facility-months. We are also finalizing our proposal to
reduce the number of records that facilities selected for National
Health Safety Network (NHSN) validation are required to submit. This
final rule also clarifies the timeline for facilities to make changes
to their NHSN Bloodstream Infection (BSI) clinical measure and NHSN
Dialysis Event reporting measure data for purposes of the ESRD QIP.
This final rule also announces final performance standards and payment
reductions that will apply for PY 2023.
This final rule describes several policies continuing for PY 2024,
but does not include any new requirements beginning with the PY 2024
ESRD QIP.
C. Summary of Costs and Benefits
In section VI of this final rule, we set forth a detailed analysis
of the impacts of the finalized changes for affected entities and
beneficiaries. The impacts include the following:
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1. Impacts of the Final CY 2021 ESRD PPS
The impact chart in section VI.B of this final rule displays the
estimated change in payments to ESRD facilities in CY 2021 compared to
estimated payments in CY 2020. The overall impact of the CY 2021
changes is projected to be a 2.0 percent increase in payments.
Hospital-based ESRD facilities have an estimated 0.2 percent decrease
in payments compared with freestanding facilities with an estimated 2.0
percent increase.
We estimate that the aggregate ESRD PPS expenditures will increase
by approximately $250 million in CY 2021 compared to CY 2020. This
reflects a $210 million increase from the payment rate update, a $50
million increase due to the updates to the outlier threshold amounts,
and an $10 million decrease from the finalized addition to the ESRD PPS
base rate to include calcimimetics and no longer provide the
transitional drug add-on payment adjustment (TDAPA) for calcimimetics.
As a result of the projected 2.0 percent overall payment increase, we
estimate there will be an increase in beneficiary co-insurance payments
of 2.0 percent in CY 2021, which translates to approximately $60
million.
These figures do not reflect increases or decreases in expenditures
based on expanding the TPNIES to include certain capital-related assets
that are home dialysis machines when used in the home for a single
patient. The fiscal impact of this cannot be determined because these
new and innovative home dialysis machines are not yet identified and
would vary in uniqueness and costs.
2. Impacts of the Final CY 2021 Payment for Renal Dialysis Services
Furnished to Individuals With AKI
The impact chart in section VI.B of this final rule displays the
estimated change in payments to ESRD facilities in CY 2021 compared to
estimated payments in CY 2020. The overall impact of the final CY 2021
changes is projected to be a 5.7 percent increase in payments for
individuals with AKI. Hospital-based ESRD facilities have an estimated
5.8 percent increase in payments compared with freestanding ESRD
facilities with an estimated 5.7 percent increase. The overall impact
reflects the effects of the updated wage index, the finalized addition
to the ESRD PPS base rate of $9.93 to include calcimimetics in the ESRD
PPS bundled payment, and the payment rate update.
We estimate that the aggregate payments made to ESRD facilities for
renal dialysis services furnished to AKI patients at the final CY 2021
ESRD PPS base rate will increase by $4 million in CY 2021 compared to
CY 2020.
3. Impacts of the Final ESRD QIP
We estimate that the overall economic impact of the PY 2023 ESRD
QIP would be approximately $224 million as a result of the policies we
have previously finalized and the proposals we are finalizing in this
final rule. The $224 million figure for PY 2023 includes costs
associated with the collection of information requirements, which we
estimate would be approximately $208 million, and $16 million in
estimated payment reductions across all facilities. We note that the
total overall economic impact and the collection of information
requirements have been updated from the estimates in the proposed rule
due to updated information about the total number of facilities
participating in the ESRD QIP and the total number of patients. We also
estimate that the overall economic impact of the PY 2024 ESRD QIP would
be approximately $224 million as a result of the policies we have
previously finalized. The $224 million figure for PY 2024 includes
costs associated with the collection of information requirements, which
we estimate would be approximately $208 million, and has been updated
from the estimates in the proposed rule due to updated information
about the total number of facilities participating in the ESRD QIP and
the total number of patients.
II. Calendar Year (CY) 2021 End-Stage Renal Disease (ESRD) Prospective
Payment System (PPS)
A. Background
1. Statutory Background
On January 1, 2011, we implemented the End-Stage Renal Disease
(ESRD) Prospective Payment System (PPS), a case-mix adjusted bundled
PPS for renal dialysis services furnished by ESRD facilities, as
required by section 1881(b)(14) of the Social Security Act (the Act),
as added by section 153(b) of the Medicare Improvements for Patients
and Providers Act of 2008 (MIPPA). Section 1881(b)(14)(F) of the Act,
as added by section 153(b) of MIPPA and amended by section 3401(h) of
the Patient Protection and Affordable Care Act (the Affordable Care
Act), established that beginning with CY 2012, and each subsequent
year, the Secretary of the Department of Health and Human Services (the
Secretary) shall annually increase payment amounts by an ESRD market
basket increase factor, reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act.
Section 632 of the American Taxpayer Relief Act of 2012 (ATRA)
(Pub. L. 112-240) included several provisions that apply to the ESRD
PPS. Section 632(a) of ATRA added section 1881(b)(14)(I) to the Act,
which required the Secretary, by comparing per patient utilization data
from 2007 with such data from 2012, to reduce the single payment for
renal dialysis services furnished on or after January 1, 2014 to
reflect the Secretary's estimate of the change in the utilization of
ESRD-related drugs and biologicals (excluding oral-only ESRD-related
drugs). Consistent with this requirement, in the CY 2014 ESRD PPS final
rule we finalized $29.93 as the total drug utilization reduction and
finalized a policy to implement the amount over a 3- to 4-year
transition period (78 FR 72161 through 72170).
Section 632(b) of ATRA prohibited the Secretary from paying for
oral-only ESRD-related drugs and biologicals under the ESRD PPS prior
to January 1, 2016. And section 632(c) of ATRA required the Secretary,
by no later than January 1, 2016, to analyze the case-mix payment
adjustments under section 1881(b)(14)(D)(i) of the Act and make
appropriate revisions to those adjustments.
On April 1, 2014, the Protecting Access to Medicare Act of 2014
(PAMA) (Pub. L. 113-93) was enacted. Section 217 of PAMA included
several provisions that apply to the ESRD PPS. Specifically, sections
217(b)(1) and (2) of PAMA amended sections 1881(b)(14)(F) and (I) of
the Act and replaced the drug utilization adjustment that was finalized
in the CY 2014 ESRD PPS final rule (78 FR 72161 through 72170) with
specific provisions that dictated the market basket update for CY 2015
(0.0 percent) and how the market basket should be reduced in CY 2016
through CY 2018.
Section 217(a)(1) of PAMA amended section 632(b)(1) of ATRA to
provide that the Secretary may not pay for oral-only ESRD-related drugs
under the ESRD PPS prior to January 1, 2024. Section 217(a)(2) of PAMA
further amended section 632(b)(1) of ATRA by requiring that in
establishing payment for oral-only drugs under the ESRD PPS, the
Secretary must use data from the most recent year available. Section
217(c) of PAMA provided that as part of the CY 2016 ESRD PPS
rulemaking, the Secretary shall establish a process for (1) determining
when a product is no longer an oral-only drug; and (2) including new
injectable and intravenous products into the ESRD PPS bundled payment.
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Finally, on December 19, 2014, the President signed the Stephen
Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE) (Pub.
L. 113-295). Section 204 of ABLE amended section 632(b)(1) of ATRA, as
amended by section 217(a)(1) of PAMA, to provide that payment for oral-
only renal dialysis services cannot be made under the ESRD PPS bundled
payment prior to January 1, 2025.
2. System for Payment of Renal Dialysis Services
Under the ESRD PPS, a single, per-treatment payment is made to an
ESRD facility for all of the renal dialysis services defined in section
1881(b)(14)(B) of the Act and furnished to individuals for the
treatment of ESRD in the ESRD facility or in a patient's home. We have
codified our definitions of renal dialysis services at Sec. 413.171,
which is in 42 CFR part 413, subpart H, along with other ESRD PPS
payment policies. The ESRD PPS base rate is adjusted for
characteristics of both adult and pediatric patients and accounts for
patient case-mix variability. The adult case-mix adjusters include five
categories of age, body surface area, low body mass index, onset of
dialysis, four comorbidity categories, and pediatric patient-level
adjusters consisting of two age categories and two dialysis modalities
(Sec. 413.235(a) and (b)).
The ESRD PPS provides for three facility-level adjustments. The
first payment adjustment accounts for ESRD facilities furnishing a low
volume of dialysis treatments (Sec. 413.232). The second adjustment
reflects differences in area wage levels developed from core based
statistical areas (CBSAs) (Sec. 413.231). The third payment adjustment
accounts for ESRD facilities furnishing renal dialysis services in a
rural area (Sec. 413.233).
The ESRD PPS provides a training add-on for home and self-dialysis
modalities (Sec. 413.235(c)) and an additional payment for high cost
outliers due to unusual variations in the type or amount of medically
necessary care when applicable (Sec. 413.237).
The ESRD PPS provides for a transitional drug add-on payment
adjustment (TDAPA) for certain new renal dialysis drugs and biological
products (Sec. 413.234(c)).
The ESRD PPS also provides for a transitional add-on payment
adjustment for new and innovative equipment and supplies (TPNIES) for
certain qualifying, new and innovative renal dialysis equipment and
supplies (Sec. 413.236(d)).
3. Updates to the ESRD PPS
Policy changes to the ESRD PPS are proposed and finalized annually
in the Federal Register. The CY 2011 ESRD PPS final rule was published
on August 12, 2010 in the Federal Register (75 FR 49030 through 49214).
That rule implemented the ESRD PPS beginning on January 1, 2011 in
accordance with section 1881(b)(14) of the Act, as added by section
153(b) of MIPPA, over a 4-year transition period. Since the
implementation of the ESRD PPS, we have published annual rules to make
routine updates, policy changes, and clarifications.
On November 8, 2019, we published a final rule in the Federal
Register titled, ``Medicare Program; End-Stage Renal Disease
Prospective Payment System, Payment for Renal Dialysis Services
Furnished to Individuals with Acute Kidney Injury, End-Stage Renal
Disease Quality Incentive Program, Durable Medical Equipment,
Prosthetics, Orthotics and Supplies (DMEPOS) Fee Schedule Amounts,
DMEPOS Competitive Bidding Program (CBP) Amendments, Standard Elements
for a DMEPOS Order, and Master List of DMEPOS Items Potentially Subject
to a Face-to-Face Encounter and Written Order Prior to Delivery and/or
Prior Authorization Requirements,'' referred to as the ``CY 2020 ESRD
PPS final rule''. In that rule, we updated the ESRD PPS base rate, wage
index, and outlier policy, for CY 2020. We also finalized revisions to
the eligibility criteria for the TDAPA for certain new renal dialysis
drugs and biological products that fall within an existing ESRD PPS
functional category, modified the basis of payment for the TDAPA for
calcimimetics, established a new policy to condition the TDAPA payment
on our receipt of average sales price (ASP) data, established the
TPNIES to support ESRD facilities in their uptake of certain new and
innovative renal dialysis equipment and supplies, and discontinued the
erythropoiesis-stimulating agent (ESA) monitoring policy under the ESRD
PPS. For further detailed information regarding these updates, see 84
FR 60648.
B. Summary of the Proposed Provisions, Public Comments, and Responses
to Comments on the Calendar Year (CY) 2021 ESRD PPS
The proposed rule, titled ``Medicare Program; End-Stage Renal
Disease Prospective Payment System, Payment for Renal Dialysis Services
Furnished to Individuals with Acute Kidney Injury, and End-Stage Renal
Disease Quality Incentive Program'' (85 FR 42132 through 42208),
referred to as the ``CY 2021 ESRD PPS proposed rule,'' was published in
the Federal Register on July 13, 2020, with a comment period that ended
on September 4, 2020. In that proposed rule, we proposed to make a
number of annual updates for CY 2021, including updates to the ESRD PPS
base rate, wage index, and outlier policy. We also proposed to modify
the ESRD PPS base rate to incorporate calcimimetics, revise the
eligibility criteria for the TPNIES, and expand the TPNIES to include
capital-related assets that are home dialysis machines when used in the
home by a single patient. We also proposed revisions to the low-volume
payment adjustment (LVPA) regulations in response to the Public Health
Emergency (PHE) for the coronavirus disease 2019 (COVID-19) pandemic.
We received 114 public comments on our proposals, including comments
from: ESRD facilities; national renal groups, nephrologists and patient
organizations; patients and care partners; manufacturers; health care
systems; and nurses.
We also received many comments related to issues that we either did
not discuss in the proposed rule or that we discussed for the purpose
of background or context, but for which we did not propose changes.
These include, for example, refinements to modeling payment and
accounting for new and innovative items and services under the ESRD
PPS, incentives for home dialysis, reporting furnished services on the
ESRD claim, network fee, and issues related to the COVID-19 pandemic.
While we are not addressing those comments in this final rule because
they are either out of scope of the proposed rule or concern topics for
which we did not propose changes, we thank the commenters for their
input and will consider the recommendations in future rulemaking.
In this final rule, we provide a summary of each proposed
provision, a summary of the public comments received and our responses
to them, and the policies we are finalizing for the CY 2021 ESRD PPS.
1. Inclusion of Calcimimetics Into the ESRD PPS Bundled Payment
a. Background on Oral-Only Renal Dialysis Drugs
Section 1881(b)(14)(A)(i) of the Act requires the Secretary to
implement a payment system under which a single payment is made to a
provider of services or a renal dialysis facility for renal dialysis
services in lieu of any other payment. Section 1881(b)(14)(B) of the
Act defines renal dialysis services,
[[Page 71402]]
and clause (iii) of such section states that these services include
other drugs and biologicals that are furnished to individuals for the
treatment of ESRD and for which payment was made separately under this
title, and any oral equivalent form of such drug or biological.
We interpreted this provision as including not only injectable
drugs and biological products used for the treatment of ESRD (other
than ESAs and any oral form of ESAs, which are included under clause
(ii) of section 1881(b)(14)(B) of the Act), but also all oral drugs and
biological products used for the treatment of ESRD and furnished under
Title XVIII of the Act. We also concluded that, to the extent oral-only
drugs or biological products used for the treatment of ESRD do not fall
within clause (iii) of section 1881(b)(14)(B) of the Act, such drugs or
biological products would fall under clause (iv) of such section, and
constitute other items and services used for the treatment of ESRD that
are not described in clause (i) of section 1881(b)(14)(B) of the Act.
We finalized and promulgated the payment policies for oral-only
renal dialysis service drugs and biological products in the CY 2011
ESRD PPS final rule (75 FR 49038 through 49053), where we defined renal
dialysis services at Sec. 413.171 as including other drugs and
biological products that are furnished to individuals for the treatment
of ESRD and for which payment was made separately prior to January 1,
2011 under Title XVIII of the Act, including drugs and biological
products with only an oral form. We further described oral-only drugs
as those that have no injectable equivalent or other form of
administration (75 FR 49038 through 49039). Although we included oral-
only renal dialysis service drugs and biological products in the
definition of renal dialysis services in the CY 2011 ESRD PPS final
rule (75 FR 49044), we also finalized a policy to delay payment for
these drugs under the PPS until January 1, 2014. In the CY 2011 ESRD
PPS proposed and final rules (74 FR 49929 and 75 FR 49038,
respectively), we noted that the only oral-only drugs and biological
products that we identified were phosphate binders and calcimimetics,
which fall into the bone and mineral metabolism ESRD PPS functional
category. We stated that there were certain advantages to delaying the
implementation of payment for oral-only drugs and biological products,
including allowing ESRD facilities additional time to make operational
changes and logistical arrangements in order to furnish oral-only renal
dialysis service drugs and biological products to their patients.
Accordingly, we codified the delay in payment for oral-only renal
dialysis service drugs and biological products at Sec. 413.174(f)(6),
and provided that payment to an ESRD facility for renal dialysis
service drugs and biological products with only an oral form is
incorporated into the PPS payment rates effective January 1, 2014.
Since oral-only drugs are generally not a covered service under
Medicare Part B, this delay of payment under the ESRD PPS also allowed
the coverage under Medicare to continue under Part D.
On January 3, 2013, ATRA was enacted. Section 632(b) of ATRA
precluded the Secretary from implementing the policy under Sec.
413.176(f)(6) relating to oral-only renal dialysis service drugs and
biological products prior to January 1, 2016. Accordingly, in the CY
2014 ESRD PPS final rule (78 FR 72185 through 72186), we delayed
payment for oral-only renal dialysis service drugs and biological
products under the ESRD PPS until January 1, 2016. We implemented this
delay by revising the effective date at Sec. 413.174(f)(6) from
January 1, 2014 to January 1, 2016. In addition, we changed the date
when oral-only renal dialysis service drugs and biological products
would be eligible for outlier services under the outlier policy
described in Sec. 413.237(a)(1)(iv) from January 1, 2014 to January 1,
2016.
On April 1, 2014, PAMA was enacted. Section 217(a)(1) of PAMA
amended section 632(b)(1) of ATRA and precluded the Secretary from
implementing the policy under Sec. 413.174(f)(6) relating to oral-only
renal dialysis service drugs and biological products prior to January
1, 2024. We implemented this delay in the CY 2015 ESRD PPS final rule
(79 FR 66262) by modifying the effective date for providing payment for
oral-only renal dialysis service drugs and biological products under
the ESRD PPS at Sec. 413.174(f)(6) from January 1, 2016 to January 1,
2024. We also changed the date in Sec. 413.237(a)(1)(iv) regarding
outlier payments for oral-only renal dialysis service drugs made under
the ESRD PPS from January 1, 2016 to January 1, 2024. Section 217(a)(2)
of PAMA further amended section 632(b)(1) of ATRA by requiring that in
establishing payment for oral-only drugs under the ESRD PPS, the
Secretary must use data from the most recent year available.
On December 19, 2014, ABLE was enacted. Section 204 of ABLE amended
section 632(b)(1) of ATRA, as amended by section 217(a)(1) of PAMA, and
precluded the Secretary from implementing the policy under Sec.
413.174(f)(6) relating to oral-only renal dialysis service drugs and
biological products prior to January 1, 2025. We implemented this delay
in the CY 2016 ESRD PPS final rule (80 FR 69027 through 69028) by
modifying the effective date for providing payment for oral-only renal
dialysis service drugs and biological products under the ESRD PPS at
Sec. 413.174(f)(6) from January 1, 2024 to January 1, 2025. We also
changed the date in Sec. 413.237(a)(1)(iv) regarding outlier payments
for oral-only renal dialysis service drugs made under the ESRD PPS from
January 1, 2024 to January 1, 2025.
b. ESRD PPS Drug Designation Process and Calcimimetics
In addition to delaying implementation of the policy for oral-only
renal dialysis service drugs and biological products under the ESRD
PPS, discussed previously in this final rule, PAMA included section
217(c), which provided that as part of the CY 2016 ESRD PPS rulemaking,
the Secretary shall establish a process for (1) determining when a
product is no longer an oral-only drug; and (2) including new
injectable and intravenous products into the ESRD PPS bundled payment.
Therefore, in the CY 2016 ESRD PPS final rule (80 FR 69013 through
69027), we finalized a process that allows us to recognize when an
oral-only renal dialysis service drug or biological product is no
longer oral-only, and a process to include new injectable and
intravenous (IV) products into the ESRD PPS bundled payment, and when
appropriate, modify the ESRD PPS payment amount to reflect the costs of
furnishing that product.
In accordance with section 217(c)(1) of PAMA, we established Sec.
413.234(d), which provides that an oral-only drug is no longer
considered oral-only if an injectable or other form of administration
of the oral-only drug is approved by FDA. We defined an oral-only drug
at Sec. 413.234(a) to mean a drug or biological with no injectable
equivalent or other form of administration other than an oral form.
Additionally, in accordance with section 217(c)(2) of PAMA, we
codified the drug designation process at Sec. 413.234(b). In the CY
2016 ESRD PPS final rule (80 FR 69024), we finalized that the drug
designation process is dependent upon the ESRD PPS functional
categories, consistent with our policy since the implementation of the
PPS in 2011. We provided a detailed discussion on how we accounted for
renal dialysis drugs and biological products in the ESRD PPS base rate
[[Page 71403]]
since its implementation on January 1, 2011 (80 FR 69013 through
69015). We explained that, in the CY 2011 ESRD PPS final rule (75 FR
49044 through 49053), in order to identify drugs and biological
products that are used for the treatment of ESRD and therefore meet the
definition of renal dialysis services (defined at Sec. 413.171) that
would be included in the ESRD PPS base rate, we performed an extensive
analysis of Medicare payments for Part B drugs and biological products
billed on ESRD claims and evaluated each drug and biological product to
identify its category by indication or mode of action. We stated in the
CY 2011 ESRD PPS final rule that categorizing drugs and biological
products on the basis of drug action allows us to determine which
categories (and therefore, the drugs and biological products within the
categories) would be considered used for the treatment of ESRD (75 FR
49047).
In the CY 2016 ESRD PPS final rule, we also explained that, in CY
2011 ESRD PPS rulemaking, we grouped the injectable and IV drugs and
biological products into ESRD PPS functional categories based on their
action (80 FR 69014). This was done for the purpose of adding new drugs
or biological products with the same functions to the ESRD PPS bundled
payment as expeditiously as possible after the drugs become
commercially available so that beneficiaries have access to them. In
the CY 2016 ESRD PPS final rule, we finalized the definition of an ESRD
PPS functional category in Sec. 413.234(a) as a distinct grouping of
drugs or biologicals, as determined by CMS, whose end action effect is
the treatment or management of a condition or conditions associated
with ESRD (80 FR 69077).
We finalized a policy in the CY 2016 ESRD PPS final rule (80 FR
69017 through 69022) that, effective January 1, 2016, if a new
injectable or IV product is used to treat or manage a condition for
which there is an ESRD PPS functional category, the new injectable or
IV product is considered included in the ESRD PPS bundled payment and
no separate payment is available. The new injectable or IV product
qualifies as an outlier service. The ESRD bundled market basket updates
the PPS base rate annually and accounts for price changes of the drugs
and biological products reflected in the base rate.
We established in Sec. 413.234(b)(2) that, if the new injectable
or IV product is used to treat or manage a condition for which there is
not an ESRD PPS functional category, the new injectable or IV product
is not considered included in the ESRD PPS bundled payment and the
following steps occur. First, an existing ESRD PPS functional category
is revised or a new ESRD PPS functional category is added for the
condition that the new injectable or IV product is used to treat or
manage. Next, the new injectable or IV product is paid for using the
TDAPA described in Sec. 413.234(c). Finally, the new injectable or IV
product is added to the ESRD PPS bundled payment following payment of
the TDAPA.
In the CY 2016 ESRD PPS final rule, we finalized a policy in Sec.
413.234(c) to base the TDAPA on pricing methodologies under section
1847A of the Act and pay the TDAPA until sufficient claims data for
rate setting analysis for the new injectable or IV product are
available, but not for less than 2 years. During the time a new
injectable or IV product is eligible for the TDAPA, it is not eligible
as an outlier service. We established that, following payment of the
TDAPA, the ESRD PPS base rate will be modified, if appropriate, to
account for the new injectable or IV product in the ESRD PPS bundled
payment.
We also established, in the CY 2016 ESRD PPS final rule (80 FR
69024 through 69027), an exception to the drug designation process for
calcimimetics. We noted that in the CY 2011 ESRD PPS proposed and final
rules (74 FR 49929 and 75 FR 49038, respectively), the only oral-only
drugs and biological products we identified were phosphate binders and
calcimimetics, which fall into the bone and mineral metabolism ESRD PPS
functional category. We stated that we defined these oral-only drugs as
renal dialysis services in our regulations at Sec. 413.171 (75 FR
49044), delayed the Medicare Part B payment for these oral-only drugs
until CY 2014 at Sec. 413.174(f)(6), and continued to pay for them
under Medicare Part D. We explained in the CY 2016 ESRD PPS final rule
that, under Sec. 413.234(b)(1), if injectable or IV forms of phosphate
binders or calcimimetics are approved by FDA, these drugs would be
considered reflected in the ESRD PPS bundled payment because these
drugs are included in an existing functional category, so no additional
payment would be available for inclusion of these drugs.
However, we recognized the uniqueness of these drugs and stated
that we will not apply this process to injectable or IV forms of
phosphate binders and calcimimetics when they are approved because
payment for the oral forms of these drugs was delayed and dollars were
never included in the ESRD PPS base rate to account for these drugs.
Instead, we finalized a policy that once the injectable or IV phosphate
binder or calcimimetic is FDA approved and has a Healthcare Common
Procedure Coding System (HCPCS) code, we will issue a change request to
pay for all forms of the phosphate binder or calcimimetic using the
TDAPA based on the payment methodologies under section 1847A of the
Act, which could include ASP + 6 percent, for a period of at least 2
years. We explained in the CY 2016 ESRD PPS final rule that this will
allow us to collect data reflecting current utilization of both the
oral and injectable or IV forms of the drugs, as well as payment
patterns and beneficiary co-pays, before we add these drugs to the ESRD
PPS bundled payment. We stated that during this period we will not pay
outlier payments for these drugs. We further stated that at the end of
the 2 or more years, we will adopt the methodology for including the
phosphate binders and calcimimetics into the ESRD PPS bundled payment
through notice-and-comment rulemaking.
In 2017, FDA approved an injectable calcimimetic. In accordance
with the policy finalized in the CY 2016 ESRD PPS final rule, we issued
a change request to implement payment under the ESRD PPS for both the
oral and injectable forms of calcimimetics using the TDAPA. Change
Request 10065, Transmittal 1889, issued August 4, 2017, replaced by
Transmittal 1999, issued January 10, 2018, and implemented the TDAPA
for calcimimetics effective January 1, 2018.
In CYs 2019 and 2020 ESRD PPS final rules (83 FR 56927 through
56949 and 84 FR 60653 through 60677, respectively), we made several
revisions to the drug designation process regulations at Sec. 413.234.
In the CY 2019 ESRD PPS final rule, for example, we revised regulations
at Sec. 413.234(a), (b), and (c) to reflect that the process applies
for all new renal dialysis drugs and biological products that are FDA
approved regardless of the form or route of administration, that is,
new injectable, IV, oral, or other form or route of administration (83
FR 56932). In addition, we revised Sec. 413.234(b) and (c) to expand
the TDAPA to all new renal dialysis drugs and biological products, not
just those in new ESRD PPS functional categories (83 FR 56942 through
56943). We also revised Sec. 413.234(c) to reflect that we base the
TDAPA on 100 percent of ASP (ASP + 0) instead of the pricing
methodologies available under section 1847A of the Act (which includes
ASP + 6). We explained that the 6 percent add-on to
[[Page 71404]]
ASP has been used to cover administrative and overhead costs, however,
the ESRD PPS base rate includes dollars for administrative complexities
and overhead costs for drugs and biological products, so we believe ASP
+ 0 is a reasonable basis for the TDAPA under the ESRD PPS (83 FR 56943
through 56944). For circumstances when ASP data is not available, we
finalized that the TDAPA is based on wholesale acquisition cost (WAC) +
0 and, when WAC is not available, the TDAPA is based on the drug
manufacturer's invoice (83 FR 56948). We also finalized a revision to
Sec. 413.234(c) to reflect that the basis of payment for the TDAPA for
calcimimetics would continue to be based on the pricing methodologies
available under section 1847A of the Act, which includes ASP + 6 (83 FR
56948). These provisions all had an effective date of January 1, 2020.
In the CY 2020 ESRD PPS final rule, we made several additional
revisions to the ESRD PPS drug designation process regulations at Sec.
413.234. For example, we revised Sec. 413.234(b) and added paragraph
(e) to codify certain eligibility criteria changes for new renal
dialysis drugs and biological products that fall within an existing
ESRD PPS functional category. That is, we excluded certain drugs from
being eligible for the TDAPA, effective January 1, 2020 (84 FR 60672).
Specifically, as detailed in the CY 2020 ESRD PPS final rule (85 FR
60565 through 60673), we excluded generic drugs approved by FDA under
section 505(j) of the Federal Food, Drug, and Cosmetic Act (FD&C Act)
and drugs for which the new drug application (NDA) is classified by FDA
as Type 3, 5, 7 or 8, Type 3 in combination with Type 2 or Type 4, or
Type 5 in combination with Type 2, or Type 9 when the ``parent NDA'' is
a Type 3, 5, 7 or 8--from being eligible for the TDAPA. We also
established at Sec. 413.234(c) a policy to condition application of
the TDAPA on our receipt of ASP data (84 FR 60681).
In the CY 2020 ESRD PPS final rule (84 FR 60673), we also discussed
the duration of payment of the TDAPA for calcimimetics and changed the
basis of the TDAPA for such products. We stated that in accordance with
our policy for calcimimetics under the drug designation process, we
would pay for calcimimetics using the TDAPA for a minimum of 2 years
until sufficient claims data for rate setting analysis is available for
these products. We noted that at the time of the CY 2020 ESRD PPS
proposed rule we were still in the process of collecting utilization
claims data for both the oral and injectable form of calcimimetics.
Therefore, in the CY 2020 ESRD PPS proposed rule, we stated that we
would continue to pay for calcimimetics using the TDAPA in CY 2020 (84
FR 38347).
However, we also noted in the CY 2020 ESRD PPS proposed rule that
we had provided the TDAPA for calcimimetics at ASP + 6 percent for 2-
full years (that is, January 1, 2018 through December 31, 2019), and we
believed that was sufficient time for ESRD facilities to address any
administrative complexities and overhead costs that may have arisen
with regard to furnishing the calcimimetics. We noted that it was clear
that ESRD facilities were furnishing calcimimetics because payment for
them using the TDAPA had increased Medicare expenditures by $1.2
billion in CY 2018 (84 FR 60673). We explained that one of the
rationales for the 6 percent add-on to ASP was to cover administrative
and overhead costs, however, the ESRD PPS base rate has dollars
included for administrative complexities and overhead costs for drugs
and biological products. Therefore, in the CY 2020 ESRD PPS final rule,
we finalized a revision to Sec. 413.234(c) to reflect that the basis
of payment for the TDAPA for calcimimetics, beginning in CY 2020, would
be 100 percent of ASP (84 FR 60676). We explained this policy change
provided a balance between supporting ESRD facilities in their uptake
of these products and limiting the financial burden that increased
payments place on beneficiaries and Medicare expenditures. We also
noted that this policy is consistent with the policy finalized for all
other new renal dialysis drugs and biological products in the CY 2019
ESRD PPS final rule (83 FR 56948).
c. Methodology for Modifying the ESRD PPS Base Rate to Account for
Calcimimetics in the ESRD PPS Bundled Payment
As we discussed in the CY 2021 ESRD PPS proposed rule (85 FR
42138), under Sec. 413.234(d), calcimimetics were no longer considered
to be an oral-only drug once FDA approved an injectable calcimimetic in
2017. We explained that we have paid for calcimimetics under the ESRD
PPS using the TDAPA since January 1, 2018. We stated in the CY 2016
ESRD PPS final rule that for calcimimetics--for which there is an ESRD
PPS functional category, but no money in the base rate--we would
utilize the TDAPA to collect utilization data before adding this drug
to the ESRD PPS base rate. This would allow us to collect data
reflecting current utilization of both the oral and injectable or IV
forms of the drug, as well as payment patterns and beneficiary co-pays.
The collection of this data for 2 or more years would allow us, with
sufficient data, to incorporate these drugs into the ESRD PPS bundled
payment through notice-and-comment rulemaking.
As we stated in the proposed rule, we believe we have collected
sufficient claims data for a rate setting analysis for calcimimetics.
Specifically, we have collected robust claims data for 2 full years and
analyzed the utilization of every generic and brand name oral
calcimimetic, along with the utilization of the injectable
calcimimetic. We also monitored the ASP data for the calcimimetics
coinciding with the specific utilization periods. Our overall analysis
of ESRD claims data for CYs 2018 and 2019 indicated an increase in the
utilization of the oral generic calcimimetic drugs and a steep decline
in the utilization of brand-name oral calcimimetic. Weighting the ASP
price data based on the utilization data resulted in an overall lower
ASP because the generic calcimimetic drugs are less expensive than the
brand calcimimetics. Since beneficiaries have a 20 percent co-pay under
the ESRD PPS, a decrease in the payment for calcimimetics results in a
decrease in the beneficiary co-pay.
Therefore, as we stated in the CY 2021 ESRD PPS proposed rule (85
FR 42138), we believed that we were at the step of the ESRD PPS drug
designation process where we should propose to adopt the methodology
for modifying the ESRD PPS base rate to account for calcimimetics in
the ESRD PPS bundled payment, which we did in the CY 2021 ESRD PPS
proposed rule. In this final rule, we are adding a per treatment amount
to the ESRD PPS base rate to include the calcimimetics in the ESRD PPS
bundled payment amount.
In developing the methodology for including calcimimetics into the
ESRD PPS base rate, we considered the methodology that we used when we
included Part B drugs and biological products in the ESRD PPS base rate
as part of our implementation of the ESRD PPS. In the CY 2011 ESRD PPS
final rule (75 FR 49074 through 49079), we discussed how we established
which renal dialysis drugs and biological products would be reflected
in the ESRD PPS base rate. We used the utilization of those drugs and
biological products from Medicare claims data and applied ASP + 6
percent to establish the price for each drug. Then we inflated each
drug's price to 2011 using the Producer Price Index (PPI) for
prescription drugs.
[[Page 71405]]
In addition, as discussed in the CY 2011 ESRD PPS final rule (75 FR
49064), we established a dialysis treatment as the unit of payment.
Consistent with the approach we used initially to include drugs and
biological products into the ESRD PPS base rate and the ESRD PPS unit
of payment, we proposed a similar methodology to calculate a one-time
modification to the ESRD PPS base rate on a per-treatment basis to
account for calcimimetics. We stated that the methodology is similar to
the CY 2011 approach because we would determine utilization of the
drug, in this case, calcimimetics, along with the payment amounts
associated with each oral and injectable form based on the ASP + 0
instead of ASP + 6, as discussed in the CY 2020 ESRD PPS final rule.
The following sections discuss each element of our proposed
methodology in detail. As an overview, we proposed to calculate a per-
treatment amount for calcimimetics that would be added to the ESRD PPS
base rate. We proposed to apply the value from the most recent calendar
quarter ASP calculations at 100 percent of ASP (that is, ASP + 0)
available to the public for calcimimetics to the utilization data for
calcimimetics from CYs 2018 and 2019 Medicare ESRD claims data to
provide the calcimimetic expenditure amount. We proposed to divide the
calcimimetic expenditure amount by the total number of hemodialysis
(HD)-equivalent dialysis treatments paid in CYs 2018 and 2019 under the
ESRD PPS. We proposed to reduce this average per treatment amount by 1
percent to account for the outlier policy, since calcimimetics would be
ESRD outlier services eligible for outlier payments beginning January
1, 2021. We proposed to add the resulting amount to the ESRD PPS base
rate. We noted that this amount would be permanently included in the
ESRD PPS base rate and be subject to the annual ESRD PPS payment
updates (that is, the productivity-adjusted market basket increase and
wage index budget neutrality adjustment factor). Under the proposal,
CMS would stop paying for these drugs using the TDAPA for dates of
service on or after January 1, 2021.
In the CY 2021 ESRD PPS proposed rule (85 FR 42141), we proposed to
revise our drug designation regulation at Sec. 413.234, by adding
paragraph (f), to describe the methodology for modifying the ESRD PPS
base rate to account for the costs of calcimimetics, including the data
sources and the steps we would take to calculate a per treatment
amount. We proposed, for dates of service on or after January 1, 2021,
calcimimetics would no longer be paid for under the ESRD PPS using the
TDAPA (Sec. 413.234(c)) and would be paid for through the ESRD PPS
base rate and eligible for outlier payments as ESRD outlier services
under Sec. 413.237.
We noted that the proposed methodology would only modify the ESRD
PPS base rate for calcimimetic drugs. As stated in the CY 2016 ESRD PPS
final rule (80 FR 69022), the TDAPA would be paid for a minimum of 2
years, during which time we would collect and analyze utilization data.
At the end of that time, the drug would be included within its new
functional category and the base rate would potentially be modified to
account for the cost of the drug, depending upon what the utilization
data show. Accordingly, we explained, our policy is to propose and
adopt this methodology when including any future eligible new renal
dialysis drugs and biological products into the ESRD PPS base rate
through notice-and-comment rulemaking.
(1) Determining Utilization of Calcimimetics
For use in the proposed calculation, we analyzed the utilization of
both the oral and injectable forms of calcimimetics reported on the
ESRD facility claims for CYs 2018 and 2019. ESRD facilities report this
information to CMS on Medicare ESRD facility claims, that is, the 837-
institutional form with bill type 072X. The oral calcimimetic is
reported as HCPCS J0604 (Cinacalcet, oral, 1 mg, (for ESRD on
dialysis)) and the injectable calcimimetic is reported as HCPCS J0606
(Injection, etelcalcetide, 0.1 mg), that is, one unit of J0604 is 1 mg,
and one unit of J0606 is 0.1 mg. For purposes of this rate setting
analysis, we considered utilization of calcimimetics as the units of
the product furnished to an ESRD beneficiary.
For the CY 2018 utilization data for calcimimetics, we proposed to
use the latest available claims data based on the CY 2018 ESRD facility
claims updated through June 30, 2019 (that is, claims with dates of
service from January 1 through December 31, 2018, that were received,
processed, paid, and passed to the National Claims History (NCH) File
as of June 30, 2019) to calculate 2018 utilization. Claims that are
received, processed, paid, and passed to the NCH file are considered to
be ``complete'' because they have been adjudicated.
For the CY 2019 utilization data for calcimimetics, we proposed to
use the latest available claims data based on the CY 2019 ESRD facility
claims updated through January 31, 2020 (that is, claims with dates of
service from January 1 through December 31, 2019, that were received,
processed, paid, and passed to the NCH File as of January 31, 2020).
In the CY 2021 ESRD PPS proposed rule (85 FR 42139), we stated that
for the final rule, the latest available CY 2019 ESRD facility claims
are those updated through June 30, 2020 (that is, claims with dates of
service from January 1 through December 31, 2019, that were received,
processed, paid, and passed to the NCH File as of June 30, 2020).
We explained that while we have continued to pay the TDAPA for
calcimimetics for dates of service in CY 2020, we did not propose to
use utilization data from this period because practice patterns in CY
2020 have been altered due to the COVID-19 pandemic and the resulting
impact on data was unknown at that time. However, we noted that our
policy to continue paying for calcimimetics using the TDAPA in CY 2020
allowed us to analyze 2 full years of adjudicated Medicare claims since
CY 2019 claims include those claims from January 1, 2019 through
December 31, 2019.
We solicited comments on the proposed use of CYs 2018 and 2019
claims data to determine the utilization of calcimimetics for purposes
of calculating the proposed addition to the ESRD PPS base rate to
account for calcimimetics at proposed Sec. 413.234(f). We stated that
we believed using claims data from CYs 2018 and 2019 is appropriate
because those years provide us with not only the most complete data
set, but also the most accurate data set reflecting paid claims. We
also solicited comments as to whether we should instead use a single
year (CY 2018 or CY 2019) rather than both CYs 2018 and 2019 in our
methodology.
(2) Pricing of Calcimimetics--Methodology
We proposed to set the price for calcimimetics using values from
the most recent calendar quarter of ASP calculations available to the
public, at 100 percent of ASP (ASP + 0). As we explained in the CY 2021
ESRD PPS proposed rule, the ASP-based value is a CMS-derived weighted
average of all of the National Drug Code (NDC) sales prices submitted
by drug manufacturers and assigned by CMS to the two existing HCPCS
codes for calcimimetics. For each billing code, CMS calculates a
weighted average sales price using data submitted by manufacturers,
which includes the following: ASP data at the 11-digit NDC level, the
number of units of the 11-digit NDC sold and the ASP for those units.
Next, the number of billing units in an NDC is determined by the
[[Page 71406]]
amount of drug in the package. CMS uses the following weighting
methodology to determine the payment limit: (1) Sums the product of the
manufacturer's ASP and the number of units of the 11-digit NDC sold for
each NDC assigned to the billing and payment code; (2) divides this
total by the sum of the product of the number of units of the 11-digit
NDC sold and the number of billing units in that NDC for each NDC
assigned to the billing and payment code, and (3) weights the ASP for
an NDC by the number of billing units sold for that NDC. This
calculation methodology is discussed in the CY 2009 Physician Fee
Schedule (PFS) final rule (73 FR 69752). The general methodology for
determining ASP-based payments for the PFS is authorized in section
1847A of the Act.
We noted that ASP-based payment limits published in the quarterly
ASP Drug Pricing files include a 6 percent add-on as required in
section 1847A of the Act; however, consistent with the TDAPA basis of
payment for CY 2020, we proposed to use 100 percent of the weighted ASP
value, in other words, ASP + 0. In the CY 2020 ESRD PPS final rule, we
noted that the ESRD PPS accounts for storage and administration costs
and that ESRD facilities do not have acquisition price variation issues
when compared to physicians. We explained that we believed ASP + 0 is
reasonable for new renal dialysis drugs and biological products that
fall within an existing functional category because there are already
dollars in the per treatment base rate for a new drug's respective
category. We also explained that we believed ASP + 0 is a reasonable
basis for payment for the TDAPA for new renal dialysis drugs and
biological products that do not fall within the existing functional
category because the ESRD PPS base rate has dollars built in for
administrative complexities and overhead costs for drugs and biological
products (83 FR 56946).
As stated in the CY 2021 ESRD PPS proposed rule, we believe using a
value based on the most recent calendar quarter ASP calculations
available to the public for both oral and injectable versions of the
calcimimetics provides an accurate representation of the price of
calcimimetics for ESRD facilities because it uses manufacturer sales
information that includes discounts (that is, rebates, volume
discounts, prompt payment, cash payment specified in section 1847A of
the Act). Every calendar quarter, CMS publishes ASP-based payment
limits for certain Part B drugs and biological products that are used
for payment of such Part B covered drugs and biological products for a
specific quarter. The amount that we proposed to use for the base rate
modifications associated with the oral and injectable versions of the
calcimimetics is based on the most recent information on average sales
prices net of discounts specified in section 1847A submitted by the
manufacturers of each of the drugs.
For the CY 2021 ESRD PPS proposed rule, values from the most recent
calendar quarter of ASP calculations available to the public was the
second quarter of 2020,\1\ and as a result of the two-quarter data lag
this reflects manufacturer sales data submitted into CMS for the fourth
quarter of 2019. We stated that for the CY 2021 ESRD PPS final rule,
the most recent calendar quarter of ASP calculations available to the
public would be the fourth quarter of 2020, which reflects manufacturer
sales data submitted into CMS for the second quarter of 2020, and we
would use that value for purposes of our final calculation.
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\1\ https://www.cms.gov/medicare/medicare-part-b-drug-average-sales-price/2020-asp-drug-pricing-files, April 2020 ASP Pricing
File.
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We proposed to update these prices by the proposed CY 2021 ESRD PPS
base rate update to reflect the estimated costs in CY 2021. That is, we
would first add the calculated per treatment payment amount to the ESRD
PPS base rate to include calcimimetics, and then we would apply the
annual payment rate update. The proposed calculation for the addition
to the ESRD PPS base rate is discussed in the following section.
Therefore, we proposed to add Sec. 413.234(f) to specify that CMS
would use 100 percent of the values from the most recent calendar
quarter ASP calculations available to the public for the oral and
injectable calcimimetic to calculate a price for each form of the drug.
We solicited comments on the proposed use of the values from the most
recent calendar quarter ASP + 0 calculations available to the public
for calcimimetics for setting the price and the proposed language at
Sec. 413.234(f).
(3) Calculation of the Addition to the ESRD PPS Base Rate To Include
Calcimimetics
To calculate the proposed amount for calcimimetics that would be
added to the ESRD PPS base rate, we applied the values from the most
recent calendar quarter 2020 ASP + 0 calculations available to the
public for calcimimetics to CYs 2018 and 2019 calcimimetic utilization
data to calculate the calcimimetic expenditure amount for both years.
As stated in the proposed rule and section II.B.1.c.(1) of this final
rule, one unit of J0604 (oral calcimimetic, cinacalcet) is 1 mg and one
unit of J0606 (injectable calcimimetic etelcalcetide) is 0.1 mg. That
is, we determined that 1,824,370,957 total units (mg) of oral
calcimimetics were used in CYs 2018 and 2019. With regard to injectable
calcimimetics, we determined that 306,714,207 total units (0.1 mg) were
used in CYs 2018 and 2019. This use indicates that 33.9 percent of ESRD
beneficiaries received calcimimetics in CYs 2018 and 2019. For the CY
2021 ESRD PPS proposed rule, we used the values from the most recent
calendar quarter ASP + 0 calculations available to the public, which at
the time of rulemaking was the second quarter of 2020. This information
can be found on the ESRD Payment website: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/ESRD-Transitional-Drug. We
used $0.231 per mg for the oral calcimimetic and $2.20 per 0.1 mg for
the injectable calcimimetic. The prices per unit correspond to 1 mg and
0.1 mg for cinacalcet and etelcalcetide respectively. (We noted that,
for the CY 2021 ESRD PPS final rule, we would update the ASP + 0 based
value on the most recent calendar quarter calculations available to the
public.) Multiplying the utilization of the oral and injectable
calcimimetics by their respective ASP and then adding the expenditure
amount for both forms of calcimimetics together would be the total 2-
year (CYs 2018 and 2019) calculated calcimimetic expenditure amount.
That is, for the CY 2021 ESRD PPS proposed rule, we calculated the
total calcimimetic expenditure amount of $1,096,200,947. The total
number of paid HD-equivalent dialysis treatments furnished to Medicare
ESRD beneficiaries in CYs 2018 and 2019 was 90,014,098. This total
number of paid treatments reflects all paid dialysis treatments
regardless of whether a calcimimetic was furnished. Dividing the
calcimimetic expenditure amount by the total number of paid HD-
equivalent dialysis treatments provides an average per treatment
payment amount of $12.18.
We then reduced this amount by 1 percent to account for the outlier
policy under Sec. 413.237 to get a total of $12.06 ($12.18 x .99 =
$12.06). Under our proposal, we would apply this 1 percent reduction
before increasing the base rate to account for outlier payments that
would be paid beginning January 1, 2021 for calcimimetics since they
would become ESRD outlier services eligible
[[Page 71407]]
for outlier payments under Sec. 413.237. As we discussed in the
proposed rule and section II.B.1.c of this final rule, in developing
the proposed methodology for including calcimimetics in the ESRD PPS
base rate, we considered the methodology applied when we developed the
ESRD PPS base rate. In the CY 2011 ESRD PPS final rule (75 FR 49074
through 49075), we explained the budget neutrality adjustments applied
to the unadjusted ESRD PPS base rate to account for statutorily
mandated reductions. Because calcimimetics would become ESRD outlier
services beginning January 1, 2021, we focused on the outlier
adjustment. That is, in CY 2011 we applied a 1 percent reduction to the
unadjusted ESRD PPS base rate to account for outlier payments. In order
for the application of the 1 percent outlier to be maintained, we
stated that we believe the 1 percent must be excluded from the addition
to the ESRD PPS base rate for calcimimetics.
Then, to determine the estimated costs in CY 2021 we proposed to
inflate the average per treatment payment amount for calcimimetics
($12.06) to 2021 using the CY 2021 ESRD PPS base rate update. As
discussed in section II.B.4.d of the CY 2021 ESRD PPS proposed rule (85
FR 42164), the proposed CY 2021 ESRD PPS base rate was $255.59. This
amount reflected a proposed CY 2021 wage index budget-neutrality
adjustment factor of .998652, a proposed base rate addition of $12.06
to include calcimimetics, and the proposed CY 2021 ESRD PPS payment
rate update of 1.8 percent. We stated that using the annual payment
rate update effectively updates the prices set for calcimimetics from
CY 2020 to CY 2021 because this is consistent with how the other
components of the base rate are updated for inflation each year, which
includes drugs. We noted, that the inflation factor used for drugs and
biological products for the ESRD bundled market basket is the Producer
Price Index as discussed in the CY 2019 ESRD PPS final rule (83 FR
56958 through 56959).
Therefore, we proposed to add Sec. 413.234(f) to specify that CMS
would multiply the utilization of the oral and injectable calcimimetics
by their respective prices and add the expenditure amount for both
forms together to calculate the total calcimimetic expenditure amount.
Then, CMS would divide the total calcimimetic expenditure amount by the
total number of paid HD-equivalent dialysis treatments in CYs 2018 and
2019, to calculate the average per-treatment payment amount. CMS would
reduce the average per-treatment payment amount by 1 percent to account
for the outlier policy under Sec. 413.237 in order to determine the
amount added to the ESRD PPS base rate.
We stated in the CY 2021 ESRD PPS proposed rule that, in keeping
with the principles of a PPS, which include motivating healthcare
providers to structure cost-effective, efficient patient care that
avoids unnecessary services, thereby reining in costs, we believe the
cost of the calcimimetics should be spread across all the dialysis
treatments, rather than be directed only to the patients receiving the
calcimimetics.
We solicited comments on the proposed revisions to Sec. 413.234 to
add paragraph (f) to Sec. 413.234 to establish the methodology for
modifying the ESRD PPS base rate to account for calcimimetics in the
ESRD PPS bundled payment.
As an alternative methodology, we considered dividing the total
Medicare expenditures for all calcimimetics in CYs 2018 and 2019
(approximately $2.3 billion) by the total number of paid HD-equivalent
dialysis treatments furnished during that same time period. However, we
noted that this approach would not factor in the impact of oral generic
calcimimetics, which entered the market from late December 2018 through
early January 2019. For example, under the proposed methodology, the
ASP calculations incorporate the more recent pricing of the oral
generic calcimimetics into the weighting which has resulted in a
significant decline in the ASP-based value. In addition, this
alternative methodology would not reflect our current policy to base
the TDAPA on ASP + 0, since in CYs 2018 and 2019 we paid for
calcimimetics using the TDAPA at ASP + 6. We stated that we believe it
is more appropriate for the ESRD PPS base rate to reflect the values
from the most recent calendar quarter of ASP calculations available
since that aligns with how ESRD facilities would be purchasing and
furnishing the oral calcimimetics rather than using expenditure data
from previous periods. We further stated that we believe that ESRD
facilities would want to support CMS's goal of lower drug and
biological products prices for its beneficiaries. In addition, we
noted, this alternative methodology would have a more significant
impact on beneficiary cost sharing in terms of a higher 20 percent co-
pay than the methodology in the proposed rule. We solicited comment on
this alternative methodology, which would entail dividing the total
Medicare expenditures (that is, actual spend) for all calcimimetics in
CYs 2018 and 2019 by the total number of paid HD-equivalent dialysis
treatments furnished during that same time period.
The comments and our responses to the comments on our proposed
methodology for including calcimimetics in the ESRD PPS base rate are
set forth below.
Comment: The majority of commenters recommended that CMS trim the
analysis data set to exclude data that is not representative of steady
utilization trends. The commenters were supportive of CMS collecting 2
full years of data for rate-setting purposes, but disagreed with the
methodology to incorporate the full data set into the analysis.
Specifically, the commenters recommended CMS remove CY 2018 claims
utilization from the analysis because it includes early utilization
data from CY 2018, the first year that CMS began paying for
calcimimetics under the ESRD PPS using the TDAPA. Commenters described
various changes occurring with regard to calcimimetics, including
changes in prescriber behavior, facility operational systems, and the
use of oral and IV calcimimetic products. The commenters asserted that
the following factors make utilization data from 2018 inaccurate
because the data fails to account for: (1) Slow adoption of the
intravenous form of calcimimetics due to the change in payment for the
drugs under Part D to Part B; (2) the time it takes for ESRD facilities
to adopt new treatment methods; and (3) a recent steady increase in
clinical utilization.
The commenters stated that the first quarter of 2018 is not an
accurate depiction of utilization because many beneficiaries had a
supply of oral calcimimetics that was paid under the Part D benefit
from 2017, being used at the start of 2018, which reduced utilization
under Part B. The commenters also stated that moving the payment from
Medicare Part D to Part B disrupted business and billing practices for
ESRD facilities. The commenters maintained that small and independent
ESRD facilities had a difficult time incorporating calcimimetics into
clinical practice compared to larger and hospital-based facilities. The
commenters explained that ESRD facilities usually need a longer time to
institute system modifications and adjust business practices when new
treatment methods become available.
The commenters stated that in the beginning of 2018 the new
intravenous form of calcimimetics was approved for treatment, and
clinical adoption has been gradual because it was a new form of
treatment, which is evidenced by
[[Page 71408]]
very low utilization in the early part of CY 2018 followed by steady
growth throughout the year, as shown in the Part B claims data. The
commenters stated that, while use of the intravenous drug increased
each quarter in 2018, the pace of that increase flattened out during CY
2019.
The commenters stated that due to these challenges and shifts in
utilization, they believed that claims data from CY 2018 reflected
lower units of calcimimetics being reported. A few commenters who
disagreed with including CY 2018 claims in the analysis, suggested CMS
trim the first and second quarter of 2018 utilization data from the
data set; however, another subset of commenters recommended CMS remove
the entire year of 2018 data and use CY 2019 data only, since their
analysis shows that year of data to be stable. The majority of the
commenters who disagreed with including the CY 2018 data recommended
that CMS use the most recent 12 months for which complete claims data
are available for rate-setting purposes. In addition, the commenters
asserted that using the most recent utilization data would align with
the proposed approach to use the most recent ASP.
MedPAC supported increasing the ESRD PPS base rate to include the
costs of calcimimetics in the ESRD PPS bundled payment. However, MedPAC
recommended refinements to CMS's proposed methodology to use units
reported on claims from both CYs 2018 and 2019 to determine utilization
for calcimimetics. MedPAC recommended that CMS use only the single year
of claims data that would result in the lowest add-on payment amount
for these products. MedPAC stated that this approach would be
consistent with the methodology used to establish the ESRD PPS base
rate beginning January 1, 2011, as required under MIPPA, which provided
that the estimated amount of total payments under the ESRD PPS for 2011
must be made based on the lowest per patient utilization data from
2007, 2008, or 2009. (Based on CMS's analysis in the CY 2011 ESRD PPS
final rule, claims data from CY 2007 reflected the lowest utilization
of ESRD services.) MedPAC noted the increase of utilization in ESAs
prior to the CY 2011 ESRD PPS final rule and recommended that our
methodology to include calcimimetics in the base rate be consistent
with the lowest per patient utilization methodology. Therefore, MedPAC
recommended that CMS use the year that would result in the lowest
average payment amount per treatment for calcimimetics.
Response: We appreciate the feedback on our proposal and the
viewpoints expressed by the commenters. Based on the recommendations we
received to use a single year or the most recent 12 months of claims
data, we re-examined the most recently available data. First, an
approach that uses the most recent 12 months of claims data would
result in a base rate increase that is larger than when both 2018 and
2019 data are used. Second, using the most recent 12 months of claims
data would not sufficiently capture the developments with calcimimetics
that took place at the end of 2018. For these reasons, we believe this
is not the better approach.
Next, using only 2019 claims data would diminish the impact of the
entry of oral generic calcimimetics into the market in mid-2018. In
examining the 2 full years of data, we see a continued increase in the
utilization of the oral generic calcimimetic drugs, a steep decline in
the brand-name oral calcimimetic, and a slow increase in the brand-name
injectable version. Using only CY 2019 claims data would also result in
a base rate increase that is larger than when both CYs 2018 and 2019
data are used. We recognize the 2018 claims data may have demonstrated
low uptake for the injectable calcimimetic, but it also may reflect
that the significant upswings in utilization of the injectable
calcimimetic in 2019 were from ESRD facilities anticipating CMS ending
the TDAPA for calcimimetics beginning January 2020. As MedPAC noted,
when the ESRD PPS was implemented in 2011, there had been a pattern of
ESA overutilization before the ESRD PPS bundled payment was implemented
and a decline in utilization of ESAs post-implementation of the ESRD
PPS that required a rebasing of the amount included in the ESRD PPS
bundled payment for ESAs. We believe it is appropriate to consider both
the slow uptake of the injectable calcimimetic and the ramping up of
utilization of generic oral calcimimetics, following the loss of the
exclusivity of the brand name product in addition to the anticipation
of the TDAPA ending in 2019. If we used only CY 2019 data, we believe
that we would be overestimating the use of calcimimetics in the ESRD
PPS bundled payment. For these reasons, we also believe using only 2019
claims data for rate setting is not the better approach.
Lastly, we examined an approach that would take into account some
commenters' request for the lowest add-on payment amount, other
commenters' request to focus on more recent data, and CMS's goal to use
a robust data set that accounts for the different types of medication
and innovation. For this approach, we examined 18 months of claims data
starting with the third quarter of 2018 through the fourth quarter of
2019. In reviewing the 18 months of data, we continue to capture the
increase in the utilization of the oral generic calcimimetic drugs and
the decline in the brand-name oral calcimimetic, which, as we noted
above, was apparent to us when we examined the full 2 years of data.
Using the 18 months of data from the third quarter of 2018 through the
fourth quarter of 2019 would result in a base rate increase that is
larger than when both CYs 2018 and 2019 data are used, but smaller than
when only CY 2019 is used. We believe the data set should reflect both
the slow uptake of the injectable calcimimetic and the ramping up of
utilization of generic oral calcimimetics. We also believe that the
commenters are reasonable in wanting to incorporate more recent data in
the utilization, and view the use of 18 months of data as a mid-point
between the proposal and what commenters suggested is appropriate.
Accordingly, we have concluded that using 18 months of claims data is
the most appropriate approach. We also agree with commenters that there
have been shifts in the utilization of calcimimetics. We believe that
the shifts in utilization reveal a rapidly changing market. We plan to
revisit the calcimimetic Medicare expenditures in the future, such as
when a generic injectable comes on the market.
We believe using 18 months of claims data provides us with the most
accurate data set reflecting paid claims for generic and brand-name
oral calcimimetic, along with the injectable calcimimetic. Therefore,
for this final rule, we used adjudicated claims from the third quarter
of 2018 through the fourth quarter of 2019 in the final calculation of
the modification to the base rate. For the CY 2018 utilization data for
calcimimetics, we used the latest available claims data based on the
third and fourth quarters of CY 2018 ESRD facility claims, updated
through June 30, 2019 (that is, claims with dates of service from July
1 through December 31, 2018, that were received, processed, paid, and
passed to the NCH file as of June 30, 2019). For CY 2019 utilization
data, we used the latest available CY 2019 ESRD facility claims,
updated through June 30, 2020 (that is, claims with dates of service
from January 1 through December 31, 2019, that were received,
processed, paid, and passed to the NCH file as of June 30, 2020).
Comment: MedPAC recommended that we set the price for calcimimetics
[[Page 71409]]
using values from the calendar quarter of ASP data that would result in
the lowest total expenditures for these drugs, at ASP+0. MedPAC also
stated that using the most recent calendar quarter of 2020 ASP data
would best reflect the increasing use of oral generic calcimimetics,
which entered the market in late December 2018, and how ESRD facilities
are likely to purchase and furnish the oral calcimimetics in the
future. MedPAC recommended this methodology because it is consistent
with how CMS bases the price for calcimimetics under current
regulations. MedPAC strongly supported pricing for calcimimetics under
the proposed methodology at ASP+0.
The majority of the commenters recommended that CMS calculate the
price using the most recent quarter ASP data available at ASP+6 because
they believed this would more accurately reflect the cost ESRD
facilities incur when purchasing and administering these drugs.
Commenters stated that most small and independent providers experience
less favorable acquisition costs for calcimimetics than other provider
types, with costs that exceed 100 percent of ASP. The commenters stated
that CMS's methodology should account for actual acquisition costs
incurred by providers, especially small and independent providers with
limited resources, and for these reasons, recommended that the
methodology be refined to add the price for calcimimetics at ASP+6
rather than ASP+0.
Response: We appreciate the feedback we received from the
commenters with regard to our proposal to base pricing for
calcimimetics at ASP+0. We agree with MedPAC that ASP+0 is appropriate
as the basis for calcimimetics. Although some commenters suggested that
the base pricing for calcimimetics should be ASP + 6, we believe this
would be a duplicative payment because the 6 percent accounts for
storage and administration of drugs and drug products, along with
routine administrative costs, and these costs are already included in
the ESRD PPS base rate. We understand the concerns expressed by the
commenters about ASP, and the difficulties that small ESRD facilities
may encounter if they are unable to negotiate the lower drug prices
attributed to volume, and inaccessibility to supply chain discounts;
however, we do not think this overrides the concern about providing
duplicative payment. As we discussed in the CY 2019 ESRD PPS final rule
(83 FR 56945), the intent of the TDAPA is to support ESRD facilities in
the uptake of the drugs and biological products that are eligible for
the add-on payment adjustment. In addition to the reasons discussed
previously, and since our payment policy for the TDAPA is based on
ASP+0, we believe basing the price for calcimimetics in the ESRD PPS
base rate on ASP+0 is appropriate and consistent with our policy;
therefore we are finalizing as proposed.
Comment: A few commenters recommended CMS create a methodology for
a beneficiary-targeted add-on payment to the ESRD PPS base rate. The
commenters recommended a targeted adjustment for the oral calcimimetic
and a separate adjustment for the intravenous calcimimetic, given that
only a subset of beneficiaries receive calcimimetics and the costs of
calcimimetics would be targeted to only beneficiaries receiving the
drug. MedPAC agreed with our proposal to spread the cost of
calcimimetics across all dialysis treatments, rather than just for the
treatments of beneficiaries receiving the drugs.
Response: The ESRD PPS is a payment system based on the ``average
patient,'' which means it is based on the costs of the average patient.
Currently, payment under the ESRD PPS is not targeted towards patients
who utilize specific drugs, items, or services. Our proposed
methodology would result in a flat increase to the base rate for all
treatments and would not vary when facilities use more or less than the
average amount. We believe the proposed methodology aligns with how
other services are paid under the bundled payment system and reflects
the average cost for furnishing renal dialysis services to patients.
Therefore, we are finalizing this aspect of our proposal as proposed.
Comment: A few commenters disagreed with the proposed methodology
to reduce the average per-treatment payment amount by 1 percent. The
commenters stated that it would be harder for ESRD facilities to meet
the eligibility requirements for outlier payments in CY 2021 and
beyond.
Response: Beginning January 1, 2021, calcimimetics are eligible for
outlier payments. In the CY 2011 ESRD PPS final rule, we applied a 1
percent reduction to the unadjusted ESRD PPS base rate to account for
outlier payments. An ESRD facility that treats beneficiaries with
unusually high resource requirements, as measured by their use of
identified services beyond a specified threshold, is entitled to
outlier payments. In order for the application of the 1 percent outlier
to be maintained, we believe 1 percent must be excluded from the
addition to the ESRD PPS base rate for calcimimetics. We continue to
believe that a 1 percent outlier payment adjustment balances the need
to pay for unusually costly resource-intensive cases, while also
ensuring an adequate add-on to the base rate for beneficiaries who do
not qualify for outlier payments. Therefore, we are finalizing this
aspect of our proposal as proposed.
Comment: Some commenters stated that CMS should not use the
alternative method discussed in the CY 2021 ESRD PPS proposed rule,
under which total calcimimetic expenditures would be divided by the
total number of HD-equivalent dialysis treatments in 2018 and 2019. The
commenters stated that the alternative method expenditures for
calcimimetics is based upon the previous policy of paying ASP+6 percent
and does not reflect ASP+0. The commenters stated that the alternative
method would likely result in a much higher increase to the base rate,
which in turn would result in higher cost-sharing for beneficiaries.
The commenters agreed that the alternative method does not factor in
the impact of the oral generic calcimimetics, whereas the proposed
methodology incorporates the recent pricing of oral generic
calcimimetics into the weighting.
Response: We agree with the commenters' assessment of the
alternative methodology, that it does not factor in the impact of oral
generic calcimimetics and does not reflect ASP+0, and we are not
adopting it in this final rule. We continue to believe that it is more
appropriate for the ESRD PPS base rate to reflect the values from the
most recent calendar quarter of ASP calculations available, since that
aligns with how ESRD facilities would be purchasing and furnishing the
oral calcimimetics, rather than using expenditure data from previous
periods. Further, including the higher payment for oral calcimimetics
that have lower priced generic equivalents is not in keeping with the
agency's overall goals of lowering drug prices.
Comment: We received several comments that were beyond the scope of
the proposed rule. Some commenters stated that CMS should apply the 3-
year data collection policy to all TDAPA-eligible therapies in the
future because it is critical for CMS to have 2-full calendar years of
claims data (which requires 3 years of payment of the TDAPA to address
data lags) to enable an appropriate understanding of actual product
utilization in clinical care.
Response: Currently, the TDAPA payment is applicable for a minimum
period of 2 years. For new drugs and biological products that are
eligible for the TDAPA in the future and are not considered included in
the ESRD PPS
[[Page 71410]]
base rate, CMS will continue to require that the TDAPA is paid until
sufficient claims data for rate setting analysis is available, as
required by the regulations. When a new renal dialysis drug or
biological product is already included in a functional category, then
the purpose of the TDAPA is to facilitate uptake of the new product
into the business process of the ESRD facility. Although we would
collect the data for purposes of analyzing utilization, we would not
collect it for purposes of a potential modification to the base rate.
Therefore we would not need 3 years of data for those drugs.
Comment: Some commenters stated concerns with the payment increase
to the patient's out-of-pocket cost due to the proposed increase to the
ESRD PPS bundled payment for calcimimetics, and recommended CMS keep
the financial burden to the beneficiary population in consideration.
Response: We understand that beneficiary coinsurance is a concern.
When evaluating the methodology for modifying the ESRD PPS base rate
for calcimimetics, we were cognizant of the burden of beneficiary co-
insurance and worked to strike a balance with beneficiary need for
access at a reasonable price, and supporting a new therapy for a
significant portion of the dialysis population. We believe the final
policy for the inclusion of dollars in the base rate strikes the
balance we are seeking.
Final Rule Action: After consideration of the comments we received,
we are finalizing Sec. 413.234 to add paragraph (f), which establishes
the methodology for modifying the ESRD PPS base rate to account for
calcimimetics in the ESRD PPS bundled payment, as proposed, with one
modification. We are using claims data from the third quarter of CY
2018 through the fourth quarter of CY 2019, instead of CYs 2018 and
2019 claims data, to determine the utilization of calcimimetics for
purposes of our methodology.
Specifically, to calculate the final amount for calcimimetics to be
added to the ESRD PPS base rate beginning January 1, 2021, we applied
the values from the most recent calendar quarter 2020 ASP + 0
calculations available to the public for calcimimetics to the
utilization period of third quarter of 2018 through the fourth quarter
of 2019 to calculate the calcimimetic expenditure amount for 18 months.
We determined that 1,350,414,515 total units (mg) of oral
calcimimetics were used from Q3 2018 through Q4 2019. With regard to
injectable calcimimetics, we determined that 280,998,916 total units
(0.1 mg) were used from Q3 2018 through Q4 2019. We used the values
from the most recent calendar quarter ASP + 0 calculations available to
the public, which is the fourth quarter of 2020. We used $0.085 per mg
for the oral calcimimetic and $2.023 per 0.1 mg for the injectable
calcimimetic. The prices per unit correspond to 1 mg and 0.1 mg for
cinacalcet and etelcalcetide, respectively. Multiplying the utilization
of the oral and injectable calcimimetics by their respective ASP and
then adding the expenditure amount for both forms of calcimimetics
together results in the total 18-months (Q3 2018 through Q4 2019)
calculated calcimimetic expenditure amount. That is, for this final
rule, we calculated the total calcimimetic expenditure amount to be
$683,246,041.
The total number of paid HD-equivalent dialysis treatments
furnished to Medicare ESRD beneficiaries from the third quarter of CY
2018 through the fourth quarter of CY 2019 was 68,148,651. This total
number of paid treatments reflects all paid dialysis treatments
regardless of whether a calcimimetic was furnished. Dividing the
calcimimetic expenditure amount by the total number of paid HD-
equivalent dialysis treatments provides an average per treatment
payment amount of $10.03. We then reduced this amount by 1 percent to
account for the outlier policy under Sec. 413.237 to get a total of
$9.93 ($10.03 x .99 = $9.93). Due to the effect of generic
calcimimetics in lowering the drug prices for calcimimetics, $9.93 is
the final amount added to the CY 2021 ESRD PPS base rate to account for
calcimimetics in the ESRD PPS bundled payment.
2. Changes to the TPNIES Eligibility Criteria
a. Background
In the CY 2020 ESRD PPS final rule (84 FR 60681 through 60698), CMS
established a transitional add-on payment adjustment for certain new
and innovative renal dialysis equipment and supplies under the ESRD
PPS, under the authority of section 1881(b)(14)(D)(iv) of the Act, in
order to support ESRD facility use and beneficiary access to these new
technologies. We established this payment adjustment to help address
the unique circumstances experienced by ESRD facilities when
incorporating new and innovative equipment and supplies into their
businesses and to support ESRD facilities transitioning or testing
these products during the period when they are new to market. We added
Sec. 413.236 to establish the eligibility criteria and payment
policies for the transitional add-on payment adjustment for new and
innovative renal dialysis equipment and supplies, which we call the
TPNIES.
We established in Sec. 413.236(b) that for dates of service
occurring on or after January 1, 2020, CMS will provide the TPNIES to
an ESRD facility for furnishing a covered equipment or supply only if
the item: (1) Has been designated by CMS as a renal dialysis service
under Sec. 413.171, (2) is new, meaning it is granted marketing
authorization by FDA on or after January 1, 2020, (3) is commercially
available by January 1 of the particular calendar year, meaning the
year in which the payment adjustment would take effect, (4) has a HCPCS
application submitted in accordance with the official Level II HCPCS
coding procedures by September 1 of the particular calendar year, (5)
is innovative, meaning it meets the criteria specified in Sec.
412.87(b)(1) and related guidance, and (6) is not a capital-related
asset that an ESRD facility has an economic interest in through
ownership (regardless of the manner in which it was acquired).
Regarding the innovation requirement in Sec. 413.236(b)(5), in the
CY 2020 ESRD PPS final rule (84 FR 60690), we stated that CMS will use
the following criteria to evaluate substantial clinical improvement
(SCI) for purposes of the TPNIES under the ESRD PPS, based on the
inpatient hospital prospective payment system (IPPS) SCI criteria in
Sec. 412.87(b)(1) and related guidance. Section 412.87(b)(1) includes
the criteria used under the IPPS new technology add-on payment (NTAP)
to determine whether a new technology represents an advance that
substantially improves, relative to renal dialysis services previously
available, the diagnosis or treatment of Medicare beneficiaries.
The totality of the circumstances is considered when making a
determination that a new renal dialysis equipment or supply represents
an advance that substantially improves, relative to renal dialysis
services previously available, the diagnosis or treatment of Medicare
beneficiaries.
A determination that a new renal dialysis equipment or supply
represents an advance that substantially improves, relative to renal
dialysis services previously available, the diagnosis or treatment of
Medicare beneficiaries means one of the following:
The new renal dialysis equipment or supply offers a
treatment option for a patient population unresponsive to, or
ineligible for, currently available treatments; or
[[Page 71411]]
The new renal dialysis equipment or supply offers the
ability to diagnose a medical condition in a patient population where
that medical condition is currently undetectable, or offers the ability
to diagnose a medical condition earlier in a patient population than
allowed by currently available methods, and there must also be evidence
that use of the new renal dialysis service to make a diagnosis affects
the management of the patient; or
The use of the new renal dialysis equipment or supply
significantly improves clinical outcomes relative to renal dialysis
services previously available as demonstrated by one or more of the
following: (1) A reduction in at least one clinically significant
adverse event, including a reduction in mortality or a clinically
significant complication; (2) a decreased rate of at least one
subsequent diagnostic or therapeutic intervention; (3) a decreased
number of future hospitalizations or physician visits; (4) a more rapid
beneficial resolution of the disease process treatment including, but
not limited to, a reduced length of stay or recovery time; (5) an
improvement in one or more activities of daily living; (6) an improved
quality of life; or (7) a demonstrated greater medication adherence or
compliance; or,
The totality of the circumstances otherwise demonstrates
that the new renal dialysis equipment or supply substantially improves,
relative to renal dialysis services previously available, the diagnosis
or treatment of Medicare beneficiaries.
Evidence from the following published or unpublished information
sources from within the United States (U.S.) or elsewhere may be
sufficient to establish that a new renal dialysis equipment or supply
represents an advance that substantially improves, relative to renal
dialysis services previously available, the diagnosis or treatment of
Medicare beneficiaries: Clinical trials, peer reviewed journal
articles; study results; meta-analyses; consensus statements; white
papers; patient surveys; case studies; reports; systematic literature
reviews; letters from major healthcare associations; editorials and
letters to the editor; and public comments. Other appropriate
information sources may be considered.
The medical condition diagnosed or treated by the new renal
dialysis equipment or supply may have a low prevalence among Medicare
beneficiaries.
The new renal dialysis equipment or supply may represent an advance
that substantially improves, relative to renal dialysis services
previously available, the diagnosis or treatment of a subpopulation of
patients with the medical condition diagnosed or treated by the new
renal dialysis equipment or supply.
We also established a process modeled after IPPS's process of
determining if a new medical service or technology meets the SCI
criteria specified in Sec. 412.87(b)(1). Specifically, similar to the
IPPS NTAP, we wanted to align our goals with the agency's efforts to
transform the healthcare delivery system for the ESRD beneficiary
through competition and innovation to provide patients with better
value and results. As we discuss in the CY 2020 ESRD PPS final rule (84
FR 60682), we believe it is appropriate to facilitate access to new and
innovative equipment and supplies through add-on payments similar to
the IPPS NTAP program and to provide innovators with standard criteria
for both inpatient and outpatient settings. In Sec. 413.236(c), we
established a process for our announcement of TPNIES determinations and
a deadline for consideration of new renal dialysis equipment or supply
applications under the ESRD PPS. CMS will consider whether a new renal
dialysis equipment or supply meets the eligibility criteria specified
in Sec. 413.236(b) and summarize the applications received in the
annual ESRD PPS proposed rules. Then, after consideration of public
comments, we will announce the results in the Federal Register as part
of our annual updates and changes to the ESRD PPS in the ESRD PPS final
rule. The TPNIES applications for CY 2021 were discussed in section
II.C.2 of the CY 2021 ESRD PPS proposed rule as well as section II.C.2
of this final rule. CMS will only consider a complete application
received by CMS by February 1 prior to the particular calendar year,
meaning the year in which the payment adjustment would take effect, and
FDA marketing authorization for the equipment or supply must occur by
September 1 prior to the particular calendar year. We stated in the CY
2020 ESRD PPS final rule (80 FR 60690) that we would establish a
workgroup of CMS medical and other staff to review the studies and
papers submitted as part of the TPNIES application, the public comments
we receive, and the FDA marketing authorization and HCPCS application
information and assess the extent to which the product provides SCI
over current technologies.
We established Sec. 413.236(d) to provide a payment adjustment for
a new and innovative renal dialysis equipment or supply. Section
413.236(d)(1) states that the TPNIES is paid for 2-calendar years.
Section 413.236(d)(2) provides that, following payment of the TPNIES,
the ESRD PPS base rate will not be modified and the new and innovative
renal dialysis equipment or supply will become an eligible outlier
service as provided in Sec. 413.237.
Under Sec. 413.236(e)(1), the Medicare Administrative Contractors
(MACs), on behalf of CMS, will establish prices for the new and
innovative renal dialysis equipment and supplies that meet the
eligibility criteria specified in Sec. 413.236(b) using verifiable
information from the following sources of information, if available:
(1) The invoice amount, facility charges for the item, discounts,
allowances, and rebates; (2) the price established for the item by
other MACs and the sources of information used to establish that price;
(3) payment amounts determined by other payers and the information used
to establish those payment amounts; and (4) charges and payment amounts
required for other equipment and supplies that may be comparable or
otherwise relevant.
b. Changes to Eligibility for the TPNIES
Currently, in Sec. 413.236(b)(2), one eligibility requirement for
the TPNIES is that an equipment or supply must be new, meaning it is
granted marketing authorization by FDA on or after January 1, 2020. In
establishing this requirement, we tied what is considered new to
January 1, 2020, the effective date of the TPNIES policy. We explained
in the CY 2020 ESRD PPS final rule (84 FR 60685) that by including FDA
marketing authorizations on or after January 1, 2020, we intended to
support ESRD facility use and beneficiary access to the latest
technological improvements to renal dialysis equipment and supplies. As
we stated in the CY 2021 ESRD PPS proposed rule, while we continue to
believe it is appropriate to tie the newness requirement to the date of
the FDA marketing authorization for the reasons discussed in the CY
2020 ESRD PPS final rule, we do not believe newness should be tied to
the effective date of the TPNIES policy going forward, for the reasons
discussed below. In addition, we believe this eligibility criterion
should address when an equipment or supply is no longer considered new.
Under the current requirement at Sec. 413.236(b)(2), we could receive
an application for the TPNIES for equipment and supplies many years
after FDA marketing authorization, when the equipment is no longer new.
In the CY 2020 ESRD PPS proposed rule (84 FR 38353), while we
proposed to define new renal dialysis equipment
[[Page 71412]]
and supplies as those that are granted marketing authorization by FDA
on or after January 1, 2020, we also solicited comment on whether a
different FDA marketing authorization date, for example, on or after
January 1, 2019, might be appropriate. We explained in the CY 2020 ESRD
PPS final rule (84 FR 60688 through 60689) that while some commenters
expressed support for the proposed definition, most of the comments
were focused on the merits of establishing a date for newness that
precedes the effective date of the TPNIES policy and whether all renal
dialysis equipment and supplies must seek FDA marketing authorization.
None of the comments addressed whether tying TPNIES eligibility to the
TPNIES policy effective date or any fixed date would limit the TPNIES
to new and innovative equipment and supplies.
After careful consideration of these comments, in the CY 2020 ESRD
PPS final rule, we finalized the proposed definition of new to mean the
renal dialysis equipment or supply was granted marketing authorization
by FDA on or after January 1, 2020. We stated that while we appreciated
that manufacturers of renal dialysis equipment and supplies that were
granted FDA marketing authorization in prior years would want these
products to be eligible for the TPNIES, our goal is not to provide a
payment adjustment for all the products that have received FDA
marketing authorization or for products that have had limited market
uptake, but rather to establish an add-on payment adjustment for
certain new and innovative products in order to support uptake by ESRD
facilities of new and innovative renal dialysis equipment and supplies.
In addition, we stated in the CY 2020 ESRD PPS final rule that we
appreciated the complex issues the commenters raised if we were to
select an earlier FDA marketing authorization date, and believed our
approach will avoid the need to address those issues. We noted that the
ESRD PPS is a prospective payment system, in which changes are
generally made prospectively, including eligibility requirements for
add-on payment adjustments. In addition, we noted that this FDA
marketing authorization date of January 1, 2020 or later is consistent
with the TDAPA's definition of a new renal dialysis drug or biological
product.
As we stated in the CY 2021 ESRD PPS proposed rule (85 FR 42142
through 42143), we no longer believe an item should be considered new,
based on the TPNIES policy effective date of January 1, 2020. Rather,
we believe that it is important for the TPNIES policy to provide a
window of time when a new renal dialysis equipment or supply is
considered new to provide transparency to potential applicants. We
noted that, under the proposal, the TPNIES policy would still be
effective as of January 1, 2020 and therefore no equipment or supply
receiving FDA marketing authorization before January 1, 2020 would be
eligible for the TPNIES. However, we proposed to revise Sec.
413.236(b)(2) to remove ``on or after January 1, 2020'' and to reflect
the definition of new to mean, within 3 years beginning on the date of
FDA marketing authorization. By defining new in this manner, we would
be giving entities wishing to apply for the TPNIES for their equipment
or supply 3 years beginning on the date of FDA marketing authorization
in which to submit their applications, while still limiting eligibility
for the TPNIES to new technologies. We proposed a 3-year newness window
to be consistent with the timeframes under the IPPS NTAP requirements
in Sec. 412.87(b)(2). Under the NTAP, new technologies are considered
to be new for 2 to 3 years after the point at which data begin to
become available reflecting the inpatient hospital code assigned to the
new service or technology. We noted that under the hospital outpatient
PPS the pass-through payment application for a medical device must also
be submitted within 3 years from the date of the initial FDA approval
or clearance, if required, unless there is a documented, verifiable
delay in U.S. market availability after FDA approval or clearance is
granted, in which case CMS will consider the pass-through payment
application if it is submitted within 3 years from the date of market
availability.
In addition, we proposed to revise Sec. 413.236(b) to remove ``For
dates of service occurring on or after January 1, 2020'' and to revise
Sec. 413.236(a) to reflect the January 1, 2020 effective date of the
TPNIES policy finalized in the CY 2020 ESRD PPS final rule. We also
proposed other revisions to this paragraph, which are discussed in
section II.B.3.b.(1) of this final rule.
We sought comment on our proposal to define new for purposes of the
TPNIES eligibility as within 3 years beginning on the date of FDA
marketing authorization. In addition, we stated that we understood
there may be situations in which a manufacturer has FDA marketing
authorization for an item, but the process of manufacturing the item
has been delayed, for example, by a PHE, such as the current COVID-19
pandemic. Therefore, we also sought comment on the number of years for
an item to be considered new, or if newness should be based on
different criteria such as the later of marketing availability or the
date of FDA marketing authorization.
Currently, Sec. 413.236(b)(4) requires applicants for the TPNIES
to have a HCPCS application submitted in accordance with the official
Level II HCPCS coding procedures by September 1 of the particular
calendar year. Section 413.236(c) currently requires applicants for
TPNIES to have the FDA marketing authorization for the equipment or
supply by September 1 prior to the particular calendar year.
After publication of the CY 2020 ESRD PPS final rule, CMS updated
its HCPCS Level II coding procedures to enable shorter and more
frequent HCPCS code application cycles. Beginning in January 2020, CMS
implemented quarterly HCPCS code application opportunities for drugs
and biological products, and biannual application opportunities for
durable medical equipment, prosthetics, orthotics, and supplies
(DMEPOS) and other non-drug, non-biological items and services.
As the Administrator of CMS announced \2\ in May 2019, this change
is part of CMS' broader, comprehensive initiative to foster innovation
and expedite adoption of and patient access to new medical
technologies. CMS' delivery on this important goal necessitated
procedural changes that balance the need to code more frequently with
the amount of time necessary to accurately process applications. CMS
has released two documents with detailed information on the updated
HCPCS Level II coding procedures, application instructions, and
deadlines for 2020. Both documents, HCPCS Level II Coding Procedures
\3\, and HCPCS Level II Code Modification Application Instructions for
the 2020 Coding Cycle \4\ are available on the CMS website. Under the
new guidance, coding cycles for DMEPOS items and services will occur no
less frequently than biannually. For 2020, the deadline for HCPCS Level
II code applications for biannual Coding Cycle 1 for DMEPOS items and
services was January 6, 2020 with issuance of final code decisions
occurring July 2020.
[[Page 71413]]
These final code decisions are effective October 1, 2020. For biannual
Coding Cycle 2, the code application deadline for DMEPOS items and
services is June 29, 2020 with issuance of final code decisions
occurring January 2021 or earlier. These final code decisions are
effective April 1, 2021. These dates are specific for 2020 and may
change annually. Specific dates for biannual Coding Cycles 1 and 2 for
future years will be published on the HCPCS website annually.
---------------------------------------------------------------------------
\2\ https://www.cms.gov/newsroom/press-releases/cms-outlines-comprehensive-strategy-foster-innovation-transformative-medical-technologies.
\3\ https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/2018-11-30-HCPCS-Level2-Coding-Procedure.pdf.
\4\ https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/2020-HCPCS-Application-and-Instructions.pdf.
---------------------------------------------------------------------------
Under the new biannual Coding Cycle 2 for DMEPOS items and
services, in order to obtain a final HCPCS Level II code decision by
January 1, 2021, the applicant must have submitted a complete HCPCS
Level II code application along with the FDA marketing authorization
documentation to CMS by June 29, 2020. In light of the change to
biannual coding cycles, we stated in the CY 2021 ESRD PPS proposed rule
that we reassessed the TPNIES eligibility criterion in Sec.
413.236(b)(4), which is related to submission of the HCPCS Level II
code application as well as Sec. 413.236(c), which discusses the
deadlines for consideration of new renal dialysis equipment or supply
applications and found that they conflict with the current HCPCS Level
II coding guidelines.
Because our HCPCS Level II coding guidelines require that
applicants submit complete code applications for DMEPOS items and
services to CMS by the deadline for biannual Coding Cycle 2 as
specified in the HCPCS Level II coding guidance on the CMS website in
order for a final HCPCS Level II code decision to be made by the
following January 1 and require that documentation of FDA marketing
authorization be submitted by the applicant to CMS by the HCPCS Level
II code application deadline, we proposed to align the TPNIES
regulation at Sec. 413.236(b)(4) and (c) with these guidelines. We
stated in the CY 2021 ESRD PPS proposed rule (85 FR 42144) that we
believe this alignment would provide consistency across CMS processes
and transparency on deadlines for applicants for the TPNIES. We further
stated that in the event of a delay in the final HCPCS Level II coding
decision, a miscellaneous code will be used in the interim until a
final coding decision is made.
We also proposed to correct a technical error in Sec.
413.236(b)(4), which requires the HCPCS application to be submitted by
September 1 ``of'' the particular calendar year, meaning the year in
which the payment adjustment would take effect. As we explained in the
CY 2021 ESRD PPS proposed rule (85 FR 42144), in accordance with the
TPNIES policy, we would need to have the HCPCS application submitted
``prior to'' the particular calendar year to be able to make a
determination of TPNIES eligibility for payment to occur in the
particular calendar year.
Therefore, we proposed to revise Sec. 413.236(b)(4) to add the
word ``complete'' and to replace ``September 1'' with ``the HCPCS Level
II code application deadline for biannual Coding Cycle 2 for DMEPOS
items and services as specified in the HCPCS Level II coding guidance
on the CMS website,'' and replace the word ``of'' with ``prior to'' to
reflect that the HCPCS code application for biannual Coding Cycle 2
must be complete and submitted as specified in the HCPCS Level II
coding guidance on the CMS website prior to the particular calendar
year. We explained in the CY 2021 ESRD PPS proposed rule that this
HCPCS application submission deadline for a HCPCS Level II code
application may result in a final HCPCS code determination by January
1, when the TPNIES payment would begin. We noted that, for 2020
biannual Coding Cycle 2, final decisions on HCPCS Level II codes issued
by January 1, 2021 are not effective until April 1, 2021. For this
reason, during this interim period, we proposed to use a miscellaneous
HCPCS code to provide the TPNIES payment. We stated that in the event
of a delay in the final HCPCS Level II coding decision, a miscellaneous
code will be used in the interim until the later effective date. In
addition, we proposed a technical change to Sec. 413.236(b)(4) to be
consistent with how CMS references the HCPCS Level II coding
procedures. That is, we proposed to revise Sec. 413.236(b)(4) from
``official Level II HCPCS coding procedures'' to ``HCPCS Level II
coding procedures on the CMS website''.
In addition, we proposed to revise Sec. 413.236(c) to replace
``September 1'' with ``the HCPCS Level II code application deadline for
biannual Coding Cycle 2 for DMEPOS items and services as specified in
the HCPCS Level II coding guidance on the CMS website'' to reflect that
FDA marketing authorization for the new and innovative equipment or
supply must accompany the HCPCS application prior to the particular
calendar year in order for the item to qualify for the TPNIES in the
next calendar year. Although applicants for the TPNIES may submit a
TPNIES application while the equipment or supply is undergoing the FDA
marketing authorization process (since the deadline for the TPNIES
application is February 1), under our proposal, FDA marketing
authorization of the equipment or supply must be granted prior to the
HCPCS Level II code application deadline. If FDA marketing
authorization is not granted prior to the HCPCS Level II code
application deadline, the TPNIES application would be denied and the
applicant would need to reapply and submit an updated application by
February 1 of the following year or within 3 years beginning on the
date of FDA marketing authorization, in accordance with the proposed
revisions to Sec. 413.236(b)(2) discussed previously in this final
rule.
Currently, Sec. 413.236(b)(5) requires that the new equipment or
supply be innovative, meaning it meets the criteria specified in Sec.
412.87(b)(1) of this chapter and related guidance. As discussed
previously in the CY 2021 ESRD PPS proposed rule and this final rule,
Sec. 412.87(b)(1) includes the criteria used under the IPPS NTAP to
determine whether a new technology represents an advance that
substantially improves, relative to technologies previously available,
the diagnosis or treatment of Medicare beneficiaries. In Sec.
413.236(b)(5) we adopted the same SCI criteria to determine if a new
renal dialysis equipment or supply is innovative for purposes of the
TPNIES under the ESRD PPS. We also stated in the CY 2020 ESRD PPS final
rule (84 FR 60690) our intention to adopt any future modifications to
the IPPS SCI criteria so that innovators would have standard criteria
to meet for both settings. While we adopted the IPPS SCI criteria under
Sec. 412.87(b)(1), we did not adopt the alternative pathway for
breakthrough devices (84 FR 42296) under the ESRD PPS.
In the fiscal year (FY) 2020 IPPS final rule (84 FR 42180 through
42181), CMS codified additional SCI criteria that had been included in
manuals and other sub-regulatory guidance. In accordance with the
reference to Sec. 412.87(b)(1), we adopted the FY 2020 IPPS changes to
the SCI criteria, and any future changes to the SCI criteria, by
reference, unless and until we make any changes to the criteria through
notice-and-comment rulemaking. Although the codification of the related
guidance for the IPPS SCI occurred prior to the publication of the CY
2020 ESRD PPS final rule, we inadvertently included a reference to
related guidance in Sec. 413.236(b)(5). Therefore, we proposed to
revise Sec. 413.236(b)(5) to remove ``and related guidance'' to
reflect that all related SCI guidance has now been incorporated into
Sec. 412.87(b)(1).
The comments and our responses to the comments on our proposed
changes
[[Page 71414]]
to the eligibility criteria for the TPNIES are set forth below.
Comment: Several national associations of dialysis stakeholders,
including organizations representing large dialysis organizations (LDO)
and non-profit facilities, expressed support for the proposal to change
the current definition of ``new'' to give entities wishing to apply for
the TPNIES 3 years beginning on the date of FDA marketing authorization
in which to submit their applications. An LDO requested that CMS
monitor this window to ensure that 3 years is sufficient to allow
manufacturers time to gather high-quality evidence of SCI for their
technologies. However, a software company that developed a renal
product that has demonstrated SCI, but was approved by the FDA almost 7
years ago, commented that 3 years is not long enough for its product to
qualify for TPNIES consideration. The software company asked CMS to
consider a longer period of eligibility for the TPNIES primarily
because the dialysis industry is slow to uptake innovations. The
company suggested that CMS could extend the window selectively if the
applicant can show that an innovative technology has no other FDA-
authorized counterpart with similar technology. The software company
asserted that by lengthening the period of eligibility for the TPNIES
program, with added criteria to maintain a high level of selectivity,
CMS would allow that company and other worthy innovators to receive the
TPNIES. The company asked that CMS consider making changes to the
eligibility criteria for TPNIES that will open up the potential for
providers to receive reimbursement for the use of technologies that can
still be proven to be innovative and demonstrate SCI even though their
FDA authorization is beyond the 3-year period.
Response: We appreciate the commenters' support for the proposal
and want to point out that TPNIES applicants may submit an application
while the equipment or supply is pending marketing authorization by the
FDA, however, FDA marketing authorization must be submitted with the
HCPCS application. We believe that 3 years is sufficient time for
manufacturers to gather high-quality evidence of SCI for their product
and establish their manufacturing, marketing, and distribution
strategies. This is consistent with the period of time during which
qualifying items and services under the Hospital Inpatient Prospective
Payment System NTAP are considered new. We intend to monitor the
process to ensure we provide the TPNIES to new and innovative renal
dialysis equipment and supplies.
Regarding the suggestion that CMS extend the window of TPNIES
eligibility if the applicant can show an innovative technology has no
other FDA-authorized counterpart with similar technology, we thank the
commenter for this input. We did not propose this policy in the CY 2021
ESRD PPS proposed rule, but will take this into consideration for
future rulemaking.
Comment: Several national associations of dialysis stakeholders,
including organizations representing LDOs and non-profit facilities,
expressed support for the proposal to align the TPNIES with the new
biannual Coding Cycle 2 application deadline as specified in the HCPCS
Level II coding guidance on the CMS website. One commenter pointed out
the alignment of the TPNIES and HCPCS processes can promote developer
and manufacturer confidence by enabling them to better navigate
multiple processes, specifically, marketing authorization at the FDA
and HCPCS coding at CMS, both critical to bringing a product to market.
Response: We appreciate the support for the proposal.
Comment: We did not receive comments on the proposed technical
change to Sec. 413.236(b)(5) to remove ``and related guidance'' to
reflect that all related SCI guidance has been incorporated into Sec.
412.87(b)(1). However, several commenters expressed their views about
the SCI criteria. While most commenters expressed support for the use
of the SCI criteria to target the increase in Medicare payments and
beneficiary coinsurance to clinically meaningful and innovative items,
others stated that the criteria are overly restrictive. One commenter
stated that some of the SCI criteria do not seem relevant to home
dialysis machines and suggested that the user-friendly nature of these
devices should be considered in the SCI criteria. Several commenters
requested that CMS establish a two-way process for the review of
evidence for TPNIES applicants that allows for rapid patient access to
new and innovative products and that CMS provide reasonable and clear
parameters in discussions with applicants on the types of evidence and
studies technical expert panel reviewers want to see.
Several organizations recommended that the TPNIES process follow
the NTAP program and exempt home dialysis devices classified as
``breakthrough'' by the FDA from the SCI requirement for the two-year
TPNIES period. One association asserted that requiring these devices to
navigate approval processes in both the FDA and CMS creates another
disincentive to parties entering the kidney care arena.
Another commenter stated that evaluation of home dialysis machines
is not the same as evaluation of medications by the FDA where the
evidence of efficacy and safety can be readily attributed to medication
exposure. The commenter noted that, in evaluating home dialysis
machines, clinical outcomes cannot be so readily attributed to the
machine itself because the effect of a home dialysis prescription is a
complex function of three factors: The technical specifications of the
machine; the dialysis prescription; and how patients and care partners
interact with the machine. The commenter disagreed with an exclusive
focus on clinical outcomes in evaluating TPNIES applications and
suggested an approach that involves evaluation of whether the home
dialysis machine improves access to home dialysis, the length of home
dialysis, and clinical outcomes.
Response: We note that the SCI criteria were put into regulation
with the establishment of the TPNIES in the CY 2020 ESRD PPS final
rule. We did not propose changes to Sec. 413.236(b)(5) beyond the
technical change described previously or to the SCI criteria in Sec.
412.87(b)(1). We note that, as we stated in the CY 2020 ESRD PPS final
rule (84 FR 60691), since renal dialysis services are routinely
furnished to hospital inpatients and outpatients, we believe the same
SCI criteria should be used to assess whether a new renal dialysis
equipment or supply warrants additional payment under the ESRD PPS.
However, we appreciate the information provided by the commenters and
will take the comments regarding SCI criteria for the TPNIES into
consideration in future rulemaking.
Final Rule Action: After consideration of the comments we received,
we are finalizing the changes to Sec. 413.236(b) introductory text,
(b)(2) through (5), and (c), as proposed, with the following
modification. As we stated previously, we proposed to revise Sec.
413.236(b)(4) to replace ``September 1'' with ``the HCPCS Level II code
application deadline for biannual Coding Cycle 2 for DMEPOS items and
services as specified in the HCPCS Level II coding guidance on the CMS
website.'' However, we inadvertently omitted the word ``items'' from
the proposed regulation text. In this final rule, we are adding the
word ``items'' to Sec. 413.236(b)(4) consistent with our proposal.
[[Page 71415]]
3. Expansion of the TPNIES for New and Innovative Capital-Related
Assets That are Home Dialysis Machines When Used in the Home for a
Single Patient
a. Background
In response to the proposed expansion of the TDAPA in the CY 2019
ESRD PPS proposed rule, we received several comments regarding payment
under the ESRD PPS for certain new, innovative equipment and supplies
used in the treatment of ESRD. For example, as we described in the CY
2019 ESRD PPS final rule (83 FR 56972), a device manufacturer and
device manufacturer association asked CMS to establish a transitional
add-on payment adjustment for new FDA devices that have received FDA
marketing authorization. They commented on the lack of new devices that
have received FDA marketing authorization for use in an ESRD facility,
highlighting the need to promote dialysis device innovation.
Other commenters, including a professional association and a LDO
urged CMS and other relevant policymakers to prioritize the development
of a clear pathway to add new devices to the ESRD PPS bundled payment
(83 FR 56973). A home dialysis patient group also expressed concern
regarding the absence of a pathway for adding new devices to the ESRD
PPS bundled payment, stating that it left investors and industry wary
of investing in the development of new devices for patients. In
response, we expressed appreciation for the commenters' thoughts
regarding payment for new and innovative devices, and stated that
because we did not include any proposals regarding this issue in the CY
2019 ESRD PPS proposed rule, we considered these suggestions to be
beyond the scope of that rule.
However, in response to this feedback, in the CY 2020 ESRD PPS
proposed rule (84 FR 38354 through 38355), we agreed that additional
payment for certain renal dialysis equipment and supplies may be
warranted under specific circumstances. We proposed to provide the
TPNIES for certain new and innovative renal dialysis equipment and
supplies furnished by ESRD facilities, but excluded from eligibility
capital-related assets, which are defined in the Provider Reimbursement
Manual (chapter 1, section 104.1) as assets that a provider has an
economic interest in through ownership (regardless of the manner in
which they were acquired). The Provider Reimbursement Manual is
available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021929. Examples
of capital-related assets for ESRD facilities are dialysis machines and
water purification systems.
As we explained in the CY 2020 ESRD PPS proposed rule (84 FR
38354), we did not believe capital-related assets should be eligible
for additional payment through the TPNIES because the cost of these
items is captured in cost reports, they depreciate over time, and they
are generally used for multiple patients. In addition, we noted that
since the costs of these items are reported in the aggregate, there is
considerable complexity in establishing a cost on a per treatment
basis. For these reasons, we therefore believed capital-related assets
should be excluded from eligibility for the TPNIES at that time, and we
proposed an exclusion to the eligibility criteria in Sec.
413.236(b)(6). However, we noted that CMS uses capital-related asset
cost data from cost reports in regression analyses to refine the ESRD
PPS so that the cost of any new capital-related assets is accounted for
in the ESRD PPS payment.
In response to the proposed exclusion of capital-related assets, we
received comments from a device manufacturers' association, which
stated that since most medical equipment is purchased as a capital-
related asset, the TPNIES effectively would exclude the innovative
equipment identified in the title of the adjustment. The association
asserted that meaningful clinical improvements and patient experience
improvements are arguably more likely to come from innovation outside
single-use supplies. The association maintained that expanding the
TPNIES to include medical equipment, regardless of how it is purchased
by the provider, would stimulate greater investment in a broader array
of new technologies for ESRD patients.
In response, we stated in the CY 2020 ESRD PPS final rule (84 FR
60688) that we recognize that accounting for renal dialysis service
equipment can vary depending on the individual ESRD facility's business
model. For example, when the owner of the capital-related asset retains
title, then the renal dialysis service equipment is a depreciable asset
and depreciation expense could be itemized. When there is no ownership
of the renal dialysis service equipment, then the item is recorded as
an operating expense.
In addition, in response to comments regarding capital leases, we
noted that regulations at Sec. 413.130(b)(1) specify that leases and
rentals are includable in capital-related costs if they relate to the
use of assets that would be depreciable if the provider owned them
outright. We stated that in the future, we will be closely examining
the treatment of capital-related assets under Medicare, including our
regulations at Sec. 412.302 regarding capital costs in inpatient
hospitals and Sec. 413.130, as they relate to accounting for capital-
related assets, including capital leases and the newly implemented
guidance for finance lease arrangements, to determine if similar
policies would be appropriate under the ESRD PPS.
b. Additional Payment for New and Innovative Capital-related Assets
That are Home Dialysis Machines When Used in the Home for a Single
Patient
Following publication of the CY 2020 ESRD PPS final rule, in which
we finalized the TPNIES policy, we continued to study the issue of
payment for capital-related assets under the ESRD PPS, taking into
account information from a wide variety of stakeholders and recent
developments and initiatives regarding kidney care. For example, we
received additional comments and information from dialysis equipment
and supply manufacturers, and a Technical Expert Panel (TEP) meeting
held in December 2019, regarding the need for additional payment for
capital-related assets under the ESRD PPS.
We also took into account the President's Executive order, signed
on July 10, 2019, aimed at transforming kidney care in America. The
Executive order discussed many new initiatives, including the launch of
a public awareness campaign to prevent patients from going into kidney
failure and proposals for the Secretary to support research regarding
preventing, treating, and slowing progression of kidney disease and
encouraging the development of breakthrough technologies to provide
patients suffering from kidney disease with better options for care
than those that are currently available. Currently, most dialysis is
furnished at ESRD facilities. In-center dialysis can be time-consuming
and burdensome for patients. In addition, the current system
prioritizes payment to in-center dialysis and the goal of the agency is
to incentivize in-home dialysis. A key focus of the Executive order is
the effort to encourage in-home dialysis.
The Executive order is available at: https://www.whitehouse.gov/presidential-actions/executive-order-advancing-american-kidney-health/.
In conjunction with the Executive order, HHS laid out three goals
for improving kidney health (see https://www.hhs.gov/about/news/2019/
07/10/hhs-launches-president-trump-
[[Page 71416]]
advancing-american-kidney-health-initiative.html):
Reducing the number of Americans developing ESRD by 25
percent by 2030.
Having 80 percent of new ESRD patients in 2025 either
receiving dialysis at home or receiving a transplant; and
Doubling the number of kidneys available for transplant by
2030.
In addition, in connection with the President's Executive order, on
July 10, 2019, CMS issued a proposed rule (84 FR 34478) to implement a
new mandatory payment model, known as the ESRD Treatment Choices (ETC)
Model, which would provide new incentives to encourage the provision of
dialysis in the home. The ETC Model, which CMS finalized in a final
rule published in the Federal Register on September 29, 2020 (85 FR
61114), is a mandatory payment model, focused on encouraging greater
use of home dialysis and kidney transplants for ESRD beneficiaries
among ESRD facilities and Managing Clinicians located in selected
geographic areas.
Lastly, as we noted in the CY 2021 ESRD PPS proposed rule, ESRD
patients who receive in-center dialysis are particularly vulnerable
during a PHE and other disasters, and greater use of home dialysis
modalities may expose these patients to less risk. The U.S. is
responding to an outbreak of respiratory disease caused by a novel
(new) coronavirus that was first detected in China and which has now
been detected in more than 215 countries internationally, and all 50
states and the District of Columbia. The virus has been named ``severe
acute respiratory syndrome coronavirus 2'' (SARS-CoV-2) and the disease
it causes has been named ``coronavirus disease 2019'' (`COVID-19').
On January 30, 2020, the International Health Regulations Emergency
Committee of the World Health Organization (WHO) declared the outbreak
a ``Public Health Emergency of international concern.'' On January 31,
2020, the Secretary determined that a PHE exists for the U.S. to aid
the nation's healthcare community in responding to COVID-19 and on
April 21, 2020, the Secretary renewed, effective April 26, 2020, the
determination that a PHE exists. On March 11, 2020, the WHO publicly
declared COVID-19 a pandemic. On March 13, 2020, the President of the
U.S. declared the COVID-19 pandemic a national emergency.
As we discussed in the CY 2021 ESRD PPS proposed rule, the
experience of multiple countries across the globe has demonstrated that
older patients and patients with multiple comorbidities and underlying
health conditions are patients who are more susceptible to the virus
and have a higher risk of morbidity than younger patients without
underlying health conditions. Per the CDC, the risk factors for COVID-
19 include older adults and people of any age who have serious
underlying medical conditions, such as diabetes and chronic kidney
disease undergoing dialysis. Medicare's ESRD population aligns with the
profile of patients who are more susceptible to COVID-19. Therefore, it
is important to reduce the risk of infection and this can be done
through isolating patients from in-center exposure by encouraging home
dialysis.
We also noted that home dialysis would mitigate the risks
associated with dialysis for these patients if the pandemic lasts
longer than expected or is refractory in some way.
(1) Expansion of the TPNIES to Certain New and Innovative Capital-
Related Assets That are Home Dialysis Machines When Used in the Home
for a Single Patient
In response to the President's Executive order, the various HHS
home dialysis initiatives, and the particular benefits of home dialysis
for ESRD beneficiaries during PHEs like the current COVID-19 pandemic,
which we discussed in the previous section, and in consideration of the
feedback we have received from stakeholders, we stated in the CY 2021
ESRD PPS proposed rule that we agree that additional payment through
the TPNIES for certain capital-related assets may be warranted under
specific circumstances outlined in the proposed rule. We noted that in
the CY 2020 ESRD PPS final rule (84 FR 60607), we specifically excluded
capital-related assets from the TPNIES. In commenting on the CY 2020
ESRD PPS proposed rule, most stakeholders expressed concern that the
TPNIES would exclude capital-related assets. In our response to
commenters, we acknowledged that significant innovation and technology
improvement is occurring with dialysis machines and peritoneal dialysis
(PD) cyclers, as well as innovation in the efficiency and effectiveness
of water systems. However, at that time we did not have enough
information regarding current usage of the various financial and
leasing arrangements, such as those involving capital leases for
depreciable assets versus operating leases recorded as operating
expenses. In addition, we noted that we would need to assess
methodological issues regarding depreciation to determine whether
TPNIES eligibility for these items would be appropriate.
We stated in the CY 2020 ESRD PPS final rule that we needed to
further study the specifics of the various business arrangements for
equipment related to renal dialysis services. This would include items
that are: (1) Purchased in their entirety and owned as capital-related
assets; (2) assets that are acquired through a capital lease
arrangement; (3) equipment obtained through a finance lease and
recorded as an asset per the Financial Accounting Standards Board
(FASB) guidance on leases (Topic 842) effective for fiscal years
beginning after December 15, 2018; \5\ or (4) equipment obtained
through an operating lease and recorded as an operating expense. In
addition to the variety of business arrangements, we noted, there are
unknown issues relating to ownership of the item and who retains title,
which may affect the equipment's maintenance expenses for capital-
related assets.
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\5\ https://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176167901010&acceptedDisclaimer=true.
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Further, we noted the issue of single use versus multiple use for
capital-related assets used for renal dialysis services. For example,
some capital-related assets used in-center and in the home setting,
such as skilled nursing facilities (SNFs) and nursing facilities, may
be used by multiple patients in a day, and by multiple patients over
their useful lifetime. Specifically, equipment classified as capital-
related assets may be refurbished and used by another patient. For
example, capital-related assets used by multiple patients in a day
could be Hoyer lifts to transfer patients and wheelchair scales. In the
CY 2021 ESRD PPS proposed rule, we did not propose to include capital-
related assets with multi-patient usage as being eligible for the
TPNIES because we aimed to support the President's Executive order and
HHS goals of promoting home dialysis, which involves a single machine
for patient use. In addition, as we discussed earlier in this section,
it is more complicated to develop a per treatment payment amount for
those items. However, we sought comments on this aspect of our
proposal, and stated our intention to gather additional information
about how ESRD facilities obtain their capital-related assets that have
multi-patient usage in future meetings with the TEP.
We stated in the CY 2021 ESRD PPS proposed rule that as we further
studied this issue, we determined that one business arrangement, that
is, where the capital-related assets are purchased in their entirety
and owned as capital-related assets, could be considered for
[[Page 71417]]
TPNIES eligibility. We noted that we continued to analyze other
business arrangements, but we understood this arrangement is more
straightforward due to ownership being clear, retained at the end of
the TPNIES period, and on the facility's balance sheet. CMS' intent
would be to pay for assets that are owned, whether purchased or
attained through a capital lease. The entity who holds the title to the
asset is the legal owner. At the end of the TPNIES period, the entity
retains ownership of the asset. We stated we would not pay the TPNIES
for equipment that is leased, as the ESRD facility has no ownership
rights. We stated that we believe this is an appropriate initial step
to support home dialysis.
In support of the HHS goals and initiatives to increase home
dialysis following the President's Executive order, we proposed to
provide the TPNIES for eligible new and innovative capital-related
assets that are home dialysis machines when used in the home. We would
limit the payment for new and innovative dialysis machines to those
used for home dialysis in order to target the additional payment
through the TPNIES to equipment that supports the various home dialysis
initiatives currently underway, as discussed previously in the CY 2021
ESRD PPS proposed rule and this section of this final rule. As more
ESRD patients and their nephrologists and other clinicians opt for home
dialysis modalities, we would seek to support ESRD facility use and
beneficiary access to the latest technological improvements to HD and
PD home dialysis machines. As we explained in prior ESRD PPS rules
establishing the TDAPA and TPNIES, ESRD facilities face unique
challenges in incorporating new renal dialysis drugs, biological
products, equipment and supplies into their businesses and these add-on
payment adjustments are intended to support ESRD facilities' use of new
technologies during the uptake period for these new products.
To codify our proposals for expanding the TPNIES to include
capital-related assets that are home dialysis machines when used in the
home for a single patient, we proposed further revisions to Sec.
413.236, in addition to the revisions finalized earlier in section
II.B.2 of this final rule.
Specifically, we proposed to revise the heading at Sec. 413.236(a)
and add paragraphs (a)(1) and (2) to distinguish this paragraph as both
the ``basis and definitions.'' We proposed to define ``capital-related
asset'' at Sec. 413.236(a)(2) as an asset that an ESRD facility has an
economic interest in through ownership (regardless of the manner in
which it was acquired) and is subject to depreciation. Equipment
obtained by the ESRD facility through operating leases are not
considered capital-related assets. This proposed definition was based
on the definition of ``depreciable assets'' in the Provider
Reimbursement Manual (chapter 1, section 104.1). The Provider
Reimbursement Manual is available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021929.
We proposed to define ``home dialysis machines'' at Sec.
413.236(a)(2) as hemodialysis machines and peritoneal dialysis cyclers
in their entirety, meaning that one new part of a machine does not make
the entire capital-related asset new, that receive FDA marketing
authorization for home use and when used in the home for a single
patient. FDA provides a separate marketing authorization for equipment
intended for home use, and our proposal was focused on supporting
efforts to increase home dialysis.
We proposed to define ``particular calendar year'' at Sec.
413.236(a)(2) as the year in which the payment adjustment specified in
paragraph (d) of Sec. 413.236 would take effect. We also proposed to
include definitions for the terms ``depreciation,'' ``straight-line
depreciation method,'' and ``useful life,'' which are discussed in
section II.B.3.b.(2) of this final rule.
We proposed to revise Sec. 413.236(b)(6) to provide an exception
to the general exclusion for capital-related assets from eligibility
for the TPNIES for capital-related assets that are home dialysis
machines when used in the home for a single patient and that meet the
other eligibility criteria in Sec. 413.236(b). We also proposed to
remove ``that an ESRD facility has an economic interest in through
ownership (regardless of the manner in which it was acquired)'' in
Sec. 413.236(b)(6) since we proposed a separate definition for
``capital-related asset'' at Sec. 413.236(a)(2).
Under the proposal, we continued to exclude other capital-related
assets from the TPNIES that are not home dialysis machines when used in
the home because those items would not be advancing HHS's goal of
increasing home dialysis. Examples of capital-related assets that would
continue to be excluded from TPNIES are water purification systems and
dialysis machines when they are used in-center. We stated that we
continue to believe we should not provide additional payment for these
capital-related assets because the cost of these items are captured in
cost reports and reported in the aggregate, depreciate over time, are
generally used for multiple patients and, most importantly, it would
not support the goal of increasing use of home dialysis. However,
capital-related assets that are home dialysis machines when used in the
home are intended for use by a single patient and can be reported on a
per treatment basis on the ESRD facility's claim. These characteristics
provide for a simple methodology for aligning the use of the asset with
the per treatment TPNIES payment.
As we stated previously in this section, we did not propose to
expand the TPNIES eligibility to in-center dialysis machines or home
dialysis machines when they are used in-center. Currently, our focus is
promoting the increase in home dialysis rather than in-center dialysis.
In addition, in-center dialysis machines are used by multiple patients
each day and would require additional analysis, along with 72X claims
and cost report modifications, in order to provide payment. For this
same reason, we did not propose to provide the TPNIES for home dialysis
machines when they are used in SNFs and nursing facilities that are
used by multiple patients each day.
We stated in the CY 2021 ESRD PPS proposed rule that we believe the
SCI criteria required under Sec. 413.236(b)(5), with our proposed
revisions, and the process used to evaluate SCI currently applicable to
TPNIES equipment and supplies are also appropriate for identifying new
and innovative capital-related assets that are home dialysis machines
that are worthy of temporary additional payment under the ESRD PPS.
This approach would provide consistent criteria and evaluation for all
equipment and supplies that are potentially eligible for the TPNIES. In
addition, we noted that we want to ensure we do not pay the TPNIES for
new home dialysis machines that are substantially similar to existing
machines and not truly innovative.
We proposed to utilize the determination process we established in
the CY 2020 ESRD PPS final rule for the TPNIES and those requirements
we proposed to revise in section II.B.2 of the CY 2021 ESRD PPS
proposed rule. That is, pursuant to Sec. 413.236(c), interested
parties would submit all information necessary for determining that the
home dialysis machine meets the TPNIES eligibility criteria listed in
Sec. 413.236(b). This would include FDA marketing authorization
information, the HCPCS application information, and studies submitted
as part of these two standardized processes, an approximate date of
commercial availability, and any information necessary for SCI criteria
evaluation. For example, clinical trials,
[[Page 71418]]
peer reviewed journal articles, study results, meta-analyses,
systematic literature reviews, and any other appropriate information
sources can be considered. We noted, for purposes of determining
whether the home dialysis machine is new under Sec. 413.236(b)(2), we
would look at the date the machine is granted marketing authorization
by FDA for home use.
We stated that, using our current process at Sec. 413.236(c), we
would provide a description of the new home dialysis machine and
pertinent facts in the ESRD PPS proposed rule so the public may comment
on them and then publish the results in this ESRD PPS final rule. We
would consider whether the new home dialysis machine meets the
eligibility criteria specified in the proposed revisions to Sec.
413.236(b) and announce the results in the Federal Register as part of
our annual updates and changes to the ESRD PPS. Per Sec. 413.236(c),
we would only consider, for additional payment using the TPNIES for a
particular calendar year, an application for a capital-related asset
that is a home dialysis machine we receive by February 1 prior to the
particular calendar year. If the application is not received by
February 1, the application would be denied and the applicant would
need to reapply within 3 years beginning on the date of FDA marketing
authorization in order to be considered for the TPNIES, in accordance
with the proposed revisions to Sec. 413.236(b)(2). We noted,
applicants are expected to submit information on the price of their
home dialysis machine as part of the TPNIES application. While we
recognize this information is proprietary, CMS requests this
information along with the equipment or supply's projected utilization.
For example, under our proposed revisions to Sec. 413.236, in
order for a particular home dialysis machine to be eligible for the
TPNIES under the ESRD PPS beginning in CY 2022, CMS must receive a
complete application meeting our requirements no later than February 1,
2021. FDA marketing authorization and submission of the HCPCS Level II
code application for Coding Cycle 2 for DMEPOS items and services must
occur as specified in the HCPCS Level II coding guidance on the CMS
website. We would include a discussion of the new capital-related asset
that is a home dialysis machine in the CY 2022 ESRD PPS proposed rule
and the CMS final determination would be announced in the CY 2022 ESRD
PPS final rule. If the home dialysis machine qualifies for the TPNIES,
the payment adjustment would begin January 1, 2022 with a miscellaneous
code and the designated HCPCS code would be effective April 1, 2022.
In accordance with Sec. 413.236(c), the CMS TPNIES final
determinations for CY 2021 are presented in section II.C of this final
rule.
The comments and our responses to the comments on our proposed
expansion of the TPNIES to include certain home dialysis machines are
set forth below.
Comment: Most commenters generally supported expanding the
eligibility for TPNIES to include capital-related assets that are home
dialysis machines and provided suggestions on ways to improve the
proposal. However, MedPAC and LDOs did not support the proposal. MedPAC
and other commenters stated that, instead of paying the TPNIES for new
home dialysis machines, CMS should address the clinical and nonclinical
factors known to affect home dialysis use. They stated that CMS's
proposal to expand the TPNIES as proposed would undermine the integrity
of the ESRD PPS bundled payment and limit the competitive forces that
generate price reductions. They stated that if CMS proceeds with the
proposal, eligible equipment should be innovative and payment should
not be duplicative. They urged CMS to take more time and engage the
industry to develop a comprehensive policy and indicated there were
more meaningful ways to support the Executive order. One LDO commented
that access to home dialysis machines is not currently a roadblock to
home therapy, and proposed add-on payments to purchase home machines
will not address any of the real barriers to home dialysis or further
the goals of the Executive order. Another LDO expressed concerns about
the proposed exclusion of dialysis machines used in-center and urged
CMS to expand the capital-related assets policy before it is finalized.
However, several device manufacturers and a home dialysis patient
organization urged CMS to not make patients wait over a year to have
access to the newest innovative home dialysis machines. Instead, they
proposed that CMS, in the final rule, allow a new application
submission period to consider applicants under the capital-related home
dialysis machines pathway for eligibility for payment beginning April
1, 2021, and provide for a 30-day comment period. They believe
proceeding in such a way would satisfy the Administrative Procedure Act
requirements for notice and comment and put CMS on a faster pathway to
success in meeting the rapidly growing demand from patients for home
dialysis, given the COVID-19 pandemic, by providing them with new
options to perform treatments safely and easily in their homes. The
patient organization noted that patients need choices and, currently,
if a patient fails to thrive on a home dialysis machine, often the
patient has no choice but to return to in-center dialysis. The patient
organization stated that new home dialysis machines in the pipeline
will be critical to achieving the Executive order goal of moving
dialysis patients home. Another commenter urged CMS to act boldly and
without delay.
Response: In order to support the goals of the Executive order, we
believe that providing the TPNIES for new and innovative home dialysis
machines is a good start because it will increase home dialysis by
leading to technological change in those machines, which will make a
difference in patient-related outcomes and long-term adherence to home
dialysis. For example, beneficiary feedback reveals that one of the
most significant drawbacks to home dialysis is fear of self-
cannulation; despite training, this remains a significant drawback. A
new and innovative home dialysis machine that is able to cannulate the
dialysis recipient would substantially improve the treatment of ESRD
beneficiaries and be a huge advancement toward increasing home
dialysis.
With regard to the suggestion that we issue the final rule with a
comment period in order to accept new applications for capital-related
home dialysis machines for payment eligibility beginning April 1, 2021,
we note that our process of evaluating substantial clinical improvement
is lengthy. An IFC published in November 2020, and accepting
applications for capital-related assets that are home dialysis machines
used in the home by February 1, 2021, with a payment eligibility date
of April 1, 2021 would not provide adequate time for review of SCI. We
note that a commenter indicated there at least 3 home dialysis machines
currently under development. Providing eligibility for home dialysis
machines earlier than our proposed effective date would give an unfair
advantage to the current applicant that has already received FDA
marketing authorization for home use. Had the other companies known
about an earlier effective date, they may have altered their testing
protocols and marketing plans. We thank MedPAC and the LDOs for their
comments and share their concern about maintaining the integrity of the
ESRD PPS bundled payment. We have tried to strike a balance between
supporting the uptake of new and
[[Page 71419]]
innovative home dialysis machines that demonstrate substantial clinical
improvement, while maintaining the integrity of the ESRD PPS bundled
payment. As discussed later in this section, as part of our final
methodology, we are offsetting the TPNIES payment for home dialysis
machines used in the home by $9.32, the amount currently included in
the base rate for the dialysis machine. Regarding the expansion of
capital-related assets to include in-center dialysis machines, at this
time we are striving to support the Executive order for payment
incentives for greater use of home dialysis.
Comment: Several commenters, including both LDOs and small dialysis
organizations, asked CMS to affirm in the final rule that the TPNIES
will attach to the device and not to the initial patient utilizing the
device. They acknowledged that CMS seeks to develop a policy for home
dialysis machines that are used by a single patient, however, they
pointed out that it is the current standard of care and practice that
such home dialysis machines are repurposed during their lifetimes to
serve successive patients who have the exclusive use of the machine
while it is in the patient's custody. They asked CMS to affirm in the
final rule that a facility may continue to claim the TPNIES for that
specific device until the facility reaches the maximum allowable TPNIES
amount pursuant to the adopted methodology.
The organization of LDOs also recommended that CMS modify the
policy to ensure that ESRD facilities are held harmless for missed
treatments. The commenter stated that the proposed methodology ties
TPNIES to the per-treatment claim for a patient. If a patient misses a
treatment, whether due to personal choice, hospitalization, travel, or
otherwise, the facility will lose a portion of the TPNIES payment. They
suggested that CMS consider an alternate methodology that would allow
providers to continue to claim these TPNIES payments for missed
treatments. For example, they suggested that CMS could allow each
facility to continue to claim the TPNIES payment on an ongoing basis
until the facility reaches the maximum allowable TPNIES amount pursuant
to the adopted methodology.
Response: The TPNIES is paid based on the HCPCS code and as such is
attached to the device, when the HCPCS code is billed. In addition, we
are aware that patients may, for various reasons, no longer require the
home dialysis machine, or may become unable to do home dialysis, and
that, when a patient no longer uses the home dialysis machine, the
machine may be refurbished and given to another home patient. With
regard to the suggestion that facilities bill Medicare for the machine
even though it wasn't used because the treatment was not furnished, it
is not appropriate for payment purposes since payment is only made for
services furnished and when the device is used. Such an approach would
not comport with the False Claims Act. We note that the calculated
TPNIES amount based on the invoice, is not a guarantee for a maximum
allowable reimbursement. Payment is tied to the dialysis treatment
provided. If the machine is purchased and not used in a treatment, the
TPNIES is not paid. The TPNIES is a payment adjustment to the ESRD PPS
base rate and is dependent on the ESRD facility providing the dialysis
treatment.
Comment: One commenter stated that although the phrase ``in the
home for a single patient'' is clear, the phrase causes confusion about
whether CMS is encouraging on-site dialysis in a SNF. The commenter
noted that in the ESRD Treatment Choices payment model proposal, CMS
included condition code 80 (home dialysis furnished in a SNF or nursing
facility) in its definition of home dialysis, suggesting that CMS
recognizes that dialysis in a SNF ought to be classified as home
dialysis--on par with home dialysis in a private residence. However,
the commenter stated that CMS's proposal seems to take the position
that the TPNIES expansion will not apply to on-site dialysis in the
SNF, apparently because a single machine there may be used by multiple
patients. The commenter recommended that, if the concern is that a
single machine may be used by multiple patients, resulting in excess
payment to the ESRD facility, then CMS could reduce the TPNIES amount
by a factor commensurate with the average number of treated patients
per machine. The commenter stated that it is in the interest of CMS and
patients alike to promote on-site dialysis in the SNF and recommended
using the TPNIES expansion to do so.
Response: It is our longstanding policy 6 7 under the
ESRD PPS (and the composite rate system that preceded it) that a
skilled nursing facility (SNF) or a nursing facility (NF) can be
considered a patient's home for dialysis. As a result, ESRD facilities
may furnish home dialysis to individual patients who are residing in
these facilities. Therefore, for purposes of the TPNIES, our
longstanding policy holds. That is, ESRD facilities may furnish home
dialysis to patients residing in SNFs and NFs, and we would provide the
TPNIES for home dialysis machines when they are used in SNFs and NFs
and are used by a single patient. Per the 1981 Committee on United
States Senate Finance Report,\8\ home dialysis machines were intended
for single patient use. While we have provided additional flexibilities
9 10 during the current PHE for ESRD facilities to furnish
in-center dialysis to groups of ESRD patients residing in SNFs or NFs,
we would not provide the TPNIES for the use of home dialysis machines
for multiple patients.
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\6\ https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/QSO18-24-ESRD.pdf.
\7\ https://ecfr.io/Title-42/Section-494.100.
\8\ https://www.finance.senate.gov/imo/media/doc/SPrt97-9.pdf.
\9\ https://www.cms.gov/files/document/qso-20-19-esrd-revised.pdf.
\10\ https://www.cms.gov/files/document/covid-19-esrd-facilities.pdf.
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Comment: We received comments from stakeholders across the ESRD
industry asking that CMS consider other factors that are critical to
successful home dialysis as we assess innovative home dialysis machines
for TPNIES eligibility. For example, one commenter stated that some of
these machines may require patients to have internet and broadband
services so that data can easily transfer from the patient's home to
the ESRD facility managing the home dialysis. The commenter stated that
in rural areas particularly, access to internet and broadband services
may be challenging and patients in rural areas in many ways could most
benefit from new access to innovative home dialysis machines, which
could help them avoid frequent extended travel times to and from ESRD
facilities to receive in-center treatment.
Another commenter recommended expansion of the TPNIES to include
water and sewer systems, explaining that innovation in the efficiency
and effectiveness of water systems would both improve patient quality
of care, as well as reduce costs for facilities and reduce the amount
of water that ESRD facilities currently waste, helping to preserve the
nation's water supply.
One organization expressed appreciation that CMS is refining TPNIES
and considering ways to include some capital-related assets in the
TPNIES policy, but stated the final rule should recognize the option
for other capital-related assets to qualify for the TPNIES potentially
in the future. The organization asked that CMS gather
[[Page 71420]]
additional information about home dialysis machines that may be
eligible for the TPNIES, as well as other types of capital-related
assets, and construct a policy that supports the TPNIES for more than
one narrow type of product. The organization suggested that we seek
additional information about how ESRD facilities obtain their capital-
related assets that have multi-patient usage through a request for
information, as well as convening a technical expert panel(s).
An LDO and LDO organization stated that the TPNIES policy should be
focused on transition payment for new equipment that represents SCI,
and not skewed by site of service. They stated that to combine the
requirement for SCI with an in-home only requirement would likely
discourage investment in new technology, undercutting the entire TPNIES
policy. They also agreed, stating that the ESRD program's fundamental
purpose is to service all patients. The LDO urged CMS not to establish
a policy that benefits only those ESRD patients who are clinically
suited for and have the social support structure necessary to elect
home dialysis. Rather, CMS should adopt a comprehensive TPNIES capital-
related expenses policy that supports technological advances across all
treatment modalities and provides adequate and sustained payment upon a
TPNIES's expiration. They encouraged CMS to establish a working group
or a TEP to inform the development of a broader TPNIES eligibility to
include in-center capital-related assets.
We received many comments from patient groups, device
manufacturers, dialysis organizations, health plans and a pharmacy
regarding the requirement that the home dialysis machine must be owned
by the ESRD facility and not leased equipment. One commenter stated
that financial incentives for acquiring breakthrough dialysis
innovations should not be limited only to the facilities that have the
financial reserves to outright purchase this equipment, that is, the
larger dialysis providers in the marketplace. They stated that smaller
and medium-size ESRD facilities may lack the capital to be able to
purchase the latest home dialysis technologies, and thus may prefer to
rely on operating leases to obtain it.
A pharmacy stated that smaller and medium-size facilities and their
patients must not be disadvantaged compared to larger facilities with
regard to financial incentives to propel use of the latest, clinically
optimal home dialysis equipment. The pharmacy commented that facilities
might choose to obtain the new home dialysis devices via operating
leases because technical support services are available under that
arrangement, which benefits both the facility and the patient. In
addition, operating leases can provide clinics the ability to more
quickly scale and increase the volume of available new devices, as more
patients choose home therapies. They believe these business
arrangements complement the accelerated trend toward home dialysis, and
therefore should be supported under the TPNIES policy. Another
commenter urged CMS to consider business arrangements other than
outright purchase of home dialysis machines and equipment, stating that
many facilities maintain subscriptions with manufacturers or lease
equipment, and the commenter believes that these arrangements should be
accounted for under TPNIES.
Response: We thank the commenters for their suggestions. We will
take these suggestions under consideration for future rulemaking. We
believe it is appropriate to implement a narrow capital-related asset
eligibility under the TPNIES at this time to advance the goals of the
Executive order. We believe we will gain valuable information through
implementation of the TPNIES for home dialysis machines that are owned
in their entirety by the ESRD facility and used for a single patient.
We are continuing to analyze and consider how to account for
depreciation for multi-patient use machines and other capital-related
assets, such as water and sewer systems. We will also consider the
commenters' suggestion regarding a TEP or RFI to get information from
ESRD facilities about the machines they use and how they acquire them.
When there is no ownership of the renal dialysis service equipment,
then the item is recorded as an operating expense. Equipment obtained
by the ESRD facility through operating leases are not considered
capital-related assets. The proposed definition of capital-related
assets is based on the definition of ``depreciable assets'' in the
Provider Reimbursement Manual (chapter 1, section 104.1). The Provider
Reimbursement Manual is available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021929. We did not propose to make an add-on payment
adjustment for operating expenses, but appreciate the suggestion and
will consider it in future rulemaking.
We appreciate the suggestions that we consider other factors than
SCI for TPNIES eligibility and allow the TPNIES for in-center
treatments. While we considered other factors than SCI for TPNIES
eligibility, our focus on the beneficiary and clinical improvement was
a primary factor. As we stated previously in the background section of
this final rule, at this point we believe it is important we use the
same criteria used under the NTAP so there are consistent standards for
manufacturers and CMS. At this time, our focus is on supporting the
goals of the Executive order to increase home dialysis as opposed to
in-center dialysis.
Comment: A health plan expressed appreciation for CMS's efforts to
encourage innovation through new technology payments, and especially
supported the proposed addition of in-home dialysis equipment to the
TPNIES program, as there has been very little innovation in this arena
in the past decade. However, the health plan expressed concern about
the financial barriers to ESRD facilities adopting new technology. As
an example, the commenter stated that the Tablo[supreg] Hemodialysis
System described in section II.C of this final rule can cost
approximately $40,000 which is twice the cost of alternative home
dialysis systems. The health plan explained that, although there may be
benefits to the new Tablo[supreg] system, the cost is financially
prohibitive to many small ESRD facilities. Even if the system (or
components of the system) are approved for the new technology add-on
payment adjustment, CMS will only pay for 65 percent of the cost,
leaving the remainder to be covered by the dialysis provider. They
stated that this arrangement will be cost-prohibitive for most small
and rural dialysis providers and will discourage the use of new
technology. The health plan is also concerned that providing new
technology add-on payment adjustments will discourage other companies
from developing similar, less expensive alternatives until the add-on
period has ended. They believe it is imperative for CMS to encourage
both competition and innovation.
Response: The intent of the TPNIES is to support ESRD facilities in
the uptake of new and innovative equipment and supplies under the ESRD
PPS that provide substantial clinical improvements to patients, which
will facilitate beneficiary access to those renal dialysis equipment
and supplies. Additionally, consistent with CMS's longstanding goals,
our goal with the TPNIES policy is to support better care at lower
costs. We expect ESRD facilities to be judicious in the selection of
new machines, balancing the cost of the machine with the promised
clinical
[[Page 71421]]
improvement the machine would provide. We also expect increased
competition for market share through both lower acquisition costs and
TPNIES dollars will enhance access to machines providing clinical
improvement for ESRD patients. We disagree that improvements would not
occur when the TPNIES is being paid for a particular home dialysis
machine. We anticipate that manufacturers will continue to develop
equipment that can compete for market share. While we do not control
what manufacturers charge ESRD facilities, as new machines in the
development pipeline come to market, there is likely to be significant
competition among manufacturers which should lead to lower prices as
the manufacturers compete for the home dialysis market.
Comment: Another commenter strongly encouraged CMS to include the
perspectives of current home dialysis patients in its evaluation of new
home dialysis machines. The commenter stated that CMS staff,
nephrologists, allied health care professionals, and epidemiologists
cannot collectively evaluate whether machines are truly innovative and
truly life-changing if patient perspectives are not solicited. The
commenter stated that, while patients are often invited to submit
letters during a public comment period following a proposed rule at the
behest of manufacturers, these letters often involve formulaic content,
not personal perspectives. The commenter asserted that most patients
are unaware of rulemaking and do not submit comments. The commenter
advised CMS to convene a TEP that includes patients to evaluate each
application and encouraged town hall forums for active patient input.
Response: We appreciate the commenter's input regarding patient
perspective. The TPNIES payment was modeled after the IPPS NTAP system,
which process includes a public meeting. We did not have a public
meeting as part of the TPNIES this first year, but a public meeting for
future TPNIES applications could draw the patient participation and
perspective the commenter suggests and we will consider adding a
patient representative to the workgroup that reviews TPNIES
applications in future rulemaking.
Final Rule Action: After consideration of public comments, we are
finalizing the revision to Sec. 413.236(b)(6) to provide an exception
to the general exclusion for capital-related assets from eligibility
for the TPNIES for capital-related assets that are home dialysis
machines when used in the home for a single patient and that meet the
other eligibility criteria in Sec. 413.236(b), as proposed. We are
also finalizing the revision to the heading at Sec. 413.236(a) and the
addition of the paragraphs (a)(1) and (2) to distinguish this paragraph
as both the ``basis and definitions.'' We are finalizing the
definitions for ``capital-related asset,'' ``depreciable assets,''
``particular calendar year,'' ``depreciation,'' ``straight-line
depreciation method,'' and ``useful life,'' which are discussed in
section II.B.3.b.(2) of this final rule, as proposed. With regard to
the definition of ``home dialysis machines,'' we are revising the
proposed definition to include parentheses to make the sentence more
readable in the preamble and the regulation text.
We are also finalizing the removal of ``that an ESRD facility has
an economic interest in through ownership (regardless of the manner in
which it was acquired)'' in Sec. 413.236(b)(6), as proposed, since we
are finalizing a separate definition for ``capital-related asset'' at
Sec. 413.236(a)(2) as discussed below.
(2) Pricing of New and Innovative Capital-Related Assets That are Home
Dialysis Machines When Used in the Home
As we explained in the CY 2020 ESRD PPS final rule (84 FR 60692),
we are not aware of pricing compendia currently available to price
renal dialysis equipment and supplies for the TPNIES. We also noted
that, unlike new renal dialysis drugs and biological products eligible
for the TDAPA, ASP and WAC pricing do not exist for renal dialysis
equipment and supplies, including capital-related assets that are home
dialysis machines.
In addition, as we explained in the CY 2020 ESRD PPS final rule (84
FR 60692), ESRD facility charges are gross values; that is, charges
before the application of allowances and discounts deductions. We
believe the TPNIES payment amount should reflect the discounts, rebates
and other allowances the ESRD facility (or its parent company)
receives. These terms are defined in the Provider Reimbursement Manual
(chapter 8).\11\ If the TPNIES payment amount does not reflect
discounts, rebates and other allowances, the price would likely exceed
the facility's cost for the item and result in higher co-insurance
obligations for beneficiaries.
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\11\ Medicare Provider Reimbursement Manual (chapter 8).
Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R450PR1.pdf.
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For this reason, in Sec. 413.236(e), we established an invoice-
based approach for MACs to use on behalf of CMS to price new and
innovative renal dialysis equipment and supplies that meet the
eligibility criteria for the TPNIES. We require the MACs to establish a
price, using verifiable information from the following sources of
information, if available: (1) The invoice amount, facility charges for
the item, discounts, allowances, and rebates; (2) the price established
for the item by other MACs and the sources of information used to
establish that price; (3) payment amounts determined by other payers
and the information used to establish those payment amounts; and (4)
charges and payment amounts required for other equipment and supplies
that may be comparable or otherwise relevant. As discussed in the CY
2020 ESRD PPS final rule (84 FR 60692 through 60693), in order to
maintain consistency with the IPPS NTAP payment policy and to mitigate
the Medicare expenditures incurred as a result of the TPNIES, we
finalized a policy at Sec. 413.236(d) to base the TPNIES payment on 65
percent of the MAC-determined price.
As we explained in the CY 2021 ESRD PPS proposed rule (85 FR 42148
through 42149), we believe that the invoice-based approach established
for the TPNIES also should be applied to capital-related assets that
are home dialysis machines, which are the focus of the TPNIES
expansion. However, capital-related assets that are home dialysis
machines when used in the home for a single patient are depreciable
assets as defined in the Provider Reimbursement Manual (chapter 1,
section 104), which defines depreciation as ``that amount which
represents a portion of the depreciable asset's cost or other basis
which is allocable to a period of operation.'' The Provider
Reimbursement Manual provides the American Institute of Certified
Public Accountant's definition of depreciation as a process of cost
allocation: ``Depreciation accounting is a system of accounting which
aims to distribute the cost or other basic value of tangible capital
assets, less salvage (if any), over the estimated useful life of the
unit (which may be a group of assets) in a systematic and rational
manner. It is a process of allocation, not of valuation. Depreciation
for the year is the portion of the total charge under such a system
that is allocated to the year.''
Because capital-related assets that are home dialysis machines when
used in the home for a single patient are depreciable assets, we
proposed to apply a 5-year straight-line depreciation method to
determine the basis of the TPNIES for these items. The Provider
Reimbursement Manual (chapter 1,
[[Page 71422]]
section 116.1) discusses the straight-line depreciation method as a
method where the annual allowance is determined by dividing the cost of
the capital-related asset by the years of useful life. Section 104.17
of the Provider Reimbursement Manual discusses that the useful life of
a capital-related asset is its expected useful life to the provider,
not necessarily the inherent useful or physical life. Further, the
manual provides that under the Medicare program, only the American
Hospital Association (AHA) guidelines may be used in selecting a proper
useful life for computing depreciation.
Using the Provider Reimbursement Manual definitions as the basis,
we proposed to define the following terms at Sec. 413.236(a)(2):
``depreciation'' as the amount that represents a portion of the
capital-related asset's cost and that is allocable to a period of
operation; ``straight-line depreciation method'' as a method in
accounting in which the annual allowance is determined by dividing the
cost of the capital-related asset by the years of useful life; and
``useful life'' as the estimated useful life of a capital-related asset
is its expected useful life to the ESRD facility, not necessarily the
inherent useful or physical life.
In keeping with the Medicare policy, we proposed to rely on the AHA
guidelines to determine the useful life of a capital-related asset that
is a home dialysis machine. That is, the useful life of a home dialysis
machine is 5 years. Since we proposed a methodology using the Provider
Reimbursement Manual's guidance, we believe these terms are appropriate
to codify for purposes of calculating the price of a home dialysis
machine that is a capital-related asset. That is, under Sec.
413.236(e), MACs, on behalf of CMS, would establish prices, using
verifiable information as described above, for new and innovative
capital-related assets that are home dialysis machines when used in the
home for a single patient that meet the eligibility criteria specified
in Sec. 413.236(b). This price would be the only element used to
determine the total cost basis for applying the straight-line
depreciation method. For example, we would exclude financing, sales
tax, freight, installation and testing, excise taxes, legal or
accounting fees, and maintenance. This specific price element would act
as the proxy for the all-encompassing cost basis in other accounting
methodologies. Using the straight-line depreciation method, we would
divide the MAC-determined price by the useful life of the capital-
related asset that is a home dialysis machine when used in the home for
a single patient. The resulting number is the annual allowance.
We considered other depreciation methods, such as units of
production and accelerated depreciation methods such as double
declining balance and sum-of-the-years-digits, but concluded that these
methods would be more complex to implement and that the simpler method
would be preferable for the calculation of an add-on payment
adjustment. In addition, we stated in the CY 2021 ESRD PPS proposed
rule that since we are not reimbursing the cost of the equipment, nor
are we revising the ESRD PPS at the end of the two-year add-on payment
period, based on the information gathered, we believe this policy is
appropriate for encouraging and supporting the uptake of new and
innovative renal dialysis equipment and supplies.
In order to determine the basis of payment for capital-related
assets that are home dialysis machines when used in the home for a
single patient, we proposed certain additional steps that MACs would
take after determining the price to develop the TPNIES per treatment
payment amount. That is, we proposed to add paragraph (f) to Sec.
413.236 to establish the pricing for the TPNIES for capital-related
assets that are home dialysis machines when used in the home for a
single patient that meet the eligibility criteria in Sec. 413.236(b).
We proposed in Sec. 413.236(f)(1) that, using the price determined
under Sec. 413.236(e), the MACs would follow a 2-step methodology for
calculating a pre-adjusted per treatment amount.
Under the first step, the MACs would determine the annual allowance
that represents the amount of the MAC-determined price that is
allocable to 1 year. To calculate the annual allowance, we proposed
that the MACs would use the straight-line depreciation method by
dividing the MAC-determined price by the useful life of the home
dialysis machine. In accordance with the straight-line depreciation
method, the MAC would divide the MAC-determined price by 5 (the useful
life for dialysis machines established by the AHA is 5 years).
Under the second step, the MACs would calculate a pre-adjusted per
treatment amount by dividing the annual allowance by the expected
number of treatments to yield a pre-adjusted per treatment amount. That
is, the MACs would establish a pre-adjusted per treatment amount by
dividing the annual allowance by the number of treatments expected to
be furnished in a year. For home dialysis machines that are expected to
be used 3 times per week, the annual number of treatments is 156 (3
treatments/week x 52 weeks = 156 treatments/year). We noted, for
purposes of calculating this TPNIES add-on payment adjustment, MACs do
not determine the number of expected treatments. This information will
be provided by CMS through the Change Request.
(a) Alternative To Offset the Pre-Adjusted Per Treatment Amount
In the CY 2011 ESRD PPS final rule (75 FR 49075), we stated that
when we computed the ESRD PPS base rate, we used the composite rate
payments made under Part B in 2007 for dialysis in computing the ESRD
PPS base rate. These are identified in Table 19 of the CY 2011 ESRD PPS
final rule (75 FR 49075) as ``composite rate services.'' Sections
1881(b)(14)(A)(i) and 1881(b)(14)(B) of the Act specify the renal
dialysis services that must be included in the ESRD PPS bundled
payment, which includes items and services that were part of the
composite rate for renal dialysis services as of December 31, 2010. As
we indicated in the CY 2011 ESRD PPS proposed rule (74 FR 49928), the
case-mix adjusted composite payment system represents a limited PPS for
a bundle of outpatient renal dialysis services that includes
maintenance dialysis treatments and all associated services including
historically defined dialysis-related drugs, laboratory tests,
equipment, supplies and staff time (74 FR 49928). In the CY 2011 ESRD
PPS final rule (75 FR 49062), we noted that total composite rate costs
in the per treatment calculation included costs incurred for training
expenses, as well as all home dialysis costs.
In addition, as we discussed in the CY 2021 ESRD PPS proposed rule
(85 FR 42150 through 42151), these composite rate payments, and
consequently the ESRD PPS base rate, include an amount associated with
the costs of capital-related assets that are home dialysis machines. As
we discussed in the CY 2021 ESRD PPS proposed rule, we believe that
capital-related assets are distinguishable from drugs and biological
products and supplies, which are single-use or disposable items,
whereas ESRD facilities can continually use a home dialysis machine
past its expected useful life and for multiple patients
(consecutively). Therefore, we stated that an offset of the proposed
TPNIES pre-adjusted per treatment amount may be warranted so that the
TPNIES would cover the estimated marginal costs of new and innovative
home dialysis machines. That is, ESRD facilities using the new and
innovative
[[Page 71423]]
home dialysis machine would receive a per treatment payment to cover
some of the cost of the new machine per treatment minus a per treatment
payment amount that we estimate to be included in the ESRD PPS base
rate for current home dialysis machines that they already own.
To account for the costs already paid through the ESRD PPS base
rate for current home dialysis machines that ESRD facilities already
own, we considered an alternative to our proposal that would include an
additional step to calculating the TPNIES. That is, we would apply an
offset to the pre-adjusted per treatment amount. We noted in the CY
2021 ESRD PPS proposed rule that if we were to adopt an offset in the
final rule, we would add language to the proposed Sec. 413.236(f)
specifying the methodology used to compute the offset and its place--
the final step--in the computation of the TPNIES for new and innovative
home dialysis machines that meet the eligibility criteria.
(b) Methodology for Estimating Home Machine and Equipment Cost Per Home
Treatment
In order to establish the value of the offset, which would be an
estimate of an average home dialysis machine and equipment cost per HD-
equivalent home dialysis treatment to use as the offset amount, we
proposed the following methodology. First, we would estimate annualized
dialysis machine and equipment cost and treatment counts from cost
reports for each ESRD facility for 2018. Next, we would compute an HD-
equivalent home dialysis treatment percentage for each ESRD facility by
dividing the annualized HD-equivalent home treatment counts by the
annualized HD-equivalent treatment counts across all modalities. Then
we would apply the home dialysis treatment percentage to the annualized
dialysis machine and equipment cost to derive an estimated home
dialysis machine and equipment cost for each ESRD facility. Next, we
would aggregate the home dialysis machine and equipment costs and the
HD-equivalent home treatment counts to derive an average home dialysis
machine and equipment cost per home dialysis treatment across all ESRD
facilities. Finally, we would inflate the 2018 average home dialysis
machine and equipment cost per home treatment to 2021 using the ESRDB
market basket update less productivity for CY 2019, CY 2020, and CY
2021, and scale the costs to ESRD PPS payments using the ratio of total
cost per treatment for CY 2021, which is obtained by scaling the CY
2018 cost per treatment to CY 2021 using the ESRDB market basket update
less productivity for CY 2019, CY 2020, and CY 2021, to the total ESRD
PPS payment per treatment projected for CY 2021.
We would obtain annualized dialysis machine and equipment cost and
treatment counts from freestanding and hospital-based ESRD cost
reports. For independent/freestanding ESRD facilities, we would use
renal facility cost reports (CMS form 265-11). We would obtain dialysis
machine and equipment cost \12\ from Worksheet B, Column 4, and sum up
Lines 8.01 through 17.02. We would obtain dialysis treatment counts by
modality from Worksheet D, Column 1, Lines 1 through 10. Since home
continuous ambulatory peritoneal dialysis (CAPD) and continuous cycling
peritoneal dialysis (CCPD) treatment counts are reported in patient
weeks, we would multiply them by 3 to get HD-equivalent counts.
Finally, we would aggregate all home dialysis treatment counts to
obtain each ESRD facility's HD-equivalent home dialysis treatment
counts and we would aggregate the treatment counts to obtain each
freestanding ESRD facility's HD-equivalent dialysis treatment counts
for all modalities.
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\12\ Here dialysis machine and equipment cost includes capital-
related costs of moveable equipment, rented and/or purchased, and
maintenance on the dialysis machine and any support equipment. This
also includes the equipment and associated maintenance and repair
and installation costs necessary to render the water acceptable for
use in dialysis.
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For hospital-based ESRD facilities, we would use hospital cost
reports (CMS form 2552-10). We would obtain dialysis machine and
equipment cost from Worksheet I-2, Column 2, and then sum up Lines 2
through 11. We would derive dialysis treatment counts by modality from
Worksheet I-4, Column 1, Lines 1 through 10. Home Continuous Ambulatory
Peritoneal Dialysis and Continuous Cyclic Peritoneal Dialysis treatment
counts are reported in patient weeks, so we would multiply them by 3 to
get HD-equivalent counts. We would aggregate all home treatment counts
to obtain each hospital-based ESRD facility's HD-equivalent home
dialysis treatment counts. Then we would aggregate all treatment counts
to obtain each hospital-based ESRD facility's HD-equivalent dialysis
treatment counts for all modalities.
We stated in the CY 2021 ESRD PPS proposed rule that using this
methodology for both freestanding and hospital-based ESRD facilities
would result in an offset of $9.23. We noted that if we were to adopt
this approach, the MAC would apply this additional step in calculating
the pre-adjusted per treatment amount. That is, the MAC would offset
the pre-adjusted per treatment amount by deducting $9.23 to account for
the costs already paid through the ESRD PPS base rate for current home
dialysis machines that ESRD facilities already own. We stated that we
believe this methodology would provide an approximation of the cost of
the home dialysis machine in the base rate. Further, we noted that we
believe deducting this amount from the calculated pre-adjusted per
treatment amount would be reasonable because the beneficiary would not
be using two home dialysis machines at the same time and at the end of
the 2 years, the ESRD facility would retain ownership of the asset,
specifically, the home dialysis machine.
We solicited comments on this alternative approach to apply an
offset to the proposed pre-adjusted per treatment amount and
specifically solicited comments on the methodology we would use to
compute the value of the offset.
Finally, consistent with the policies finalized last year in Sec.
413.236(d) for the TPNIES, we proposed to revise Sec. 413.236(d) to
reflect that we would pay 65 percent of the pre-adjusted per treatment
amount for capital-related assets that are home dialysis machines when
used in the home for a single patient. That is, as discussed in the CY
2020 ESRD PPS final rule (84 FR 60692 through 60693), we finalized a
policy to base the TPNIES payment on 65 percent of the MAC-determined
price in order to maintain consistency with the IPPS NTAP payment
policy and to mitigate the Medicare expenditures incurred as a result
of the TPNIES. Therefore, we proposed to pay 65 percent of the pre-
adjusted per treatment amount for these machines.
For example, for a home dialysis machine that has a MAC-determined
price of $25,000 and a 5-year useful life, using the proposed straight-
line depreciation method, the annual allowance would equate to $5,000
per year. At 156 treatments per year, the pre-adjusted per treatment
amount is $32.05 ($5,000/156) and 65 percent of that amount equals a
TPNIES per treatment add-on payment amount of $20.83 ($32.05 x .65). We
noted that, currently, the useful life of 5 years and the expected
number of treatments of 156 is fixed since these variables have been
established by CMS. That is, as we discussed previously in this section
with regard to the use of the AHA
[[Page 71424]]
guidance that dialysis machines have a 5-year useful life. With regard
to the expected number of treatments, this is based on the current
payment policy of 3 treatments per week. Under the alternative
proposal, we would reduce the pre-adjusted per treatment add-on payment
amount ($32.05) by $9.23 to offset the amount for a dialysis machine
included in the base rate ($32.05-$9.23 = $22.82). Then 65 percent of
that amount would equal a TPNIES per treatment add-on payment amount of
$14.83 ($22.82 x .65).
We explained in the CY 2021 ESRD PPS proposed rule that in the
future, if an innovative home dialysis machine is designed to require
fewer treatments per week relative to existing machines, MACs, using
the same methodology could account for fewer treatments in the
denominator in the calculation of the pre-adjusted per treatment
amount. This change to the denominator would allow the total TPNIES
amount paid at the end of the year to be equivalent to the annual
allowance and we would then proceed with the calculation to achieve the
targeted 65 percent of that annual allowance.
For a PD cycler that is used 7 times per week, the annual allowance
for TPNIES would remain at $5,000 per year. A daily modality, or 7
treatments per week, equals 364 treatments per year (7 treatments per
week x 52 weeks = 364 treatments per year). The annual allowance
(numerator) would be divided by the number of treatments (denominator).
At 364 treatments per year, the pre-adjusted per treatment amount would
be $13.74 ($5,000/364 treatments = $13.74); and 65 percent of that
amount would yield a TPNIES per treatment add-on payment of $8.93.
Under the alternative proposal, we would reduce the pre-adjusted per
treatment add-on payment amount ($13.74) by an offset to reflect the
amount for a dialysis machine included in the base rate. We would apply
the HD-equivalency calculation, that is used to convert PD treatments
for payment purposes, to the offset since the per treatment amount in
this example is a daily modality. Therefore, the offset would be $3.96
($9.23*(3/7) = $27.69/7 = $3.96). Then the pre-adjusted per treatment
add-on payment amount would be $9.51 ($13.47-$3.96 = $9.51). Then 65
percent of that amount would equal a TPNIES per treatment add-on
payment amount of $6.18 ($9.51 x .65 = $6.18).
The methodology is the same. The two variables, regardless of
modality, are: (1) The cost of the machine used to calculate annual
allowance (2) the number of treatments the machine is expected to
deliver per year.
We invited public comment on using the proposed and alternative
method for determining the pricing of capital-related assets that are
home dialysis machines when used in the home for a single patient and
that meet the eligibility criteria in Sec. 413.236(b), including the
revisions discussed in section II.B.3.b.(1) of this final rule.
Consistent with the TPNIES policy and in accordance with Sec.
413.236(d)(1), we proposed that we would apply the TPNIES for these
home dialysis machines for 2-calendar years from the effective date of
the change request, which would coincide with the effective date of a
future CY ESRD PPS final rule. In the change request we would specify
that the add-on payment adjustment would be applicable to home dialysis
treatments and provide the billing guidance on how to report the
miscellaneous code for the eligible item on the claim until a permanent
HCPCS is available.
As we stated in the CY 2021 ESRD PPS proposed rule, we believe the
duration of the application of the TPNIES for all equipment and
supplies determined eligible for this payment adjustment should be
consistent, and that 2 years would be a sufficient timeframe for ESRD
facilities to set up or adjust business practices so that there is
seamless access to the new and innovative home dialysis machines. In
addition, we noted that in light of the current COVID-19 pandemic,
stakeholders are increasingly aware of the importance of having home
dialysis readily available and in place to prevent ESRD patients from
being exposed to asymptomatic or pre-symptomatic infections that
contribute to COVID-19 transmission by having to utilize in-center
dialysis.
We further stated that we believe that providing the TPNIES for 2
years for these machines would address the stakeholders' concerns
regarding additional payment to account for higher cost of more new and
innovative home dialysis machines that they believe may not be
adequately captured by the dollars allocated in the ESRD PPS base rate.
That is, we believe that the TPNIES would help remove barriers to
market penetration and foster competition with other dialysis machines
that are already on the market. In the CY 2021 ESRD PPS proposed rule,
we noted that this proposal would increase Medicare expenditures, which
would result in increases to ESRD beneficiary co-insurance, since we
have not previously provided a payment adjustment for any capital-
related assets in the past. However, to support HHS's goals and
initiatives to increase home dialysis and the President's Executive
order of July 10, 2019, we stated that we believe that the proposed
expansion of the TPNIES to capital-related assets that are home
dialysis machines when used in the home for a single patient would be
appropriate to support ESRD facility uptake in furnishing new and
innovative renal dialysis equipment to ESRD patients.
We noted that the intent of the proposed TPNIES for new and
innovative capital-related assets that are home dialysis machines when
used in the home would be to provide a transition period to support
ESRD facility use of these machines when they are new and innovative to
the market. We stated that, at this time, we do not believe that it
would be appropriate to add dollars to the ESRD PPS base rate for new
and innovative home dialysis machines because, as noted previously, the
ESRD PPS base rate includes the cost of equipment and supplies used to
furnish a dialysis treatment.
While we would monitor renal dialysis service utilization trends
during the TPNIES payment period, we proposed that these capital-
related assets that are home dialysis machines when used in the home
would not be eligible outlier services as provided in Sec. 413.237. As
assets, capital-related home dialysis machines are distinct from
operating expenses such as the disposable supplies and leased equipment
with no conveyed ownership rights. These expenses are generally
accounted for on a per patient basis and therefore, when used in excess
of the average constitute outlier use, which makes them eligible for
outlier payments.
Therefore, we proposed revisions at Sec. 413.236(d)(2) to reflect
that following payment of the TPNIES for new and innovative capital-
related assets that are home dialysis machines when used in the home
for a single patient, the ESRD PPS base rate will not be modified and
the equipment would not be an eligible outlier service as provided in
Sec. 413.237. In addition, we proposed revisions at Sec.
413.237(a)(1)(v) to exclude capital-related assets that are home
dialysis machines when used in the home for a single patient from
outlier eligibility after the TPNIES period ends. We also proposed
minor editorial changes to paragraph (a)(1)(i) to remove the semicolon
at the end of the sentence and add a period in its place; and in
paragraph (a)(1)(iv) to remove ``; and'' and add a period in its place.
With regard to the TPNIES application, we would post any final
[[Page 71425]]
changes to both the timing of the various eligibility criteria and the
content of the TPNIES application to the TPNIES website, along with
information about all renal dialysis equipment and supplies that CMS
has determined are eligible for the TPNIES, consistent with the
policies we finalize in the CY 2021 ESRD PPS final rule. The TPNIES
website is available at: https://www.cms.gov/medicare/esrd-pps/esrd-pps-transitional-add-payment-adjustment-new-and-innovative-equipment-and-supplies-tpnies.
The comments we received and our responses to the comments on our
proposed and alternative pricing methodology are set forth below:
Comment: A group of organizations, representing the kidney and
medical technology communities recommended that CMS extend the TPNIES
period from 2 years to at least 3 years. They stated that 2 years is an
inadequate amount of time after taking into account the scale of
resources and time necessary to build a responsible support and
distribution infrastructure nationwide. This is especially true for
companies in their earlier stages, for example, small manufacturers
that tend to lack the type of distribution and support infrastructure
that their larger, more established counterparts may feature.
Furthermore, staffing constraints could mean the technology would take
too long to come to market, causing the ESRD facility to be unable to
get the TPNIES for 2 years. Accordingly, the commenter stated that a 2-
year TPNIES period creates a level of risk that would discourage
smaller start-up companies from pursuing the development of new and
innovative equipment and supplies. These commenters stated that
extending the TPNIES period would help level the playing field between
small innovators and large, global manufacturers with an existing
support and distribution footprint. They pointed out that the new
technology add-on payment that applies under the hospital inpatient
setting allows for technologies to qualify for the add-on payment up to
three years to account for the lag time in data collection to be
reflected in updated MS-DRGs. Given that it takes significantly longer
for devices, particularly home dialysis machines, to achieve
significant adoption, they stated that CMS should align with the
hospital inpatient policy and allow for an additional year of TPNIES.
Many commenters urged CMS to reconsider the proposed policy to
limit the TPNIES to only 2 years and not adjust the base rate when
truly innovative renal equipment and supplies are added to the ESRD PPS
bundled payment. They noted that, experience with the TDAPA for
calcimimetics demonstrates that having a three-year transition period
is important for data collection purposes, giving CMS adequate time to
review claims and determine whether the base rate should be adjusted.
Commenters reported that small, independent and low-volume ESRD
facilities continue to experience low to negative Medicare margins and
that, while TDAPA and TPNIES can provide helpful transitional add-on
payment adjustments for limited periods of time, they do not account
for incorporating innovative renal drugs, equipment and supplies into
high-quality clinical care over the long term. Commenters suggested
that CMS could increase the base rate by the difference between the
cost of the TPNIES-eligible device and the amount to dollars already in
the base rate for similar devices and that this methodology would
recognize the dollars already in the base rate, but still establish a
fair, yet competitive, playing field allowing for long-term stability.
Other commenters pointed out that if a new home dialysis machine is
eligible for the TPNIES in 2022 and 2023, only a machine that is used
continuously between January 2022 and December 2023 will be reimbursed
at an amount equivalent to 26 percent of the MAC-determined price. In
contrast, a machine that is used continuously between January 2023 and
December 2023 will be reimbursed at an amount equivalent to only 13
percent of the MAC-determined price. The commenter encouraged CMS to
consider the following adaptation: If a home dialysis machine is
eligible for the TPNIES in 2022 and 2023, then an ESRD facility may
collect TPNIES payments for two years after the first use of the
machine among all patients in the facility. In other words, an ESRD
facility that collects its first TPNIES payment for a home dialysis
machine in October 2022 will be eligible for continued payments through
September 2024. Nevertheless, that ESRD facility must collect its first
TPNIES payment no later than December 2023. The commenter stated that
this adaptation would allow all ESRD facilities to have an opportunity
to collect 26 percent of the MAC-determined price.
Response: We believe the commenter is requesting that we pay the
TPNIES for 3 years, similar to the length of time we paid the TDAPA for
calcimimetics, and that like calcimimetics we then adjust the base rate
to account for the cost of such products. Since we are not adjusting
the base rate for the equipment and supplies eligible for the TPNIES,
the collection of data for a 3-year period of time is not necessary. We
believe the payment of the TPNIES for 2 years is adequate time for ESRD
facilities to incorporate new products into their business model. With
regard to the commenters' concern with the duration of the TPNIES and
when it would begin for ESRD facilities that are unable to obtain and
report the equipment or supply on the claim beginning January 1, we
understand the commenters' concern and will consider refinements to the
TPNIES to address this issue in future rulemaking. We continue to
believe that 2 years is adequate since the purpose of TPNIES is to
support facility uptake of these items and that this policy strikes an
appropriate balance between supporting ESRD facilities and limiting the
financial burden that increased payments place on beneficiaries and
Medicare expenditures. In addition, we note that this is the first year
of implementing the TPNIES for capital related assets that are home
dialysis machines and we intend to monitor the use and payments for the
TPNIES to assess whether new and innovative machines are adopted by the
ESRD facilities.
With regard to small manufacturers that may take longer to have
their equipment or supply come to market, we note that the purpose of
the TPNIES is to facilitate ESRD facility uptake of the new and
innovative equipment and supplies. Unlike the IPPS NTAP that will end
in an adjustment to the MS-DRG, there will be no change in the ESRD PPS
base rate when TPNIES ends, therefore, the data collection needs are
not the same. We believe providing 2 years of an add-on payment
adjustment for supplies and equipment is sufficient time for market
uptake if the manufacturers prepare in advance of the TPNIES
application. Doing so will allow ESRD facilities to align their
business plan to obtain 2 full years of TPNIES payments.
Comment: A commenter expressed concern that home dialysis machines
were being defined as in their entirety, meaning that one new part of a
machine does not make the entire capital-related asset new. The
commenter explained that PD patients often have issues related to
handling and storage of PD solution and if an innovator develops a
machine that generates PD solution that interfaces with an existing
cycler, the machine could not be considered for TPNIES eligibility. The
commenter recommended that CMS finalize a TPNIES expansion that will
offer a clear pathway to approval of machines that
[[Page 71426]]
produce on-demand PD solution. The commenter also questioned the
disqualification of water purification systems, but recognized that the
application of such systems to the home setting is unclear.
Response: The commenter is correct that a piece of equipment that
is used along with a PD cycler or HD machine would not meet our
definition of a home dialysis machine, however, such equipment could be
considered for the TPNIES as renal dialysis equipment (which was
finalized in the CY 2020 ESRD PPS final rule (84 FR 60691 through
60692) and implemented January 1, 2020). We note that the exclusion of
other capital-related assets, such as water purification systems,
applies to the systems used in ESRD facilities for in-center dialysis
and benefits all in-center patients. Our payment methodology for
capital-related assets that are home dialysis machines addresses
individual patient use in the home and is not geared to assets that
benefit all patients.
Comment: A group of organizations representing the kidney and
medical technology communities requested that CMS instruct MACs to
provide public, timely, and consistent payment determinations. They
recommended that CMS exclude the language in the regulation that gives
MACs flexibility to determine the pricing of any TPNIES supply,
equipment or capital-related asset that meets the TPNIES eligibility
criteria based on charges and payment amounts for other equipment and
supplies that may be comparable or otherwise relevant. They stated that
the regulatory language undermines CMS approvals for applicants of the
TPNIES as, by definition, approved products have achieved SCI over
existing products. They also recommended that CMS more clearly define
the payment parameters and instruct the MACs to publish a database
online that provides a discrete TPNIES payment amount no later than
March 31 of the first year of TPNIES eligibility.
MedPAC supported the proposal to base the TPNIES amount on the
price established by the MACs (using information from invoices and
other relevant sources of information) but only for the first two
calendar quarters after CMS begins applying the TPNIES. Thereafter,
they recommended that CMS set the price of new equipment and supplies
using a method based on pricing data collected directly from each
manufacturer, similar to how the agency establishes the ASP for Part B
drugs. They explained that the ASP for a Part B drug reflects the
average price realized by the manufacturer for its sales broadly across
different types of purchasers, for patients with different types of
insurance coverage, and based on the manufacturer's sales to all
purchasers (with certain exceptions) net of manufacturer rebates,
discounts, and price concessions. They stated that an approach similar
to how CMS collects ASP data would increase the consistency of pricing
data and should lead to more accurate payment rates for items paid
under the TPNIES. They further recommended that CMS link payment of the
TPNIES to a requirement that equipment and supply manufacturers submit
ASP-like data to the agency, similar to the TDAPA policy.
Response: We continue to believe that the payment amounts for other
equipment and supplies that may be comparable or otherwise relevant, as
described at Sec. 413.236(e)(1)(iv) of this final rule, as an
important consideration for the MACs to determine the price of any
TPNIES supply, equipment or capital-related asset that meets the TPNIES
eligibility criteria. While we recognize that TPNIES items will have
demonstrated SCI over existing items, we seek to avoid Medicare paying
65 percent of an excessively inflated price, for example, a dialysis
machine that is 3 times the cost of current machines. Since the
manufacturer will determine the price to be paid by the provider, the
MACs' consideration of charges and payment for comparable equipment and
supplies serves as a guard rail for the use of invoice pricing. With
regard to the suggestion that we instruct the MACs to publish an online
database with TPNIES payment amounts, we are working with MACs on
mechanisms for pricing transparency. We will consider the suggestion
for future rulemaking. With regard to the suggestion for an ASP-like
reporting system, we think the idea has merit and will take it into
consideration for future rulemaking.
Comment: An organization of LDOs stated they are supportive of CMS
fixing the expected number of treatments at 156 for the purpose of
calculating the TPNIES value, however, they expressed significant
concerns about any policy changes that would undermine the ability of
treating physicians to prescribe the frequency of dialysis that is
clinically appropriate for their patients. They suggested that CMS may
be interested in capping the TPNIES payment for a device. They proposed
that CMS adopt a modification to the methodology that would respect
both the TPNIES cap and the importance of physician prescribing with
regard to frequency of dialysis. For example, CMS could cap total
TPNIES payments for a specific device at the maximum allowable TPNIES
payment pursuant to the adopted methodology, even if that amount is
achieved prior to the end of the 2-year TPNIES period.
Response: The purpose of the 156 treatments is to compute a per
treatment amount. An ESRD patient's nephrologist may order additional
reasonable and necessary dialysis treatments beyond 3 per week. When a
MAC has determined that the additional treatments are reasonable and
necessary, we would pay the TPNIES on each covered treatment that is
furnished. At this time, we do not believe it is necessary to adopt the
commenter's suggested modification to the proposed methodology that
takes into account both the TPNIES cap and the prescribed frequency of
dialysis; however, we will monitor use of the TPNIES and consider if
such a policy is necessary for future rulemaking.
Comment: A group of organizations, representing the kidney and
medical technology communities recommended that we establish a formal
appeals process for the manufacturers whose applications for the TPNIES
are denied. They expressed concern that, without an opportunity to
review CMS' initial determination, situations may arise in which new
technologies fail to obtain a favorable TPNIES determination due to
technical errors or insufficient information necessary in the initial
TPNIES application. They asserted that a formal appeals process would
ensure that TPNIES applicants would have an opportunity to seek
additional, independent review as necessary. They noted that the
standard process for seeking review of Medicare Part A/B claims under
42 CFR part 405, subpart I, may not apply, and encouraged CMS to allow
for administrative appeals of TPNIES determinations to be conducted
within the Office of Medicare Hearings and Appeals (that is, a hearing
before the Departmental Appeals Board).
Response: We did not propose a formal appeals process for the
manufacturers whose applications for TPNIES are denied for CY 2021 and
therefore we are not adopting the suggestion. However, we thank the
commenters for this suggestion and will consider it for future
rulemaking. We note that applicants may reapply for the TPNIES if their
application is denied as long as they reapply within 3 years of the
date of FDA marketing authorization or approval.
Comment: A commenter expressed confusion about the discussion in
the proposed rule on treatment frequency insofar as it is determinative
of TPNIES payment. The commenter stated that, while the discussion is
easier to
[[Page 71427]]
contemplate for PD, as most patients undergo treatment 6 or 7 days per
week, it does not make sense for HD. The commenter noted that HD
prescriptions can be written for as few as 2 days or as many as 7 days
per week, and there is no concept of an ``ordinary'' treatment
frequency for a HD machine, whether it is used in a facility or at
home. The commenter recommended that CMS simply issue a TPNIES payment
on a monthly basis according to whether the ESRD facility claim
includes a condition code that indicates that a qualifying home
dialysis machine has been used.
Response: We disagree with the commenter's assertion that there is
no ordinary treatment frequency for HD machines. In-center HD machines
are designed to be used 3 times per week to achieve adequate dialysis.
Our intention of providing examples in the CY 2021 ESRD PPS proposed
rule using various annual treatments was to clarify that the
methodology for calculating the TPNIES per treatment payment can also
be used if a new home dialysis machine was designed to achieve adequate
dialysis in fewer treatments per week. We note that, when questioned
specifically about frequency, a home dialysis machine manufacturer
confirmed that adequate dialysis can be achieved in 3 treatments per
week, however, the treatments may take longer to administer.
Comment: An LDO recommended that we set the useful life for home
dialysis machines at 7 years rather than the 5 years we proposed. The
organization noted that standard accounting practice is to depreciate
dialysis equipment, for the center or the home, over a period of at
least 7 years.
Response: Medicare policies \13\ hold providers to strict AHA
guidelines with respect to the useful life. Under AHA guidelines,
useful life for dialysis machines is 5 years. ESRD facilities are
allowed to use more or less than the AHA guidelines for business
financial reporting but they must use the AHA guidelines for Medicare.
---------------------------------------------------------------------------
\13\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021929.
---------------------------------------------------------------------------
Comment: MedPAC did not support expanding the TPNIES to include
home dialysis equipment, but stated that, if CMS finalizes its
proposal, it should remove the portion of payment attributable to home
dialysis machines from the base rate for those cases receiving the
TPNIES because paying for new home dialysis machines under the TPNIES
for two years is duplicative of payment for items with a similar
purpose or use that are already paid under the ESRD PPS base rate.
MedPAC stated that it supported the proposal if CMS subtracted the
amount for capital-related machines already included in the ESRD PPS
base rate for those cases receiving the TPNIES.
While some commenters expressed support for the offset, an
organization of renal professionals, providers and manufacturers, an
organization of LDOs, and an individual objected to offsetting the
TPNIES with the cost of the home dialysis machine already included in
the base rate, stating that the purpose of a transitional add-on
payment is to incentivize the adoption of innovative products. These
commenters stated that the purpose of the TPNIES is not to reimburse
providers dollar for dollar for their costs. In their view, the
government assumes the risk of making an additional payment during the
TPNIES period with the presumed reward of beneficiaries experiencing
clinical improvement, as claimed by the applicant. Following the end of
the TPNIES period, the providers assume that risk. The commenters
asserted that this is true of the inpatient and outpatient hospital
payment systems, as well as the TPNIES. They stated, given that the
proposed TPNIES amount is only a portion of the cost providers incur
when using the device, further reducing the TPNIES amount with the
offset would only further reduce the likelihood of adoption of the
machine.
Response: We agree with MedPAC that the TPNIES payment is
duplicative of payment for items with a similar purpose or use that are
already paid under the ESRD PPS base rate. For this reason, we are
finalizing an offset to the TPNIES payment, which we discussed in the
CY 2021 ESRD PPS rule, to reflect the value of the dialysis machine
included in the ESRD PPS base rate.
We disagree with the commenters who stated that applying an offset
to reflect the amount for a dialysis machine in the base rate would
reduce the likelihood the new machine will be purchased by ESRD
facilities. We believe that ESRD facilities will need to buy additional
dialysis machines to support the goals of the Executive order and the
ETC model and that the TPNIES payment will help support ESRD facility
uptake of new home dialysis machines.
Final Rule Action: After careful consideration of the comments we
received, we are finalizing our proposed pricing methodology for
capital-related assets that are home dialysis machines when used in the
home for a single patient and the proposed changes to Sec. 413.236(f)
requiring MACs to calculate the annual allowance and the pre-adjusted
per treatment amount with revisions.
Since we are finalizing an offset to the TPNIES payment to reflect
the value of a dialysis machine in the ESRD PPS base rate, we revised
the proposed changes to Sec. 413.236(f) to reflect the additional step
of calculating a per treatment amount for use in calculating the pre-
adjusted per treatment amount. We also revised paragraph (f) to reflect
that the pre-adjusted per treatment amount is reduced by an estimated
average per treatment offset amount to account for the costs already
paid through the ESRD PPS base rate.
In the CY 2021 ESRD PPS proposed rule, we stated our intention to
further amend Sec. 413.236(f) if we finalized the offset. Since we are
finalizing the offset, we are adding the data sources and
methodological steps for computing the offset in paragraph (f). In the
proposed rule the $9.23 offset was based on the proposed CY 2021 ESRDB
market basket less the multifactor productivity adjustment. For this
final rule, we have recomputed the offset to reflect the final CY 2021
payment rate update factor (1.6 percent). The final offset for CY 2021
is $9.32. We will continue to update the offset amount on an annual
basis so that it is consistent with how the ESRD PPS base rate is
updated.
We are also finalizing the revision to Sec. 413.236(d) to reflect
that we would pay 65 percent of the pre-adjusted per treatment amount
minus the offset for capital-related assets that are home dialysis
machines when used in the home for a single patient.
4. CY 2021 ESRD PPS Update
a. CY 2021 ESRD Bundled (ESRDB) Market Basket Update, Productivity
Adjustment, and Labor-Related Share
In accordance with section 1881(b)(14)(F)(i) of the Act, as added
by section 153(b) of MIPPA and amended by section 3401(h) of the
Affordable Care Act, beginning in 2012, the ESRD PPS payment amounts
are required to be annually increased by an ESRD market basket increase
factor and reduced by the productivity adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act. The application of the productivity
adjustment may result in the increase factor being less than 0.0 for a
year and may result in payment rates for a year being less than the
payment rates for the preceding year. The statute also provides that
the market basket increase factor should reflect the changes over time
in the prices of an appropriate mix of goods and services used to
furnish renal dialysis services.
As required under section 1881(b)(14)(F)(i) of the Act, CMS
developed an all-inclusive ESRD
[[Page 71428]]
Bundled (ESRDB) input price index (75 FR 49151 through 49162). In the
CY 2015 ESRD PPS final rule we rebased and revised the ESRDB input
price index to reflect a 2012 base year (79 FR 66129 through 66136).
Subsequently, in the CY 2019 ESRD PPS final rule, we finalized a
rebased ESRDB input price index to reflect a 2016 base year (83 FR
56951 through 56962).
Although ``market basket'' technically describes the mix of goods
and services used for ESRD treatment, this term is also commonly used
to denote the input price index (that is, cost categories, their
respective weights, and price proxies combined) derived from a market
basket. Accordingly, the term ``ESRDB market basket,'' as used in this
document, refers to the ESRDB input price index.
We proposed to use the CY 2016-based ESRDB market basket as
finalized and described in the CY 2019 ESRD PPS final rule (83 FR 56951
through 56962) to compute the CY 2021 ESRDB market basket increase
factor based on the best available data. Consistent with historical
practice, we proposed to estimate the ESRDB market basket update based
on IHS Global Inc.'s (IGI's), forecast using the most recently
available data. IGI is a nationally recognized economic and financial
forecasting firm that contracts with CMS to forecast the components of
the market baskets. Using this methodology and IGI's first quarter 2020
forecast of the CY 2016-based ESRDB market basket (with historical data
through the fourth quarter of 2019), the proposed CY 2021 ESRDB market
basket increase factor was 2.2 percent.
Under section 1881(b)(14)(F)(i) of the Act, for CY 2012 and each
subsequent year, the ESRD market basket percentage increase factor
shall be reduced by the productivity adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act. The growth in multifactor
productivity (MFP) is derived by subtracting the contribution of labor
and capital input growth from output growth. We finalized the detailed
methodology for deriving the MFP projection in the CY 2012 ESRD PPS
final rule (76 FR 40503 through 40504). The most up-to-date MFP
projection methodology is available on the CMS website at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/Downloads/MFPMethodology.pdf. Using
this methodology and IGI's first quarter 2020 forecast, the proposed
MFP adjustment for CY 2021 (the 10-year moving average of MFP for the
period ending CY 2021) was projected to be 0.4 percent.
As a result of these provisions, the proposed CY 2021 ESRD market
basket adjusted for MFP was 1.8 percent. The proposed market basket
increase is calculated by starting with the proposed CY 2021 ESRDB
market basket percentage increase factor of 2.2 percent and reducing it
by the proposed MFP adjustment (the 10-year moving average of MFP for
the period ending CY 2021) of 0.4 percentage point. We also proposed
that if more recent data become available after the publication of this
proposed rule and before the publication of the final rule (for
example, a more recent estimate of the market basket update or MFP), we
would use such data, if appropriate, to determine the final CY 2021
market basket update and/or MFP adjustment (85 FR 42152).
The comments and our responses to the comments on the proposed ESRD
market basket update and MFP adjustment for CY 2021 are set forth
below.
Comment: Several commenters stated that with new drugs being added
to the ESRD PPS bundled payment, it is more important than ever to use
the most appropriate price proxies for determining the base rate and
update each year. The commenters urged the adoption of a better price
proxy for non-ESAs that are not over-the-counter (OTC) vitamins and
recommended that CMS use the BLS Series ID: WPS063 Series Title: PPI
Commodity Data for Chemicals and Allied Products-Drugs and
Pharmaceuticals, seasonally adjusted. One commenter stated that the
timing of addressing the price proxy used for non-ESA drugs in the ESRD
market basket is relevant since new drugs in the pipeline could be
added to the ESRD PPS bundled payment during the next few years because
of the TDAPA provisions.
Response: We appreciate the commenters' suggestion that we use the
most appropriate price proxy for non-ESA drugs in the ESRD market
basket. We did not propose changes to the price proxies in the ESRD
market basket for CY 2021, so we will not be adopting such changes in
this final rule. However, as described in the CY 2019 ESRD PPS final
rule (83 FR 56960 through 56961), we believe the PPI for Vitamins,
Nutrients, and Hematinic Preparation (VNHP) is the most appropriate
price proxy for non-ESA drugs and analysis of the ASP data for Non-ESA
drugs in the bundle suggests the trends in the PPI VNHP trends are
reasonable. We appreciate the commenters' concern for the potential
shifts in the mix of drugs within the ESRD PPS bundled payment amount
as a result of the TDAPA provisions. We will continue to monitor the
impact that these changes have on the relative cost share weights and
the mix of non-ESA drugs included in the bundled payment in the ESRDB
market basket.
Comment: One commenter expressed support for the annual update to
the ESRD PPS base rate for CY 2021 and recognized that CMS does not
have the authority to eliminate the productivity adjustment, but wanted
to highlight their continued concern about the overall negative
Medicare margins. The commenter stated that the experience of ESRD
facilities disputes the idea that productivity in ESRD facilities can
be improved year over year at the rate of economy-wide productivity.
Response: Section 1881(b)(14)(F)(i) of the Act requires the
application of the MFP adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act to the ESRD PPS market basket update
for 2012 and subsequent years. We will continue to monitor the impact
of the payment updates, including the effects of the MFP adjustment, on
ESRD provider margins as well as beneficiary access to care as reported
by MedPAC. However, any changes to the productivity adjustment would
require a change to current law.
In the March 2020 Report to Congress, MedPAC found most indicators
of payment adequacy to be positive, and recommend that for 2021, the
ESRD PPS base rate should be updated by the amount determined under
current law.
Final Rule Action: Consistent with our historical practice and our
proposal, we are estimating the market basket increase and the MFP
adjustment based on IGI's forecast using the most recent available
data. Based on IGI's third quarter 2020 forecast with historical data
through the second quarter of 2020, the 2016-based ESRDB market basket
percentage increase for CY 2021 is 1.9 percent. We note that the first
quarter 2020 forecast used for the proposed market basket update was
developed prior to the economic impacts of the COVID-19 pandemic. This
lower update (1.9 percent) for CY 2021 relative to the CY 2021 ESRD PPS
proposed rule (2.2 percent) is primarily driven by slower anticipated
compensation growth for both health-related and other occupations as
labor markets are expected to be significantly impacted during the
recession that started in February 2020 and throughout the anticipated
recovery.
Based on the more recent data available for this CY 2021 ESRD PPS
final rule, the current estimate of the 10-year moving average growth
of MFP for CY 2021 is projected to be 0.3 percent.
[[Page 71429]]
This MFP estimate is based on the most recent macroeconomic outlook
from IGI at the time of rulemaking (released September 2020) in order
to reflect more current historical economic data. IGI produces monthly
macroeconomic forecasts, which include projections of all of the
economic series used to derive MFP. In contrast, IGI only produces
forecasts of the more detailed price proxies used in the 2016-based
ESRDB market basket on a quarterly basis. Therefore, IGI's third
quarter 2020 forecast is the most recent forecast of the 2016-based
ESRD market basket percentage increase factor.
We note that it has typically been our practice to base the
projection of the market basket price proxies and MFP in the final rule
on the third quarter IGI forecast. For this CY 2021 ESRD PPS final
rule, we are using the IGI September macroeconomic forecast for MFP
because it is a more recent forecast, and it is important to use more
recent data during this period when economic trends, particularly
employment and labor productivity, are notably uncertain because of the
COVID-19 pandemic. However, we also note that the 10-year moving
average of MFP based on the third quarter 2020 forecast is also 0.3
percent.
Therefore, the final CY 2021 ESRD PPS payment rate update is 1.6
percent. That is, the CY 2021 ESRD market basket percentage increase
factor of 1.9 percent less the 0.3 percentage point MFP adjustment (the
10-year moving average of MFP for the period ending CY 2021).
For the CY 2021 ESRD payment update, we proposed to continue using
a labor-related share of 52.3 percent for the ESRD PPS payment, which
was finalized in the CY 2019 ESRD PPS final rule (83 FR 56963). We did
not receive any public comments on this proposal and therefore, we are
finalizing the continued use of a 52.3 percent labor-related share for
CY 2021.
b. The CY 2021 ESRD PPS Wage Indices
(1) Background
Section 1881(b)(14)(D)(iv)(II) of the Act provides that the ESRD
PPS may include a geographic wage index payment adjustment, such as the
index referred to in section 1881(b)(12)(D) of the Act, as the
Secretary determines to be appropriate. In the CY 2011 ESRD PPS final
rule (75 FR 49200), we finalized an adjustment for wages at Sec.
413.231. Specifically, CMS adjusts the labor-related portion of the
base rate to account for geographic differences in the area wage levels
using an appropriate wage index, which reflects the relative level of
hospital wages and wage-related costs in the geographic area in which
the ESRD facility is located. We use the Office of Management and
Budget's (OMB's) core-based statistical area (CBSA)-based geographic
area designations to define urban and rural areas and their
corresponding wage index values (75 FR 49117). OMB publishes bulletins
regarding CBSA changes, including changes to CBSA numbers and titles.
The bulletins are available online at https://www.whitehouse.gov/omb/information-for-agencies/bulletins/.
For CY 2021, we updated the wage indices to account for updated
wage levels in areas in which ESRD facilities are located using our
existing methodology. We used the most recent pre-floor, pre-
reclassified hospital wage data collected annually under the inpatient
PPS. The ESRD PPS wage index values are calculated without regard to
geographic reclassifications authorized under sections 1886(d)(8) and
(d)(10) of the Act and utilize pre-floor hospital data that are
unadjusted for occupational mix. For CY 2021, the updated wage data are
for hospital cost reporting periods beginning on or after October 1,
2016 and before October 1, 2017 (FY 2017 cost report data).
We have also adopted methodologies for calculating wage index
values for ESRD facilities that are located in urban and rural areas
where there is no hospital data. For a full discussion, see CY 2011 and
CY 2012 ESRD PPS final rules at 75 FR 49116 through 49117 and 76 FR
70239 through 70241, respectively. For urban areas with no hospital
data, we compute the average wage index value of all urban areas within
the state to serve as a reasonable proxy for the wage index of that
urban CBSA, that is, we use that value as the wage index. For rural
areas with no hospital data, we compute the wage index using the
average wage index values from all contiguous CBSAs to represent a
reasonable proxy for that rural area. We apply the statewide urban
average based on the average of all urban areas within the state to
Hinesville-Fort Stewart, Georgia (78 FR 72173), and we apply the wage
index for Guam to American Samoa and the Northern Mariana Islands (78
FR 72172). In the CY 2021 ESRD PPS proposed rule (85 FR 42152), we
noted that for the CY 2020 ESRD PPS final rule, we did not apply the
statewide urban average to Carson City, Nevada as we did in the CY 2020
ESRD PPS proposed rule (84 FR 38359) because hospital data was
available to compute the wage index.
A wage index floor value (0.5000) is applied under the ESRD PPS as
a substitute wage index for areas with very low wage index values.
Currently, all areas with wage index values that fall below the floor
are located in Puerto Rico. However, the wage index floor value is
applicable for any area that may fall below the floor. A description of
the history of the wage index floor under the ESRD PPS can be found in
the CY 2019 ESRD PPS final rule (83 FR 56964 through 56967).
An ESRD facility's wage index is applied to the labor-related share
of the ESRD PPS base rate. In the CY 2019 ESRD PPS final rule (83 FR
56963), we finalized a labor-related share of 52.3 percent, which is
based on the 2016-based ESRDB market basket. Thus, for CY 2021, the
labor-related share to which a facility's wage index would be applied
is 52.3 percent.
For CY 2021, in addition to updating the ESRD PPS wage index to use
more recent hospital wage data, we also proposed to adopt newer OMB
delineations and a transition policy in a budget-neutral manner as
discussed in the CY 2021 ESRD PPS proposed rule and sections
II.B.4.b.(2) and II.B.4.b.(3), respectively, of this final rule.
(2) Implementation of 2018 OMB Labor Market Delineations
As discussed previously in the CY 2021 ESRD PPS proposed rule and
this final rule, the wage index used for the ESRD PPS is calculated
using the most recent pre-floor, pre-reclassified hospital wage data
collected annually under the inpatient PPS and is assigned to an ESRD
facility on the basis of the labor market area in which the ESRD
facility is geographically located. ESRD facility labor market areas
are delineated based on the CBSAs established by the OMB. In accordance
with our established methodology, we have historically adopted through
rulemaking CBSA changes that are published in the latest OMB bulletin.
Generally, OMB issues major revisions to statistical areas every 10
years, based on the results of the decennial census. However, OMB
occasionally issues minor updates and revisions to statistical areas in
the years between the decennial censuses.
[[Page 71430]]
In the CY 2015 ESRD PPS final rule (79 FR 66137 through 66142), we
finalized changes to the ESRD PPS wage index based on the newest OMB
delineations, as described in OMB Bulletin No. 13-01 \14\ issued on
February 28, 2013. We implemented these changes with a 2-year
transition period (79 FR 66142). OMB Bulletin No. 13-01 established
revised delineations for U.S. Metropolitan Statistical Areas,
Micropolitan Statistical Areas, and Combined Statistical Areas based on
the 2010 Census. OMB Bulletin No. 13-01 also provided guidance on the
use of the delineations of these statistical areas using standards
published on June 28, 2010 in the Federal Register (75 FR 37246 through
37252).
---------------------------------------------------------------------------
\14\ https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2013/b13-01.pdf.
---------------------------------------------------------------------------
On July 15, 2015, OMB issued OMB Bulletin No. 15-01,\15\ which
updated and superseded OMB Bulletin No. 13-01 issued on February 28,
2013. The attachment to OMB Bulletin No. 15-01 provided detailed
information on the update to statistical areas since February 28, 2013.
These updates were based on the application of the 2010 Standards for
Delineating Metropolitan and Micropolitan Statistical Areas to the U.S.
Census Bureau population estimates for July 1, 2012 and July 1, 2013.
---------------------------------------------------------------------------
\15\ https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2015/15-01.pdf.
---------------------------------------------------------------------------
On August 15, 2017, OMB issued OMB Bulletin No. 17-01,\16\ which
updated and superseded OMB Bulletin No. 15-01 issued on July 15, 2015.
The attachment to OMB Bulletin No. 17-01 provided detailed information
on the update to statistical areas since July 15, 2015. These updates
were based on the application of the 2010 Standards for Delineating
Metropolitan and Micropolitan Statistical Areas to the U.S. Census
Bureau population estimates for July 1, 2014 and July 1, 2015. In OMB
Bulletin No. 17-01, OMB announced a new urban CBSA, Twin Falls, Idaho
(CBSA 46300).
---------------------------------------------------------------------------
\16\ https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2017/b-17-01.pdf.
---------------------------------------------------------------------------
On April 10, 2018, OMB issued OMB Bulletin No. 18-03 \17\ which
updated and superseded OMB Bulletin No. 17-01 issued on August 15,
2017. The attachment to OMB Bulletin No. 18-03 provided detailed
information on the update to statistical areas since August 15, 2017.
On September 14, 2018, OMB issued OMB Bulletin No. 18-04,\18\ which
updated and superseded OMB Bulletin No. 18-03 issued on April 10, 2018.
OMB Bulletin Numbers 18-03 and 18-04 established revised delineations
for Metropolitan Statistical Areas, Micropolitan Statistical Areas, and
Combined Statistical Areas, and provided guidance on the use of the
delineations of these statistical areas. These updates were based on
the application of the 2010 Standards for Delineating Metropolitan and
Micropolitan Statistical Areas to the U.S. Census Bureau population
estimates for July 1, 2015 and July 1, 2016.
---------------------------------------------------------------------------
\17\ https://www.whitehouse.gov/wp-content/uploads/2018/04/OMB-BULLETIN-NO.-18-03-Final.pdf.
\18\ https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf.
---------------------------------------------------------------------------
As we discussed in the CY 2021 ESRD PPS proposed rule (85 FR
42153), while OMB Bulletin No. 18-04 is not based on new census data,
there were some material changes to the CBSA-based geographic area
designations based on the 2018 OMB delineations. For example, some new
CBSAs and urban counties would become rural, rural counties would
become urban, and existing CBSAs would be split apart. We explained
that we believe that the 2018 OMB delineations accurately reflect the
local economies and wage levels of the areas where ESRD facilities are
located. We also explained that we believe it is important for the ESRD
PPS to use the most recent OMB delineations practicable in order to
maintain a more accurate and up-to-date payment system that reflects
the reality of population shifts and labor market conditions. We
further believe that using the newer OMB delineations would increase
the integrity of the ESRD PPS wage index system by creating a more
accurate representation of geographic variations in wage levels.
Therefore, we proposed to adopt the newer OMB delineations
established in OMB Bulletin No. 18-04 effective for CY 2021 under the
ESRD PPS. We also proposed a wage index transition applicable to all
ESRD facilities that experience negative impacts due to the proposed
implementation of the 2018 OMB delineations. This transition policy is
discussed in section II.B.4.b.(3) of the CY 2021 ESRD PPS proposed rule
and section II.B.4.b.(3) of this final rule.
In the CY 2021 ESRD PPS proposed rule (85 FR 42153), we noted that,
on March 6, 2020, OMB issued OMB Bulletin 20-01 (available at https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf).
While the March 6, 2020 OMB Bulletin 20-01 was not issued in time for
development of the proposed rule, we were able to review the updates it
provides and have determined that they were minor. We stated that while
we do not believe the minor updates included in OMB Bulletin 20-01
would impact our CY 2021 updates to the CBSA-based labor market area
delineations, if appropriate, we would propose any updates from this
Bulletin in the CY 2022 ESRD PPS proposed rule.
As we stated in the CY 2021 ESRD PPS proposed rule (85 FR 42153),
to implement the newer OMB delineations established in OMB Bulletin No.
18-04 under the ESRD PPS beginning in CY 2021, it is necessary to
identify the new labor market area delineation for each affected county
and ESRD facility in the U.S. We discuss these changes in more detail
in the following sections.
(a) Urban Counties That Would Become Rural Under the 2018 OMB
Delineations
In the CY 2021 ESRD PPS proposed rule (85 FR 42153 through 42155),
we proposed to implement the 2018 OMB labor market area delineations
(based upon the 2010 Decennial Census data) beginning in CY 2021. Our
analysis of the 2018 OMB delineations showed that a total of 34
counties (and county equivalents) that are currently considered part of
an urban CBSA would be considered located in a rural area, beginning in
CY 2021. In the CY 2021 ESRD PPS proposed rule (85 FR 42154), we listed
the 34 urban counties as set forth in Table 1, which would be rural if
we finalized our proposal to adopt the 2018 OMB delineations beginning
in CY 2021.
Table 1--CY 2021 Proposed Urban to Rural CBSA Crosswalk
----------------------------------------------------------------------------------------------------------------
County/county
FIPS county code equivalent State Current CBSA CBSA title
----------------------------------------------------------------------------------------------------------------
01127 WALKER................ AL.................... 13820 Birmingham-Hoover, AL.
12045 GULF.................. FL.................... 37460 Panama City, FL.
13007 BAKER................. GA.................... 10500 Albany, GA.
[[Page 71431]]
13235 PULASKI............... GA.................... 47580 Warner Robins, GA.
15005 KALAWAO............... HI.................... 27980 Kahului-Wailuku-
Lahaina, HI.
17039 DE WITT............... IL.................... 14010 Bloomington, IL.
17053 FORD.................. IL.................... 16580 Champaign-Urbana, IL.
18143 SCOTT................. IN.................... 31140 Louisville/Jefferson
County, KY-IN.
18179 WELLS................. IN.................... 23060 Fort Wayne, IN.
19149 PLYMOUTH.............. IA.................... 43580 Sioux City, IA-NE-SD.
20095 KINGMAN............... KS.................... 48620 Wichita, KS.
21223 TRIMBLE............... KY.................... 31140 Louisville/Jefferson
County, KY-IN.
22119 WEBSTER............... LA.................... 43340 Shreveport-Bossier
City, LA.
26015 BARRY................. MI.................... 24340 Grand Rapids-Wyoming,
MI.
26159 VAN BUREN............. MI.................... 28020 Kalamazoo-Portage, MI.
27143 SIBLEY................ MN.................... 33460 Minneapolis-St. Paul-
Bloomington, MN-WI.
28009 BENTON................ MS.................... 32820 Memphis, TN-MS-AR.
29119 MC DONALD............. MO.................... 22220 Fayetteville-
Springdale-Rogers, AR-
MO.
30037 GOLDEN VALLEY......... MT.................... 13740 Billings, MT.
31081 HAMILTON.............. NE.................... 24260 Grand Island, NE.
38085 SIOUX................. ND.................... 13900 Bismarck, ND.
40079 LE FLORE.............. OK.................... 22900 Fort Smith, AR-OK.
45087 UNION................. SC.................... 43900 Spartanburg, SC.
46033 CUSTER................ SD.................... 39660 Rapid City, SD.
47081 HICKMAN............... TN.................... 34980 Nashville-Davidson--
Murfreesboro--Frankli
n, TN.
48007 ARANSAS............... TX.................... 18580 Corpus Christi, TX.
48221 HOOD.................. TX.................... 23104 Fort Worth-Arlington,
TX.
48351 NEWTON................ TX.................... 13140 Beaumont-Port Arthur,
TX.
48425 SOMERVELL............. TX.................... 23104 Fort Worth-Arlington,
TX.
51029 BUCKINGHAM............ VA.................... 16820 Charlottesville, VA.
51033 CAROLINE.............. VA.................... 40060 Richmond, VA.
51063 FLOYD................. VA.................... 13980 Blacksburg-
Christiansburg-
Radford, VA.
53013 COLUMBIA.............. WA.................... 47460 Walla Walla, WA.
53051 PEND OREILLE.......... WA.................... 44060 Spokane-Spokane
Valley, WA.
----------------------------------------------------------------------------------------------------------------
We proposed that the wage data for all ESRD facilities located in
the counties listed above would be considered rural, beginning in CY
2021, when calculating their respective state's rural wage index. We
stated in the CY 2021 ESRD PPS proposed rule (85 FR 42155) that we
recognize that rural areas typically have lower area wage index values
than urban areas, and ESRD facilities located in these counties may
experience a negative impact in their payment under the ESRD PPS due to
the proposed adoption of the 2018 OMB delineations. A discussion of the
proposed wage index transition policy is available in section
II.B.4.b.(3) of the CY 2021 ESRD PPS proposed rule and section
II.B.4.b.(3) of this final rule.
(b) Rural Counties That Would Become Urban Under the 2018 OMB
Delineations
In the CY 2021 ESRD PPS proposed rule (85 FR 42155 through 42157),
we proposed to implement the 2018 OMB labor market area delineations
(based upon the 2010 Decennial Census data) beginning in CY 2021. Our
analysis of the 2018 OMB delineations showed that a total of 47
counties (and county equivalents) that are currently considered located
in rural areas would be considered located in urban CBSAs, beginning in
CY 2021. In the CY 2021 ESRD PPS proposed rule (85 FR 42156), we listed
the 47 rural counties that would be urban, as set forth in Table 2, if
we finalized our proposal to adopt the 2018 OMB delineations beginning
in CY 2021.
Table 2--CY 2021 Proposed Rural to Urban CBSA Crosswalk
----------------------------------------------------------------------------------------------------------------
County/county
FIPS county code equivalent State name Proposed CBSA Proposed CBSA title
----------------------------------------------------------------------------------------------------------------
01063 GREENE................ AL.................... 46220 Tuscaloosa, AL.
01129 WASHINGTON............ AL.................... 33660 Mobile, AL.
05047 FRANKLIN.............. AR.................... 22900 Fort Smith, AR-OK.
12075 LEVY.................. FL.................... 23540 Gainesville, FL.
13259 STEWART............... GA.................... 17980 Columbus, GA-AL.
13263 TALBOT................ GA.................... 17980 Columbus, GA-AL.
16077 POWER................. ID.................... 38540 Pocatello, ID.
17057 FULTON................ IL.................... 37900 Peoria, IL.
17087 JOHNSON............... IL.................... 16060 Carbondale-Marion, IL.
18047 FRANKLIN.............. IN.................... 17140 Cincinnati, OH-KY-IN.
18121 PARKE................. IN.................... 45460 Terre Haute, IN.
18171 WARREN................ IN.................... 29200 Lafayette-West
Lafayette, IN.
19015 BOONE................. IA.................... 11180 Ames, IA.
19099 JASPER................ IA.................... 19780 Des Moines-West Des
Moines, IA.
20061 GEARY................. KS.................... 31740 Manhattan, KS.
21043 CARTER................ KY.................... 26580 Huntington-Ashland, WV-
KY-OH.
[[Page 71432]]
22007 ASSUMPTION............ LA.................... 12940 Baton Rouge, LA.
22067 MOREHOUSE............. LA.................... 33740 Monroe, LA.
25011 FRANKLIN.............. MA.................... 44140 Springfield, MA.
26067 IONIA................. MI.................... 24340 Grand Rapids-Kentwood,
MI.
26155 SHIAWASSEE............ MI.................... 29620 Lansing-East Lansing,
MI.
27075 LAKE.................. MN.................... 20260 Duluth, MN-WI.
28031 COVINGTON............. MS.................... 25620 Hattiesburg, MS.
28051 HOLMES................ MS.................... 27140 Jackson, MS.
28131 STONE................. MS.................... 25060 Gulfport-Biloxi, MS.
29053 COOPER................ MO.................... 17860 Columbia, MO.
29089 HOWARD................ MO.................... 17860 Columbia, MO.
30095 STILLWATER............ MT.................... 13740 Billings, MT.
37007 ANSON................. NC.................... 16740 Charlotte-Concord-
Gastonia, NC-SC.
37029 CAMDEN................ NC.................... 47260 Virginia Beach-Norfolk-
Newport News, VA-NC.
37077 GRANVILLE............. NC.................... 20500 Durham-Chapel Hill,
NC.
37085 HARNETT............... NC.................... 22180 Fayetteville, NC.
39123 OTTAWA................ OH.................... 45780 Toledo, OH.
45027 CLARENDON............. SC.................... 44940 Sumter, SC.
47053 GIBSON................ TN.................... 27180 Jackson, TN.
47161 STEWART............... TN.................... 17300 Clarksville, TN-KY.
48203 HARRISON.............. TX.................... 30980 Longview, TX.
48431 STERLING.............. TX.................... 41660 San Angelo, TX.
51097 KING AND QUEEN........ VA.................... 40060 Richmond, VA.
51113 MADISON............... VA.................... 47894 Washington-Arlington-
Alexandria, DC-VA-MD-
WV
51175 SOUTHAMPTON........... VA.................... 47260 Virginia Beach-Norfolk-
Newport News, VA-NC.
51620 FRANKLIN CITY......... VA.................... 47260 Virginia Beach-Norfolk-
Newport News, VA-NC.
54035 JACKSON............... WV.................... 16620 Charleston, WV.
54065 MORGAN................ WV.................... 25180 Hagerstown-
Martinsburg, MD-WV.
55069 LINCOLN............... WI.................... 48140 Wausau-Weston, WI.
72001 ADJUNTAS.............. PR.................... 38660 Ponce, PR.
72083 LAS MARIAS............ PR.................... 32420 Mayag[uuml]ez, PR.
----------------------------------------------------------------------------------------------------------------
We proposed that when calculating the area wage index, beginning
with CY 2021, the wage data for ESRD facilities located in these
counties would be included in their new respective urban CBSAs. We
stated in the CY 2021 ESRD PPS proposed rule (85 FR 42157) that
typically, ESRD facilities located in an urban area receive a higher
wage index value than or equal wage index value to ESRD facilities
located in their state's rural area. A discussion of the proposed wage
index transition policy is available in section II.B.4.b.(3) of the CY
2021 ESRD PPS proposed rule and section II.B.4.b.(3) of this final
rule.
(c) Urban Counties That Would Move to a Different Urban CBSA Under the
2018 OMB Delineations
In the CY 2021 ESRD PPS proposed rule (85 FR 42157 through 42158),
we stated that in certain cases, adopting the 2018 OMB delineations
would involve a change only in CBSA name and/or number, while the CBSA
continues to encompass the same constituent counties. For example, we
noted that CBSA 19380 (Dayton, OH) would experience both a change to
its number and its name, and become CBSA 19430 (Dayton-Kettering, OH),
while all of its three constituent counties would remain the same. We
also stated that in other cases, only the name of the CBSA would be
modified, and none of the currently assigned counties would be
reassigned to a different urban CBSA. In the CY 2021 ESRD PPS proposed
rule (85 FR 42158), we listed the CBSAs where there would be a change
either in CBSA name or CBSA number, as set forth in Table 3, if we
finalized our proposal to adopt the 2018 OMB delineations beginning in
CY 2021.
Table 3--CY 2021 Proposed Change in CBSA Name and/or Number Crosswalk
------------------------------------------------------------------------
Current CBSA Proposed CBSA Proposed CBSA
Current CBSA code title code title
------------------------------------------------------------------------
10540 Albany, OR....... 10540 Albany-Lebanon,
OR.
11500 Anniston-Oxford- 11500 Anniston-Oxford,
Jacksonville, AL. AL.
12060 Atlanta-Sandy 12060 Atlanta-Sandy
Springs-Roswell, Springs-
GA. Alpharetta, GA.
12420 Austin-Round 12420 Austin-Round Rock-
Rock, TX. Georgetown, TX.
13460 Bend-Redmond, OR. 13460 Bend, OR.
13980 Blacksburg- 13980 Blacksburg-
Christiansburg- Christiansburg,
Radford, VA. VA.
14740 Bremerton- 14740 Bremerton-
Silverdale, WA. Silverdale-Port
Orchard, WA.
15380 Buffalo- 15380 Buffalo-
Cheektowaga- Cheektowaga, NY.
Niagara Falls,
NY.
19430 Dayton-Kettering, 19380 Dayton, OH.
OH.
24340 Grand Rapids- 24340 Grand Rapids-
Wyoming, MI. Kentwood, MI.
24860 Greenville- 24860 Greenville-
Anderson- Anderson, SC.
Mauldin, SC.
25060 Gulfport-Biloxi- 25060 Gulfport-Biloxi,
Pascagoula, MS. MS.
25540 Hartford-West 25540 Hartford-East
Hartford-East Hartford-
Hartford, CT. Middletown, CT.
25940 Hilton Head 25940 Hilton Head
Island-Bluffton- Island-Bluffton,
Beaufort, SC. SC.
[[Page 71433]]
28700 Kingsport-Bristol- 28700 Kingsport-
Bristol, TN-VA. Bristol, TN-VA.
31860 Mankato-North 31860 Mankato, MN.
Mankato, MN.
33340 Milwaukee- 33340 Milwaukee-
Waukesha-West Waukesha, WI.
Allis, WI.
34940 Naples-Immokalee- 34940 Naples-Marco
Marco Island, FL. Island, FL.
35660 Niles-Benton 35660 Niles, MI.
Harbor, MI.
36084 Oakland-Hayward- 36084 Oakland-Berkeley-
Berkeley, CA. Livermore, CA.
36500 Olympia-Tumwater, 36500 Olympia-Lacey-
WA. Tumwater, WA.
38060 Phoenix-Mesa- 38060 Phoenix-Mesa-
Scottsdale, AZ. Chandler, AZ.
39150 Prescott Valley- 39140 Prescott, AZ.
Prescott, AZ.
23224 Frederick- 43524 Silver Spring-
Gaithersburg- Frederick-
Rockville, MD. Rockville, MD.
44420 Staunton- 44420 Staunton, VA.
Waynesboro, VA.
44700 Stockton-Lodi, CA 44700 Stockton, CA.
45940 Trenton, NJ...... 45940 Trenton-
Princeton, NJ.
46700 Vallejo- 46700 Vallejo, CA.
Fairfield, CA.
47300 Visalia- 47300 Visalia, CA.
Porterville, CA.
48140 Wausau, WI....... 48140 Wausau-Weston,
WI.
48424 West Palm Beach- 48424 West Palm Beach-
Boca Raton- Boca Raton-
Delray Beach, FL. Boynton Beach,
FL.
------------------------------------------------------------------------
In the CY 2021 ESRD PPS proposed rule (85 FR 42159), we explained
that ESRD facilities located in an urban area that, due to the 2018 OMB
delineations, involves a change only in the CBSA name or number would
not experience a consequential change in their wage index value.
However, we also stated that in other cases, if we adopted the 2018
OMB delineations, counties would shift between existing and new CBSAs,
changing the constituent makeup of the CBSAs. We considered these types
of changes, where CBSAs are split into multiple new CBSAs or a CBSA
loses one or more counties to another urban CBSAs, to be significant
modifications.
In the CY 2021 ESRD PPS proposed rule (85 FR 42160), we listed the
urban counties that would move from one urban CBSA to another a newly
proposed or modified CBSA, as set forth in Table 4, if we finalized our
proposal to adopt the 2018 OMB delineations beginning in CY 2021.
Table 4--CY 2021 Proposed Urban to a Different Urban CBSA Crosswalk
--------------------------------------------------------------------------------------------------------------------------------------------------------
County/county Proposed CBSA
FIPS county code equivalent State Current CBSA Current CBSA name code Proposed CBSA name
--------------------------------------------------------------------------------------------------------------------------------------------------------
17031 COOK.................. IL.................... 16974 Chicago-Naperville- 16984 Chicago-Naperville-
Arlington Heights, IL. Evanston, IL.
17043 DU PAGE............... IL.................... 16974 Chicago-Naperville- 16984 Chicago-Naperville-
Arlington Heights, IL. Evanston, IL.
17063 GRUNDY................ IL.................... 16974 Chicago-Naperville- 16984 Chicago-Naperville-
Arlington Heights, IL. Evanston, IL.
17093 KENDALL............... IL.................... 16974 Chicago-Naperville- 20994 Elgin, IL.
Arlington Heights, IL.
17111 MC HENRY.............. IL.................... 16974 Chicago-Naperville- 16984 Chicago-Naperville-
Arlington Heights, IL. Evanston, IL.
17197 WILL.................. IL.................... 16974 Chicago-Naperville- 16984 Chicago-Naperville-
Arlington Heights, IL. Evanston, IL.
34023 MIDDLESEX............. NJ.................... 35614 New York-Jersey City- 35154 New Brunswick-
White Plains, NY-NJ. Lakewood, NJ.
34025 MONMOUTH.............. NJ.................... 35614 New York-Jersey City- 35154 New Brunswick-
White Plains, NY-NJ. Lakewood, NJ.
34029 OCEAN................. NJ.................... 35614 New York-Jersey City- 35154 New Brunswick-
White Plains, NY-NJ. Lakewood, NJ.
34035 SOMERSET.............. NJ.................... 35084 Newark, NJ-PA......... 35154 New Brunswick-
Lakewood, NJ.
36027 DUTCHESS.............. NY.................... 20524 Dutchess County-Putnam 39100 Poughkeepsie-Newburgh-
County, NY. Middletown, NY.
36071 ORANGE................ NY.................... 35614 New York-Jersey City- 39100 Poughkeepsie-Newburgh-
White Plains, NY-NJ. Middletown, NY.
36079 PUTNAM................ NY.................... 20524 Dutchess County-Putnam 35614 New York-Jersey City-
County, NY. White Plains, NY-NJ.
47057 GRAINGER.............. TN.................... 28940 Knoxville, TN......... 34100 Morristown, TN.
54043 LINCOLN............... WV.................... 26580 Huntington-Ashland, WV- 16620 Charleston, WV.
KY-OH.
72055 GUANICA............... PR.................... 38660 Ponce, PR............. 49500 Yauco, PR.
72059 GUAYANILLA............ PR.................... 38660 Ponce, PR............. 49500 Yauco, PR.
72111 PENUELAS.............. PR.................... 38660 Ponce, PR............. 49500 Yauco, PR.
72153 YAUCO................. PR.................... 38660 Ponce, PR............. 49500 Yauco, PR.
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 71434]]
We stated in the CY 2021 ESRD PPS proposed rule (85 FR 42160), that
if ESRD facilities located in these counties move from one CBSA to
another under the 2018 OMB delineations, there may be impacts, both
negative and positive, to their specific wage index values. A
discussion of the proposed wage index transition policy is available in
II.B.4.b.(3) of the CY 2021 ESRD PPS proposed rule and section
II.B.4.b.(3) of this final rule.
(d) Changes to the Statewide Rural Wage Index
In the CY 2021 ESRD PPS proposed rule (85 FR 42160), we stated that
ESRD facilities currently located in a rural area may remain rural
under the 2018 OMB delineations but experience a change in their rural
wage index value due to the movement of constituent counties. If ESRD
facilities located in these counties move from one CBSA to another
under the 2018 OMB delineations, there may be impacts, both negative
and positive, upon their specific wage index values. A discussion of
the proposed wage index transition policy is available in section
II.B.4.b.(3) of the CY 2021 ESRD PPS proposed rule and section
II.B.4.b.(3) of this final rule.
We explained that we believe these revisions to the CBSA-based
labor market area delineations as established in OMB Bulletin 18-04
would ensure that the ESRD PPS area wage level adjustment most
appropriately accounts for and reflects the relative wage levels in the
geographic area of the ESRD facility. Therefore, we proposed to adopt
the 2018 OMB delineations under the ESRD PPS, effective January 1, 2021
and invited public comment on this proposal.
(3) Transition for ESRD Facilities Negatively Impacted
In the CY 2021 ESRD PPS proposed rule (85 FR 42160 through 42161),
we stated that in the past we provided for transition periods when
adopting changes that have significant payment implications,
particularly large negative impacts, in order to mitigate the potential
impacts of proposed policies on ESRD facilities. For example, we have
proposed and finalized budget-neutral transition policies to help
mitigate negative impacts on ESRD facilities following the adoption of
the OMB delineations as described in the February 28, 2013 OMB Bulletin
No. 13-01 (79 FR 66142). Specifically, as part of the CY 2015 ESRD PPS
rulemaking, we implemented a 2-year transition blended wage index for
all ESRD facilities. ESRD facilities received 50 percent of their CY
2015 wage index value based on the OMB delineations for CY 2014 and 50
percent of their CY 2015 wage index value based on the newer OMB
delineations. This resulted in an average of the two values. Then, in
CY 2016, an ESRD facility's wage index value was based 100 percent on
the newer OMB delineations.
As we stated in the CY 2021 ESRD PPS proposed rule (85 FR 42161),
we considered having no transition period and fully implementing the
2018 OMB delineations beginning in CY 2021, which would mean that all
ESRD facilities would have payments based on updated hospital wage data
and the 2018 OMB delineations starting on January 1, 2021. However,
because the overall amount of ESRD PPS payments would increase slightly
due to the 2018 OMB delineations, the wage index budget neutrality
factor would be higher. This higher factor would reduce the ESRD PPS
per treatment base rate for all ESRD facilities paid under the ESRD
PPS, despite the fact that the majority of ESRD facilities would be
unaffected by the 2018 OMB delineations. Thus, we explained that we
believe it would be appropriate to provide for a transition period to
mitigate the resulting short-term instability of a lower ESRD PPS base
rate as well as consequential negative impacts to ESRD facilities that
experience reduced payments. For example, ESRD facilities currently
located in CBSA 35614 (New York-Jersey City-White Plains, NY-NJ) that
would be located in new CBSA 35154 (New Brunswick-Lakewood, NJ) under
the proposed changes to the OMB delineations would experience a nearly
17 percent decrease in the wage index as a result of the proposed
change.
Therefore, under the authority of section 1881(b)(14)(D)(iv)(II) of
the Act and consistent with past practice, we proposed a transition
policy to help mitigate any significant, negative impacts that ESRD
facilities may experience due to our proposal to adopt the 2018 OMB
delineations under the ESRD PPS. Specifically, as a transition for CY
2021, we proposed to apply a 5 percent cap on any decrease in an ESRD
facility's wage index from the ESRD facility's wage index from the
prior calendar year. This transition would allow the effects of our
proposed adoption of the 2018 OMB delineations to be phased in over 2
years, where the estimated reduction in an ESRD facility's wage index
would be capped at 5 percent in CY 2021, and no cap would be applied to
the reduction in the wage index for the second year, CY 2022. We
explained that we believe a 5 percent cap on the overall decrease in an
ESRD facility's wage index value, regardless of the circumstance
causing the decline, would be an appropriate transition for CY 2021 as
it would provide predictability in payment levels from CY 2020 to the
upcoming CY 2021 and additional transparency because it is
administratively simpler than our prior 2-year 50/50 blended wage index
approach. We further explained that we believe 5 percent is a
reasonable level for the cap because it would effectively mitigate any
significant decreases in an ESRD facility's wage index for CY 2021. We
solicited comment on the proposal to apply a 5 percent cap on any
decrease in an ESRD facility's wage index for CY 2021 from the ESRD
facility's wage index from the prior calendar year, CY 2020.
(4) Budget Neutrality Adjustments for Changes to the ESRD PPS Wage
Index
In the CY 2021 ESRD PPS proposed rule (85 FR 42161), we stated that
consistent with the historical wage index budget-neutrality adjustment
policy finalized in the CY 2012 ESRD PPS final rule (76 FR 70241
through 70242) under the authority of section 1881(b)(14)(D)(iv)(II) of
the Act, we proposed that the proposed adoption of the 2018 OMB
delineations and the proposed transition policy would not result in any
change of estimated aggregate ESRD PPS payments by applying a budget
neutrality factor to the ESRD PPS base rate. We noted budget neutrality
was also applied to the adoption of newer OMB delineations and
transition policy in the CY 2015 ESRD PPS final rule (79 FR 66128
through 66129). Our methodology for calculating this budget neutrality
factor is discussed in section II.B.4.d.(2) of the CY 2021 ESRD PPS
proposed rule and section II.B.4.d.(2) of this final rule.
The comments and our responses to the comments on our proposed
adoption of the 2018 OMB delineations are set forth below.
Comment: Several commenters supported the adoption of the 2018 OMB
delineations under the ESRD PPS, effective January 1, 2021.
Response: We appreciate the comments supporting the adoption of the
2018 OMB delineations.
Comment: A national non-profit dialysis organization expressed
concern that its analysis of the proposal indicates that it will have
multiple facilities negatively impacted by the adoption of the 2018 OMB
delineations, which is worsened by the current COVID-19 pandemic.
Response: We appreciate the detailed concerns described by the
commenter
[[Page 71435]]
regarding the impact that the 2018 OMB delineations would have on its
specific facilities. While we understand the commenter's concern
regarding the potential financial impact, we believe that implementing
the 2018 OMB delineations will result in a more accurate representation
of labor market areas nationally and in ESRD facility wage index values
being more representative of the actual costs of labor in a given area.
We believe that the OMB standards for delineating Metropolitan and
Micropolitan Statistical Areas are appropriate for determining area
wage differences and that the values computed under the revised
delineations will result in more appropriate payments to ESRD
facilities by more accurately accounting for and reflecting the
differences in area wage levels.
We recognize that using the updated OMB delineations will mean
there are areas that will experience a decrease in their wage index. As
such, it is our longstanding policy to provide a temporary transition
to mitigate negative impacts from the adoption of new policies or
procedures. In the CY 2021 ESRD PPS proposed rule, we proposed a 2-year
transition in order to mitigate the resulting short-term instability
and negative impacts on certain ESRD facilities and to provide time for
facilities to adjust to their new labor market delineations. We
continue to believe that the 1-year 5-percent cap transitional policy
provides an adequate safeguard against any significant payment
reductions, allows for sufficient time for facilities to make
operational changes for future CYs, and provides a reasonable balance
between mitigating some short-term instability in ESRD PPS payments and
improving the accuracy of the payment adjustment for differences in
area wage levels.
We also recognize the impact that the COVID-19 PHE is having on all
health care providers, which is why we have issued waivers and
flexibilities 19 20 to ease burden and allow providers to
respond effectively during the COVID-19 PHE.
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\20\ https://www.cms.gov/files/document/covid-19-esrd-facilities.pdf.
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Comment: Several commenters supported the use of a transition
policy to mitigate the impact of changes to the wage index values and
the proposed transition methodology. Some of these commenters,
including MedPAC, suggested alternatives to the methodology. MedPAC
suggested that the 5 percent cap limit should apply to both increases
and decreases in the wage index so that no ESRD facility would have its
wage index value increase or decrease by more than 5 percent for CY
2021.
A patient organization acknowledged the reasoning of CMS proposing
a less administratively complex methodology of managing the transition
given the relatively small proportion of ESRD facilities that will be
affected. The commenter noted that if the total change in payment is 10
percent or less for all facilities, a methodology that caps the
decrease in a facility's wage index at 5 percent in the first year
makes sense. However, the commenter expressed concern that at least one
facility will see a 17 percent decrease in the wage index, which would
defer the burden of the transition to the second year. The commenter
noted that while providing an extra year for the facility to adjust to
the change is helpful, for ESRD facilities that see a drop in wage
index payments in the second year and that are located in states
without staffing requirements, the negative implications for hiring and
retention of staff will be significant. The commenter indicated that it
would prefer for CMS to apply the 50/50 blended wage index to manage
the transition, but could support the 5 percent cap approach if staff
time saved by using a less complex methodology is redirected to
addressing higher priority issues, such as securing staff assistance
for home dialysis patients or developing a flexible approach to
interpretation of the SCI criteria for the TPNIES.
Finally, a national non-profit dialysis organization recommended
that CMS provide an extended transition period, beyond the proposed 5
percent limit for 2021, for at least 3 years.
Response: We appreciate the comments supporting the proposed
transition methodology. Further, we appreciate MedPAC's suggestion that
the 5 percent cap should also be applied to increases in the wage
index. However, as we discussed in the CY 2021 ESRD PPS proposed rule
(85 FR 42161), the purpose of the proposed transition policy, as well
as those we have implemented in the past, is to help mitigate the
significant negative impacts of certain wage index changes, not to
curtail the positive impacts of such changes, and thus we do not
believe it would be appropriate to apply the 5 percent cap on wage
index increases as well. To the extent that an ESRD facility's wage
index would increase under the 2018 OMB delineations, this means that
the ESRD facility is currently being paid less than their reported wage
data suggests is appropriate. We believe the transition policy, as
proposed, would help ensure these ESRD facilities do not receive a wage
index adjustment that is lower than appropriate and that payments are
as accurate as possible.
With regard to recommendation that we apply the 50/50 blended wage
index to manage the transition since some facilities will see a wage
index decrease greater than 10 percent, we believe that this approach
would not be appropriate for the proportion of ESRD facilities that
will be impacted. The use of a 50/50 blended wage index transition
would affect all ESRD facilities. We believe it would be more
appropriate to allow ESRD facilities that would experience an increase
in their wage index value to receive the full benefit of their
increased wage index value, which is intended to reflect accurately the
higher labor costs in that area. The utilization of a cap on negative
impacts restricts the transition to only those with negative impacts
and allows ESRD facilities who would experience positive impacts to
receive the full amount of their wage index increase. As such, we
believe a 5 percent cap on the overall decrease in an ESRD facility's
wage index value is an appropriate transition as it would effectively
mitigate any significant decreases in an ESRD facility's wage index for
CY 2021. With regard to the comment suggesting staff time be used to
address higher priority issues, we believe that the comment was
referring to CMS staff. We appreciate the commenter's recommendation
for polices that impact home dialysis and innovation.
With regard to the suggestion that we extend the transition period,
beyond the proposed 5 percent limit for CY 2021, for at least 3 years,
we believe this would undermine the goal of the wage index policy,
which is to improve the accuracy of payments under the ESRD PPS.
Extending the transition period and applying a cap would serve to
further delay improving the accuracy of the ESRD PPS by continuing to
pay certain ESRD facilities more than their wage data suggest is
appropriate. Therefore, while we believe that a transition policy is
necessary to help mitigate some initial significant negative impacts
from the revised OMB delineations, we also believe this mitigation must
be balanced against the importance of ensuring accurate payments.
The general comments received on the CY 2021 ESRD PPS wage index
and our responses to the comments are set forth below.
Comment: Two health insurance organizations in Puerto Rico
commented on the wage index for Puerto Rico. One health insurance
organization in Puerto
[[Page 71436]]
Rico expressed appreciation for the wage index floor of 0.5000 and
explained that it represents an important acknowledgment of the many
complexities associated with providing dialysis in Puerto Rico. The
commenter noted that in the post-hurricane environment particularly,
infrastructure challenges lead to high costs of dialysis care. The
commenter strongly encouraged CMS to continue to look closely at the
wage index as it relates to Puerto Rico.
One of the health insurance organizations asserted that a wage
index floor of 0.70 would result in rates that more accurately reflect
actual cost per treatment based on costs after multiple natural
disasters and the disruptions in 2020 due to COVID-19. The commenter
expressed concern that the financial viability of dialysis providers in
Puerto Rico is under stress and that it is in the interest of
beneficiaries, the Medicare program, and the fragile healthcare
infrastructure in Puerto Rico to have available multiple competing
dialysis services providers. The commenter stated that the average in-
center HD costs for independent facilities in Puerto Rico is $232.25
per treatment using CMS data from 2017. The commenter asserted that
this number is significantly higher than the average FFS payment rate
for Puerto Rico and significantly lower than the rates contracted by
Medicare Advantage companies for the same service. The commenter noted
that in-center HD represents the majority of the treatments for Puerto
Rico ESRD patients. The commenter suggested that CMS consider basing
the ESRD wage index on a new survey of ESRD outpatient facility wage
costs as a means for wage index reform.
Both health insurance organizations referred to the wage index
policy changes included in the FY 2020 IPPS/LTCH PPS final rule (84 FR
42326 through 42332). Specifically, the commenters urged that the FFS
ESRD PPS wage index system for Puerto Rico should use the recently
adjusted inpatient facility (Part A) wage index values to reverse the
wage index ``downward spiral'' consistently across all Medicare payment
systems. Finally, they recommended that CMS assure that the
corresponding adjustment in Medicare Advantage benchmarks for ESRD is
made to reflect any adjustments in ESRD PPS payments.
Response: We did not propose specific policies relating to the wage
index floor. We thank the commenters for sharing their concerns
regarding Puerto Rico's wage index and their suggestions for wage index
reform, along with the recommendation of a wage index for Puerto Rico
of 0.70 and their concern regarding the Medicare Advantage benchmarks
for ESRD. We will take these thoughtful suggestions into consideration
when considering future rulemaking.
Final Rule Action: After considering the comments received, for the
reasons set forth in this final rule and in the CY 2021 ESRD PPS
proposed rule, we are finalizing our proposal to adopt the newer OMB
delineations contained in OMB Bulletin 18-04 as proposed. We are also
finalizing our proposal to apply a 5 percent cap on any decrease in an
ESRD facility's wage index for CY 2021 from the ESRD facility's wage
index from the prior calendar year (CY 2020) as proposed. We did not
receive comments on our proposal regarding wage index budget
neutrality, therefore we are finalizing the application of a budget
neutrality factor to the ESRD PPS base rate to ensure that the adoption
of the 2018 OMB delineations and the transition policy will not result
in any change of estimated aggregate ESRD PPS payments.
We are finalizing the CY 2021 ESRD PPS wage indices based on the
latest hospital wage data as proposed. For CY 2021, the labor-related
share to which a facility's wage index is applied is 52.3 percent.
The final CY 2021 ESRD PPS wage index is set forth in Addendum A
and is available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/End-Stage-Renal-Disease-ESRD-Payment-Regulations-and-Notices.html. Addendum A provides a
crosswalk between the CY 2020 wage index for an ESRD facility using the
current OMB delineations in effect in CY 2020, the CY 2021 wage index
using the current OMB delineations in effect in CY 2020, and the CY
2021 wage index using the final 2018 OMB delineations. Addendum B
provides an ESRD facility-level impact analysis. Addendum B includes
the final transition wage index values that will be in effect in CY
2021. Addendum B is available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/End-Stage-Renal-Disease-ESRD-Payment-Regulations-and-Notices.html.
c. CY 2021 Update to the Outlier Policy
Section 1881(b)(14)(D)(ii) of the Act requires that the ESRD PPS
include a payment adjustment for high cost outliers due to unusual
variations in the type or amount of medically necessary care, including
variability in the amount of ESAs necessary for anemia management. Some
examples of the patient conditions that may be reflective of higher
facility costs when furnishing dialysis care would be frailty, obesity,
and comorbidities, such as secondary hyperparathyroidism. The ESRD PPS
recognizes high cost patients, and we have codified the outlier policy
and our methodology for calculating outlier payments at Sec. 413.237.
The policy provides that the following ESRD outlier items and services
are included in the ESRD PPS bundle: (1) Renal dialysis drugs and
biological products that were or would have been, prior to January 1,
2011, separately billable under Medicare Part B; (2) Renal dialysis
laboratory tests that were or would have been, prior to January 1,
2011, separately billable under Medicare Part B; (3) Renal dialysis
medical/surgical supplies, including syringes, used to administer renal
dialysis drugs and biological products that were or would have been,
prior to January 1, 2011, separately billable under Medicare Part B;
(4) Renal dialysis drugs and biological products that were or would
have been, prior to January 1, 2011, covered under Medicare Part D,
including renal dialysis oral-only drugs effective January 1, 2025; and
(5) Renal dialysis equipment and supplies that receive the transitional
add-on payment adjustment as specified in Sec. 413.236 after the
payment period has ended.
In the CY 2011 ESRD PPS final rule (75 FR 49142), we stated that
for purposes of determining whether an ESRD facility would be eligible
for an outlier payment, it would be necessary for the facility to
identify the actual ESRD outlier services furnished to the patient by
line item (that is, date of service) on the monthly claim. Renal
dialysis drugs, laboratory tests, and medical/surgical supplies that
are recognized as outlier services were originally specified in
Attachment 3 of Change Request 7064, Transmittal 2033 issued August 20,
2010, rescinded and replaced by Transmittal 2094, dated November 17,
2010. Transmittal 2094 identified additional drugs and laboratory tests
that may also be eligible for ESRD outlier payment. Transmittal 2094
was rescinded and replaced by Transmittal 2134, dated January 14, 2011,
which included one technical correction.
Furthermore, we use administrative issuances and guidance to
continually update the renal dialysis service items available for
outlier payment via our quarterly update CMS Change Requests, when
applicable. We use this separate guidance to identify renal dialysis
service drugs that were or would have been covered under Medicare Part
D for
[[Page 71437]]
outlier eligibility purposes and in order to provide unit prices for
calculating imputed outlier services. In addition, we identify through
our monitoring efforts items and services that are either incorrectly
being identified as eligible outlier services or any new items and
services that may require an update to the list of renal dialysis items
and services that qualify as outlier services, which are made through
administrative issuances.
Under Sec. 413.237, an ESRD facility is eligible for an outlier
payment if its actual or imputed Medicare allowable payment (MAP)
amount per treatment for ESRD outlier services exceeds a threshold. The
MAP amount represents the average incurred amount per treatment for
services that were or would have been considered separately billable
services prior to January 1, 2011. The threshold is equal to the ESRD
facility's predicted ESRD outlier services MAP amount per treatment
(which is case-mix adjusted and described in the following paragraphs)
plus the fixed-dollar loss (FDL) amount. In accordance with Sec.
413.237(c), facilities are paid 80 percent of the per treatment amount
by which the imputed MAP amount for outlier services (that is, the
actual incurred amount) exceeds this threshold. ESRD facilities are
eligible to receive outlier payments for treating both adult and
pediatric dialysis patients.
In the CY 2011 ESRD PPS final rule and at Sec. 413.220(b)(4),
using 2007 data, we established the outlier percentage, which is used
to reduce the per treatment base rate to account for the proportion of
the estimated total payments under the ESRD PPS that are outlier
payments, at 1.0 percent of total payments (75 FR 49142 through 49143).
We also established the FDL amounts that are added to the predicted
outlier services MAP amounts. The outlier services MAP amounts and FDL
amounts are different for adult and pediatric patients due to
differences in the utilization of separately billable services among
adult and pediatric patients (75 FR 49140). As we explained in the CY
2011 ESRD PPS final rule (75 FR 49138 through 49139), the predicted
outlier services MAP amounts for a patient are determined by
multiplying the adjusted average outlier services MAP amount by the
product of the patient-specific case-mix adjusters applicable using the
outlier services payment multipliers developed from the regression
analysis used to compute the payment adjustments.
In the CY 2020 ESRD PPS final rule (84 FR 60705), we stated that
based on the CY 2018 claims data, outlier payments represented
approximately 0.5 percent of total payments. We also noted that,
beginning in CY 2020, the total expenditure amount includes add-on
payment adjustments made for calcimimetics under the TDAPA policy. We
projected that for each dialysis treatment furnished, the average
amount attributed to the TDAPA would be $21.03 (84 FR 60704).
For CY 2021, we proposed that the outlier services MAP amounts and
FDL amounts would be derived from claims data from CY 2019. As we
stated in the CY 2021 ESRD PPS proposed rule (85 FR 42162), because we
believe that any adjustments made to the MAP amounts under the ESRD PPS
should be based upon the most recent data year available in order to
best predict any future outlier payments, we proposed that the outlier
thresholds for CY 2021 would be based on utilization of renal dialysis
items and services furnished under the ESRD PPS in CY 2019. We noted
that, for CY 2020, the total expenditure amount includes add-on payment
adjustments made for calcimimetics under the TDAPA policy (calculated
to be $14.87 per treatment). However, as discussed in section II.B.1 of
this final rule, for CY 2021 we modified the ESRD PPS base rate by
adding $9.93 to account for calcimimetics in the ESRD PPS bundled
payment and will no longer pay for these drugs using the TDAPA. In
addition, we are finalizing that beginning January 1, 2021,
calcimimetics will be eligible outlier services.
As discussed in section II.B.4.c.(2) of this final rule, CY 2019
claims data show outlier payments represented approximately 0.5 percent
of total payments. As we stated in the CY 2021 ESRD PPS proposed rule,
we recognize that the utilization of ESAs and other outlier services
have continued to decline under the ESRD PPS, and that we have lowered
the MAP amounts and FDL amounts every year under the ESRD PPS. We
stated that, for CY 2021, the adult predicted outlier services MAP
amounts and FDL amounts have increased as a result of our incorporation
of oral and injectable calcimimetics into the outlier policy.
(1) CY 2021 Update to the Outlier Services MAP Amounts and FDL Amounts
For this final rule, the outlier services MAP amounts and FDL
amounts were updated using 2019 claims data. The impact of this update
is shown in Table 5, which compares the outlier services MAP amounts
and FDL amounts used for the outlier policy in CY 2020 with the updated
estimates for this final rule. The estimates for the CY 2021 outlier
policy, which are included in Column II of Table 5, were inflation
adjusted to reflect projected 2021 prices for outlier services.
TABLE 5--Outlier Policy: Impact of Using Updated Data To Define the Outlier Policy
----------------------------------------------------------------------------------------------------------------
Column I final outlier policy Column II final outlier policy
for CY 2020 (based on 2018 for CY 2021 (based on 2019
data, price inflated to 2020) data, price inflated to 2021)
* -------------------------------
--------------------------------
Age < 18 Age >= 18 Age < 18 Age >= 18
----------------------------------------------------------------------------------------------------------------
Average outlier services MAP amount per $30.95 $37.33 $30.33 $53.08
treatment......................................
----------------------------------------------------------------------------------------------------------------
Adjustments
----------------------------------------------------------------------------------------------------------------
Standardization for outlier services............ 1.0655 0.9781 1.0390 0.9789
MIPPA reduction................................. 0.98 0.98 0.98 0.98
Adjusted average outlier services MAP amount.... $32.32 $35.78 $30.88 $50.92
FDL amount that is added to the predicted MAP to $41.04 $48.33 $44.78 $122.49
determine the outlier threshold................
Patient-months qualifying for outlier payment... 11.35% 10.38% 8.80% 5.15%
----------------------------------------------------------------------------------------------------------------
Note: Column I was obtained from Column II of Table 2 from the CY 2020 ESRD PPS final rule (84 FR 60705).
[[Page 71438]]
As demonstrated in Table 5, the estimated FDL amount per treatment
that determines the CY 2021 outlier threshold amount for adults (Column
II; $122.49) is higher than that used for the CY 2020 outlier policy
(Column I; $48.33). The higher threshold is accompanied by an increase
in the adjusted average MAP for outlier services from $35.78 to $50.92.
For pediatric patients, there is an increase in the FDL amount from
$41.04 to $44.78 and a decrease in the adjusted average MAP for outlier
services, from $32.32 to $30.88.
As we stated previously, the predicted outlier services MAP amounts
and FDL amounts have increased as a result of the incorporation of oral
and injectable calcimimetics into the outlier policy. Approximately 30
percent of ESRD beneficiaries receive calcimimetics and a subset of
these beneficiaries tend to have the highest ESRD PPS expenditures,
which trigger outlier payments under the ESRD PPS. Since the highest
per-beneficiary ESRD PPS expenditures will increase due to
calcimimetics being eligible ESRD outlier services, the outlier FDL
will increase to ensure that total outlier payments project to 1
percent of total Medicare ESRD PPS expenditures.
We estimate that the percentage of patient months qualifying for
outlier payments in CY 2021 will be 5.15percent for adult patients and
8.80 percent for pediatric patients, based on the 2019 claims data. The
outlier MAP and FDL amounts continue to be lower for pediatric patients
than adults due to the continued lower use of outlier services
(primarily reflecting lower use of calcimimetics, ESAs and other
injectable drugs).
(2) Outlier Percentage
In the CY 2011 ESRD PPS final rule (75 FR 49081) and under Sec.
413.220(b)(4), we reduced the per treatment base rate by 1 percent to
account for the proportion of the estimated total payments under the
ESRD PPS that are outlier payments as described in Sec. 413.237. Based
on the 2019 claims, outlier payments represented approximately 0.5
percent of total payments, which is below the 1 percent target due to
declines in the use of outlier services. Recalibration of the
thresholds using 2019 data is expected to result in aggregate outlier
payments close to the 1 percent target in CY 2021.
We believe the update to the outlier MAP and FDL amounts for CY
2021 will increase payments for ESRD beneficiaries requiring higher
resource utilization and move us closer to meeting our 1 percent
outlier policy because we are using more current data for computing the
MAP and FDL, which is more in line with current outlier services
utilization rates. The inclusion of calcimimetics as ESRD outlier
services in CY 2021 will fundamentally change the per-treatment
distribution of outlier services relative to previous CYs. In 2019
claims, roughly 33 percent of ESRD beneficiaries and 28 percent of
dialysis treatments are associated with calcimimetics and those that
often have significantly higher utilization of ESRD outlier services
relative to beneficiaries who do not receive calcimimetics. The MAP and
FDL increases account for this change. We note that recalibration of
the FDL amounts in this final rule will result in no change in payments
to ESRD facilities for beneficiaries with renal dialysis services that
are not eligible for outlier payments.
The comments and our responses to the comments on our proposed
updates to the outlier policy are set forth below.
Comment: Although we did not propose changes to the outlier target
percentage or methodology for computing the MAP or FDL amounts, we
received many comments from MedPAC, national dialysis associations,
large dialysis organizations, non-profit dialysis associations, a
patient advocacy organization, and an academy of nutrition and
dietetics expressing concern that the outlier policy has not been
effective. Most of the commenters opposed the proposed changes to the
MAP and FDL along with suggestions that ranged in complexity for the
policy's reform, which are described in detail below. We also received
data from the commenters' analysis that studied the impact of outlier
payments once calcimimetics become ESRD outlier services.
All commenters noted that since the beginning of the ESRD PPS, the
outlier pool has not paid out the full amount withheld each year.
MedPAC noted that every year the outlier threshold has been reduced and
yet still turns out to have been set too high. MedPAC stated that this
phenomenon suggests a declining trend in the use of outlier-eligible
services (that is, drugs and laboratory services that were separately
billable under the prior payment system) for ESRD beneficiaries with
very high estimated spending on those services. MedPAC asserted that
CMS' strategy of updating the base year of data used to calculate the
outlier threshold to bring the outlier payments closer to the targeted
1 percent, has not been effective.
Many commenters recommended that CMS adjust the outlier percentage
to more accurately represent the percentage of total payments that have
been historically paid under the outlier policy. For example,
commenters suggested that CMS reduce the outlier pool withheld to less
than 1 percent, indicating that they believe this approach to be
consistent with the intent of Congress since a minimum percentage was
not set in the legislation. One non-profit dialysis organization
recommended removing the outlier provision from the bundled payment
system but recognized that the provision is required by statute and
suggested that the percentage be decreased from 1 percent to 0.5
percent. A few other commenters agreed with reducing the percentage to
0.5 and recommended that CMS finalize this change for CY 2021.
An LDO recommended that CMS establish a mechanism to return unpaid
amounts withheld from ESRD facilities as part of the target percentage
when it does not achieve the 1 percent outlier policy in a given year.
An academy of nutrition and dietetics made a similar comment and stated
when these dollars are paid back to ESRD facilities they would be
invested in patient care.
A national dialysis association stated that CMS is correctly adding
resources to the ESRD PPS bundled payment to help continued patient
access to calcimimetics after the end of the TDAPA period, but this
correct policy decision creates adverse, unintended consequences for
the outlier pool that must be mitigated in the final rule.
Several commenters opposed the proposal to increase the adult FDL
and MAP outlier amounts accounting for the calcimimetics. Some
commenters, including MedPAC, stated that this action could further
exacerbate the longstanding issue of the outlier pool being underpaid.
MedPAC identified two problems that are additive; meaning the outlier
payments may be too low because (1) the outlier threshold calculation
does not account for the trend of decreasing spending for services
previously eligible for an outlier payment; and (2) in making
calcimimetics eligible for outlier payments in CY 2021, the outlier
threshold calculation does not account for the likelihood that
calcimimetic use will be lower after payment for calcimimetics is added
to the ESRD PPS bundled payment. MedPAC indicated that the fact that
CMS is proposing to increase the outlier threshold by 126 percent in
2021, rather than decrease the threshold as the agency has done in
every other year, corroborates the reliance on high calcimimetic use
for receiving an outlier payment in 2021. MedPAC further stated that,
if calcimimetic use decreases between
[[Page 71439]]
2019 (when the products were paid using the TDAPA) and 2021 (when the
products will be paid as part of the ESRD PPS base rate), the outlier
threshold will be set too high and outlier payments will be lower than
the 1 percent of total 2021 payments.
Several commenters urged CMS to lower the thresholds proposed for
2021. The commenters expressed concern that increases to the outlier
threshold would cause a shift in the cases qualifying for an outlier
payment. They stated that the increases to the thresholds would limit
most outlier payments to those patients who use IV calcimimetics,
largely excluding outlier payments for the care of patients using other
relatively high-cost items and services that otherwise would be
eligible for outliers absent adoption of the proposed substantial
increases to the outlier thresholds. Many commenters referred to a
study performed by the Moran Company which was submitted in a comment
letter from a national dialysis organization. The study demonstrated
that as a result of the proposed policy changes to increase the outlier
thresholds, 76.3 percent of the outlier pool will be dedicated solely
to patients that utilize calcimimetics, leaving few resources for other
high-cost patients.
Several commenters expressed concern that the dynamic shift of the
allocation of outlier payments seen in the Moran Company's analyses for
calcimimetics would continue to happen in the future when new therapies
become ESRD outlier services. One commenter explained that any new
product that qualifies for the outlier policy and has a significant
cost associated with it will lead to higher threshold amounts. Several
commenters referred to MedPAC's public comment for the CY 2020 ESRD PPS
rulemaking, in which MedPAC recommended that CMS exclude payments
during a TDAPA--or TPNIES--period from outlier pool calculations given
that CMS policy makes a drug or equipment or supply ineligible for
outlier payments during the add-on period. The commenters described
this as a policy misalignment that causes outlier payments to be less
than the outlier target percentage.
Two commenters suggested comprehensive refinement of the outlier
policy methodology. MedPAC recommended that CMS consider an approach
that reflects the trend in separately billable spending over time.
MedPAC noted that other CMS payment systems use trend information when
establishing similar payment policies. For example, in establishing
county benchmark rates, MedPAC stated that the Medicare Advantage
program uses a prediction method that accounts for utilization trends
for specific services combined with the most recent available prices.
MedPAC asserted that such an approach could produce a more reliable
outlier threshold estimate and may result in the outlier payment
amounts that, on average, are closer to the target.
Several commenters recommended that CMS explore reserving a portion
of the outlier pool to be in proportion to the share of new ESRD
outlier services, in this case calcimimetics, compared to the current
spending on all other ESRD outlier services in the ESRD PPS. Under this
type of policy, CMS could establish a MAP and fixed-loss amount for
each sub-pool. The total value of the outlier pool could remain at 1
percent (or less as noted above) of the ESRD PPS. CMS could recalculate
the size of the sub-pool based on the most recently available claims
data. Over time, CMS could evaluate whether additional functional
categories (in addition to bone and mineral metabolism) would merit the
creation of additional sub-pools. One national kidney dialysis
organization explained that in addition to allowing the outlier pool to
address higher-costs patients outside of the calcimimetic costs, the
distributed nature of the sub-pools would decrease the risk of dollars
being removed from the payment system unintentionally.
A national dialysis association provided a simulation of the
calculation of outlier payments performed by the Moran Company testing
two sub-pools of the outlier withhold: One for patients using
calcimimetics and another for other, high cost patients who do not use
calcimimetics. The Moran Company found that use of sub-pools would
improve the distribution of outlier payments for all high cost
patients, but indicated that it is not likely to eliminate all leakage
from the ESRD PPS due to the outlier pool. The commenter stated that
this finding underscores the need to reduce the withhold amount to 0.5
percent and correct the misalignment between CMS's policies that
withhold dollars during an add-on payment period when the treatment is
not eligible for outlier payments. The commenter urged CMS to include
its recommended approach to bifurcate the outlier policy in the CY 2021
ESRD PPS final rule. The commenter suggested that CMS could publish an
interim final rule with comment period, if needed, to ensure that the
public can comment on these proposals prior to implementation. However,
the commenter emphasized that these policies should take effect for CY
2021 to ensure that the outlier pool continues to support high cost
patients under the ESRD PPS.
Many commenters expressed interest in working with CMS to refine
the outlier policy methodology to make sure that it addresses the needs
of all types of high costs patients. The commenters suggested that a
larger discussion of a solution to the outlier pool being dominated by
a single product is warranted, perhaps through a TEP or in another
forum.
Response: We appreciate all of the thoughtful suggestions provided
by commenters. We acknowledge that, even with annually adjusting the
MAP and FDL to reflect the most recent utilization and costs of ESRD
PPS eligible outlier services, total outlier payments have not yet
reached the 1 percent target. However, it is also true that use of
eligible ESRD outlier services declined each year. That is, ESRD
facilities incurred lower costs than anticipated, and those savings
accrued to facilities more than offsetting the extent to which the
consequent outlier payments fell short of the 1.0 percent target.
We appreciate the comments suggesting solutions for refining the
outlier policy methodology, for example, reducing the outlier
percentage pool withhold to less than 1 percent or establishing a
mechanism that pays back ESRD facilities those allocated outlier
amounts that did not pay out in the year projected. We also appreciate
the comments suggesting more complex solutions, such as the approach
provided by MedPAC, that uses trend information for establishing
thresholds or the approach from other commenters that bifurcates the
outlier pool into sub-pools. We did not propose any changes to the
outlier policy methodology in the CY 2021 ESRD PPS proposed rule. Our
proposal was limited to updating the outlier services MAP amounts and
FDL amounts to reflect the utilization of outlier services reported on
2019 claims. Therefore, we are not finalizing these significant
methodological changes the commenters suggested.
However, we recognize that the incorporation of calcimimetics into
the ESRD PPS bundled payment system, and of which effective January 1,
2021 are ESRD PPS eligible outlier services, brings with them a unique
dynamic. As the commenters have indicated, these products are expensive
and these high costs have been loaded into the projections for the
outlier payments. We also agree with the commenters that as new
therapies become eligible ESRD outlier services, they too will bring
significant costs that could further
[[Page 71440]]
complicate the allocation of outlier payments to beneficiaries that may
not be using the particular new therapy. As we noted in the previous
paragraph, we do not believe it is appropriate to finalize significant
methodological changes, such as bifurcating the outlier pool into sub-
pools, without performing detailed analyses to inform us on the
implications of the changes. Similarly, we do not agree with the
suggestion that CMS publish an interim final rule with comment period
to finalize complex changes to the outlier policy methodology so that
they can take effect in CY 2021; doing so would be premature since we
would not have carefully studied and considered the potential
consequences.
We appreciate the commenters' expressed interest in working with
CMS to refine the outlier policy methodology to make sure that it
addresses the needs of all types of high costs patients. While
commenters suggested a TEP or another forum to develop a solution to
the outlier pool being dominated by a single product, we had already
indicated in the CY 2020 ESRD PPS final rule (84 FR 60607) that a TEP
would address the outlier policy as part of the efforts to refine the
ESRD PPS. Following publication of the CY 2020 ESRD PPS final rule, a
TEP was held in December 2019. The outlier policy was on the agenda and
our data contractor discussed: The current approach to outlier
payments, stakeholder concerns regarding the current outlier payment,
an alternative methodology to achieve the 1 percent outlier target, and
feedback on the proposed approach.
Under the alternative approach discussed at the TEP, the underlying
basis of the alternative methodology is to relax the assumption of
constant utilization of eligible outlier services over time, which
allows for the modeling of the MAP amounts as they change over time. It
also allows for the use of data from a greater number of years to
inform trends. Details regarding the session dedicated to the outlier
policy are available on the CMS website: https://www.cms.gov/files/document/end-stage-renal-disease-prospective-payment-system-technical-expert-panel-summary-report-december.pdf.
We believe that the information gathered at the TEP and the
thoughtful suggestions provided in the public comments submitted in
response to the CY 2021 ESRD PPS proposed rule can be taken into
consideration in the future as we explore ways to refine the outlier
policy methodology.
Final Rule Action: After considering the public comments, we are
finalizing the updated outlier thresholds for CY 2021 displayed in
Column II of Table 5 of this final rule and based on CY 2019 data.
d. Final Impacts to the CY 2021 ESRD PPS Base Rate
(1) ESRD PPS Base Rate
In the CY 2011 ESRD PPS final rule (75 FR 49071 through 49083), we
established the methodology for calculating the ESRD PPS per-treatment
base rate, that is, ESRD PPS base rate, and the determination of the
per-treatment payment amount, which are codified at Sec. Sec. 413.220
and 413.230. The CY 2011 ESRD PPS final rule also provides a detailed
discussion of the methodology used to calculate the ESRD PPS base rate
and the computation of factors used to adjust the ESRD PPS base rate
for projected outlier payments and budget neutrality in accordance with
sections 1881(b)(14)(D)(ii) and 1881(b)(14)(A)(ii) of the Act,
respectively. Specifically, the ESRD PPS base rate was developed from
CY 2007 claims (that is, the lowest per patient utilization year as
required by section 1881(b)(14)(A)(ii) of the Act), updated to CY 2011,
and represented the average per treatment MAP for composite rate and
separately billable services. In accordance with section 1881(b)(14)(D)
of the Act and our regulation at Sec. 413.230, the per-treatment
payment amount is the sum of the ESRD PPS base rate, adjusted for the
patient specific case-mix adjustments, applicable facility adjustments,
geographic differences in area wage levels using an area wage index,
any applicable outlier payment and training adjustment add-on, the
TDAPA, and the TPNIES.
(2) Annual Payment Rate Update for CY 2021
We are finalizing an ESRD PPS base rate for CY 2021 of $253.13.
This update reflects several factors, described in more detail as
follows:
Wage Index Budget-Neutrality Adjustment Factor: We compute
a wage index budget-neutrality adjustment factor that is applied to the
ESRD PPS base rate. For CY 2021, we are not proposing any changes to
the methodology used to calculate this factor, which is described in
detail in the CY 2014 ESRD PPS final rule (78 FR 72174). We computed
the proposed CY 2021 wage index budget-neutrality adjustment factor
using treatment counts from the 2019 claims and facility-specific CY
2020 payment rates to estimate the total dollar amount that each ESRD
facility would have received in CY 2020. The total of these payments
became the target amount of expenditures for all ESRD facilities for CY
2021. Next, we computed the estimated dollar amount that would have
been paid for the same ESRD facilities using the ESRD PPS wage index
for CY 2021. As discussed in section II.B.4.b of this final rule, the
final ESRD PPS wage index for CY 2021 includes an update to the most
recent hospital wage data, the adoption of the 2018 OMB delineations,
and a 5 percent cap on wage index decreases applied for CY 2021. The
total of these payments becomes the new CY 2021 amount of wage-adjusted
expenditures for all ESRD facilities. The wage index budget-neutrality
factor is calculated as the target amount divided by the new CY 2021
amount. When we multiplied the wage index budget-neutrality factor by
the applicable CY 2021 estimated payments, aggregate payments to ESRD
facilities would remain budget neutral when compared to the target
amount of expenditures. That is, the wage index budget-neutrality
adjustment factor ensures that wage index adjustments do not increase
or decrease aggregate Medicare payments with respect to changes in wage
index updates. The final CY 2021 wage index budget-neutrality
adjustment factor is .999485. This application would yield a CY 2021
ESRD PPS base rate of $239.21, ($239.33 x .999485 = $239.21), prior to
the addition to the ESRD PPS base rate to include calcimimetics and the
application of the final market basket increase.
Addition to the ESRD PPS Base Rate to Include
Calcimimetics: As discussed in section II.B.1 of this final rule, for
CY 2021 we are modifying the ESRD PPS base rate by adding $9.93 to
account for calcimimetics in the ESRD PPS bundled payment. This
application would yield a CY 2021 ESRD PPS base rate of $249.14
($239.21 + $9.93 = $249.14), prior to the application of the final
market basket increase.
Market Basket Increase: Section 1881(b)(14)(F)(i)(I) of
the Act provides that, beginning in 2012, the ESRD PPS payment amounts
are required to be annually increased by the ESRD market basket
percentage increase factor. The latest projection of the ESRDB market
basket percentage increase factor for CY 2021 is 1.9 percent. In CY
2021, this amount must be reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act, as required by
section 1881(b)(14)(F)(i)(II) of the Act. As discussed previously, the
final MFP adjustment for CY 2021 is 0.3 percentage point, thus yielding
an update to the base rate of 1.6 percent for CY 2021. Therefore, the
final CY 2021
[[Page 71441]]
ESRD PPS base rate is $253.13 ($249.14 x 1.016 = $253.13).
In summary, we are finalizing a CY 2021 ESRD PPS base rate of
$253.13. This amount reflects a CY 2021 wage index budget-neutrality
adjustment factor of .999485, an addition of $9.93 to the ESRD PPS base
rate to include calcimimetics, and the CY 2021 ESRD PPS payment update
of 1.6 percent.
The comments and our responses to the comments on our updates to
the CY 2021 ESRD PPS base rate are set forth below.
Comment: Commenters were supportive of the updates to the ESRD PPS
base rate for CY 2021.
Response: We appreciate the comments in support of the updates.
Comment: An academy of nutrition and dietetics urged CMS to
consider access to care in rural areas when setting the rates under the
ESRD PPS. The commenter referred to MedPAC's March 2020 Report to
Congress,\21\ and noted MedPAC's concern about the gap in the Medicare
margin between rural and urban facilities. The commenter believes that
the proposal to cap any decrease in an ESRD facility's wage index is
one way to address these access to care concerns, including access to
registered dietitian nutritionists (RDNs). The commenter explained that
RDNs perform many roles in ESRD facilities aimed at improving outcomes
and promoting therapy adherence, including dialysis treatments, dietary
recommendations, and medication regimes. The commenter expressed
concern that there are significant challenges to the hiring and
retention of RDNs in rural area ESRD facilities, therefore rates for
the rural facilities require an adequate margin to support recruitment
and retention of qualified RDNs to address the needs of this
nutritionally high-risk population.
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\21\ http://www.medpac.gov/docs/default-source/reports/mar20_medpac_ch6_sec.pdf?sfvrsn=0.
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Response: We appreciate the commenter's recommendation for CMS to
consider access to care in rural areas when setting the rates under the
ESRD PPS, specifically with regard to hiring and retaining specialized
staff that provide quality care to ESRD beneficiaries. As we stated in
the CY 2020 ESRD PPS final rule (84 FR 60701), the annual update factor
is intended to account for the overall increase in cost of care at the
national level. The patient case-mix payment adjustments and the
facility level adjustments, such as the rural adjustment and low-volume
payment adjustment account for differences in both patient and facility
characteristics. These payment adjustments are provided to address the
variation of costs of a particular facility relative to the national
standard. The CY 2016 ESRD PPS final rule discusses the methodology for
calculating the patient and facility-level adjustments (80 FR 68972
through 69004). In addition, the ESRD PPS base rate is adjusted for any
applicable outlier payment, training add-on payment, the TDAPA, and the
TPNIES to arrive at the per treatment payment amount.
For these reasons, we believe that the CY 2021 ESRD PPS base rate
is appropriate despite the challenges some ESRD facilities experience.
We also continue to believe that the payment adjustments, such as the
rural adjustment and the low volume payment adjustment help mitigate
the challenges faced by those facilities that are eligible for the
adjustments.
Final Rule Action: We are finalizing a CY 2021 ESRD PPS base rate
of $253.13.
5. Changes to the Low-Volume Payment Adjustment
a. Background
As required by section 1881(b)(14)(D)(iii) of the Act, the ESRD PPS
includes a payment adjustment that reflects the extent to which costs
incurred by low-volume facilities in furnishing renal dialysis services
exceed the costs incurred by other facilities in furnishing such
services. We have established a LVPA factor of 23.9 percent for ESRD
facilities that meet the definition of a low-volume facility. Under
Sec. 413.232(b), a low-volume facility is an ESRD facility that, based
on the submitted documentation--(1) Furnished less than 4,000
treatments in each of the 3 cost reporting years (based on as-filed or
final settled 12-consecutive month cost reports, whichever is most
recent) preceding the payment year; and (2) Has not opened, closed, or
received a new provider number due to a change in ownership in the 3
cost reporting years (based on as-filed or final settled 12-consecutive
month cost reports, whichever is most recent) preceding the payment
year. Under Sec. 413.232(c), for purposes of determining the number of
treatments furnished by the ESRD facility, the number of treatments
considered furnished by the ESRD facility equals the aggregate number
of treatments furnished by the ESRD facility and the number of
treatments furnished by other ESRD facilities that are both under
common ownership with, and 5 road miles or less from, the ESRD facility
in question.
For purposes of determining eligibility for the LVPA,
``treatments'' mean total HD-equivalent treatments (Medicare and non-
Medicare as well as ESRD and non-ESRD). For PD patients, 1 week of PD
is considered equivalent to 3 HD treatments. As noted previously, we
base eligibility on the 3 years preceding the payment year and those
years are based on cost reporting periods. Specifically, under Sec.
413.232(g), the ESRD facility's cost reports for the periods ending in
the 3 years preceding the payment year must report costs for 12-
consecutive months (76 FR 70237).
In order to receive the LVPA under the ESRD PPS, an ESRD facility
must submit a written attestation statement to its MAC confirming that
it meets all of the requirements specified in Sec. 413.232 and
qualifies as a low-volume ESRD facility. The attestation is required
because: (1) ESRD facility's cost reporting periods vary and may not be
based on the calendar year; and (2) the cost reports are due 5 months
after the close of the cost reporting period (that is, there is a lag
in the cost reporting submission). Thus, the MACs may not have the cost
report for the third year to determine eligibility and would need to
rely on the attestation for that year until the cost report is
available. Section 413.232(e) imposes a yearly November 1 deadline for
attestation submissions, with a few exceptions where the deadline is
December 31. The November 1 timeframe provides 60 days for a MAC to
verify that an ESRD facility meets the LVPA eligibility criteria (76 FR
70236).
As stated in the Medicare Benefit Policy Manual, (Pub. L. 100-02),
(chapter 11, section 60.B.1),\22\ once the attested ESRD facility's
cost report is submitted to the MAC, the MAC verifies the as-filed cost
report for the third eligibility year and finds that the ESRD facility
met the eligibility criteria, the ESRD facility would then receive the
LVPA payment for all the Medicare-eligible treatments in the payment
year. However, if the attested ESRD facility's cost report for the
third eligibility year exceeds the total dialysis treatment threshold,
then the MAC recoups by reprocessing claims paid during the payment
year in which the ESRD facility incorrectly received the LVPA.
Recoupment also occurs if any cost reports used for eligibility are
subsequently found to have not met the low-volume criteria, for
example, reopening or appeals.
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Further information regarding the administration of the LVPA is
provided
[[Page 71442]]
in the Medicare Benefit Policy Manual, chapter 11, section 60.B.1.\23\
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\23\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c11.pdf.
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b. Revisions to the LVPA Requirements and Regulations
As we discussed in the CY 2019 ESRD PPS final rule (83 FR 56949)
and the CY 2021 ESRD PPS proposed rule (85 FR 42165), we have heard
from stakeholders that low-volume facilities rely on the LVPA and loss
of the adjustment could result in beneficiary access issues.
Specifically, stakeholders expressed concern that the eligibility
criteria in the LVPA regulations are very explicit and leave little
room for flexibility in certain circumstances.
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42165),
according to the Centers for Disease Control and Prevention (CDC), the
risk factors for COVID-19 include older adults and people of any age
who have serious underlying medical conditions, such as diabetes and
chronic kidney disease undergoing dialysis. Medicare's ESRD population
aligns with the profile of patients who are more susceptible to COVID-
19. As a result, ESRD facilities are working together to keep the risk
of spreading COVID-19 down as much as possible by shifting patients
among the ESRD facilities in the same area. In some cases, this
shifting of patients has caused some low-volume ESRD facilities to
temporarily dialyze patients that they otherwise would not have
dialyzed if there had not been a PHE. In addition, since cases of acute
kidney injury (AKI) have increased in certain areas of the country due
to COVID-19, there is also an increase in the number of patients
discharged that need outpatient dialysis for some period of time while
their kidneys regain normal function. We expressed concern that these
increases in dialysis treatments due to the COVID-19 PHE in CY 2020 may
put certain low-volume facilities over the LVPA's treatment threshold
causing the loss of, or the inability to qualify for, the 23.9 percent
per treatment payment adjustment for payment years 2021, 2022, and
2023. We noted that in CY 2020, 338 ESRD facilities receive the LVPA.
We also noted that in a typical year, we estimate that between 50-60
facilities lose their LVPA status. That is, there are between 50-60
ESRD facilities that typically lose their LVPA status because their
patient population grew for reasons other than the COVID-19 PHE.
In light of the unique circumstance due to the COVID-19 PHE, we
proposed to hold ESRD facilities harmless if an increase in their
treatment counts in 2020 is COVID-19-related such that the increase
would prevent them from qualifying for the LVPA. We proposed that the
ESRD facility would attest that the increase in treatments, meaning
total HD-equivalent treatments (for ESRD and AKI), was temporary and
related to the redistribution of patients in response to the COVID-19
PHE. When this occurs, instead of using total dialysis treatments
furnished in cost reporting periods ending in 2020, CMS would rely on
the facility's attestation that the increase in total dialysis
treatments was due to the PHE for the COVID-19 pandemic. We proposed
that for purposes of determining LVPA eligibility for payment years
2021, 2022, and 2023, we would only consider total dialysis treatments
furnished for 6 months of a facility's cost-reporting period ending in
2020, and that an ESRD facility would decide which 6 months to use
(consecutive or non-consecutive) for purposes of reporting total
treatments. That is, ESRD facilities would attest that, while it
furnished 4,000 or more treatments in its cost-reporting period ending
in 2020, the number of treatments exceeding the allowed threshold to
otherwise qualify for the LVPA was due to temporary patient shifting as
a result of the COVID-19 PHE, and that their total dialysis treatments
for any 6 months of that period is less than 2,000. MACs would
annualize the total dialysis treatments for those 6 months by
multiplying by 2. ESRD facilities would be expected to provide
supporting documentation to the MACs upon request.
We proposed to revise Sec. 413.232(g) by adding paragraph (g)(4)
to reflect that, for purposes of determining LVPA eligibility for
payment years 2021, 2022, and 2023, an ESRD facility's attestation must
indicate that the ESRD facility meets all the LVPA criteria except
that, for a facility that does not otherwise meet the number-of-
treatments criterion (that is, less than 4,000 in a year) because of
the COVID-19 PHE, the facility furnished less than 2,000 treatments in
any 6 months during its cost-reporting period ending in 2020 due to
temporary patient shifting as a result of the COVID-19 PHE. We also
proposed that the MAC would rely on the facility's attestation and
would annualize the total dialysis treatments for the 6 months by
multiplying those collective 6 month treatments by 2.
In addition, since CMS changed cost reporting deadlines due to the
COVID-19 PHE, we believe the extraordinary circumstances of the COVID-
19 pandemic justify an exception to the November 1, 2020 attestation
deadline. Therefore, for payment year 2021, we proposed to allow more
time for ESRD facilities to submit attestations by extending the
deadline to December 31, 2020. We would reflect this change in Sec.
413.232(e) by reformatting the section to reflect already established
exceptions to the November 1 attestation deadline in paragraphs (e)(1)
through (3), and to include in new paragraph (e)(4) that, for payment
year 2021, the attestation must be provided by December 31, 2020.
We proposed a technical change at Sec. 413.232(b) to remove the
heading ``Definition of low-volume facility'' to be consistent with the
current CFR requirements.\24\
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\24\ Document Drafting Handbook, chapter 2, section 2.10, page
2-18: https://www.archives.gov/files/federal-register/write/handbook/ddh.pdf.
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We also proposed a technical change at Sec. 413.232(e) and (g). We
proposed to add ``MAC'' in Sec. 413.232(e) to establish the acronym
for Medicare Administrative Contractor. We proposed to replace
``Medicare Administrative Contractor (MAC)'' with ``MAC'' in Sec.
413.232(g) since the acronym would now be established in Sec.
413.232(e).
c. Clarification for MAC LVPA Determinations
As we discussed in the CY 2021 ESRD PPS proposed rule (85 FR
42166), in order to receive the LVPA, an ESRD facility must meet the
requirements of Sec. 413.232, including submitting attestations to the
MACs indicating its eligibility for the adjustment. In its attestation
for the third eligibility year, which is the cost-reporting year
immediately preceding the payment year, a facility attests that it will
be eligible for the adjustment; this attestation typically occurs prior
to the MAC having the facility's cost report for the third eligibility
year, in which case the MAC relies on the facility's attestation to
determine if the facility qualifies for the LVPA. When an ESRD facility
qualifies for the adjustment, the LVPA would be applied to all the
Medicare-eligible treatments for the entire payment year. If the MAC
subsequently determines, however, that the ESRD facility failed to
qualify for the LVPA, and the facility had already begun to receive the
adjustment to which the MAC has determined it is not entitled, the MAC
would reprocess the claims to remove and recoup the low-volume
payments.
We understand that in some instances, MACs may be discontinuing
LVPA payments to a facility in the payment year for which the facility
is eligible for the adjustment. However,
[[Page 71443]]
the established policy is such that, if an ESRD facility meets the LVPA
eligibility criteria in Sec. 413.232, it is entitled to the payment
adjustment for the entire payment year. Because there may be some
inconsistent application of this policy, we are taking this opportunity
to make this aspect of the LVPA policy clear in the regulation text.
We proposed to revise Sec. 413.232 by adding paragraph (h) to
specify that, if an ESRD facility provides an attestation in accordance
with Sec. 413.232(e) for the third eligibility year, the MAC verifies
the as-filed cost report. If the MAC determines an ESRD facility meets
the definition of a low-volume facility, CMS adjusts the low-volume
facility's base rate for the entire payment year. However, if the MAC
determines an ESRD facility does not meet the definition of a low-
volume facility, the MAC reprocesses claims and recoups low volume
adjustments paid during the payment year.
The comments and our responses to the comments on our LVPA
proposals are set forth below.
Comment: Several commenters expressed support for the proposal to
hold harmless ESRD facilities that would otherwise qualify for the LVPA
but for a temporary increase in dialysis treatments due to the PHE for
the COVID-19 pandemic. Two of the commenters indicated that holding
these ESRD facilities harmless will better ensure ESRD patients' access
to life-sustaining dialysis.
Response: We appreciate the support of the commenters as we strive
to ensure access to care during this unprecedented time.
Comment: One commenter expressed concern that the intent of the
proposal would not be met as the length of the PHE for COVID-19 remains
uncertain.
Response: We thank the commenter for its support for the proposed
LVPA modifications while appreciating this concern. While the end of
the PHE for COVID-19 remains uncertain, we believe that the
modification adequately address the current and foreseen impact of
COVID-19 on low volume ESRD facilities. We will consider the COVID-19
PHE during rulemaking in the future, if warranted.
Comment: One commenter expressed confusion over the proposed
methodology, indicating that LVPA attestation data can be pulled from
any six-month period in the preceding three years. The commenter
expressed concern that facilities who would have exceeded the
threshold, even in the absence of COVID-19, can `mask' their
disqualification.
Response: We acknowledge the commenter's confusion over the
proposal. For purposes of determining LVPA eligibility for payment
years 2021, 2022, and 2023, the facility would attest that its total
dialysis treatments for those 6 months of their cost-reporting period
ending in 2020 are less than 2,000 and that, although the total number
of treatments furnished throughout the entire year otherwise exceeded
the LVPA threshold of 4,000, the excess treatments are a direct result
of patient shifting from the COVID-19 PHE. ESRD facilities would select
6 months (consecutive or non-consecutive) of total dialysis treatments
furnished for purposes of the LVPA determination and, if eligible, will
receive the benefit for the entire payment year. If the ESRD facility
would have not qualified for the LVPA in the absence of COVID-19, the
facility cannot attest that the COVID-19 PHE caused its excess
treatments. The policy is intended to directly address the burden
placed on ESRD facilities in 2020 due to the COVID-19 PHE. Future
rulemaking will address the PHE's impact on the LVPA, if the impact
continues into following years.
Comment: We received comments that suggested we adopt a methodology
including a combination of the rural and LVPA adjusters to create a
tiered LVPA, targeting facilities providing less than 4,000 treatments
per year, and expanding the adjuster to include a second tier that
includes facilities providing less than 6,000 treatments per year.
Response: We appreciate commenters' suggestions for an alternative
methodology and will take their suggestions into consideration for
future rulemaking.
Final Rule Action: After consideration of public comments, for CY
2021, we are finalizing the revisions to the LVPA, as proposed. We are
finalizing the revision to Sec. 413.232(g) by adding paragraph (g)(4)
to codify the process. We are also finalizing the proposal to reformat
Sec. 413.232(e) to reflect already established exceptions to the
November 1 attestation deadline in paragraphs (e)(1) through (3), and
to include in new paragraph (e)(4) that, for payment year 2021, the
attestation must be provided by December 31, 2020. We are finalizing a
technical change at Sec. 413.232(b) to remove the heading ``Definition
of low-volume facility.'' We are also finalizing technical changes at
Sec. 413.232(e) and (g), whereby ``MAC'' would be added in Sec.
413.232(e) to establish the acronym for Medicare Administrative
Contractor and ``MAC'' would replace ``Medicare Administrative
Contractor (MAC)'' in Sec. 413.232(g). Lastly, we are finalizing the
revision of Sec. 413.232 by adding paragraph (h) to specify that, if
an ESRD facility provides an attestation in accordance with Sec.
413.232(e) for the third eligibility year, the MAC verifies the as-
filed cost report.
C. Transitional Add-On Payment Adjustment for New and Innovative
Equipment and Supplies for CY 2021 Payment
1. Background
In the CY 2020 ESRD PPS final rule, we finalized the establishment
of a transitional add-on payment adjustment for new and innovative
equipment and supplies (TPNIES) to support ESRD facilities in the
uptake of certain new and innovative renal dialysis equipment and
supplies under the ESRD PPS. Under our current regulation at Sec.
413.236(b), we will provide the TPNIES to an ESRD facility for
furnishing a covered equipment or supply only if the item: (1) Has been
designated by CMS as a renal dialysis service under Sec. 413.171, (2)
is new, meaning it is granted marketing authorization by FDA on or
after January 1, 2020, (3) is commercially available by January 1 of
the particular calendar year, meaning the year in which the payment
adjustment would take effect; (4) has a Healthcare Common Procedure
Coding System (HCPCS) application submitted in accordance with the
official Level II HCPCS coding procedures by September 1 of the
particular calendar year; (5) is innovative, meaning it meets the
criteria specified in Sec. 412.87(b)(1) of this chapter and related
guidance; and (6) is not a capital-related asset that an ESRD facility
has an economic interest in through ownership (regardless of the manner
in which it was acquired). Specifically, the equipment or supply must
represent an advance that substantially improves, relative to renal
dialysis services previously available, the diagnosis or treatment of
Medicare beneficiaries.
Under the first criterion, as reflected in the CY 2020 ESRD PPS
final rule, renal dialysis equipment and supplies will be considered
``new'' if FDA grants them marketing authorization on or after January
1, 2020. By including FDA marketing authorizations on or after January
1, 2020, we intended to support ESRD facility use and beneficiary
access to the latest technological improvements to renal dialysis
equipment and supplies. We note that in section II.B.2.b of this final
rule, we are refining the newness criterion (year in which the product
was granted FDA marketing
[[Page 71444]]
authorization) and establish that an equipment or supply is considered
``new'' within 3 years beginning on the date of FDA marketing
authorization for that equipment or supply. For capital-related assets
that are dialysis machines when used in the home setting for a single
patient, the 3 years would begin from the date of FDA marketing
authorization for home use. We note that the changes to the newness
criteria and the other changes discussed in section II.B.2.b are
effective beginning January 1, 2021, that is, applicable for the TPNIES
applications received in 2021.
As we stated in the CY 2021 ESRD PPS proposed rule (85 FR 42166),
we believed the IPPS SCI criteria and the process used to evaluate SCI
under the IPPS could be used for identifying new and innovative
equipment and supplies worthy of additional payment under the ESRD PPS.
We noted that under the IPPS, CMS has been assessing new technologies
for many years to assure that the additional new technology add-on
payments to hospitals are made only for truly innovative and
transformative products, and we stated that CMS is proposing to adopt
the IPPS SCI criteria under the ESRD PPS for the same reason. We
explained that we wanted to ensure that the add-on payment adjustments
made under the ESRD PPS are limited to new equipment and supplies that
are truly innovative. In addition, since renal dialysis services are
routinely furnished to hospital inpatients and outpatients, we stated
that we believed the same SCI criteria should be used to assess whether
a new renal dialysis equipment or supply warrants additional payment
under Medicare.
We finalized the adoption of IPPS's SCI criteria specified in Sec.
412.87(b)(1), including modifications finalized in future IPPS final
rules, to determine when a new and innovative renal dialysis equipment
or supply is eligible for the TPNIES under the ESRD PPS. That is, we
would adopt IPPS's SCI criteria in Sec. 412.87(b)(1) and any
supporting policy around these criteria as discussed in IPPS preamble
language. We stated that we believed that by incorporating the IPPS SCI
criteria for new and innovative renal dialysis equipment under the ESRD
PPS, we would be consistent with IPPS and innovators would have
standard criteria to meet for both settings. We also proposed to
establish a process modeled after IPPS's process of determining if a
new medical service or technology meets the SCI criteria specified in
Sec. 412.87. That is, we proposed that CMS would use a similar process
to determine whether the renal dialysis equipment or supply meets the
eligibility criteria proposed in newly added Sec. 413.236(b). Similar
to how we evaluate whether a new renal dialysis drug or biological
product is eligible for the TDAPA, as discussed in the CY 2016 ESRD PPS
final rule (80 FR 69019), we would need to determine whether the renal
dialysis equipment and supply meets our eligibility criteria for the
TPNIES.
Specifically, under Sec. 413.236(b)(5) we evaluate SCI for
purposes of the TPNIES under the ESRD PPS based on the IPPS SCI
criteria (see Sec. 412.87(b)(1)). We note that in the CY 2021 ESRD PPS
proposed rule as well as section II.B.2.a of this final rule, we
provide a detailed discussion of the SCI criteria. In addition, in
section II.B.2.b of this final rule we are revising Sec. 413.236(b)(5)
to remove ``and related guidance'' to reflect that all related SCI
guidance has now been incorporated into Sec. 412.87(b)(1).
As we discussed in the CY 2021 ESRD PPS proposed rule and in
section II.B.2.a of this final rule, we established in Sec. 413.236(c)
a process for our announcement of TPNIES determinations and a deadline
for consideration of new renal dialysis equipment or supply
applications under the ESRD PPS. CMS will consider whether a new renal
dialysis equipment or supply meets the eligibility criteria specified
in Sec. 413.236(b). Then, after consideration of public comments we
will announce the results in the Federal Register as part of our annual
ESRD PPS final rule. We noted we would only consider a complete
application received by February 1 prior to the particular calendar
year. FDA marketing authorization for the equipment or supply must
occur by September 1 prior to the particular calendar year. We note in
section II.B.2.b of this final rule, we are revising Sec. 413.236(c)
to replace ``September 1'' with ``the HCPCS Level II code application
deadline for Coding Cycle 2 for DMEPOS items and services as specified
in the HCPCS Level II coding guidance on the CMS website'' to reflect
that FDA marketing authorization for the new and innovative equipment
or supply must accompany the HCPCS application prior to the particular
calendar year in order for the item to qualify for the TPNIES in the
next calendar year.
2. Applications for TPNIES Payment for CY 2021
We received two applications for the TPNIES for CY 2021. A
discussion of these applications is presented below.
a. Theranova 400 Dialyzer and Theranova 500 Dialyzer
(1) Baxter Healthcare Corporation (Baxter) Application
Baxter submitted an application for the Theranova 400 Dialyzer/
Theranova 500 Dialyzer. The 400 and 500 denote differences in surface
area. The applicant stated that Theranova represents an SCI over
currently available HD therapies for the treatment of renal failure.
The applicant stated that Theranova is a new class of hollow-fiber,
single-use dialyzer intended to treat renal failure by HD. The
applicant stated that it features an innovative 3-layer membrane
structure that offers a higher permeability than high-flux dialyzers,
with improved removal of large proteins up to 45 kilodaltons (kDa)
while selectively maintaining essential proteins such as
albumin.25 26 27 The applicant stated that Theranova has the
potential to transform in-center HD by allowing Medicare beneficiaries
with renal failure to benefit from expanded hemodialysis (HDx). HDx is
defined as a process of blood purification that includes the clearance
of small uremic toxins through large middle molecule (LMM) (categorized
as uremic solute whose molecular size is 25 kDa up to 60 kDa) toxins
without the need for an external infusion of replacement fluid. For
purposes of the application, HDx is collectively referred to in the
application as ``Theranova''. The applicant asserted that the Theranova
dialyzer integrates with existing HD machines that an ESRD facility
already owns and that the Theranova dialyzer replaces other dialyzers.
---------------------------------------------------------------------------
\25\ Boschetti-de-Fierro, A., et al., ``MCO Membranes: Enhanced
Selectivity in High-Flux Cases,'' www.nature.com/Scientific Reports,
[5:18448] DOI: 10.1038/srep18448.
\26\ Krause, B., et al., ``Highly selective membranes for Blood
purification,'' Gambro Dialysatoren GmbH, Hechingen/Germany,
Presentation abstract March 26, 2015.
\27\ Zweigart, C., et al., ``Medium cut-off membranes--closer to
the natural kidney removal function,'' Int. J Artif Organs, 2017,
40(7), pp. 328-334. DOI: 10.5301/uijao.5000603.
---------------------------------------------------------------------------
The applicant described the Theranova membrane as unique and stated
it allows for the removal of an expanded range of solutes, creating a
filtration profile closer to a natural kidney. The applicant described
the membrane structure as being divided into three distinct layers: A
fingerlike porous outer layer, a sponge-like intermediate layer, and a
very thin inner layer (skin). By reducing the inner diameter of the
membrane, internal filtration is increased, allowing for enhanced
clearance of LMMs through
[[Page 71445]]
additional convective transport.\28\ The Theranova dialyzer enables the
efficient removal of uremic toxins (up to 45 kDa).29 30 The
applicant included an adapted figure from a book titled, ``Modelling
and Control of Dialysis Systems \31\ to compare removal of toxins by
Theranova to the kidney and to other dialysis therapies, such as low
flux dialyzers (LF), high flux dialyzers (HFD) and hemodiafiltration
(HDF). The applicant's adapted figure showed the following: LF, HFD,
HDF and HDx remove urea (60 Daltons (Da)), phosphate (96 Da),
Parathyroid hormone (9,500 Da); HFD, HDF and HDx remove Beta 2
microglobulin (12 kDa), cystatin C (13 kDa), Myoglobulin (17 kDa), and,
kappa free-light-chains (23 kDa); HDF and HDx remove complement factor
D (24 kDa), Interleukin (IL)-6 (25 kDa), alpha 1 microglobulin (33
kDa); and, HDx removes Chitinase-3-like protein 1 (40 kDa), lambda
free-light-chains (45 kDa) and albumin (67 kDa).
---------------------------------------------------------------------------
\28\ Lorenzin, A., et al., ``Quantification of Internal
Filtration in Hollow Fiber Hemodialyzers with Medium Cut-Off
Membrane,'' Blood Purif, 2018, 46, pp. 196-204.
\29\ Boschetti-de-Fierro, A., et al., ``MCO Membranes: Enhanced
Selectivity in High-Flux Cases,'' www.nature.com/Scientific Reports,
[5:18448] DOI: 10.1038/srep18448.
\30\ Boschetti-de-Fierro, A., et al., ``MCO Dialyzers: Enhanced
Selectivity High-Flux,'' Gambro Dialysatoren GmbH, Research and
Development, Hechingen, Germany, Poster No. SAT-481 (Baxter).
\31\ Azar, A.T. and Canaud, B., ``Chapter 8: Hemodialysis
System,'' Modeling and Control of Dialysis Systems, 2013, pp. 99-
106, SCI 404 Berlin, Springer-Verlag, Berlin, Heidelberg. ISBN: 978-
3642274572.
---------------------------------------------------------------------------
The applicant stated that compared with low-flux HD, high-flux HD,
and HDF, the Theranova dialyzer filtration profile is more similar to
that of a natural kidney, as shown in vitro 32 33 giving it
expanded clearance of uremic toxins.
---------------------------------------------------------------------------
\32\ Krause, B., et al., ``Highly selective membranes for Blood
purification,'' Gambro Dialysatoren GmbH, Hechingen/Germany,
Presentation abstract March 26, 2015.
\33\ Boschetti-de-Fierro, A., et al., ``MCO Membranes: Enhanced
Selectivity in High-Flux Cases,'' www.nature.com/Scientific Reports,
[5:18448] DOI: 10.1038/srep18448.
---------------------------------------------------------------------------
The applicant asserted that the design of the Theranova dialyzer
allows for use on any HD machine, made by any manufacturer, by merely
changing the dialyzer. The applicant stated that the membrane is
compatible with standard fluid quality and does not require any
additional fluid quality control measure.
Theranova received approval for Investigational Device Exemption
(IDE) protocol from the FDA, on August 31, 2017, and then received
approval for coverage on September 13, 2017. The Class II
investigational device exemption received the code G170157.\34\ The FDA
requested a 6-month clinical study to validate efficacy of large toxin
removal and safety. According to the applicant, safety is defined in
part by albumin loss. The applicant stated that it is seeking marketing
authorization through the FDA's De Novo pathway and marketing
authorization this year for the May 2020 cycle. The applicant stated
that it plans to submit a HCPCS application to CMS in June 2020.
---------------------------------------------------------------------------
\34\ Available on p. 49828 at: https://www.federalregister.gov/documents/2017/10/27/2017-23447/medicare-and-medicaid-programs-quarterly-listing-of-program-issuances-july-through-september-2017.
---------------------------------------------------------------------------
The applicant noted that it has not submitted an application for
pass-through payments under the Medicare Outpatient Prospective Payment
System (OPPS) or the NTAP program under the Medicare IPPS for the
Theranova 400 Dialyzer/Theranova 500 Dialyzer.
The applicant stated that it expects Theranova to be commercially
available immediately after receiving marketing authorization and will
provide proof of commercial availability.
With regard to demonstrating the requirements for SCI, the
applicant asserted that Theranova represents an SCI in outcomes for
Medicare beneficiaries over currently available HD therapies treating
renal failure. The applicant noted that ESRD patients on current HD
therapies suffer unsatisfactorily high mortality and morbidity from
cardiovascular disease and infections.\35\
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\35\ United States Renal Data System. 2018 USRDS annual data
report: Epidemiology of kidney disease in the United States.
National Institutes of Health, National Institute of Diabetes and
Digestive and Kidney Diseases, Bethesda, MD, 2018.
---------------------------------------------------------------------------
In addition, the applicant stated that the HDx enabled by Theranova
effectively targets the removal of LMM uremic toxins (25 kDa to 60
kDa), which are linked to the development of inflammation,
cardiovascular disease, and other comorbidities in dialysis patients.
The applicant stated that this results in improved clinical outcomes,
relative to current dialyzers in four clinical categories. First, a
decreased rate of subsequent therapeutic interventions, including fewer
infections, reduced hospitalization duration, and reduced medication
usage. Specifically, the applicant stated that patients treated with
HDx therapy have decreased infections. A prospective cross-over study
found an average of seven episodes of infection for patients treated
with HDx versus 18 for high flux HD (p = 0.003).\36\ The applicant also
stated that patients receiving HDx therapy with Theranova had hospital
stays averaging 4.4 days versus 5.9 days for patients receiving
traditional HD (p = 0.0001) along with lower hospitalization rates (71
percent versus 77 percent (p = 0.69)).\37\ The U.S. IDE Randomized
Controlled Trial (NCT032574 l 0) of 172 patients, although not powered
for all-cause hospitalization events, showed a 49 percent decreased
number of hospitalization events in the Theranova arm (18 events) as
compared to the control arm (37 events).\38\ With regard to improved
medication usage, the applicant stated that patients receiving HDx
therapy had reduced medication usage. The applicant cited three studies
that showed a significant decrease in erythropoietin stimulating agents
(ESA) usage.39 40 41 One study also found a substantial
reduction in the need for iron usage.42 43 Two studies saw
an improvement in EPO resistance index (ERI) and one study showed a
statistically significant decrease in phosphate binder (calcium
carbonate) usage.44 45
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\36\ Cozzolino, C., et al., ``Effects of a medium cut-off
(Theranova) dialyzer on haemodialaysis patients: A prospective,
cross-over study,'' Clinical Kidney Journal, 2019, pp. 1-8. Doi
10.1093/ckj/sfz 155.
\37\ Sanabria, R.M., et al. ``Expanded Hemodialysis and its
effects on hospitalizations and medication usage,'' Submitted for
publication.
\38\ Weiner, D.E., et al. 2019, ``Efficacy and Safety of
Expanded Hemodialysis with the Theranova 400 Dialyzer: A Randomized
Control Trial,'' Abstract at ASN meeting, FR-PO 488.
\39\ Gallo, M., ``The Real-Life Study on Expanded Hemodialysis
(HDx): 9 Months Experience of a Single Hemodialysis Unit,''
Nephrology Dialysis Transplantation, 34, Issue Supplement_1, June
2019, gfz106.FP539, https://doi.org/10.1093/ndt/gfz106.FP539.
\40\ Sanabria, R.M., et al., Ibid.
\41\ Lim, J-H., et al., ``Novel Medium Cut-Off Dialyzer Improves
Erythropoietin Stimulating Agent Resistance in Maintenance
Hemodialysis Patients: A Randomized Controlled Trial,'' Manuscript
submitted for publication.
\42\ Sanabria, R.M., et al., Ibid.
\43\ Lim, J-H., et al., Ibid.
\44\ Sanabria, R.M., et al., Ibid.
\45\ Lim, J-H., et al. Ibid.
---------------------------------------------------------------------------
The second clinical improvement category listed by the applicant is
a more rapid beneficial resolution of the disease process treatment.
The applicant cited a 2019 publication which noted that the average
recovery time after dialysis is reduced with HDx therapy, with the
median self-reported recovery time at 120 minutes, 60 min., 60 min.,
and 105 min. at 3, 6, 9, and 12 months compared to a baseline 240 min.
(p < 0.01 for 6, 9, and 12-month ratings; N = 110).\46\
---------------------------------------------------------------------------
\46\ Bolton, S., et al., ``Dialysis symptom burden and recovery
time in expanded hemodialysis,'' Manuscript submitted.
---------------------------------------------------------------------------
The third category of improved clinical outcomes listed by the
applicant
[[Page 71446]]
is reduced inflammation in patients receiving HDx Therapy with
Theranova. The applicant referenced a 2018 review article, which notes
that chronic inflammation in ESRD patients is associated with the
build-up of known uremic toxins spanning the molecular size spectrum
from 12 kDa to 45 kDa such as beta-2-microglobulin, soluble tumor
necrosis factor (TNF), Receptor 2, IL-1, Prolactin, IL-18, IL-6,
Hyaluronic Acid, TNF-a, Soluble TNF Receptor 1, Pentraxin-3, and
Advanced Glycation End-Products. The same article notes the following:
(1) LMM (25 kDa to 60 kDa) have been associated with inflammation,
cardiovascular events and other dialysis-related comorbidities; (2)
current dialytic therapies, though efficient in removing small solutes,
have limited capability in removing LMM; (3) current dialyzer design,
limited by membrane permeability, does not provide long-lasting,
effective reduction of the full spectrum of small molecular uremic
toxins (<500 Da), conventional middle molecular uremic toxins (500 Da
to <25 kDa) and large middle molecular uremic toxins (25 kDa to 60
kDa), even when their usage is enhanced with convective transport; and
(4) a broad spectrum of uremic toxins are not effectively treated by
conventional HD nor HDF which is not readily utilized in the U.S.\47\
The applicant asserted that for the first time, HDx enabled by
Theranova results in the superior removal of the aggregate of small,
conventional middle and large middle molecular uremic toxins.\48\ The
applicant asserted that Theranova, in effectively targeting the
spectrum of uremic toxins, that this spectrum encompasses the totality
of these inflammation-modulating molecules.
---------------------------------------------------------------------------
\47\ Wolley, M., et al., ``Exploring the Clinical Relevance of
Providing Increased Removal of Large Middle Molecules,'' Cli, J Am
Soc Nephrol, 2018, 13, pp. 805-813.
\48\ Kirsch AH, Lyko R, Nilsson LG., et al. Performance of
hemodialysis with novel medium cut-off dialyzers. Nephrol Dial
Transplant 2017; 32: 165-172.
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The applicant also asserted that when analyzing the full set of
studies utilizing Theranova dialyzers, the collective evidence shows
consistent improvement in these inflammatory marker levels. Of 14
measurements of inflammation across four studies,49 50 51 52
71 percent (10 of 14) showed statistically significant improvement in
the inflammatory marker. For the remaining 29 percent of the measured
inflammatory markers, all showed improvement in the inflammatory
profile but were not statistically significant. In most of the
situations where statistically significant results were not achieved,
the applicant asserted, the studies were underpowered to demonstrate
statistically significant change of the particular marker.
---------------------------------------------------------------------------
\49\ Belmouaz, M., et al., ``Comparison of the Removal of Uremic
Toxins with Medium Cut-Off and High Flux Dialyzers: A Randomized
Clinical Trial,'' Nephrol Dial Transplant, 2020, 35, pp. 328-335.
\50\ Kharbanda, K., et al., ``A Randomised Study Investigating
the Effect of Medium Cut-Off Haemodialysis on Markers of Vascular
Health Compared with On-Line Haemodiafiltration (MoDal Study)''.
Poster presented at the American Society of Nephrology, 2019.
\51\ Cozzolino, M., ``Effects of Mediun Cut-Off (Theranova)
Dialyzer on Hemodialysis Patients: A Prospective Cross-Over Study
[Abstract].'' J Am Soc Nephrol, 29. 2018, pp. 616-617.
\52\ Cantaluppi, V., et al., ``Removal of Large Middle Molecules
on Expanded Hemodialysis (HDx): A Multicentric Observantional Study
of 6 Months Follow-Up,'' J Am Soc Nephrol, 29, 2018, Poster TH-PO
357.
---------------------------------------------------------------------------
The applicant stated that studies have demonstrated stable albumin
levels,53 54 and a reduction of endothelial dysfunction and
Albumin and C-Reactive Protein (CRP) levels.55 56 57 In
addition, the applicant specifically described a single cohort study (N
= 41) showing a significant decrease in serum levels for urea,
[beta]2m, kappa and lambda free light chain at 3 months. At 3 and 6
months, there was a substantial decrease in serum CRP levels. Also,
blood assay demonstrated a decline in the production of IL-6.\58\ In a
40-participant cross-over prospective study, HDx with Theranova versus
high flux HD demonstrated both a higher reduction ratio and a decrease
in serum levels for lambda free light chains.59 60 61
---------------------------------------------------------------------------
\53\ Krishnasamy, R., et al., ``Trial evaluating mid cut-off
value membrane clearance of albumin and light chains in hemodialysis
patients (REMOVAL-HD): A safety and efficacy study,'' 2018, ASN 2018
Kidney Week Abstract TH-P0353.
\54\ Bunch, A., et al., ``Long-Term Effects of Expanded
Hemodialysis (HDx) on Clinical and Laboratory Parameters in a Large
Cohort of Dialysis Patients,'' 2018, ASN 2018 Kidney Week Abstract
FR-P0766.
\55\ Kharbanda, K., et al. 2019, Ibid.
\56\ Cantaluppi, V., et al., Ibid.
\57\ Cantaluppi, V., et al., ``Removal of Large- Middle
Molecules, Inhibition of Neutrophil Activation and Modulation of
Inflammation-Related Endothelial Dysfunction During Expanded
Hemodialysis (HDx),'' June 2019, Nephrol Dial Transplantation, 34,
Issue Supplement_1. gfz096.FO048, https://doi.org/10.1093/ndt/gfz096.FO048.
\58\ Cantaluppi, V., et al., Ibid.
\59\ Belmouaz, M., et al., ``Comparison of the Removal of Uremic
Toxins with Medium Cut-Off and High Flux Dialyzers: A Randomized
Clinical Trial,'' J Am Soc Nephrol, 2018, 29, Poster TH-PO348.
\60\ Belmouaz M, et al., ``Comparison of hemodialysis with
medium cut-off dialyzer and on-line hemodiafiltration on the removal
of small and middle-sized molecules,'' Clin Nephrol. Jan 2018, 89
(2018)(1):50-56.
\61\ Belmouaz, M., et al., ``Comparison of the Removal of Uremic
Toxins with Medium Cut-Off and High-Flux Dialyzers: A Randomized
Clinical Trial,'' Nephrol Dial Transplant, 2020, 35, pp. 328-335.
---------------------------------------------------------------------------
The applicant also noted that, in addition to IL-6, a well-
recognized biological marker of inflammation, there is also a broader
spectrum of uremic toxins associated with inflammation. The applicant
listed references for elevated levels of IL-6 leading to the following:
Hepcidin production with decreased iron availability; \62\ increased
endothelial damage; 63 64 increased CRP and decreased
albumin production.\65\ The applicant attested that with the use of
Theranova, patients present clinically with the opposite of each of the
above listed concerns, suggesting that chronic inflammation mediated by
IL-6 is reduced by treatment with Theranova. However, the applicant
submitted a reference that concluded that when compared to HD using
high flux membrane, HD using a medium cut-off (MCO) membrane may not be
inferior in albumin loss.\66\
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\62\ Caramelo, C., et al., ``Anemia: Pathophysiology,
pathogenesis, treatment, incognitate,'' Rev Esp Cardiol., 2007, 60,
pp. 848-60.
\63\ Kharbanda, K., et al., ``A randomized study investigating
the effect of medium cut off haemodialysis on markers of vascular
health compared with on-line hemodiafiltration (MoDal Study),''
2019, Presented at the Scientific Congress American Society of
Nephrology, 2019.
\64\ Cozzolino, C., et al., ``Effects of a medium cut-off
(Theranova) dialyzer on haemodialaysis patients: A prospective,
cross-over study,'' Clinical Kidney Journal, 2019, pp. 1-8. Doi
10.1093/ckj/sfz 155.
\65\ Gillerot, G., et al. ``Genetic and Clinical Factors
Influence the Baseline Permeability of the Peritoneal Membrane,''
Kidney Int. 2005, 67, pp. 2477-2487.
\66\ Jung, J.H., et al., ``A 6-Month Study on the Efficacy of
Hemodialysis Therapy Using Dialyzers with Mediun Cut-Off Membranes
in Asian Patients with End-Stage Renal Disease,'' Nephrol Dial
Transplant, June 2019. 84, Issue Supplement, gfz103.SP487, https://doi.org/10.1093/ndt/gfz103.SP487.
---------------------------------------------------------------------------
An additional prospective cross-over study (N=20) showed reduced
levels of IL-6 (6.4561.57 pg/m vs. 9.4862.15 pg/ml) in patients treated
with HDx.\67\ The applicant included findings from their U.S. IDE Study
in the TPNIES application. Although the IL-6 level was not a primary
endpoint of the US IDE Study (NCT03257410), nor was the study
sufficiently powered to statistically prove a change in IL-6 level, the
analysis of the US IDE Study (NCT032574 l 0), comparing Theranova to HD
with Elisio 17H, indicates a trend for difference in the pre- to post-
dialysis change in plasma IL-6 level, favoring Theranova (p=0.07 and
p=0.08 at 4 weeks and 24 weeks, respectively). The pre-dialysis level
of IL-6 shows a
[[Page 71447]]
positive trend for Theranova (p=0.2).\68\ The applicant stated that the
accumulation of IL-6 and lambda free light chains may contribute to the
chronic inflammation state of ESRD patients, increasing the risk of
chronic vascular disease and bacterial infections, respectively. The
applicant noted that the company is exploring options to assess the
impact of the reduction of these solutes via HDx in ongoing studies.
---------------------------------------------------------------------------
\67\ Cozzolino, C., et al., 2019, Ibid.
\68\ Weiner, D.E., et al., 2019 ``Efficacy and Safety of
Expanded Hemodialysis with the Theranova 400 Dialyzer: A Randomized
Control Trial,'' Abstract at ASN meeting, FR-P.O. 488.
---------------------------------------------------------------------------
Finally, the last category of improved clinical outcomes listed by
the applicant is enhanced quality of life across many different
measures, including, but not limited to, decreased recovery time,
decreased restless leg syndrome, and reduced pruritus. The applicant
stated that there was decreased symptom burden, citing a study of
patients who switched to HDx with Theranova in a multicenter
6-month observational study (N=992), who had statistically significant
improvements in measures of symptoms of kidney disease, effects of
kidney disease, and the burden of kidney disease.\69\ The applicant
also stated that there was improved reported mental health component
and statistically significant reduced Restless Leg Syndrome
diagnosis.70 71 72 73 Regarding improved physical
functioning and decreased pruritus, the applicant submitted an article
reporting the results of a randomized control trial (N=50), where
Theranova resulted in improved results for physical functioning and
physical role, and the mean scores of mean pruritus distribution and
frequency of scratching during sleep were significantly lower with
Theranova.\74\ In another study (single cohort, N=14), Theranova was
associated with statistically significant improvement in the physical
and mental component quality of life measures.\75\ The applicant also
submitted a case report of a HD patient with pruritus who responded to
the initiation of HDx using a MCO dialysis membrane.\76\
---------------------------------------------------------------------------
\69\ Alarcon, J.C., et al., ``Real World Evidence on the Impact
of Expanded Hemodialysis (HDx) Therapy on Patient
Reported Outcomes (PROs): COREXH Registry,'' Manuscript submitted
for Publication.
\70\ Alarcon, J.C., Manuscript submitted for publication, Ibid.
\71\ Gernone, G., et al., ``Mid-term Evaluation of the New
Medium Cut-Off Filter (Theranova) on Removal Efficiency and Quality
of Life,'' Nephrology Dialysis Transplantation, 2018, ERA EDTA
Scientific Congress Abstract, SP 489, doi.10.1093/ndt/gfy104.
\72\ Florens, N and Juillard, L., ``Expanded haemodialysis: News
from the field,'' Nephrol Dial Transplant, 2018, 33, pp. iii48-
iii52.
\73\ Bunch, A., et al. ``Long-Term Effects of Expanded
Hemodialysis (HDx) on Clinical and Laboratory Parameters
in a Large Cohort of Dialysis Patients'' ASN 2018 Kidney Week
Abstract FR-P0766.
\74\ Lim, J-H., et al. ``Novel medium cut off dialyzer improves
erythropoietin stimulating agent resistance in maintenance
hemodialysis: A randomized controlled trial,'' Submitted for
publication.
\75\ Gernone, G., et al., ``Mid-term Evaluation of the New
Medium Cut-Off Filter (Theranova) on Removal Efficiency and Quality
of Life,'' Nephrology Dialysis Transplantation, 2018, ERA EDTA
Scientific Congress Abstract, SP 489, doi.10.1093/ndt/gfy104.
\76\ Penny, J., et al. ``Pruritus: ls there a salty truth?''
Submitted for publication.
---------------------------------------------------------------------------
(2) CMS Analysis
(a) Summary of Submitted Evidence of the Theranova Dialyzer by CMS
CMS evaluated the claims and assertions made by Baxter with regard
to the articles submitted by them for the Theranova Dialyzer.
Patients with ESRD requiring dialysis are at high risk of mortality
due to the presence of uremic toxins.\77\ However, identifying the
putative uremic toxin (or toxins) has proven challenging; the European
Uremic Toxin Work Group previously identified at least 90 compounds
that are retained in patients undergoing dialysis.\78\ Current HD
technology relies on diffusion of toxins across a semi-permeable
membrane to allow for the removal of small-sized (<500 Da) water-
soluble molecules. While HD is generally able to remove water-soluble
small toxins (<500 Da), HD has limited ability to clear protein bound
solutes, those that are sequestered, or LMM solutes (>500
Da).79 80 81 The accumulation of uremic toxins with higher
molecular weight is associated with immunodeficiency, inflammation,
protein-wasting, and cardiovascular complications. For instance,
solutes such as Beta-2 microglobulin (11.8 kDa) 82 83 are
associated with increased mortality.\84\ Protein-bound solutes such as
indoxyl sulfate and p-cresol sulfate also appear to be poorly
dialyzable and are associated with the uremic syndrome and
cardiovascular disease.\85\
---------------------------------------------------------------------------
\77\ Boschetti-de-Fierro, A., et al., ``MCO Membranes: Enhanced
Selectivity in High-Flux Cases,'' www.nature.com/Scientific Reports,
[5:18448] DOI: 10.1038/srep18448.
\78\ Vanholder R, et al., European Uremic Toxin Work Group
(EUTox). Review on uremic toxins: Classification, concentration, and
interindividual variability. Kidney Int, 2003 May; 63 (5):1934-43.
\79\ Mac[iacute]as N., et al., ``Middle molecule elimination in
expanded haemodialysis: only convective transport'' Clin Kidney J.,
Dec. 2018, 15;12 (3), pp. 447-455.
\80\ Garc[iacute]a-Prieto, A., et al., ``Evaluation of the
efficacy of a medium cut-off dialyser and comparison with other
high-flux dialysers in conventional haemodialysis and online
haemodiafiltration.'' Clin Kidney J., Oct. 2018, 11(5):742-746.
\81\ Dobre, M., et al., ``Searching for Uremic Toxins'' Clinical
Journal of American Society of Nephrology. February 2013, 8 (2) 322-
327.
\82\ Belmouaz, M., et al. ``Comparison of the Removal of Uremic
Toxins with Medium Cut-Off and High-Flux Dialyzers: A Randomized
Clinical Trial,'' J Am Soc Nephrol, 29, 2018, Poster TH-PO348.
\83\ Belmouaz, M., et al., ``Comparison of hemodialysis with
medium cut-off dialyzer and on-line hemodiafiltration on the removal
of small and middle-sized molecules,''Clin Nephrol. Jan 2018, 89
(2018)(1):50-56.
\84\ Cordeiro, I., et al.'' High-Flux versus High-Retention-
Onset Membranes: In vivo Small and Middle Molecules Kinetics in
Convective Dialysis Modalities,'' Blood Purification, Jul 2019,
30:1-8.
\85\ Vanholder, R., et al., ``Protein-bound uremic solutes: The
forgotten toxin,'' Kidney International. Feb 2001, 59 (78), S266-
S270.
---------------------------------------------------------------------------
While dialysis can eliminate the immediate risk of death from
uremia, it does not replace functioning kidneys. Patients receiving
adequate dialysis do not completely recover from the uremic syndrome,
indicating that other uremic toxins may not fully be
cleared.86 87 Compared to the general population, patients
with ESRD who receive dialysis are at an increased risk of death,
commonly suffer from uremic symptoms such as itching, restless legs,
and malnutrition, and are at increased infection risk. Conventional
dialysis is effective in removing small molecules, but is less
effective in removing larger molecules, sequestered molecules, and
protein-bound toxins. Accumulation of middle molecule and protein-bound
toxins may contribute to adverse outcomes among patients receiving
dialysis \88\ and may explain why even a small amount of ``residual''
kidney function is strongly associated with increased survival
89 90 and higher quality of life.91 92
---------------------------------------------------------------------------
\86\ Tanaka H, Sirich TL, Plummer NS, Weaver DS, Meyer TW. An
Enlarged Profile of Uremic Solutes. PLoS One. 2015; 10(8): e0135657.
\87\ Sirich, T.L, et al., ``The Frequent Hemodialysis Network
Trial Group. Limited reduction in uremic solute concentrations with
increased dialysis frequency and time in the Frequent Hemodialysis
Network Daily Trial.Kidney Int, May 2017, 91 (5): 1186-
1192.doi:10,1016/j.kint.2016.11.002.Epub 2017 Jan 12.
\88\ Clark, W.R., et al. ``Uremic Toxins and their Relation to
Dialysis Efficacy.'' Blood Purif., 2019,48(4), pp.299-314. Epub 2019
Sep 27.
\89\ Obi, Y., et al., ``Residual Kidney Function Decline and
Mortality in Incident Hemodialysis Patients,'' J Am Soc Nephrol.,
Dec. 2016, 27(12), pp. 3758-3768. Epub 2016 May 11.
\90\ Wang, A.Y. and Lai, K.N. ``The importance of residual renal
function in dialysis patients.'' Kidney Int., May, 2006, 69(10), pp.
1726-32.
\91\ Dobre, M., et al., ``Searching for Uremic Toxins'' Clinical
Journal of American Society of Nephrology. February 2013, 8 (2) 322-
327.
\92\ Bargman, J.M., et al., ``CANUSA Peritoneal Dialysis Study
Group. Relative contribution of residual renal function and
peritoneal clearance to adequacy of dialysis: A reanalysis of the
CANUSA Study,'' J Am Soc Nephrol., Oct. 2001, 12(10), pp. 2158-62.
---------------------------------------------------------------------------
[[Page 71448]]
Innovations in dialysis care include the development of
technologies that might remove potential toxins resistant to clearance
using current devices. One technology called HDF removes larger
molecules by combining convection with diffusion. Convection relies on
pressure gradients across the dialyzer membrane, leading to more
effective removal of middle to large molecules from the blood.
Substantial fluid losses with convection, must be replaced via infusion
of typically ultrapure water and dialysis fluids.\93\ This newer
technology was later supplemented by online HDF, which enables dialysis
providers with ultrapure water systems to generate replacement fluid
solution. Although HDF has been associated with improvements to
survival in retrospective, observational studies,\94\ randomized
controlled trials have been less consistent.95 96 97 98
Online HDF has become more widely used in Europe, but it not commonly
used in the U.S. due to costs associated with the need for ultrapure
water.\99\
---------------------------------------------------------------------------
\93\ Zweigart, C., et al., ``Medium cut-off membranes--closer to
the natural kidney removal function,'' Int. J Artif Organs, 2017,
40(7), pp. 328-334. DOI: 10.5301/uijao.5000603.
\94\ Garc[iacute]a-Prieto, A., et al., ``Evaluation of the
efficacy of a medium cut-off dialyser and comparison with other
high-flux dialysers in conventional haemodialysis and online
haemodiafiltration.'' Clin Kidney J., Oct. 2018, 11(5):742-746.
\95\ Grooteman, M.P., et al.; ``CONTRAST Investigators. Effect
of online hemodiafiltration on all-cause mortality and
cardiovascular outcomes,'' J Am Soc Nephrol., June 2012, 23(6),
pp.1087-1096.
\96\ Maduell, F., et al., ``ESHOL Study Group. High-efficiency
postdilution online hemodiafiltration reduces all-cause mortality in
hemodialysis patients'' J Am Soc Nephrol., Feb 2013, 24(3), pp. 487-
497. doi: 10.1681/ASN.2012080875. Epub 2013 Feb 14. Erratum in: J Am
Soc Nephrol. 2014 May; 25(5):1130.
\97\ Morena, M., et al., ``FRENCHIE Study Investigators.
Treatment tolerance and patient-reported outcomes favor online
hemodiafiltration compared to high-flux hemodialysis in the
elderly,'' Kidney Int., June 2017, 91(6):1495-1509.
\98\ Ok, E., et al., ``Online Haemodiafiltration Study.
Mortality and cardiovascular events in online haemodiafiltration
(OL-HDF) compared with high-flux dialysis: Results from the Turkish
OL-HDF Study,'' Nephrol Dial Transplant, Jan 2013, 28(1), pp. 192-
202.
\99\ Zweigart, C., 2017. Ibid.
---------------------------------------------------------------------------
Newer dialysis membranes aimed at improved middle molecule
clearance are an active area of research.\100\ High flux membranes with
larger pore sizes can remove larger molecules, including inflammatory
cytokines and immunoglobulin light chains but at the cost of albumin
loss.\101\ This is significant because low albumin levels are
associated with higher mortality rates in patients with ESRD.\102\
---------------------------------------------------------------------------
\100\ Zweigart, C., 2017. Ibid.
\101\ Krause, B., et al., ``Highly selective membranes for Blood
purification,'' Gambro Dialysatoren GmbH, Hechingen/Germany,
Presentation abstract March 26, 2015.
\102\ Zweigart, C., et al., ``Medium cut-off membranes--closer
to the natural kidney removal function,'' Int. J Artif Organs, 2017,
40(7), pp. 328-334. DOI: 10.5301/uijao.5000603.
---------------------------------------------------------------------------
In addition to potential risks associated with efforts to remove
larger molecules during dialysis (such as the loss of albumin and
immunoglobulins), benefits of improved middle molecule clearance have
not been demonstrated in large, randomized-controlled trials. In 2002,
a large multicenter randomized controlled trial (HEMO) compared
patients receiving maintenance dialysis via high-flux versus low-flux
dialyzer membranes. There was no difference in the primary endpoint
(death from all causes) or in secondary endpoints (hospitalizations for
cardiac cause or death, and hospitalizations for infection or death)
between the two groups. In rhabdomyolysis, myoglobin clearance has been
demonstrated with large pore dialyzers and HDF, but clinical benefit
remains largely unproven.\103\ Similarly, HDF has historically garnered
much attention in sepsis due to its ability to efficiently clear
inflammatory cytokines like IL-6, but numerous studies have shown no
mortality benefit in sepsis with possible downsides in the form of
shortened filter life.\104\ No trials have examined the potential
benefit of removing larger quantities of middle molecules than is
typically achieved from high-flux membranes.
---------------------------------------------------------------------------
\103\ Amyot, S.L, et al., ``Myoglobin clearance and removal
during continuous venovenous hemofiltration,'' Intensive Care
Medicine, 1999 (25), PP. 1169-1172.
\104\ Friedrich J.O., et al., ``Hemofiltration compared to
hemodialysis for acute kidney injury: Systematic review and meta-
analysis,'' Critical Care, Aug 6, 2012 (16): R146.
---------------------------------------------------------------------------
The clearance of protein-bound and sequestered molecules remains a
technical challenge and may explain why HDF and other technologies
aimed at improved middle-molecule clearance have not significantly
changed clinical outcomes.\105\ Theoretically, intensive, long-duration
dialysis should improve the clearance of these difficult to remove
substances.\106\ In practice, large, randomized trials have not shown
any difference in the level of substances like indoxyl sulfate and p-
cresol sulfate.107 108 Improving clearance of these
molecules could improve clinical outcomes in patients without residual
renal function and would be a boon to the dismal outcomes faced by
patients undergoing dialysis.
---------------------------------------------------------------------------
\105\ Vanholder, R., et al., ``Protein-bound uremic solutes: The
forgotten toxin,'' Kidney International. Feb 2001, 59 (78), S266-
S270.
\106\ Sirich, T.L, et al., ``The Frequent Hemodialysis Network
Trial Group. Limited reduction in uremic solute concentrations with
increased dialysis frequency and time in the Frequent Hemodialysis
Network Daily Trial.'' Kidney Int, May 2017, 91 (5): 1186-
1192.doi:10,1016/j.kint.2016.11.002. Epub 2017 Jan 12.
\107\ Kalim, S., et al., ``Extended Duration Nocturnal
Hemodialysis and Changes in Plasma Metabolite Profiles,'' Clin J Am
Soc Nephrol, Mar 7, 2018, 13(3), pp.436-444.
\108\ Sirich, T.L., et al., ``The Frequent Hemodialysis Network
Trial Group. Limited reduction in uremic solute concentrations with
increased dialysis frequency and time in the Frequent Hemodialysis
Network Daily Trial.'' Kidney Int, May 2017, 91 (5): 1186-
1192.doi:10,1016/j.kint.2016.11.002.Epub 2017 Jan 12.
---------------------------------------------------------------------------
(b) Assessment of Substantial Similarity to Currently Available
Equipment or Supplies
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42171),
with regard to the criterion as to whether Theranova uses the same or a
similar mechanism of action to achieve a therapeutic outcome, CMS
believes that this product slightly modifies existing HD technology. A
MCO membrane was designed for use in HD (but not HFD or HDF) modes.
These modifications include the removal of larger molecules and
increased convection compared to existing HD. As to whether the new use
of the technology involves treatment of the same or similar type of
disease and the same or similar patient population, CMS noted that
Theranova treats similar patients, specifically, patients with ESRD.
(c) Preliminary Assessment of SCI (see Sec. Sec. 413.236(b)(5) and
412.87(b)(1)) by CMS
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42171),
with regard to the SCI criteria, we noted that Theranova is a treatment
modality and does not offer the ability to diagnose a medical condition
as discussed in Sec. 412.87(b)(1)(ii)(B). We noted that Theranova does
not offer a treatment option for a patient population unresponsive to,
or ineligible for, currently available treatments. The patients who are
eligible for this treatment would also be eligible for HD, HDF, or
online HDF. CMS carefully analyzed the evidence submitted as to whether
Theranova significantly improves the treatment and clinical outcomes of
Medicare beneficiaries relative to renal dialysis services previously
available as demonstrated by the totality of the circumstances. Below,
we have summarized the clinical evidence for claims of SCI, along with
the additional references submitted by
[[Page 71449]]
the applicant following the publication of the proposed rule.
There is significant literature on the topic of MCO membranes and
high retention onset dialyzers. To evaluate this specific technology,
CMS performed a literature search for published articles using the
Theranova dialyzer and reviewed all articles submitted by the
applicant. They are categorized according to an estimated degree of
peer review. Summaries are also provided beneath each citation with
disclosures also noted. On the studies with more clinically significant
measures, there is more annotation added.
(d) Clinical Evidence for Claims of SCI
Below is a list of references for SCI based on evidence beginning
with the highest form of evidence, peer-reviewed journals. We summarize
the studies grouped by listings with the most rigorous review to those
with the least rigorous review, specifically, those published in Peer-
Reviewed Journals, then Review Articles and Editorials, to Posters and
Abstracts, including submitted manuscripts, and ending with Incomplete
Manuscripts.
Published in Peer-Reviewed Journals
Belmouaz M, et al.\109\ is a retrospective analysis of 10
patients treated with online HDF and then switched to MCO dialysis over
1 year. The authors evaluated three dialysis sessions per patient and
noted that there were not significant differences between the two
methods in clearance of urea, creatinine, [beta]2-microglobulin, and
myoglobin. The authors received funding support by Baxter.
---------------------------------------------------------------------------
\109\ Belmouaz M, Diolez J, Bauwens M, Duthe F, Ecotiere L,
Desport E, Bridoux F. Comparison of hemodialysis with medium cut-off
dialyzer and online HDF on the removal of small and middle-sized
molecules. Clin Nephrol. 2018 Jan;89 (2018)(1):50-56.
---------------------------------------------------------------------------
Belmouaz M, et al.\110\ is a cross-over prospective study
performed in France. It included 40 patients randomly assigned to
receive either 3 months of medium cut-off hemodialysis (MCO-HD)
followed by 3 months of high-flux HD (HF-HD), or vice versa. The
primary endpoint was myoglobin reduction ratio (RR) after 3 months of
MCO-HD. Secondary endpoints were the effect of MCO-HD on other middle-
weight toxins and protein-bound toxins, and on parameters of nutrition,
inflammation, anemia, and oxidative stress. Compared with HF-HD, MCO-HD
provides higher myoglobin and other middle molecules RR and is
associated with moderate hypoalbuminemia. The authors noted that the
potential benefits of this strategy on long-term clinical outcomes
deserve further evaluation. This study was supported by Baxter.
---------------------------------------------------------------------------
\110\ Belmouaz M, Bauwens M, Hauet T, Bossard V, Jamet P, Joly
F,Chikhi E, Joffrion S, Gand E, Bridoux F. Comparison of the removal
of uremic toxins with medium cut-off and high-flux dialysers: A
randomized clinical trial. Nephrol Dial Transplant. 2020:35:328-335.
---------------------------------------------------------------------------
Boschetti-de-Fierro A, et al.\111\ is a report on in vitro
testing of four prototypes for MCO membranes as compared to high-flux,
high cut-off membranes, and a rat glomerular membrane model. Sieving
characteristics were evaluated before and after blood contact. Authors
noted that increasing pore sizes often results in loss of albumin but
controlling the pore size diameter and variance results in enhanced
selection for middle sized proteins. A protein layer also forms along
the synthetic membrane, further restricting the loss of albumin. All
authors were employed by Gambro Dialysatoren, which is part of Baxter
International Inc.
---------------------------------------------------------------------------
\111\ Boschetti-de-Fierro A, Voigt M, Storr M, Krause B. MCO
Membranes: Enhanced Selectivity in High-Flux Class. Sci. Rep. 5,
18448; doi: 10.1038/srep18448 (2015).
---------------------------------------------------------------------------
Cordeiro ISF, et al.\112\ is a prospective crossover trial
of 16 patients undergoing HF-HD and switched to online
hemodiafiltration (olHDF) and high retention onset (HRO) HD for 4
weeks. Molarity concentrations were lowered to greater extent in olHDF
and HRO-HD.
---------------------------------------------------------------------------
\112\ Cordeiro ISF, Cordeiro L, Wagner CS, et al. High-Flux
versus High-Retention-Onset Membranes: In vivo Small and Middle
Molecules Kinetics in Convective Dialysis Modalities. Blood
Purification. 2019 Jul 30:1-8.
---------------------------------------------------------------------------
Cozzolino M, et al.\113\ is an Italian prospective, open-
label, cross-over study in 20 patients which compared the Theranova 400
HDx membrane to conventional HD, showing a non-significant
trend of lower IL-1B and IL-6 levels with HDx. Although
infections were statistically more likely in the HD population, the
definition of infection was vague, and most of them appeared to be with
respiratory tract and fever of unknown origin. Because culture evidence
was not required, the risk of bias in the categorization of infection
is high (for example, upper respiratory tract infections
inappropriately treated with antibiotics). The HDx had a
non-significant trend towards fewer hospitalizations. Potential risks
from HDx include an allergic reaction to polysulphone and
lower serum albumin levels. The small sample size, single center
disease, and short follow-up mean that the results, while promising,
require substantial corroborating evidence in the form of a multi-
center, blinded randomized controlled trial. The study was supported by
an unrestricted grant from Baxter.
---------------------------------------------------------------------------
\113\ Cozzolino M. Magagnoli L, Ciceri P, Conte F, Galassi A.
Effects of a medium cut-off (Theranova) dialyser on haemodialysis
patients: A prospective, cross-over study. Clinical Kidney Journal,
2019, 1-8.
---------------------------------------------------------------------------
Garc[iacute]a-Prieto A, et al.\114\ is a crossover study
of 18 HD patients who received online HDF for one week, then
conventional HD the second week, and the use of a MCO membrane for the
third week. Authors collected RR and albumin losses and noted that MCO
membranes were similar in efficacy as olHDF. Both online and MCO
methods had greater reduction of middle molecules. The study was
conducted in Spain and authors did not declare any conflicts of
interest.
---------------------------------------------------------------------------
\114\ Garc[iacute]a-Prieto A,Vega A, Linares T, Abad S,
Mac[iacute]as N, Aragoncillo I, Torres E, Hern[aacute]ndez A,
Barbieri D, Lu[ntilde]o J. Evaluation of the efficacy of a medium
cut-off dialyser and comparison with other high-flux dialysers in
conventional haemodialysis and online haemodiafiltration. Clin
Kidney J. 2018 Oct;11(5):742-746.
---------------------------------------------------------------------------
Gillerot G, et al.\115\ is a research paper submitted by
the applicant in which the investigators tested the role of IL-6 gene
expression on 156 PD patients and its putative role in inflammation.
They tested a homogeneous population of 152 from Belgium and the North
of France. The investigators stated their findings substantiate the
critical role played by IL-6 in the peritoneal membrane and support the
hypothesis that underlying mechanisms (regulation of IL-6 gene
expression) could regulate systemic and local inflammation in
association with comorbidity and uremia. However, they noted that
confirmation of this hypothesis will require well-designed, adequately
powered studies, in different populations and different settings. This
study was focused on PD and the Theranova membrane is used in HD, so
extrapolation of the IL-6 data to that modality is questionable. These
studies were supported by Baxter Belgium.
---------------------------------------------------------------------------
\115\ Gillerot G, Goffin E, Michel C, Evenepoel,P, Van Biesen W,
TIntillier M, Stenvinkel P, Heimburger O, Lindholm B, Nordfors L,
Robert A, Devuyst O. Genetic and Clinical Factors Influence the
Baseline Permeability of the Peritoneal Membrane. Kid Int. 2005; 76:
2477-2487.
---------------------------------------------------------------------------
Lorenzin A, et al.\116\ is a performed mathematical
modeling, and through it, the authors calculated that the HRO membranes
allowed for internal filtration and high convective volumes.
---------------------------------------------------------------------------
\116\ Lorenzin A, Neri M, Clark WR, et al. Ronco C (ed):
Expanded Hemodialysis--Innovative Clinical Approach in Dialysis.
Contrib Nephrol. Basel, Karger, 2017, vol 191, pp 127-141.
---------------------------------------------------------------------------
Lorenzin A, et al.\117\ is a paper in which the authors
used semi-empirical
[[Page 71450]]
methods to estimate convective volumes for Theranova 400 and Theranova
500 under standard 4-hour HD conditions. Using their ``most complex''
mathematical model that incorporated gradients and blood changes along
the dialyzer length, authors estimated internal filtration rates of
300ml/min and 400 ml/min for both hemodialyzers.
---------------------------------------------------------------------------
\117\ Lorenzin A, Neri M, Clark WR, Garzotto F, Brendolan A,
Nalesso F, Marchionna N, Zanella M, Sartori M, Fiore GB, Ronco C.
Modeling of Internal Filtration in Theranova Hemodialyzers. Contrib
Nephrol. 2017;191:127-141.
---------------------------------------------------------------------------
Lorenzin A, et al.\118\ is an in vitro test of Theranova
400 and 500 at zero net ultrafiltration. Albumin macro-aggregates were
labeled with Technetium-99m (99mTc) to assess cross filtration through
the length of the filter. Using a gamma camera, local cross filtration
and internal filtration were calculated. Authors noted that the MCO
membrane allowed for clearance of medium-large molecular weight solutes
(~11 KDa) and retention of more albumin without requiring special
equipment. The authors had no disclosures.
---------------------------------------------------------------------------
\118\ Lorenzin A, Neri M, Lupi A, Todesco M, Santimaria M,
Alghisi A, Brendolan A, Ronco C. Quantification of Internal
Filtration in Hollow Fiber Hemodialyzers with Medium Cut-Off
Membrane. Blood Purif. 2018;46(3):196-204.
---------------------------------------------------------------------------
Mac[iacute]as N, et al.\119\ is a prospective study of 14
patients on maintenance olHDF. Patients underwent a midweek dialysis
session with the Theranova-500 machine under their usual dialysis
conditions. Researchers measured the presence of uremic toxins at
various molecular weights pre-dialysis, and post-dialysis. Pressures at
the inlet and outlet of dialyzer compartments were also measured to
estimate direct filtration and back filtration volumes. Researchers
used semi-empirical methods to determine that diffusive clearance was
more prominent than convective transport (which requires higher
volumes). No funding or financial contribution was supplied. Membranes,
monitors, and laboratory tests were those routinely used in the
dialysis unit.
---------------------------------------------------------------------------
\119\ Mac[iacute]as N, Vega A, Abad S, Aragoncillo I,
Garc[iacute]a-Prieto AM, Santos A, Torres E, Lu[ntilde]o J. Middle
molecule elimination in expanded haemodialysis: Only convective
transport? Clin Kidney J. 2018 Dec 15;12(3):447-455.
---------------------------------------------------------------------------
Reque J, et al.\120\ is a prospective study of eight
patients who either underwent olHDF or underwent HDx with Theranova 500
for 24 sessions. After a 1-week washout with HF-HD, all patients
crossed over to the alternative method. Laboratory values were obtained
before and after each session, specifically of urea, creatinine,
phosphorous, beta2-microglobulin, myoglobin, and prolactin. The urea
and beta2-microglobulin reduction ratios were the same but HDx
demonstrated higher RR of myoglobin (60 percent compared to 35 percent
in HDF). The authors had no disclosures.
---------------------------------------------------------------------------
\120\ Reque J, P[eacute]rez Alba A, Panizo N, S[aacute]nchez-
Canel JJ, Pascual MJ, Pons Prades R. Is Expanded Hemodialysis an
Option to Online Hemodiafiltration for Small- and Middle-Sized
Molecules Clearance? Blood Purif. 2019;47(1-3):126-131.
---------------------------------------------------------------------------
Review Articles/Editorials
This is the second grouping in the list of evidence for SCI from
most compelling to least compelling. We summarize the studies the
applicant provided as follows:
Caramelo C, et al.\121\ is an article that reviews the
clinical and pathophysiological characteristics of anemia in this
context. Particular emphasis has been placed on cellular and molecular
regulatory mechanisms, and their implications for treatment. The
applicant referenced the review article's language on hepcidin, because
it is considered the homeostatic regulator of iron in its intestinal
absorption, its recycling by macrophages and its mobilization from
liver stores. Its transcription is markedly induced in inflammatory
processes, especially by cytokines like IL-6.
---------------------------------------------------------------------------
\121\ Caramelo C, Just S, Gil P. Anemia in Heart Failure:
Pathophysiology, Pathogenesis, Treatment and Incognitae. Rev Esp
Cardiol. 2007; 60(8): 848-860.
---------------------------------------------------------------------------
Florens N, et al.\122\ is a review article included in
Baxter's application. It summarizes feedback from the first routine use
of HDx therapy under real-life conditions in European
facilities. The authors reported no adverse event after 5,191
HDx treatments, and opined that patients suffering from
itching, restless legs syndrome, persistent asthenia or malnourishment
could benefit from HDx therapy. While they discussed the
promising applications in which HDx could be valuable
(myeloma, rhabdomyolysis or cardiovascular diseases), the message is
mitigated by reminding why and how prudence should be taken in the
design of future HDx studies, particularly with poor de-
aeration of the filter in automatic mode and manual intervention
required to prime the membrane. Some patients required more anti-
coagulation using the Theranova membrane. In addition, patients were
aware of the use of the Theranova device because of lack of logo
removal. The authors noted that although promising, the clinical
evidence is incomplete. Both authors received a grant Investigator
Initiated research for the evaluation of HDx in clinical
practice and one performed occasional lectures for Baxter.
---------------------------------------------------------------------------
\122\ Florens N, Juillard L. ``Expanded Haemodialysis: News from
the Field,'' Nephrol Dial Transplant, 2018; 33: iii48-iii52.
---------------------------------------------------------------------------
Wolley M, et al.\123\ is a clinical review article that
recognizes that advances in dialysis technology do not always improve
patient outcomes, and it reviews the clinical relevance regarding the
removal of LMMs, particularly those involved in chronic inflammation,
atherosclerosis, structural heart disease, and secondary
immunodeficiency. The authors noted that single-center safety and
efficacy studies have identified that use of these membranes in
maintenance dialysis populations is associated with limited loss of
albumin and increased clearance of large middle molecules. When the
review was published in 2018, the authors noted that larger, robustly
conducted, multicenter studies were evaluating these findings. They
concluded that after completion of these safety and efficacy studies,
the perceived clinical benefits of providing clearance of LMMs must be
assessed in rigorously conducted, randomized clinical studies. One of
the authors received research funding from Baxter and participated on
advisory boards and speaker bureaus for Baxter.
---------------------------------------------------------------------------
\123\ Wolley M, Jardin M, Hutchinson, C. ``Exploring the
Clinical Relevance of Providing Increased Removal of Large Middle
Molecules,'' Cli, J Am Soc Nephrol 2018;13: 805-813.
---------------------------------------------------------------------------
Zweigart C, et al.\124\ is an editorial review submitted
by the applicant on MCOs, which was generally favorable with regard to
high quality and good performance. All of the authors are employees of
the Gambro Dialysatoren GmbH, Hechingen (Germany) or Gambro Lundia AG.
Gambro AB (including all direct and indirect subsidiaries) is now part
of Baxter International Inc.
---------------------------------------------------------------------------
\124\ Zweigart C, Boschetti-de-Fierro A, Hulko M, Nilsson L-G,
Beck W, Storr M, Krause B. Medium Cut-Off Membranes--Closer to the
Natural Kidney Removal Function. Int j Artif Organs. 2017; 40(7);
328-334.
---------------------------------------------------------------------------
Posters and Abstracts
This is the third grouping in the list of evidence for SCI from
most compelling to least compelling. We summarize the poster sessions
and abstracts, including submitted manuscripts which the applicant
provided as follows:
Belmouaz M, et al.\125\ is a randomized open label
crossover study in which 46 patients underwent MCO-HD and HF-H). MCO-HD
had higher medium RRs of myoglobin and beta-2 microglobulin and
increased albumin
[[Page 71451]]
loss compared to HF-HD. The authors received funding support by Baxter.
---------------------------------------------------------------------------
\125\ Belmouaz M, Bauwens M, Bouteau I, Thierry A, Ecotiere L,
Bridoux F. Comparison of the Removal of Uremic Toxins with Medium
Cut-Off and High-Flux Dialyzers: A Randomized Clinical Trial. TH-
PO348, 2018.
---------------------------------------------------------------------------
Boschetti-de-Fierro A, et al.\126\ is a poster in which
the investigators assessed the performance of the MCO devices in
simulated HD and HDF treatments. The applicant's submission of the
material presented in this poster was incomplete regarding date and
location of the poster session. This study was funded by Baxter.
---------------------------------------------------------------------------
\126\ Boschetti-de-Fierro A, Voigt M, Huiko M, Krause B. MCO
Dialyzers: Enhanced Selectivity in High-Flux. Gambro Dialysatoren
GmbH, Research and Development, Hechingen, Germany, Poster No. SAT-
481 (Baxter).
---------------------------------------------------------------------------
Kharbanda K, et al.\127\ is a randomized study funded by
Baxter Healthcare and the National Institute for Health Research which
compared HDF with HDx and suggested an improved recovery
time with HDx. The study showed lower levels of endothelial
cell microvesicles in HDx. However, the study did not have
comparable baseline recovery times (for example, 41 percent with < 2
hours with HDx versus 35 percent with HDF) and the authors
performed a per-protocol rather than an intention to treat analysis,
exacerbating bias in the study.
---------------------------------------------------------------------------
\127\ Kharbanda K, Herring A, Wilkinson F, Alexander Y, Mitra S.
A Randomised Study Investigating the Effect of Medium Cut-Off
Haemodialysis on Markers of Vascular Health Compared with On-Line
Haemodiafiltration (MoDal Study). Manchester Metropolitan
University. 2019
---------------------------------------------------------------------------
Kirsch AH, et al.\128\ is a poster that summarizes a two
pilot randomized controlled prospective open-label crossover studies,
in which 39 HD patients underwent treatment with MCO membranes, a HFD,
and HDF. The authors concluded that MCO-HD removed middle molecules
(free light chain) more effectively than high-flux and high-volume HDF.
However, the authors noted that there are several limitations of the
study. First, compared to the control dialyzers used, the experimental
membranes used were different, less tight membranes. Second, the study
design was confined to only one single treatment with each dialyzer for
each patient and the study did not examine the long term effects of
such membranes on serum levels of middle molecules and albumin. The
authors conclude that future studies should assess whether the
performance of MCO-HD improves clinical outcomes. The study was
conducted in Germany and funded by Baxter, and the conflicts of
interest statement in the paper lists three of the ten authors as
employees of Baxter.
---------------------------------------------------------------------------
\128\ Kirsch AH, Lyko R, Nilsson LG., et al. Performance of
hemodialysis with novel medium cut-off dialyzers. Nephrol Dial
Transplant 2017; 32: 165-172.
---------------------------------------------------------------------------
Bunch, A, et al.\129\ is a multicenter prospective study
in prevalent HD patients, older than 18 years old; enrolled from
September 1 to November 30, 2017, and converted to HDx using
Theranova 400. The investigators found an initial small decrease in
serum albumin level, which stabilized and was within the normal range
per their Bogata, Columbia laboratory references. Although Table 1 and
Table 2 were cited in the abstract, both were missing. Dialysis
performance adequacy (Kt/V) was achieved. No clinically significant
differences in laboratory values at 6 months with November 30 of 2017,
and converted to HDx using Theranova 400 (3 sessions per
week, 4 hours per session, same heparin dose). The lead author has been
listed as the medical director of Renal Therapy Services, owned by
Baxter, in Bogota, Columbia.
---------------------------------------------------------------------------
\129\ Bunch A., Nilsson L, Vesga J, Ardila F, Zuniga E, Alarcon
J. ``Long-Term Effects of Expanded Hemodialysis (HDx) on
Clinical and Laboratory Parameters in a Large Cohort of Dialysis
Patients'' ASN 2018 Kidney Week Abstract FR-P0766.
---------------------------------------------------------------------------
Cantaluppi V, et al.\130\ is a multicentric observational
study of 6 months follow-up. American Society of Nephrology (ASN) Week,
2018, Abstract, Thu-PO357. This multicenter (Italy) study evaluated 41
HD patients comparing standard HD molecular levels versus
HDx and found a significant decrease in urea, beta-2-
microglobulin, and free light chains. The study did not evaluate
clinical outcomes.
---------------------------------------------------------------------------
\130\ Cantaluppi V, Donati G, Lacquaniti A, Cosa F, Gernone G,
Marengo M, Teatii U Removal of large-middle molecules on expanded
hemodialysis (HDx): A multicentric observational study of 6 months
follow-up. ASN Week, 2018, Abstract, Thu-PO357.
---------------------------------------------------------------------------
Cantaluppi V, et al.\131\ is an abstract submitted by the
applicant reporting on a study where 41 HD patients (age 67,613,4) in standard high flux HD were shifted to HDx using
Theranova 400 (1.7 m2, Baxter). Each patient was studied at baseline HD
(T0), 3 months (T3) and 6 months (T6) after HDx, after which
they were evaluated the following pre-dialysis parameters: Urea,
Creatinine, Phosphate, Beta2-microglobulin, Myoglobin, Free Light
Chains, Hemoglobin, Albumin and CRP. For in vitro studies, T0 and T6
plasma were used to evaluate neutrophil activation (ROS generation,
apoptosis, adhesion) and endothelial dysfunction/senescence. The
investigators concluded that HDx therapy provided high
removal of different LMMs, leading to a significant reduction of
molecules involved in uremia-associated inflammation and organ
dysfunction (in particular Free Light Chains kappa and lambda). Long-
term studies with a larger sample size are needed to evaluate the
clinical impact of HDx.
---------------------------------------------------------------------------
\131\ Cantaluppi V, Marengo M, Allessandro Q, Berto M, Donati G,
Antonio L, Cosa F, Gernone G, Teatini U, Migliori M, Panichi V.
Removal of Large-Middle Molecules, Inhibition of Neutrophil
Activation and Modulation of Inflammation-Related Endothelial
Dysfunction During Expanded Hemodialysis (HDx), Nephrol Dial
Transplantation, June 2019, 34, Issue Supplement_1. gfz096.FO048,
https://doi.org/10.1093/ndt/gfz096.FO048.
---------------------------------------------------------------------------
Cozzolino, M.\132\ is an abstract of a pilot study with 20
prevalent HD patients studied for six months in two dialysis
treatments: One MCO (Theranova) dialyzer and one high-flux dialyzer.
The author claimed the pilot study shows the Theranova dialyzer has a
good tolerance profile and reduces the cumulative number of infections
in HD patients. The study was funded by an unrestricted grant from
Baxter.
---------------------------------------------------------------------------
\132\ ``Effects of Medium Cut-Off (Theranova) Dialyzer on
Hemodialysis Patients: A Prospective Cross-Over Study [Abstract].''
J Am Soc Nephrol, 29. 2018, pp. 616-617.
---------------------------------------------------------------------------
Gallo M.\133\ is a single cohort study in Italy which
compared HDx to baseline HD treatments in 15 patients and showed no
difference in uremic toxins, though there was a change in ESA dose.
---------------------------------------------------------------------------
\133\ Gallo M. The Real-Life study on expanded hemodialysis
(HDx): 9 months experience of a single hemodialysis unit.
Nephrol Dial Transplantation and Transplantation, June 2019, ERA
EDTA Abstract. FP539.
---------------------------------------------------------------------------
Gernone G, et al.\134\ is a single cohort study in Italy
which investigated 14 patients using Theranova with baseline HD and
showed no statistical change in outcomes, clearance, or quality of
life.
---------------------------------------------------------------------------
\134\ Gernone G, Montemurro M, Capurso D, Colucci G., Dell'Anna
D, Deltomaso F, LaRosa R, La Volpe M, Partipilo F., Pepe V, Ripa E.
Mid-term evaluation of the new medium cut-off filter (Theranova) on
removal efficiency and quality of life. Nephrology and
Transplantation, Abstract. SP489.
---------------------------------------------------------------------------
Jung JH, et al.\135\ is a study that was questionably
designed since they chose young, well-nourished patients at the start
of the study, which made it difficult to analyze the comparison of the
two groups at various points in time. This observational study of 42
Korean patients comparing HD to HDx showed no comparative
difference between the two groups in any markers.
---------------------------------------------------------------------------
\135\ Jung JH, Song JH, Ahn S-H. A 6-month study on the efficacy
of hemodialysis therapy using dialyzers with medium cut-off
membranes in Asian patients with end-stage renal disease. Nephrol
Dial Transplantation, June 2019, 84 Issues Supplement-1,
gfz103.SP487, https://doi.org/10.1093/ndt/gfz103.SP487.
---------------------------------------------------------------------------
Krishnasamy R, and Hutchinson C.\136\ is an abstract
submitted by the
[[Page 71452]]
applicant from this single-arm, multi-center study with 92 Australian/
New Zealand patients. The study examined the safety and efficacy and
patient-centered outcomes of MCO dialyzer use in chronic HD patients
over 6 months. The investigators concluded that there was a small but
acceptable reduction in serum albumin in regular HD using the MCO
dialyzer. However, the figures were not included in the abstract sent
by the applicant for review by CMS. The investigator noted that future
randomized controlled trials should assess the impact of the MCO
dialyzer on clinical and long-term patient-centered outcomes.
---------------------------------------------------------------------------
\136\ Krishnasamy R, and Hutchinson C. Trial Evaluating Mid Cut-
Off Value Membrane Clearance of Albumin and Light Chains in
Hemodialysis Patients (REMOVAL-HD): A Safety and Efficacy Study.
Oct. 2018 ASN Scientific Congress Abstract TH-PO363.
---------------------------------------------------------------------------
Krause B, et al.\137\ is a description of membrane
manufacturing utilizing hollow fiber technology.
---------------------------------------------------------------------------
\137\ Krause B, Boschetti-de-Fierro A, Dutczak S, Zweigart C.
Highly Selective Membranes for Blood Purification. Jahrestreffen der
Fachgruppen ``Fluidverfahrenstechnik'' und ``Membrantechnik'' 26 Mar
2015.
---------------------------------------------------------------------------
Weiner DE, et al.\138\ included two items for this U.S.
based study at a large academic medical center. The first was the ASN
2019 Scientific Congress abstract and the second was a copy of the
poster session at the ASN annual meeting in 2019. This open label
randomized controlled trial in 172 patients who underwent 24 weeks of
Theranova 400 MCO dialyzer compared to a high flux dialyzer showed a
potential decrease in hospitalizations with HDX, but the
authors did not produce statistical tests of significance. While this
was a randomized control trial (RCT), covariates were not well-
balanced, including substantially more patients with diabetes in the
conventional HD arm. The study showed lower lambda free light chains in
HDX compared to high flux HD. Albumin levels were maintained
in both. The presenters concluded that larger studies of longer
duration are needed to assess if better larger molecule clearance is
associated with improvements in clinical outcomes, including vascular
disease, quality of life, and mortality. The authors received
commercial support from Baxter.
---------------------------------------------------------------------------
\138\ Weiner DE, Falzon L, Beck W, Xiao M, Tran H, Bernardo AA.
Efficacy and Safety of Expanded Hemodialysis Enabled by a Medium
Cut-Off Membrane: A Randomized Control Trial. FR-PO 488, ASN 2019.
---------------------------------------------------------------------------
Alarcon J, et al.\139\ describes a study over 12 months in
which 992 patients from 12 renal clinics were followed after switching
from high-flux HD to HDX. The authors assessed many patient
quality of life outcomes using the short form kidney disease quality of
life (KDQoL-SF36), dialysis symptom index (DSI) and prevalence of
restless leg syndrome (RLS) and found modest reductions in DSI severity
scores, increases in KDQoL-SF36 scores in some domains (but unchanged
in the mental and physical domains), and reduced prevalence of restless
leg syndrome. Notably, the authors did not provide a control group.
Also, the authors performed a large number of statistical tests without
adjustment, further increasing the risk of Type 1 error. The study was
supported by Renal Therapy Services-Columbia, owned by Baxter. Five of
the eight authors are employees of Renal Therapy Services. One author
is a full-time employee of Baxter and has a patent pending for RLS
medication.
---------------------------------------------------------------------------
\139\ Alarcon J, Bunch A, Ardila F, Zuniga E, Vesga J, Rivera A,
Sanchez R, Sanabria M. Real world evidence on the impact of expanded
hemodialysis (HDX) therapy on Patient Reported Outcomes
(PROs): CPREXH Registry (in submission).
---------------------------------------------------------------------------
Ariza J, et al.\140\ is a manuscript that was provided by
the applicant. Cost estimates were extrapolated using an observational
design, which suggested lower hospital days (but not hospitalizations)
and lower medication use in the HDX. However, the lack of
randomization makes this study difficult to evaluate. Furthermore, the
authors did not show any difference in costs between HDX and
HD. The study was funded by Baxter.
---------------------------------------------------------------------------
\140\ Ariza J., Walton SM, Sanabria M, Vega J, Suarez A, Rivera
A. An Initial Evaluation of the Potential Cost Impact and Cost
Effectiveness of Expanded Hemodialysis (in submission).
---------------------------------------------------------------------------
Penny JD, et al.\141\ is a manuscript in submission that
was included by the applicant. It is a single case-study of a HD
patient with pruritis and extreme levels of tissue sodium. Both
responded to HDX therapy. The authors acknowledged that
further robust clinical exploration is required.
---------------------------------------------------------------------------
\141\ Penny JD, Salerno F, Akbari A, McIntyre, C. ``Pruritis-Is
There a Salty Truth?'' (in submission). The applicant included a
manuscript in submission.
---------------------------------------------------------------------------
Sanabria RM, et al.\142\ is manuscript provided by the
applicant and has not been published. The observational study followed
81 patients receiving high-flux HD for 1 year who subsequently switched
to HDX for 1 year. While there was a significant reduction
in number of hospital days (but no change in hospitalization rate) and
medication use, findings were limited by the lack of a control group.
The shortening of hospital stays could be attributed to a systematic
change in admission practice patterns, rather than HDX.
Furthermore, Kt/V was higher in the HDX group, but the
authors did not standardize dialysis dosing, making it difficult to
attribute effects to HDX or to other causes of increased
dialysis adequacy. Hemoglobin levels, albumin, hsCRP were not
statistically different in the two arms. All investigators are
employees of RTS Ltd, Columbia, an affiliate of Baxter Healthcare. The
study was supported by Renal Therapy Services-Columbia, an independent
entity owned by Baxter International, Inc.
---------------------------------------------------------------------------
\142\ Sanabria RM,Vesga JI, Ariza J, Sanchez R, Suarez A,
Bernardo A, Rivera A. Expanded Hemodialysis and its effects on
hospitalization and medication usage: An exploratory study. (in
submission).
---------------------------------------------------------------------------
Incomplete Manuscripts
This is the fourth and final grouping in the list of evidence for
SCI from most compelling to least compelling. We summarize the
incomplete manuscripts which the applicant provided as follows:
Bolton S, et al.\143\ is a manuscript provided by the
applicant and is unfinished. It describes a crossover study of patients
previously treated with high-flux HD and switched to Theranova. Patient
reported outcome measures (PROMs) suggested decreased self-reported
dialysis recovery time and symptom burden, especially at 6 months.
However, regression to the mean appeared common, and there was no
control group.
---------------------------------------------------------------------------
\143\ Bolton S, Gair S, Metthews M, Stewart L, McCullagh N, A 1-
year routine assessment of patient-reported symptom burden after
implementing expanded hemodialysis, 2019. (in process).
---------------------------------------------------------------------------
Lim J, et al.\144\ is a manuscript provided by the
applicant, reporting a randomized trial comparing MCO to high-flux HD,
with 50 patients undergoing 12 weeks of treatment in Korea. The study
was small, and the authors performed a large number of statistical
tests comparing quality-of-life outcomes, with only a couple
statistically significant. Without adjusting p-values for the number of
statistical test, the risk for Type 1 error is large and not
unexpected. A second trial suggested lower medication doses, but again
results were statistically significant only for a few of the parameters
of interest. The study is small and requires replication at additional
centers to confirm results.
---------------------------------------------------------------------------
\144\ Lim J, Park Y, Yook J, Choi S, Jung H, Choi J, Park S, Kim
C, Kim Y, Cho J. Randomized controlled trial of medium cut-off
versus high-flux dialyzers on quality-of-life outcomes in
maintenance hemodialysis patients. (in submission).
---------------------------------------------------------------------------
Lim J-H, et al.\145\ is a manuscript provided by the
applicant, reporting a
[[Page 71453]]
randomized trial comparing MCO to high-flux HD, with 50 patients
undergoing 12 weeks of treatment in Korea. Its purpose was to evaluate
the effects of ESA resistance of HD using a MCO dialyzer. The number of
registered patients was small and the study duration not long enough to
assess definite results. Also, the study was not blinded to clinicians,
which may have affected the ESA and iron supplementation prescriptions.
Additional studies need to be performed to assess clinical outcomes.
---------------------------------------------------------------------------
\145\ Lim J-H, Yook J-M, Choi S-Y, Jung H-Y, Choi, J-Y, Park S-
H, Kim C-D, Kim Y-L, Cho H-H. Novel Medium Cut-Off Dialyzer Improves
Erythropoiesis Stimulating Agent Resistance in Maintenance
Hemodialysis Patients: A Randomized Control Trial. (in submission).
---------------------------------------------------------------------------
(e) CMS Comments on the Baxter Application
In the CY 2021 ESRD PPS proposed rule (85 FR 42175), CMS discussed
the specific concerns regarding the evidence submitted for proof of
eligibility via the SCI criteria. While Theranova represents a unique
technology, CMS noted that the current evidence supporting SCI is
lacking but that other evidence may be forthcoming during the comment
period. CMS believes it's too early to tell if the patient-recorded
outcomes, such as fewer cardiovascular events, are significant because
of the small numbers in the studies. Specifically, a study for
infection was cited with an N=20; another had an N=10. Also, the
definition of the infection was vague. Although hospitalization rates
are discussed in the articles, the cause of the hospitalization was
unknown. Patient laboratory results should be correlated with patient-
reported results. In the submitted articles, the studies are all open-
label and observational, with tenuous findings; alternative approaches
could include larger studies focused on the U.S. dialysis population's
patient health outcomes with patients blinded in these studies.
The background information provided by the applicant and researched
by the group is conflicting. This may be due to the variation in the
location of the studies, including Columbia, France, Belgium, England,
Ireland, Australia, New Zealand, and Korea. CMS suggested a meta-
analysis be done, along with the heterogeneity of dialysis care in
those countries as compared to the care received by the Medicare
population in the U.S.
In the CY 2021 ESRD PPS proposed rule (85 FR 42176), CMS stated
that while HDX appears to be a promising technology, the
current state of evidence insufficiently demonstrates SCI in Medicare
patients undergoing dialysis, but that additional evidence may be
forthcoming in the comment period. In general, the dialyzer appears to
have improved middle molecule clearance. While observational studies
show an association between high levels of middle molecules and poor
outcomes, these correlations do not prove causation. For instance, a
growing body of evidence suggests that protein-bound solutes such as
indoxyl sulfate and p-cresol sulfate could be responsible for the
uremic syndrome. Conventional HD, HDF, and HDX do not
effectively clear protein-bound toxins.
In the CY 2021 ESRD PPS proposed rule (85 FR 42176), CMS provided a
summary of the current body of evidence:
Theranova more effectively removes middle molecules
compared to conventional dialysis with high-flux membranes. These
include molecules that have varying degrees of plausible toxicity (for
example, beta 2 microglobulin to cytokines to endothelial proteins).
Because nephrologists have not identified the putative uremic toxin, it
is not certain that clearance of these toxins will lead to improved
clinical outcomes.
Although small before and after studies suggest potential
clinical benefits from MCO dialyzer membranes compared with
conventional HD via high-flux membranes, such as reduced infection,
improved itching and restless legs, and shorter recovery time from
dialysis, these studies are mostly observational, small in nature, with
a high potential for bias. A large, multi-center trial would be
necessary to prove substantial benefit from HDX over
conventional HD.
Several small studies suggest that MCO dialyzer membranes
are comparable to HDF in removal of middle molecules, but online HDF is
not generally available in the U.S. Furthermore, online HDF has not
consistently shown to improve health outcomes relative to conventional
HD with high-flux membranes.
There may be increased removal of albumin with MCO
membranes compared to conventional high-flux dialysis, which could have
negative health consequences.
A large randomized controlled clinical trial did not
demonstrate clinical benefits from removing larger solutes, including
middle molecules, but the study did not examine newer technologies such
as hemodiafiltration which are more efficient in removing those. This
negative study provides reason to be somewhat skeptical about the
benefits of HDX over HD.
Following the FDA-requested 6-month clinical study to
validate efficacy of large toxin removal and safety, the applicant
stated that it anticipates FDA marketing approval in May 2020. However,
we note that, per the application, safety is defined in part by albumin
loss. At this time we do not believe the clinical trials included
safety and efficacy studies for the large middle molecules the
applicant asserts to be the cause of inflammation. Therefore, the
perceived clinical benefits of providing clearance of those large
middle molecules were not assessed in rigorously conducted, randomized
clinical studies.
As stated previously, at the time of the CY 2021 ESRD PPS proposed
rule there was concern about the sufficiency of the evidence available
for Theranova demonstrating a clear clinical benefit for Medicare
dialysis patients. However, we noted that additional evidence could be
forthcoming in the comment period, and invited public comment as to
whether Theranova meets the TPNIES SCI criteria.
The collective comments and our response are set forth below.
Comment: The applicant provided information and a meta-analysis
that duplicated information provided in the CY 2021 ESRD PPS proposed
rule. Several physician commenters provided comments in support of the
research. The commenters' disclosures in their publications noted
financial support from the applicant. The commenters stated that they
believed that Theranova meets the criteria set forth in TPNIES for SCI
over the existing standard of care. The commenters urged CMS to
reconsider the data, and review such data in its combined totality
rather than focusing on each study in isolation. The commenters
asserted that existing data supported improved clinical outcomes with
the removal of large middle molecules, including Interleukin-6, YKL-40,
Alpha-1 microglobulin, and Lambda Free Light Chains (FLC), which have
been associated with inflammation, cardiovascular events, and other
dialysis-related comorbidities.
A physician commenter stated that changing over to Theranova-based
HD from conventional high-flux HD might partially restore some of the
benefits of residual renal function to patients. The commenter stated
that these larger molecules are removed poorly, if at all, by
conventional high-flux HD, resulting in plasma levels that are many
times above the normal value. The commenter stated that it is known
that clinical outcomes are improved in dialysis patients with even
small amounts of residual renal function, and that there
[[Page 71454]]
are multiple reasons for this, one likely being the failure of current
methods of dialysis to remove large middle molecules. The commenter
also stated that high plasma levels of these and similar molecules have
been associated with increased mortality, inflammation and
cardiovascular disease.
Another physician commenter stated that based on the clinical data
presented in the CY 2021 ESRD PPS proposed rule, the commenter believed
that Theranova therapy represented a substantial clinical improvement
in treatment for Medicare beneficiaries on dialysis. The commenter
studied the impact of Theranova on endothelial cells and noted that it
had a positive impact on the process of atherosclerosis formation. The
commenter also found that the effects of Theranova on vascular
calcification in vitro was significantly reduced after Theranova
therapy, compared to other high-flux dialyzers, and that cell death was
significantly lower in the Theranova group.
A physician commenter asserted that accumulated or increased levels
of Interleukin-6 may contribute to the chronic inflammation state of
ESRD patients, thereby increasing the risk of chronic vascular disease
and bacterial infections. Another physician commenter stated that
accumulated or increased levels of Interleukin-6 increased the risk of
protein energy wasting, has been associated with anemia in HD patients,
and has been identified as a principal driver of early vascular aging
with calcification. The commenters asserted that YKL-40 has been linked
to atherosclerosis, rheumatologic diseases, arterial stiffness, stroke,
mortality in type 2 diabetes, that it adds to vascular inflammation
risk prediction for all-cause and cardiovascular mortality, and is
associated with cardiovascular events in HD patients. The commenters
also noted that the removal of large middle molecules like Alpha-
1microglobulin, may alleviate insomnia, pruritus, irritability,
restless leg syndrome, anemia, and osteoarticular pain. Further, the
commenters noted that removal of FLCs, which is associated with non-
traditional cardiovascular risk factors, including markers of
inflammation, could reduce mortality risk in persons with ESRD.
The commenters noted that current dialytic therapies, due to
current design and limited by membrane permeability, have limited
capacity to remove the expanded range of uremic toxins, including the
spectrum of large middle molecules that Theranova, as demonstrated by
the collective evidence to date, removes. The commenters therefore
stated treatment with Theranova results in substantial clinical
improvement over current HD therapies treating renal failure.
Several physician commenters asserted, in reliance on research
cited as part of the primary TPNIES application, that important
clinical data has been accumulated internationally during the past 5
years demonstrating that use of the Theranova dialysis system results
in clinically meaningful improvement outcomes, including patient
quality of life measures, such as reduced symptom burden, decreased
restless leg syndrome, decreased itching, and improved physical
function. In addition, the commenters noted more rapid recovery after a
dialysis session, with preliminary data suggesting that all-cause
hospitalization length of stay might be reduced with Theranova versus
conventional HD, and that the need for ESA therapy might be reduced.
Another physician commenter stated that the Theranova dialyzer
offers the improved spectrum of larger molecule clearance associated
with hemodiafiltration, but only requires a standard HD machine, and
represents the type of innovation and improvement long lacking for
Medicare beneficiaries on HD and potentially meeting the standard for
substantial clinical improvement under TPNIES.
One commenter, a nephrologist, noted that they conducted a
randomized controlled trial of Theranova versus high-flux dialyzer in
maintenance HD patients to investigate the effect of Theranova on the
removal of middle molecules, utilizing a total of 50 patients
randomized to either Theranova or a high flux group, and stated that
the Theranova dialyzer displayed better removal of [kappa]FLC and
[lambda]FLC compared with the high-flux dialyzer. The commenter
indicated that the results were consistent with those of other studies
and asserted that taken together, Theranova dialyzer showed a greater
removal of larger middle molecules than high-flux dialyzer and could
decrease their blood concentrations.
The study also evaluated improved quality of life in those
patients, and noted that the Theranova group showed better scores in
physical functioning and role physical domains in physical component
domain at 12 weeks. The commenter stated that this suggested that the
Theranova dialyzer may improve patient-reported outcomes, particularly
physical components and uremic pruritus in HD patients.
The study also evaluated the effect of improving ESA resistance,
and the commenter hypothesized that Theranova could improve the ESA
resistance because it has better removal of large middle molecules than
hemodiafiltration. The commenter stated that the changes might be
associated with a greater reduction in TNF-[alpha] and lower serum TNF-
[alpha] level in Theranova compared to the high-flux group, and that
Theranova has potential to reduce ESA dose with further study possibly
proving the cost-effectiveness of Theranova for ESA use. The commenter
concluded that Theranova achieved more improvement in ESA resistance
than the high-flux dialyzer, removed more quantity of the inflammatory
cytokine such as TNF-[alpha] than the high-flux dialyzer, potentially
influencing the iron metabolism.
The commenter stated that although they did not yet have evidence
that Theranova could improve the survival rate of HD patients, they
noted that ongoing multicenter trials might reveal the effect of
Theranova on the survival of HD patients, and expressed hope that
before this, U.S. patients could have a chance to use Theranova, which
has proven benefits without any serious side effects.
Another physician commenter stated that Theranova offers SCI
because the commenter is able to switch patients progressively from
hemodiafiltration to HD. The commenter has also observed clinical
improvement in their patients, especially the impact in recovery time
and nutrition, even those treated for a long period by
hemodiafiltration. The commenter stated that evidence for improved
removal of large uremic toxins, without the burden of external fluid
reinjection such as in hemodiafiltration may occur immediately without
the burden of extensive training for physicians and staff.
Two commenters reiterated the CY 2021 ESRD PPS proposed rule's
explanation that, compared to the general population, patients with
ESRD who receive dialysis are at an increased risk of death, commonly
suffer from uremic symptoms such as itching, restless legs, and
malnutrition, are at increased infection risk, and dialyze with
standard high-flux dialyzers that focus entirely on removing smaller
uremic toxins. The commenters stated that the removal of large middle
molecules will address many of these concerns and is associated with
decreased hospitalization length and the number of hospitalizations, a
reduced need for certain medications, reduced inflammation and
infection, improved recovery times, and improved quality of life. The
commenters urged CMS to consider the totality of the evidence
[[Page 71455]]
combined, rather than focusing on each study in isolation, and stated
their belief that the clinical data supports Theranova's application
and claims of SCI.
Several beneficiary commenters commended CMS's efforts in promoting
dialysis innovation through the TPNIES policy. We also received
comments from other stakeholders that commended CMS on promoting
dialysis innovation. Those commenters and others, including several
physicians, stated that approval of applications for the TPNIES would
improve treatment choices for patients and address systemic barriers
that may limit access to Medicare beneficiaries suffering with kidney
failure.
Physician commenters expressed concern that CMS did not address the
COVID-19 pandemic, and strongly support efforts to expand access to new
dialysis products, particularly during the pandemic. The physician
commenters stated that COVID-19 may provoke a ``cytokine storm,'' with
cytokines leading to complications, and that Theranova may reduce the
presence of cytokines. The commenters noted that, as a result, a
clinical guideline in Italy recommends Theranova in managing COVID-19
positive patients undergoing HD to reduce the severity of a cytokine
storm. One physician commenter stated that since increased persistent
inflammation inhibits immunity and affects responses to infections, it
is logical to aim for a reduction of inflammatory drivers during HD in
a patient group at high risk of adverse outcome during COVID-19
infection. The commenters urged CMS to consider this information in
light of the COVID-19 pandemic.
Another commenter stated that as we learn more about COVID-19,
there are indications that Theranova may offer a unique clinical
benefit to COVID-19-positive patients, and urged CMS to take into
account the challenging environment and expand access to new dialysis
products, especially during the pandemic.
Several physician commenters noted that the Theranova system allows
for removal of large uremic toxins, without spilling clinically
important amounts of albumin, because the membrane pores vary less in
size than many other membranes, and because of relatively high internal
resistance, leading to increased within-dialyzer convective removal.
One physician commented that one of the major concerns with Theranova
is the risk of albumin loss and the removal of essential proteins by a
more permeable membrane. The commenter stated they compared laboratory
data including serum albumin, and as a result, laboratory data such as
hemoglobin, creatinine, phosphate, and lipid, and dialysis adequacy
were not different at baseline and 12 weeks between the two groups. The
commenter found that the serum albumin concentration after 3 months of
using Theranova dialyzer decreased by a mean of 0.13 0.23
mg/dL from baseline, and that the serum albumin concentrations did not
differ between Theranova and high flux dialyzers. The commenter
concluded that the Theranova dialyzer has a non-significant effect on
the serum albumin concentration over 12 weeks of treatment. The
commenter asserted that their conclusion was supported by long-term
studies. In their opinion, the decrease in serum albumin is more
prominent in the early period of Theranova dialyzer use. However, when
examined within the 1-year period, the change is minor and without
significance. The commenter added that regarding other adverse events
in their study, there were no serious adverse events including
cardiovascular events, patient death, or a decline of blood pressure
that required dialyzer changes throughout the 12 weeks.
One physician commenter claimed that, in their experience, albumin
levels stay stable over many months with Theranova. The commenter
further noted that during their trials, patients tolerated Theranova
very well, many reported an improved quality of life, and the commenter
indicated no knowledge of relevant side effects.
Several patient commenters expressed varied sentiments regarding
the TPNIES policy. One commenter stated that home dialysis permitted
the commenter to work until retirement. Another commenter, self-
identified as having been on dialysis for nearly a decade, encouraged
support for dialysis patients. Other commenters, both recent dialysis
patients and those with kidney failure and other related illness,
expressed general support for innovations, options and services to
support treatment. One commenter, a decade's long beneficiary, stated
the commenter had been diagnosed with ESRD since early childhood, has
had numerous kidney transplants and has been on home and in-center
dialysis. This commenter indicated that they proactively sought out the
best care, machines and innovations the market offered, since they felt
most dialysis patients are not offered such options as they are not
promoted or known. The commenter stated that they supported
advancements to information, technology and innovations to improve the
care of dialysis beneficiaries, as in their view the current system
minimally offered adequate care, which was not enough, and which
commenter stated ESRD patients needed to offer them a higher quality of
life care. One commenter, whose significant other is on PD dialysis at
home, asked for continued support of new innovations for the thousands
of dialysis beneficiaries who rely on dialysis to live, and stated that
the cycler machines were old, refurbished multiple times and that they
had to replace machines several due to noise or other issues.
An LDO commenter indicated that they performed a systematic review
of published literature in preparation for a potential meta-analysis on
hospital admissions and patient-reported outcomes, including quality of
life, comparing patients dialyzed with Theranova and high flux
dialyzers. The commenter stated that 45 relevant publications were
identified for potential inclusion in the meta-analysis, but 40 of
those publications were excluded due to the following reasons: No
availability in English or not conducted in HD patients (n=5); Review
only/not original study data (n=12); Study was performed in vitro, or
no clinical outcomes measured (n=11); and, No data on hospitalization
or patient-reported outcomes (n=12).
The commenter further stated that out of the remaining five
publications, two were disqualified because they mentioned the outcomes
of interest but did not provide information on comparator rates, with
three publications ultimately identified as potentially eligible for
inclusion in commenter's meta-analysis. The commenter noted that, out
of those three, one showed null findings for hospital data, one showed
null findings for patient reported outcomes, and the final study showed
imbalance in study groups that was larger than the difference after use
of the dialyzer and used inappropriate statistical analysis. The
commenter stated that its analysis therefore found there were not
enough robustly conducted studies for a meta-analysis to be performed,
and the few that were available showed insignificant results.
The commenter opined that the potential impact of replacing the use
of high-flux membranes with Theranova to increase removal of middle
molecules remains inconclusive and under-studied, since to date, no
strong evidence supports a survival benefit associated with increasing
removal of middle molecules. The commenter is unaware of studies
devoted to studying the effects of different dialyzers for
[[Page 71456]]
patients who are at particularly high risk for derangements in albumin
synthesis. The commenter also added that, similarly, the results of
studies of short duration may not adequately capture long-term trends
or reflect changes in compensatory mechanisms, nutritional state over
time, or worsening underlying health status. The commenter stated that
given the insufficient clinical evidence to support a finding of SCI
and specific concerns regarding the impact of Theranova's albumin-
leaking properties, the commenter supported CMS's evaluation in the CY
2021 ESRD PPS proposed rule and strongly recommended that CMS not
provide a TPNIES payment for the Theranova dialyzer.
Renal dieticians and an LDO commenters expressed their concerns
about albumin loss in the dialysis patients and the risk of infection,
along with it being a predictor of mortality and hospitalizations and
other comorbidities. One commenter stated that a low serum albumin
level complicates the fluid removal process as it causes excess fluid
to shift out of the blood space, making treatment ineffective at fluid
and toxin removal. Another commenter believed it was important for the
applicant to generate and establish Theranova's safety data via well-
controlled, randomized clinical trials of adequate duration on albumin
loss in U.S. dialysis patients. The dieticians also expressed concern
over the removal of other biological materials, aside from uremic
toxins, such as electrolytes, insulin, sodium and potassium.
Another commenter noted that a 2019 study, which concluded that an
increase of 0.25mg/dL/year in albumin decreased all-cause mortality,
and more significantly a decline in albumin of 0.5 mg/dL/year or
greater was associated with a 55 percent higher risk of mortality, did
not provide sufficient evidence in long-term consequences to serum
albumin levels to make a sound decision of approval, as it was only
conducted for a short three-month span.
An organization of LDOs commented that CMS correctly applied the
TPNIES SCI criteria in its analysis of the Theranova Dialyzers. The
commenter noted that many of the studies presented were of a small
number of patients, not conducted for an extended period of time, were
not representative of the Medicare population in the U.S., and pointed
out that given the Theranova dialyzers are available in Europe, they
were surprised that there were no long term studies with a larger
number of patients to offer insight into the relative benefit compared
with other devices. The commenter also had a stated preference for
seeing studies conducted in the U.S. and among the Medicare population
to ensure that products are compatible with our systems of care and
that devices are tested in a relevant population that is reflective of
the diversity of America's Medicare beneficiaries who are reliant upon
dialysis. A physician commenter agreed with the need for a randomized
controlled study done in the U.S., and asserted that said study would
need to ensure the diversity of participants arriving at an accurate
representation of the total under care.
Several dietician commenters noted that patients in different
countries had dietary habits that clearly were not reflective of the
U.S., and there was no accounting for differing diet habits, which may
be markedly different from the U.S. ESRD patient population.
Additionally, dialysis practice differed greatly from the U.S., and
thus, data gathered in small sample sizes from substantially different
patient populations should not be extrapolated to U.S. Medicare
patients, as the data from other countries possibly varied greatly from
this specific population. One dietician commented that the sample size
of the research conducted included a mere 50 individuals in 2017,
making it impossible to conclude the benefit of Theranova outweighs the
risks that could incur from its use.
A dialysis company commenter stated that products eligible for
TPNIES should first be evaluated through research, demonstrating
significant improvement in quality of life, mortality, facilitation of
home therapy, or some other measurable quality metric, and that such
studies should show a direct benefit or an effect on a well-established
clinical parameter associated with beneficial outcome. The commenter
stated that this scientifically-based standard, when applied to
Theranova, made it inappropriate for the TPNIES process.
An LDO commenter identified and assessed three studies that were
not included in Theranova's application or the CY 2021 ESRD PPS
proposed rule. The commenter found the studies lacking in a number of
critical areas, and thus not providing any additional basis for
approving Theranova.
A dialysis company commenter recounted past experiences with other
dialysis membrane products, namely high flux polysulphone dialysis
membranes in the 1990's touted as an improvement in dialysis with
enhanced clearance of beta-2-microglobulin. The commenter stated that,
while their use was widely adopted and paid for by Medicare through the
composite rate, when the HEMO study in 2002 finally investigated the
effect of this membrane in an article published in the New England
Journal of Medicine, no benefit was found. The commenter believed that
this experience did not need to be duplicated with Theranova.
Response: We thank all of the commenters for their informative
comments regarding the Baxter application for TPNIES for the Theranova
Dialyzer. CMS evaluated the application, accompanying articles, meta-
analysis and all the comments submitted. CMS evaluated all the criteria
at Sec. 413.236(b)(5) and 412.87(b)(1) to evaluate SCI for purposes of
the TPNIES. In doing so, we applied the following eligibility criterion
from Sec. 412.87(b)(1)(i): ``The totality of the circumstances is
considered when making a determination that a new [renal dialysis
equipment or supply] represents an advance that substantially improves,
relative to [renal dialysis services] previously available, the
diagnosis or treatment of Medicare beneficiaries.''
CMS identified two major concerns with the information presented to
CMS: (1) Studies and data presented were either low powered, did not
provide statistical significance in their results, and/or did not
include a control population; (2) Studies provided signals that albumin
might be filtered by the product, resulting in low levels of albumin
for some patients. Albumin is a critical protein that carries vitamins
and other proteins through the bloodstream, as well as performing other
functions. While there are some signals in the information provided by
the applicant that it may be possible for some patients to have albumin
levels rebound over a certain period of time, the data are considered
nascent in identifying the subpopulations whose albumin levels may be
able to respond appropriately to the filtering. Additionally,
commenters, including a major dialysis organization noted similarities
to a product that entered the market in the 1990s where the clinical
data was nascent upon entry and that ultimately clinicians considered
the product clinically similar to other products on the market.
Further, CMS clinicians involved in the review of the product were
unable to identify subpopulations for which they believed the evidence
demonstrated a substantial clinical improvement at this time. The
clinicians indicated that without additional evidence they would
consider this product similar to other products on the market and would
need
[[Page 71457]]
to closely monitor albumin levels of their patients. In other words,
they would consider using this product in a more observational manner
rather than adopting it based on any expected outcomes. As previously
noted, we did not find the submitted evidence and public comments
sufficient in meeting the ``totality of the circumstances'' regulatory
criterion.
Although CMS did not find the submitted evidence and public
comments sufficient in meeting the ``totality of the circumstances''
criterion to qualify the Theranova Dialyzer for the TPNIES adjustment
for CY 2021, we anticipate that the applicant may submit additional
evidence for the Theranova Dialyzer in support of the claim of
substantial clinical improvement for CY 2022. We note that the
applicant is eligible to apply for the TPNIES adjustment for the
Theranova Dialyzer for CY 2022 and CY 2023, and CMS would review any
new information provided for the CY 2022 rulemaking cycle. A product
that is determined to meet the criteria to receive the TPNIES would
receive the adjustment for 2-calendar years.
b. Tablo[supreg] Cartridge for Exclusive Use With the Tablo[supreg]
Hemodialysis System
(1) Outset Medical Application
For CY 2021, Outset Medical submitted an application for the TPNIES
for the Tablo[supreg] Cartridge for exclusive use with the
Tablo[supreg] Hemodialysis System. The applicant stated that the
Tablo[supreg] Cartridge is intended to substantially improve the
treatment of Medicare beneficiaries with ESRD by removing barriers to
home dialysis.
The applicant noted that the Tablo[supreg] Cartridge is necessary
to operate the Tablo[supreg] Hemodialysis System for use in home. The
cartridge is comprised of a pre-strung blood tubing set and series of
sensor-receptors mounted to a user-friendly organizer, and together
these are referred to as the Cartridge. The blood tubing set comprises
a blood pump tubing segment that interfaces with a peristaltic (blood)
pump mounted on the inner front panel of the Tablo[supreg] console and
arterial and venous lines that connect to the corresponding lines on
the patient. Additional components to the cartridge include consumable
supplies: Bicarbonate and acid concentrate jugs and straws, and an
adapter for disinfectant use.
The applicant stated that the blood tubing set is primarily
comprised of one arterial line and one venous line and is enhanced with
a recirculating adaptor, a bifurcated saline line, a pressure
transducer protector, a drip chamber with clot filter, and an arterial
pressure pod.
According to the applicant, in addition to the blood lines, there
is an integrated saline line that enables automatic priming as well as
monitored delivery of saline boluses during treatment. There is also an
infusion line and two infusion ports (arterial and venous) for manual
delivery of medicine, anticlotting agents, and blood sampling.
In describing what the Tablo[supreg] Cartridge does, the applicant
stated that it was designed with features to seamlessly integrate with
sensors on the front panel of the console (for example, air sensing,
arterial and venous pressure sensing) and to reduce touch points during
priming and blood return (for example, recirculating adapter and
bifurcated saline line) to minimize contamination. The blood pump draws
blood from the patient into the blood tubing set and passes the blood
through a dialyzer before returning the treated blood to the patient.
The applicant specifically stated that the Tablo[supreg]
Hemodialysis System includes the Tablo[supreg] Cartridge. In its
entirety, it has been specifically designed for patient-driven self-
care using an iterative human factors process, with key design
objectives being to facilitate learning and to minimize device training
time.\146\ Human factors studies performed in a laboratory setting have
demonstrated that patients can accurately learn and manage the
Tablo[supreg] Hemodialysis System after a brief training
period.147 148 A recent prospective, multicenter, open-
label, crossover trial comparing in-center and in-home HD using
Tablo[supreg] Hemodialysis System further supported the clinical
efficacy, safety, and ease of use of the system.\149\
---------------------------------------------------------------------------
\146\ Alvarez, Luis, et al. ``Clinical Experience with a New
Hemodialysis System Designed for In-Center Self-Care Hemodialysis.''
Self-Care, vol. 8, no. 3, 2017, pp. 12-18. Self-Care vol. 8, no. 3,
2017, pp.12-18.
\147\ Wilcox, Stephen B., et al. ``Results of Human Factors
Testing in a Novel Hemodialysis System Designed for Ease of Patient
Use.'' Hemodialysis International, vol. 20, no. 4,16 May 2016, pp.
643-649.doi:10.1111/hdi.12430.
\148\ Alvarez, Luis, et al. ``Tablet-Based Training for In-
Center Self Dialysis--A Pilot Study.'' Journal of the American
Society of Nephrology, vol. 27, no. Abstract Edition, Nov. 2016, p.
895A.
\149\ Plumb, Troy et al. ``Safety and efficacy of the Tablo
hemodialysis system for in-center and home hemodialysis.''
Hemodialysis International, Online, 2019, DOI:10.1111/hdi.12795.
---------------------------------------------------------------------------
The applicant stated that the Tablo[supreg] Hemodialysis System is
the first and only all-in-one technology and includes a number of
features that make it new and different from current standard of home
dialysis care. These unique features include (1) A single-use
Tablo[supreg] Cartridge with user-friendly pre-strung blood, saline,
and infusion tubing and an integrated blood pressure monitor that
interfaces with the console to enable automated features such as air
removal, priming, and blood return which minimize use, user errors,
save time and streamline the user experience; \150\ (2) on demand water
and dialysate production using a standard tap water source, eliminating
the need for time-consuming advance water preparation, bagged dialysate
or dialysate batching; \151\ (3) a consumer-centric touchscreen
interface that guides users with step-by-step instructions including
non-technical language, animation, and color-coded parts, to enable
easier training, faster set-up and simpler management including clear
alarm explanations and resolution instructions; \152\ and (4)
electronic data capture and automatic wireless transmission to
eliminate the need for manual record keeping by the patient, care
partner, or nurse.\153\
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\150\ Outset Medical, ``Safety Reference Guide.'' DOC-0004336
Rev 04, 2019.
\151\ Outset Medical, ``Tablo Preconfigured System White
Paper.'' DOC-0004252 Rev 01, 2019.
\152\ Alvarez, Luis, et al. ``Tablet-Based Training for In-
Center Self Dialysis--A Pilot Study.'' Journal of the American
Society of Nephrology, vol. 27, no. Abstract Edition, Nov. 2016, p.
895A.
\153\ Outset Medical, ``Tablo Information Security Design White
Paper.'' DOC-0003639 Rev 03, 2019.
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The applicant asserted, both in the written application and at an
in-person meeting with CMS, that the observational studies with the
Tablo[supreg] Hemodialysis System were able to achieve CMS adequacy
targeted on three times per week dialysis at an average treatment time
of less than 4 hours. Tablo[supreg] has demonstrated the ability to
treat to adequacy targets within the Medicare standard reimbursement of
three treatments per week.
The applicant has not submitted an application for pass-through
payments under the Medicare OPPS or the NTAP program under the Medicare
IPPS for the Tablo[supreg] Hemodialysis System, including the
Tablo[supreg] Cartridge.
This application for TPNIES is only for the Tablo[supreg] Cartridge
and its components for use in the home, which the applicant stated that
it intended to begin marketing in March 2020 following FDA clearance of
the Tablo[supreg] Hemodialysis System for home use. On March 31, 2020,
Outset Medical received FDA clearance to market the device for use in
the home, and CMS received a copy of this letter.
The applicant submitted a Premarket Notification 510(k) for
clearance of Tablo[supreg]. Previous 510(k) clearances for
[[Page 71458]]
the Tablo[supreg] Hemodialysis System and Tablo[supreg] Cartridge were
for hospital and outpatient clinic use only. The applicant could not
use or market the Tablo[supreg] Cartridge in the home setting until the
Tablo[supreg] Hemodialysis System was granted marketing authorization
by the FDA (note: Tablo[supreg] Hemodialysis System and cartridge was
granted FDA market authorization in November 2016). While the cartridge
was previously cleared through a separate 510k and was not necessary to
include in the submission for marketing authorization for home use, the
Tablo[supreg] Hemodialysis System cannot be operated without the
Tablo[supreg] Cartridge. According to the applicant, the cartridge was
included in the use instructions for the home approval.
The applicant noted that the Tablo[supreg] Cartridge is not
currently available for marketing in the home setting. As explained
above, the applicant intended to begin marketing in the home setting in
March 2020, after the FDA cleared the Tablo[supreg] Hemodialysis System
for marketing for home use. The applicant expected the first shipments
of the Tablo[supreg] Cartridge for use in the home to occur March 2020,
however, the first patient started training on June 1, 2020.
The applicant had an Investigational Device Exemption (IDE) to
study the Tablo[supreg] Hemodialysis System's safety and efficacy for
use in the home, which had been completed as of the filing of the
TPNIES application. The applicant stated that the IDE would be closed
once marketing authorization for the use of the Tablo[supreg]
Hemodialysis System in the home was granted. The IDE study reference
number was G140098. The Tablo[supreg] Cartridge was classified as a
Class II device.
The applicant stated that it submitted a HCPCS application for the
Tablo[supreg] Cartridge in advance of the September 1, 2020 deadline.
The applicant identified and described how the new and innovative
renal dialysis equipment or supply meets the criteria for SCI over
existing renal dialysis services. The applicant stated the
Tablo[supreg] Cartridge is necessary to operate the Tablo[supreg]
Hemodialysis System and therefore enables the system to deliver the
treatments that meet CMS's SCI criteria.
The applicant stated that the Tablo[supreg] Hemodialysis System
enables a treatment option for a patient population unresponsive to, or
ineligible or, currently available treatments. As supporting background
material, the applicant noted that home HD is a highly underutilized
treatment for ESRD patients. Currently 90 percent of patients receive
HD in a clinic. Fewer than 2 percent have HD treatment at home.
Contributing to this low penetration rate is also a high dropout rate
with the incumbent home devices of 25 percent and 35 percent at 12 and
24 months, respectively.\154\ The barriers to home dialysis adoption
and retention have been well studied and include: (1) Treatment burden
for patients and care partner fatigue; (2) technical challenges
operating HD machine; (3) space, home modifications, and supplies
management; (4) patients not wanting medical equipment in the home; and
(5) safety concerns.155 156 The applicant asserted that
Tablo[supreg] is the first new home HD system in over 15 years,
designed to address many of the above-mentioned barriers that currently
result in patients resigning themselves to in-center care and/or
stopping home modalities due to the associated burden of self-managed
therapy. Among other things, the objective of this order is for 80
percent of ESRD patients starting kidney replacement therapy (KRT) with
a transplant or home dialysis by 2025.\157\ The applicant stated that
this goal will require a multi-faceted solution, inclusive of less
burdensome technology, to address the key barriers to home dialysis.
---------------------------------------------------------------------------
\154\ Sehasi, Rebecca et al. Factors Associated With
Discontinuation of Home Hemodialysis, American Journal of Kidney
Disease, Volume 67, Issue 4, 2016, Pages 629-637.
\155\ Seshasai, R.K., et al. The home hemodialysis patient
experience: A qualitative assessment of modality use and
discontinuation. Hemodialysis International, 23: 139-150, 2019.
doi:10.1111/hdi.12713.
\156\ Chan, Christopher T. et al. Exploring Barriers and
Potential Solutions in Home Dialysis: An NKF-KDOQI Conference
Outcomes Report, Mar 2019, American Journal of Kidney Diseases,
Volume 73, Issue 3, 363-371.
\157\ U.S. Department of Health and Human Services, Office of
the Assistant Secretary for Planning and Evaluation, Advancing
American Kidney Health, July 10, 2019.
---------------------------------------------------------------------------
The applicant stated that the Tablo[supreg] Hemodialysis System has
the potential to significantly increase home dialysis. The applicant
conducted an IDE study for the primary purpose of evaluating the safety
and efficacy of Tablo[supreg] Hemodialysis System use in the home
setting. The applicant stated that the results from the IDE study
demonstrate the following: (1) Patients will opt for home dialysis if
the Tablo[supreg] Hemodialysis System is available; (2) patients have
confidence in the safety and efficacy of the Tablo[supreg] Hemodialysis
System; (3) the unique features of the Tablo[supreg] Cartridge as part
of the Tablo[supreg] Hemodialysis System simplify set-up and use; and
(4) the wireless transmission of data feature is reassuring to patients
because it relieves patients of the burden of recording and fear that
the patient may forget to document some aspect of treatment. The
applicant claimed that the IDE study results show that these key
features will facilitate growth and ongoing use of the Tablo[supreg]
Hemodialysis System in the home setting.
During the course of the study, with an average treatment time of
3.4 hours, twenty-eight out of thirty patients completed all phases of
the trial and no patient dropouts occurred during the in-home phase.
There is only one other mobile HD machine on the market. Its IDE, based
on six times per week therapy at an average treatment duration of 2.8
hours, showed a higher drop-out rate (19 percent vs Tablo's[supreg] 7
percent) and lower adherence to treatment at home (89 percent vs
Tablo's[supreg] 99 percent).158 159
---------------------------------------------------------------------------
\158\ Kraus, M., et al., A comparison of center-based vs. home-
based daily hemodialysis for patients with end-stage renal disease.
Hemodialysis International, 11: 468-477 2007 doi:10.1111/j.1542-
4758.2007.00229.x.
\159\ Plumb, T.J., Alvarez, et al. Safety and efficacy of the
Tablo hemodialysis system for in-center and home hemodialysis.
Hemodialysis Internationa 2019l. doi:10.1111/hdi.12795.
---------------------------------------------------------------------------
The applicant asserted that the Tablo[supreg] Hemodialysis System
significantly reduced training time for both patients and their
caregivers, improving training completion and reducing patient
technique failure and care partner burden. The applicant stated that
the cartridge element of the Tablo[supreg] Hemodialysis System removes
many of the manual steps and minimizes both set up time, and the need
to make difficult connections, which requires training to avoid
contamination. In human factors testing submitted to the FDA, the use
of the cartridge resulted in 90 percent of the users being able to set
up Tablo[supreg] in under 10 minutes.\160\ The applicant stated that
the Tablo[supreg] Hemodialysis System home IDE data demonstrates that
on average it takes 3.5 training sessions to learn the Tablo[supreg]
Hemodialysis System compared to 14.5 sessions on the device that is the
current standard of care for home HD.\161\ The applicant asserted that
reduced training time increases likelihood of successful completion,
reduces patient technique failure, and decreases caregiver burden. The
applicant noted the following: (1) The graphical user interface guides
users through the treatment and
[[Page 71459]]
eliminates the need for memorization and mental math; (2) sensors and
automation eliminate multiple manual steps in treatment set-up; and (3)
contextual alarms instantly alert patients to any issues with their
treatment and provide video and text direction on how to resolve them.
This is in comparison to numerical alarm codes with the incumbent
device that requires reference to the user manual or memorization with
no video guidance available.
---------------------------------------------------------------------------
\160\ Alvarez, Luis, et al. ``Clinical Experience with a New
Hemodialysis System Designed for In-Center Self-Care Hemodialysis.''
Self-Care, vol. 8, no. 3, 2017, pp. 12-18. Self-Care vol. 8, no. 3,
2017, pp.12-18
\161\ Chahal, Yaadveer, Decreased Time to Independence with the
Tablo Hemodialysis System: A Subset Analysis of the Tablo Home
Clinical Trial, Abstract accepted for the National Kidney Foundation
Spring Clinical Meeting 2020.
---------------------------------------------------------------------------
The applicant stated that the Tablo[supreg] Hemodialysis System
significantly reduces set up and treatment time reducing treatment
burden, improving retention at home, and reducing the need for and
involvement of a care partner. The applicant noted that data from
Outset Medical's Tablo[supreg] Hemodialysis System home IDE trial
showed that a patient could set up the Tablo[supreg] Hemodialysis
System in 9.2 minutes.\162\ With the average number of treatments of
3.6 per week for an average duration of 3.4 hours,\163\ a Tablo[supreg]
Hemodialysis System user treating 4 times per week can expect to spend
approximately 14 hours a week preparing for and conducting treatments,
versus 40 hours a week on the incumbent device for patients who batch
solutions.164 165 The applicant stated that this significant
reduction in setup and treatment time is a result of software and
workflow improvements incorporated in the Tablo[supreg] Hemodialysis
System and its cartridge, many of which were driven by patient
feedback. Reducing overall treatment burden improves modality retention
at home on behalf of the patient and limits the care partner burden by
reducing the need for their active involvement in treatment.
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\162\ Outset Medical subset analysis of Home IDE Trial data on
set up time for Tablo Cartridge and concentrates.
\163\ Plumb, T.J., Alvarez, et al. Safety and efficacy of the
Tablo hemodialysis system for in-center and home hemodialysis.
Hemodialysis Internationa 2019l. doi:10.1111/hdi.12795.
\164\ NxStage Medical, Transitional Dialysis Care Operational
Guidance, June 2019, https://www.nxstage.com/wpcontent/uploads/2019/06/APM2548-Rev-B-TDC-Operational-Guidance.pdf.
\165\ Kraus, M., et al., A comparison of center-based vs. home-
based daily hemodialysis for patients with end-stage renal disease.
Hemodialysis International, 11: 468-477 2007 doi:10.1111/j.1542-
4758.2007.00229.x.
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The applicant stated that the cartridge portion of the
Tablo[supreg] Hemodialysis System is pre-strung and requires only two
connections to operate as compared to other systems that require
stringing, hanging, snapping, and tapping multiple lines. In the home
IDE time set up of dialysate concentrates, the Tablo[supreg] Cartridge
took less than 12 minutes on average. With an average time of 8
minutes, an uninterrupted patient can initiate therapy in as little as
20 minutes.\166\ This is a significant improvement in the standard of
care, which can take approximately 45 minutes.\167\ The applicant
asserted that the Tablo[supreg] Hemodialysis System's automatic and
integrated sensors and automated degassing and priming also make the
machine easier to use and quicker to set up and get to treatment.
---------------------------------------------------------------------------
\166\ Outset Medical subset analysis of Home IDE Trial data on
set up time for Tablo Cartridge and concentrates.
\167\ Informal interviews with NxStage patients.
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The applicant stated that the Tablo[supreg] Hemodialysis System is
the only system with a fully integrated water treatment system that
allows for real-time water purification and dialysate produced on
demand with no need to batch solutions or hang bags of dialysate. In
addition, the applicant noted that it requires only a standard,
grounded electrical outlet and Environmental Protection Agency quality
tap water to operate, obviating the need to store bags of dialysate in
the home, significantly reducing the number of supplies patients need
to receive each month.
The applicant noted that the Tablo[supreg] Hemodialysis System
reduces patient/care partner burden and technique failure.
Specifically, the applicant stated that automation of processes such as
prime and rinse back reduces the overall number of treatment related
steps. In addition, the applicant said that the Tablo[supreg]
Hemodialysis System's easy to use touchscreen interface walks users
through each step of setup, treatment, and take down; the treatment
information displays data that patients most wanted to see. The
applicant asserts that this automation and patient-centric design
reduces technique failure as evidence by results from the IDE study,
which demonstrated a significant increase in treatment adherence and
high rate of study completion compared to the current standard.
The applicant further stated that the Tablo[supreg] Hemodialysis
System eliminates documentation burden and reduces reporting errors,
and that it is the only HD system with 2-way wireless transmission
delivering HIPAA compliant data to the healthcare provider without any
need for additional equipment. This frees patients from the need to
manually document treatment data by hand or on a separate tablet and
ensures higher data accuracy.
The 28 patients who entered the home phase of the Tablo[supreg]
Hemodialysis System home IDE answered weekly if they needed help with
treatment over the prior seven days. The applicant stated that by the
end of the study, 216 of 224 possible responses were obtained. The care
partner burden rating for prior in-home patients who were previously
dialyzing on the incumbent device decreased from 3.1 to 2.4 on
Tablo[supreg]. Among prior in-home patients, 69 percent of patients
reported needing help from a trained individual with their prior device
with 46 percent of respondents stating the help needed was device
related, 15 percent related to cannulation alone, and 8 percent
reported other. By contrast, while on Tablo[supreg], only 38 percent of
patients reported needing help with treatment--only 22 percent needed
help related to use of Tablo[supreg] while 16 percent needed help
related to cannulation. The applicant asserted that this data
underscores a significant decrease in patients needing assistance with
treatment at home.
The applicant stated that Tablo[supreg] Hemodialysis System's
unique features increase patient safety and satisfaction. The applicant
noted that Tablo[supreg] Hemodialysis System's integrated, 2-way
wireless connection provides clinicians with the ability to monitor
patients in real time without any separate equipment necessary. The
applicant asserted that the Tablo[supreg] Hemodialysis System is the
only HD technology with this function, which allows for early
identification and intervention by a patient's healthcare team as a key
safety feature. At 34 inches tall, Tablo[supreg] Hemodialysis System
user interface matches the height of a user while seated in a standard
dialysis chair allowing patients to directly, and quickly engage with
the integrated touch screen to view progress of the treatment, resolve
alarms, and adjust certain functions to tailor the treatment to his or
her needs. As an example, a patient with limited mobility can reach the
interactive touch screen to adjust the flow rate if they feel cramping
coming on. The IDE generated data that demonstrated how the technology
enabled more rapid resolution of alarms. During the home arm of the
study, patients were able to resolve alarms on the Tablo[supreg]
Hemodialysis System in 5 seconds.\168\ The applicant asserted that
rapid resolution of alarms and enhanced communication improve safety by
facilitating rapid correction of any treatment related events, limiting
[[Page 71460]]
treatment interruptions and improving communication between the patient
and provider.
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\168\ Wilcox, Stephen B. et al., Results of human factors
testing in a novel hemodialysis system designed for ease of patient
use, Hemodialysis International 2016; 20:643-649.
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Once approved for home use, the applicant stated that the
Tablo[supreg] Hemodialysis System will provide a simpler, easier to use
system that is likely to increase the number of people who are able to
receive and remain on dialysis at home by addressing many of the well-
documented, key barriers to home dialysis reported in peer-reviewed
literature.
In addressing the way in which the Tablo[supreg] Hemodialysis
System with its cartridge significantly improves clinical outcomes
relative to the renal dialysis services previously available, the
applicant focused on hospitalization and quality of life. The applicant
stated that the Tablo[supreg] Hemodialysis System's 2-way wireless
connection allows for real-time intervention to prevent
hospitalizations. The applicant stated that during the Tablo[supreg]
Hemodialysis System home IDE, the patients using the Tablo[supreg]
Hemodialysis System had an all cause admission rate of 426 per 1,000
patient years. In the general dialysis population, the all cause
admission rate is 1688 per 1,000 patient years and for patients who do
PD, the hospitalization rate is 1460 per 1,000 patient years,
highlighting that the Tablo[supreg] Hemodialysis System may
significantly reduce hospitalizations and lower cost of care.\169\ The
applicant stated that Tablo[supreg] Hemodialysis System's integrated,
2-way wireless connection provides clinicians the ability to monitor
patients in real time without any separate equipment necessary, and is
the only equipment with this embedded functionality which allows for
earlier identification and intervention by a patient's healthcare team
and could prevent unnecessary hospitalizations for dialysis related
events or missed treatments.
---------------------------------------------------------------------------
\169\ United States Renal Data System. 2019 USRDS annual data
report: Epidemiology of kidney disease in the United States.
National Institutes of Health, National Institute of Diabetes and
Digestive and Kidney Diseases, Bethesda, MD, 2019, Executive Summary
Reference Table G2.
---------------------------------------------------------------------------
The applicant stated that the Tablo[supreg] Hemodialysis System can
effectively deliver adequacy with 3-4 treatments per week, potentially
reducing Medicare expenditures on additional dialysis treatments per
week. The applicant said that among home HD patients, Medicare payment
for dialysis treatments was highly variable across different regions at
3.5 to 5.7 per week.\170\ In the IDE for the Tablo[supreg] Hemodialysis
System, the applicant asserted that there was effectively delivered
adequacy with 4 treatments per week with an average session length of
3.4 hours, resulting in an average weekly treatment duration of ~13.6
hours. An average weekly standard Kt/V of 2.8 was achieved and 94
percent of patients achieved an ultrafiltration rate within 10 percent
of the prescribed value.\171\ The applicant noted that a previous study
of Tablo[supreg] Hemodialysis System used in the clinic showed
achievement of a spKt/V of 1.2 based on 3 treatments per week including
for patients over 90 kg. While the frequency of how often patients
should receive dialysis is a clinical decision that should be made
between the physician and the patient, the Tablo[supreg] Hemodialysis
System is the only mobile HD system with clinical data showing
achievement of adequacy standards and ultrafiltration endpoints for 3
and 4 treatments per week regardless of the size of the
patient.172 173 The applicant concluded that in this way,
the Tablo[supreg] Hemodialysis System has the potential to reduce
Medicare expenditures on the billing of additional dialysis treatments.
---------------------------------------------------------------------------
\170\ Wilk, Adam S. et al., Persistent Variation in Medicare
Payment Authorization for Home Hemodialysis Treatments Health
services research vol. 53,2 (2018): 649-670.
\171\ Plumb, T.J., Alvarez, et al. Safety and efficacy of the
Tablo hemodialysis system for in-center and home hemodialysis.
Hemodialysis International, 2019. doi:10.1111/hdi.12795.
\172\ Alvarez, Luis et al. Urea Clearance Results in Patients
Dialyzed Thrice Weekly Using a Dialysate Flow of 300 mL/min,
clinical abstract, presented March 2019, Annual Dialysis Conference,
Dallas, TX.
\173\ Alvarez, Luis and Chertow, Glenn, Real World In-Center
Urea Clearance Experience with a Novel Hemodialysis System, clinical
abstract, presented March 2019, Annual Dialysis Conference, Dallas,
TX.
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The applicant stated that Tablo[supreg] Hemodialysis System's
ability to deliver adequacy on fewer treatments per week may also
reduce vascular access complications due to frequent cannulation.\174\
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\174\ Agency for Healthcare Quality and Research, End Stage
Renal Disease in the Medicare Population: Frequency and Duration of
Hemodialysis and Quality of Life Assessment, Draft Technology
Assessment, Agency for Healthcare Quality and Research November 22,
2019.
---------------------------------------------------------------------------
The applicant submitted several examples in four topics to
demonstrate how the Tablo[supreg] Hemodialysis System improves the
quality of life. The applicant noted that patients value having a high-
quality daily life, ability to live well, and feeling empowered to
control their outcomes over mortality.\175\ The applicant asserted that
the use of the Tablo[supreg] Hemodialysis System at home allows
patients to have an improved quality of life and control over their
outcomes.
---------------------------------------------------------------------------
\175\ Urquhart-Secord, Rachel et al Patient and Caregiver
Priorities for Outcomes in Hemodialysis: An International Nominal
Group Technique Study American Journal of Kidney Diseases, Sept.
2016, Volume 68, Issue 3, 444-454.
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The first topic of improved quality of life focused on sleep and
reduction in fatigue. The applicant noted that kidney patients
participating in an international research collaborative to identify
outcome measures most important to them ranked fatigue/energy as their
top priority.\176\ The applicant reported that patients in the IDE who
were on home HD with an incumbent device experienced a 14 percent
improvement in waking up feeling rested while on the Tablo[supreg]
Hemodialysis System. Additionally, 22 percent fewer patients reported
having trouble staying asleep, and 15 percent fewer patients reported
waking up several times during the night while on the Tablo[supreg]
Hemodialysis System.\177\ The applicant asserted that this data shows
that the Tablo[supreg] Hemodialysis System is able to make a clinically
significant improvement in the quality of life indicator most valued by
dialysis patients.
---------------------------------------------------------------------------
\176\ Ibid.
\177\ Plumb, T.J., Alvarez, L., Ross, D.L., Lee, J.J., Mulhern,
J.G., Bell, J.L., Abra, G., Prichard, S.S., Chertow, G.M. and
Aragon, M.A. (2019), Safety and efficacy of the Tablo hemodialysis
system for in-center and home hemodialysis. Hemodialysis
International. doi:10.1111/hdi.12795.
---------------------------------------------------------------------------
The second topic of improved quality of life discussed by the
applicant was improvement in the patients' experience of hypotensive
events. The applicant submitted that investigators report that a drop
in blood pressure was also ranked in the top 10 of symptoms rated by
patients that impact their quality of life.\178\ The applicant reported
that a total of 12 (40.0 percent) and 8 (26.7 percent) subjects
reported hypotensive events during the Tablo[supreg] Hemodialysis
System treatments during the In-Center and In-Home treatment periods,
respectively, compared to 27 (90.0 percent) subjects reporting
hypotensive events at baseline on another HD machine. All patients who
reported hypotensive events while on dialysis in the study had also
reported hypotension in their baseline history.\179\
---------------------------------------------------------------------------
\178\ Urquhart-Secord, Rachel et al. Patient and Caregiver
Priorities for Outcomes in Hemodialysis: An International Nominal
Group Technique Study American Journal of Kidney Diseases, Sept.
2016, Volume 68, Issue 3, 444-454.
\179\ Outset Medical Data from Home IDE Trial, pg 33 of clinical
report submitted to the Food and Drug Administration, data table 43,
2019.
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The third topic of improved quality of life was that fewer patients
reported feeling cold. The applicant reported that a total of 15 (50.0
percent) subjects during the in-center treatment period and 12 (40.0
percent) subjects during the In-Home treatment period reported feeling
cold while dialyzing on the
[[Page 71461]]
Tablo[supreg] Hemodialysis System compared to 28 (93.3 percent)
subjects who reported feeling cold at baseline while dialyzing on
another dialysis machine. The applicant asserted that the Tablo[supreg]
Hemodialysis System's design results in tight control of dialysate
temperature and allows patients to easily and accurately adjust
temperature through the graphical user interface.\180\
---------------------------------------------------------------------------
\180\ Ibid.
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The fourth topic of improved quality of life was patient preference
for the Tablo[supreg] Hemodialysis System. The applicant stated that
the Kidney Health Initiative (KHI), a public private partnership
between the FDA and the American Society of Nephrology, Renal
Replacement Therapy (RRT) Roadmap prioritizes patient-centered
innovation, which includes dialysis equipment that is more portable,
removes barriers to home dialysis and improves patients' ease of use to
increase opportunities for self-care. The RRT, which was developed in
conjunction with patients, also prioritizes patient centered outcomes
and technology that reduces disruption in social and family life.\181\
The applicant reported that among prior home HD users in the IDE trial,
85 percent reported they preferred the Tablo[supreg] Hemodialysis
System to their current equipment.\182\ Patients also rated
Tablo[supreg] as easier to set-up, treat, and take down. Ease of use
ratings comparing the patient's prior device to Tablo[supreg] were as
follows: Set up--3.5 to 4.5, Treatment--3.3 to 4.6, Take Down--3.8 to
4.6.\183\
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\181\ Kidney Health Initiative, Technology Roadmap for
Innovative Approaches to Renal Replacement Therapy, prepared by the
Nexight Group, October 2018, https://www.asnonline.org/g/blast/files/KHI_RRT_Roadmap1.0_FINAL_102318_web.pdf.
\182\ Chahal, Yaadveer, Patient Device Preference for Home
Hemodialysis: A Subset Analysis of the Tablo Home IDE Trial,
Abstract Accepted by the National Kidney Foundation Spring Clinical
Meeting 2020.
\183\ Outset Medical Data from Home IDE Trial, pg 33 of clinical
report submitted to the Food and Drug Administration, data table 43,
2019.
---------------------------------------------------------------------------
In summary, the applicant submitted that the Tablo[supreg]
Hemodialysis System has the potential to significantly expand the
number of patients who are able to receive home HD and persist on the
therapy. The applicant stated that it is an innovative HD system that
removes most of the device-related key barriers, reduces dialysis-
related symptoms, is mobile and easy to use, and therefore minimizes
dialysis-related disruptions in patients' lives.
(2) CMS Analysis
(a) Summary of Current Technology
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42180),
patients with ESRD who are not able to receive a kidney transplant must
undergo maintenance dialysis therapy. Patients can receive dialysis 3-4
days a week at an in-center HD facility, or they can administer
dialysis themselves at home. Due to the reliance on outpatient dialysis
units, numbers of patients utilizing home dialysis in the U.S. have
remained low. In 2017, only 10.8 percent of US dialysis patients
received home-based therapies.\184\ Patients and caregivers cite
concerns with self-cannulation, fears of needle disconnect and
complications.\185\ Home dialysis use is lower than many other rich
countries.\186\
---------------------------------------------------------------------------
\184\ United States Renal Data System (USRDS). 2019 Annual Data
Report: Reference Tables. https://www.usrds.org/reference.aspx. Last
Access Date Feb 20, 2020.
\185\ Young BA, Chan C, Blagg C, Lockridge R, Golper T,
Finkelstein F, Shaffer R, Mehrotra R; ASN Dialysis Advisory Group.
How to overcome barriers and establish a successful home HD program.
Clin J Am Soc Nephrol. 2012 Dec;7(12):2023-32. doi: 10.2215/
CJN.07080712. Epub 2012 Oct 4.
\186\ Wilkie M. Home dialysis--an international perspective. NDT
Plus. 2011 Dec;4(Suppl 3):iii4-iii6.
---------------------------------------------------------------------------
Most patients administering dialysis at home use PD. However, home
HD has more recently re-emerged as an alternative way for patients to
dialyze at home. Home HD may offer many of the advantages observed with
PD, such as increased flexibility and quality-of-life benefits.
However, adoption of home HD has been limited, with approximately only
1 percent of ESRD patients utilizing this modality.\187\
---------------------------------------------------------------------------
\187\ Mailloux LU, Blagg CR. Berns JS (ed.) Home Hemodialysis.
Uptodate. Nov 18, 2016.
---------------------------------------------------------------------------
Observational studies do not indicate significant differences in
survival when comparing home dialysis to in-center dialysis.\188\ Yet,
there are some potential benefits to home-based dialysis. Prior
analyses have noted that home-based dialysis affords greater patient
flexibility, improved quality of life,\189\ increased likelihood of
employment,\190\ and improved cost.\191\ However, regarding cost
comparisons, it is important to note that many cost analyses of home-
based dialysis include estimates from PD. The machines for HD are
costly and there may be higher rates of infection from self-
cannulation, which could offset any savings. Since such a small
percentage of patients receive home-based HD, it is challenging to know
actual cost without pooling it with PD estimates. Regardless, due to an
Executive order issued in 2019, economic incentives for home dialysis
(both peritoneal and home HD) were increased with the goal of expanding
its use.\192\
---------------------------------------------------------------------------
\188\ Chiu YW, Jiwakanon S, Lukowsky L, Duong U, Kalantar-Zadeh
K, Mehrotra R. An update on the comparisons of mortality outcomes of
hemodialysis and peritoneal dialysis patients. Semin Nephrol.
2011;31:152-158.
\189\ Rubin HR, Fink NE, Plantinga LC, Sadler JH, Kliger AS,
Powe NR. Patient ratings of dialysis care with peritoneal dialysis
vs hemodialysis. JAMA. 2004;291:697-703.
\190\ Muehrer RJ, Schatell D, Witten B, Gangnon R, Becker BN,
Hofmann RM. Factors affecting employment at initiation of dialysis.
Clin J Am Soc Nephrol. 2011 Mar;6(3):489-96.
\191\ Berger A, Edelsberg J, Inglese GW, Bhattacharyya SK, Oster
G. Cost comparison of peritoneal dialysis versus hemodialysis in
end-stage renal disease. American Journal of Managed Care.
2009;15:509-518.
\192\ The White House. Executive order on Advancing American
Kidney Health. July 10, 2019. https://www.whitehouse.gov/presidential-actions/executive-order-advancing-american-kidney-health/ Last Access Date Feb 18, 2020.
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(b) Description of New Technology
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42181),
the first personal HD system on the market was called the Aksys
personal HD (Aksys Ph.D.) system. It created its own ultrapure
dialysate and was FDA cleared in 2002. It later underwent recall in
2006 due to marketing inconsistencies with system design.\193\
Eventually, the manufacturer shut down operations after difficulties in
securing financing.\194\ In addition to these issues, it was a large
machine that required significant patient utility resources and
specialized maintenance.\195\ Around this time, development of the
Allient dialysis system began, which utilizes a sorbent column to
regenerate dialysate from tap water.\196\ It is still in development
for potential home based therapy.
---------------------------------------------------------------------------
\193\ Food and Drug Administration. Class 2 Device Recall Aksys
Ph.D. Personal Hemodialysis System. Medical Devices Database. June
2006. https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfres/res.cfm?id=46686.
\194\ Modern Healthcare. Dialyais machine firm Aksys shuts down.
Feb 21, 2007. https://www.modernhealthcare.com/article/20070221/NEWS/70221010/dialysis-machine-firm-aksys-shuts-down. Last Access
Date Feb 18, 2020.
\195\ Mailloux LU, Blagg CR. Berns JS (ed.) Home Hemodialysis.
Uptodate. Nov 18, 2016.
\196\ Ash SR. The Allient dialysis system. Semin Dial. 2004 Mar-
Apr;17(2):164-6.
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Several home dialysis machines are currently available. Recently,
the NxStage[supreg] System One dialysis machine was FDA approved for
510(k) premarket status in August 2017.\197\ It has a smaller profile
than the Aksys machine
[[Page 71462]]
but requires 4 to 6 large bags of ultrapure dialysate and comes with
home storage requirements. The NxStage[supreg] PureFlow SL was
subsequently developed for use with the NxStage[supreg] System One. It
allows patients to prepare dialysate from tap water with a reduced need
to store dialysate bags. The NxStage[supreg] system advertises an
easier experience learning how to administer home dialysis. Within this
arena, the Tablo[supreg] Hemodialysis System has recently emerged and
been approved for use in hospitals and outpatient settings. The
Tablo[supreg] Hemodialysis System is most comparable to NxStage System
One combined with NxStage[supreg] PureFlow, in that it may be easier to
use than conventional home dialysis machines and can be used from a tap
water source. The applicant is currently pursuing approval for use of
cartridges for the Tablo[supreg] Hemodialysis System in the home
setting. While this application centers on reimbursement of the
Tablo[supreg] Cartridge, this cartridge is only compatible with the
Tablo[supreg] Hemodialysis System. The cartridge is made up of a rigid
``Organizer'' which mounts the necessary tubing to allow for greater
ease in set-up. This self-contained and single-use cartridge houses
both the arterial and venous lines, an adaptor to connect the lines, a
saline line, and an infusion line. There is also a pressure transducer
protector, venous drip chamber with clot filter, and an arterial
pressure pod. The applicant noted that the cartridge simplifies
connection to the Tablo[supreg] Hemodialysis System and reduces set-up
time. It would seem that this cartridge would be most useful in the
home-setting, since hospital and clinic settings would normally have
trained personnel to assist with set-up. Although separate from the
Tablo[supreg] Cartridge, the Tablo[supreg] Hemodialysis System also
performs real-time water purification on demand dialysate production.
---------------------------------------------------------------------------
\197\ Food and Drug Administration. Traditional Section 510(k)
Premarket Notification Letter, Number K171331. August 24, 2017.
https://www.accessdata.fda.gov/cdrh_docs/pdf17/K171331.pdf.
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A significant challenge to increasing the use of home dialysis
includes burn out (or technique failure) and return to in-center HD.
According to one recent observational study, approximately 25 percent
of patients who initiate home HD return to in-center HD within the
first year.\198\ A good measure of a home-based system's success would
be in its ability to allow patients to remain on the therapy long-term.
Failure to maintain home HD, and low use of home HD, may be a result of
anxiety and unease that many patients have about performing the
treatment themselves (or with the help of care
takers).199 200 201 This includes fear of self-cannulation
in order to access the blood for dialysis and a lack of self-efficacy
in performing the therapy. By simplifying the process of setting up
dialysis tubing, offered by the Tablo[supreg] Hemodialysis System
cartridge, some patients may be able to successfully perform home HD.
---------------------------------------------------------------------------
\198\ Seshasai RK, Mitra N, Chaknos CM, Li J, Wirtalla C,
Negoianu D, Glickman JD, Dember LM. Factors Associated With
Discontinuation of Home Hemodialysis. Am J Kidney Dis. 2016
Apr;67(4):629-37.
\199\ Cafazzo JA, Leonard K, Easty AC, Rossos PG, Chan CT.
Patient-perceived barriers to the adoption of Nocturnal Home
Hemodialysis. Clin J Am Soc Nephrol. 2009;4:784-789.
\200\ Suri RS, Larive B, Garg AX, et al. Burden on caregivers as
perceived by hemodialysis patients in the frequent Hemodialysis
network (FHN) trials. Nephrol Dial Transplant. 2011;26:2316-2322.
\201\ Zhang AH, Bargman JM, Lok CE, et al. Dialysis modality
choices among chronic kidney disease patients: Identifying the gaps
to support patients on home-based therapies. Int Urol Nephrol.
2010;42:759-764.
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(c) Approvals
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42181),
the applicant has not previously submitted applications for pass-
through or add-on payments. The applicant has received 510(k) marketing
clearance for the machine to be used in hospital and outpatient clinic
use only. As such, the applicant is pursuing FDA marketing
authorization for use in the home setting for February 2020. The
Tablo[supreg] Hemodialysis System cartridge received FDA marketing
approval in December, 2019 and the Tablo[supreg] Hemodialysis System
received FDA marketing authorization for home setting in March 2020.
The applicant noted that upon approval, the company plans to ship that
same month. The technology had an investigational device exemption for
use in the home and which closed after granting of marketing
authorization. It is classified as a Class II device.
(d) Assessment of Substantial Similarity to Currently Available
Technology
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42182),
the NxStage[supreg] One is the only home-based HD system that is FDA
has approved at this time. The Tablo[supreg] Hemodialysis System
differs from the NxStage[supreg] in that dialysate is produced on
demand whereas the NxStage[supreg] requires that patients batch
dialysate or use pre-filled concentrate with the PureFlow. The
Tablo[supreg] Hemodialysis System also includes a cartridge (which is
the portion being evaluated for TPNIES) designed to facilitate the
connection of tubing in the appropriate configuration. This product
treats similar patients, notably patients with ESRD requiring HD.
(e) Assessment of SCI (See Sec. Sec. 413.236(b)(5) and 412.87(b)(1))
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42182),
the Tablo[supreg] Hemodialysis System is a treatment modality, not a
diagnostic tool. With regard to the question as to whether this new
renal dialysis equipment offers a treatment option for a patient
population unresponsive to, or ineligible for, currently available
treatments, we note that patients who are eligible for this treatment
would currently be eligible for in-center HD, home HD with currently
available treatments, and possibly PD.
(f) Clinical Evidence for Claims of SCI
As stated in the CY 2021 ESRD PPS proposed rule (85 FR 42182
through 42183), the applicant included an annotated bibliography in its
application. Many of the articles describe the features of the HD
system: Straightforward and relatively efficient set-up and training,
presence of safety features, water purification system, and wireless
communication. In terms of clinical outcomes and improvements, the
referenced authors have presented or published data on safety,
clearance and treatment times, hypotensive events and cold symptoms,
and patient preference. As these are arguably more important
considerations, we are focusing on the evidence with those claims of
clinical improvement or patient reported outcomes.
Below is a list of references for SCI based on evidence published
from several sources. We summarized the studies grouped by listings
with the most rigorous review to those with the least rigorous review,
specifically, Trials Published in Peer-Reviewed Journals, then Posters
and Abstracts, and ending with Unpublished Data.
Trials Published in Peer-Reviewed Journals
Plumb TJ, et al.\202\ describes the IDE study, which was a
prospective, multicenter, open-label crossover trial evaluating in-
center versus in-home use of the Tablo[supreg] Hemodialysis System.
Thirty patients underwent a run-in period, 8 weeks of in-center therapy
(4 treatments a week), then a 4-week transition period, and finally an
8-week in-home treatment (4 times a week).
[[Page 71463]]
Authors evaluated efficacy in effective removal of uremic toxins, as
measured by a weekly standard Kt/Vurea [gteqt]2.1 and a secondary
endpoint of delivered ultrafiltration within 10 percent of prescribed.
Twenty-eight out of 30 patients completed the study. One patient died
from cardiac arrest and the authors felt it was unrelated to the
treatments. Another patient withdrew prior to starting in-home HD.
There were primary outcomes, secondary outcomes, adverse event rates,
alarms per treatment, and alarm response times between the two groups.
Patients demonstrated high adherence rates of 96 percent, and 99
percent for the in-center and in-home groups, respectively. There is
bias from the open-label study and this is a small study conducted over
a short period of 12 weeks total, 4 weeks of in-home dialysis. Long-
term and larger studies would be helpful to capture any safety signals.
Some authors serve as Chief Medical Officer or consultants for Outset
Medical.
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\202\ Plumb TJ, Alvarez L, Ross DL, Lee JJ, Mulhern JG, Bell JL,
Abra G, Prichard SS, Chertow GM, Aragon MA. Safety and efficacy of
the Tablo hemodialysis system for in-center and home hemodialysis.
Hemodial Int. 2020 Jan;24(1):22-28. doi: 10.1111/hdi.12795. Epub
2019 Nov 7.
---------------------------------------------------------------------------
Kraus M, et al.\203\ is a study involving the comparator
technology known as NxStage[supreg] System, which is a portable HD
unit. This was a prospective, open-label, crossover study comparing in-
center HD versus home HD in 32 patients over 18 weeks total. The
primary endpoint was delivery of 90 percent prescribed fluid volume,
which was achieved in similar fashion and >90 percent in both groups.
There were statistically significant differences in adverse events,
which favored the home HD group. The applicant included this study to
demonstrate similar evidence as well as compare time spent in
performing the home sessions. Treatment durations were slightly shorter
than what was noted in the IDE study above (mean 2.8 hours for
NxStage[supreg] versus mean 3.4 hours with Tablo[supreg] Hemodialysis
System). This study was supported by NxStage[supreg] Medical Inc.
---------------------------------------------------------------------------
\203\ Kraus M, Burkart J, Hegeman R, Solomon R, Coplon N, Moran
J, A comparison of center-based vs. home-based daily hemodialysis
for patients with end-stage renal disease. Hemodialysis
International, 11: 468-477, (2007).
---------------------------------------------------------------------------
Posters/Abstracts
Alvarez, Luis et al.\204\ is a retrospective study, 29
patients underwent HD with the Tablo[supreg] Hemodialysis System at a
lower flow rate than what is used in conventional in-center HD. Average
treatment times were slightly higher in the Tablo[supreg] Hemodialysis
System group compared to those using non-Tablo[supreg] systems. After
patient weight stratification at 90 kg, authors felt that both groups
achieved similar weight changes (extrapolated from pre and post
weights), as well as Kt/Vurea change. This research was funded by
Outset Medical, Inc.
---------------------------------------------------------------------------
\204\ Alvarez L, Spry L. Mulhern J, Prichard S, Shallall C,
Chertow G, Aragon, M, Urea Clearance Results in Patients Dialyzed
Thrice Weekly Using a Dialysate Flow of 300 mL/min, clinical
abstract, presented March 2019, Annual Dialysis Conference, Dallas,
TX.
---------------------------------------------------------------------------
Alvarez, Luis et al.\205\ utilized lower flow rates of 300
ml/min, and evaluated patients as they transitioned to in-center but
self-directed HD with Tablo[supreg] Hemodialysis System. Patients
underwent 3 times a week treatment and data was collected over a 3-
month period. Based on urea samples and calculated Kt/Vurea, authors
concluded that this treatment resulted in adequate clearance.
---------------------------------------------------------------------------
\205\ Alvarez, Luis and Chertow, Glenn, Real World In-Center
Urea Clearance Experience with a Novel Hemodialysis System, clinical
abstract, presented March 2019, Annual Dialysis Conference, Dallas,
TX.
---------------------------------------------------------------------------
Chahal, Yaadveer \206\ is a study that focused on the
patient experience through surveys and compared the patient's responses
to prior in-home and in-center experiences. As part of the IDE study,
13 participants provided survey responses to compare their experience
with the Tablo[supreg] Hemodialysis System to their prior experience
with in-home dialysis. Of those 13 participants, 85.6 percent found
this system easier to use. While this is promising, the true test of
superiority in this realm would be rates of discontinuation at 1 year.
Issues of self-cannulation and the burden of this responsibility still
remain with this system. The primary study was undertaken by Outset
Medical.
---------------------------------------------------------------------------
\206\ Chahal, Yaadveer. Patient Device Preference for Home
Hemodialysis: A Subset Analysis of the Tablo Home IDE Trial,
Abstract Accepted by the National Kidney Foundation Spring Clinical
Meeting 2020.
---------------------------------------------------------------------------
Unpublished Data
Outset Medical Data \207\ is a limited section, in which
the applicant submitted cold and hypotensive events while on in-center
or in-home HD. From just raw numbers, there were lower percentages of
either sign/symptom within the home dialysis group compared to in-
center.
---------------------------------------------------------------------------
\207\ Outset Medical Data from Home IDE Trial, page 33 of
clinical report submitted to the FDA, data Table 43, 2019.
---------------------------------------------------------------------------
(g) CMS Comments
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42183),
only the Tablo[supreg] Cartridge portion of the Tablo[supreg]
Hemodialysis System was evaluated in this application, but it is
important to note that it can only be used with the Tablo[supreg]
Hemodialysis System. Although there are changes to the Tablo[supreg]
Hemodialysis System for home use, the cartridge portion remains
unchanged from its original FDA approval. Therefore, the cartridge
itself is not new. Also, it is unclear as to whether the Tablo[supreg]
Hemodialysis System can be used in-center without the cartridge. As
such, much of the evidence presented in this application is really
about the system itself, such as ease of training, its various
features, and less about the incremental benefit of using the
cartridge. Additionally, the system itself may have its own risks and
benefits which are not within the scope of this application, and
peripherally and incompletely addressed with the provided materials.
For example, a study should be conducted determining the number of
patients who were back in the hospital for a dialysis-related
condition.
In the CY 2021 ESRD PPS proposed rule (85 FR 42183), we stated that
to evaluate the cartridge, it would be helpful to have studies on
whether there are any issues with the components of the cartridge (that
is, any dialyzer reactions to tubing, any issues affecting clearance).
Since the primary intent of the cartridge is to facilitate patient set-
up at home, the most useful evidence would be in the form of larger
studies of patient-reported outcomes, quality of life, analyses of
patient/caregiver burnout, and sustained adherence (beyond 1 year) to
the use of this home-based modality. If the applicant is claiming to
improve the patients' quality of life, then it needs to be proven for
patient-specific outcomes and with a risk-benefit analysis to the
patient. In some of the references cited, the patient factors affecting
home HD are self-cannulation, burdens to caregivers, and concerns for
complications, yet the cartridge has not demonstrated improvements in
addressing these issues.
We stated that the cartridge is a promising concept to encourage
home HD but again, the evaluation of this technology is complicated by
the need to also peripherally assess the system. There does not appear
to be a need for this cartridge in the hospital or clinic setting as
trained personnel should be able to assist with set-up. Within the
larger policy context of FDA approval and the fact that TPNIES does not
currently cover capital-related assets, we believe there are some
irregularities and misalignments in the current application, and we are
concerned that the stand-alone cartridge cannot be evaluated for
meeting the criteria for SCI.
[[Page 71464]]
The Outset Medical application was submitted only for the
Tablo[supreg] Cartridge, which can only be used with the Tablo[supreg]
Hemodialysis System. As background, the Tablo[supreg] Hemodialysis
System originally received FDA marketing authorization for hospital and
outpatient use on November 15, 2016. Without any additional studies
being required, an FDA marketing authorization was issued for just the
cartridge on December 19, 2019. An application was submitted by Outset
Medical to the FDA for home use of only the Tablo[supreg] Hemodialysis
System, not the cartridge. FDA marketing authorization was issued for
the Tablo[supreg] Hemodialysis System on March 31, 2020. Therefore,
with regard to the application for TPNIES for the Tablo[supreg]
Cartridge, it does not meet the newness requirement at Sec.
413.236(b)(2), which specifies that the item is granted FDA marketing
authorization on or after January 1, 2020.
We invited public comment as to whether the stand-alone cartridge
of the Tablo[supreg] Hemodialysis System meets the SCI criteria for the
TPNIES.
The collective comments and our response to them are set forth
below.
Comment: The applicant suggested that because a HD system received
approval for home use, the system and cartridge can be marketed in the
same home setting. Additionally, the applicant stated, because the
system and cartridge must operate together, the SCI should be linked.
The applicant disagrees with the idea of only the cartridge being
relevant.
Another commenter stated that according to the TPNIES policy CMS
finalized for payment in CY 2021, the equipment or supply being
considered for an add-on payment must represent an advance that
substantially improves, relative to technologies previously available,
the diagnosis or treatment of Medicare beneficiaries. The commenter
stated that the evidence submitted by the applicant describes the
features of the Tablo[supreg] Hemodialysis System and only the system.
They noted that the applicant does not offer support for its assertion
that the Tablo[supreg] Cartridge substantially improves the diagnosis
or treatment of Medicare beneficiaries relative to dialysis services
previously available. The commenter stated that because the application
offers no clinical evidence on the cartridge itself, the subject of the
application, it does not meet the eligibility requirements and CMS
should not approve the TPNIES for this product for CY 2021.
A commenter noted that the studies that were performed were only on
the Tablo[supreg] Hemodialysis System and not on the cartridge, which
is the subject of the TPNIES application.
Response: CMS is supportive of new and innovative supplies and
equipment for renal dialysis services. However, the Tablo[supreg]
Cartridge does not meet the newness eligibility criteria of Sec.
413.236(b)(2). Since the publication of the CY 2021 ESRD PPS proposed
rule, we have learned that the Tablo[supreg] Cartridge and
Tablo[supreg] Hemodialysis System have two different dates for FDA
marketing authorizations. The FDA marketing authorization was issued
for just the cartridge on December 19, 2019, which pre-dates the
eligibility date for the TPNIES of January 1, 2020. Therefore, the
cartridge does not meet the newness criterion.
In addition, CMS agrees with the commenters that the application
for the cartridge only included studies applicable to the Tablo[supreg]
Hemodialysis System as a whole and the cartridge by itself does not
show evidence of SCI. Therefore, we are not approving the Tablo[supreg]
Cartridge for as eligible for the TPNIES for CY 2021.
III. CY 2021 Payment for Renal Dialysis Services Furnished to
Individuals With Acute Kidney Injury (AKI)
A. Background
The Trade Preferences Extension Act of 2015 (TPEA) (Pub. L. 114-27)
was enacted on June 29, 2015, and amended the Act to provide coverage
and payment for dialysis furnished by an ESRD facility to an individual
with acute kidney injury (AKI). Specifically, section 808(a) of the
TPEA amended section 1861(s)(2)(F) of the Act to provide coverage for
renal dialysis services furnished on or after January 1, 2017, by a
renal dialysis facility or a provider of services paid under section
1881(b)(14) of the Act to an individual with AKI. Section 808(b) of the
TPEA amended section 1834 of the Act by adding a subsection (r) to
provide payment, beginning January 1, 2017, for renal dialysis services
furnished by renal dialysis facilities or providers of services paid
under section 1881(b)(14) of the Act to individuals with AKI at the
ESRD PPS base rate, as adjusted by any applicable geographic adjustment
applied under section 1881(b)(14)(D)(iv)(II) of the Act and adjusted
(on a budget neutral basis for payments under section 1834(r) of the
Act) by any other adjustment factor under section 1881(b)(14)(D) of the
Act that the Secretary elects.
In the CY 2017 ESRD PPS final rule, we finalized several coverage
and payment policies in order to implement subsection (r) of section
1834 of the Act and the amendments to section 1881(s)(2)(F) of the Act,
including the payment rate for AKI dialysis (81 FR 77866 through 77872,
and 77965). We interpret section 1834(r)(1) of the Act as requiring the
amount of payment for AKI dialysis services to be the base rate for
renal dialysis services determined for a year under the ESRD PPS base
rate as set forth in Sec. 413.220, updated by the ESRD bundled market
basket percentage increase factor minus a productivity adjustment as
set forth in Sec. 413.196(d)(1), adjusted for wages as set forth in
Sec. 413.231, and adjusted by any other amounts deemed appropriate by
the Secretary under Sec. 413.373. We codified this policy in Sec.
413.372 (81 FR 77965).
B. Summary of the Proposed Provisions, Public Comments, and Responses
to Comments on the CY 2021 Payment for Renal Dialysis Services
Furnished to Individuals With AKI
The proposed rule, titled ``Medicare Program; End-Stage Renal
Disease Prospective Payment System, Payment for Renal Dialysis Services
Furnished to Individuals with Acute Kidney Injury, and End-Stage Renal
Disease Quality Incentive Program'' (85 FR 42132 through 42208),
hereinafter referred to as the ``CY 2021 ESRD PPS proposed rule,'' was
published in the Federal Register on July 13, 2020, with a comment
period that ended on September 4, 2020. In that proposed rule, we
proposed to update the AKI dialysis payment rate. We received 4 public
comments on our proposal, including comments from ESRD facilities,
national renal groups, transplant organizations, and nurses.
We also received several comments related to issues that we either
did not discuss in the proposed rule or that we discussed for the
purpose of background or context, but for which we did not propose
changes. These include, for example, AKI dialysis in the home,
modifications to claims and cost reports to monitor AKI dialysis, and
Conditions of Coverage specific to AKI dialysis. While we are not
addressing those comments in this final rule because they are either
out of scope of the proposed rule or concern topics for which we did
not propose changes, we thank the commenters for their input and will
consider the recommendations in future rulemaking.
In this final rule, we provide a summary of the proposed
provisions, a summary of the public comments received and our responses
to them, and the policies we are finalizing for CY 2021 payment for
renal dialysis services furnished to individuals with AKI.
[[Page 71465]]
C. Annual Payment Rate Update for CY 2021
1. CY 2021 AKI Dialysis Payment Rate
The payment rate for AKI dialysis is the ESRD PPS base rate
determined for a year under section 1881(b)(14) of the Act, which is
the finalized ESRD PPS base rate, including the applicable annual
market basket payment update, geographic wage adjustments and any other
discretionary adjustments, for such year. We note that ESRD facilities
have the ability to bill Medicare for non-renal dialysis items and
services and receive separate payment in addition to the payment rate
for AKI dialysis.
As discussed in section II.B.4.d of the CY 2021 ESRD PPS proposed
rule and section II.B.4.d of this final rule, the CY 2021 ESRD PPS base
rate is $253.13, which reflects the application of the CY 2021 wage
index budget-neutrality adjustment factor of .999485, a final addition
to the ESRD PPS base rate to include calcimimetics, and the CY 2021
ESRDB market basket increase of 1.9 percent reduced by the multifactor
productivity adjustment of 0.3 percentage point, that is, 1.6 percent.
Accordingly, we are finalizing a CY 2021 per treatment payment rate of
$253.13 for renal dialysis services furnished by ESRD facilities to
individuals with AKI. This payment rate is further adjusted by the wage
index as discussed below.
2. Geographic Adjustment Factor
Under section 1834(r)(1) of the Act and Sec. 413.372, the amount
of payment for AKI dialysis services is the base rate for renal
dialysis services determined for a year under section 1881(b)(14) of
the Act (updated by the ESRD bundled market basket increase that is
reduced by the multifactor productivity adjustment), as adjusted by any
applicable geographic adjustment factor applied under section
1881(b)(14)(D)(iv)(II) of the Act. Accordingly, we apply the same wage
index under Sec. 413.231 that is used under the ESRD PPS and discussed
in section II.B.4.b of this final rule. The AKI dialysis payment rate
is adjusted by the wage index for a particular ESRD facility in the
same way that the ESRD PPS base rate is adjusted by the wage index for
that facility (81 FR 77868). Specifically, we apply the wage index to
the labor-related share of the ESRD PPS base rate that we utilize for
AKI dialysis to compute the wage adjusted per-treatment AKI dialysis
payment rate. As stated previously, we are finalizing a CY 2021 AKI
dialysis payment rate of $253.13, adjusted by the ESRD facility's wage
index.
The comments and our responses to the comments on our AKI dialysis
payment proposal are set forth below.
Comment: Commenters were supportive of the updates to the AKI
dialysis payment rate for CY 2021.
Response: We appreciate the comments in support of the update.
Final Rule Action: We are finalizing the AKI payment rate as
proposed, that is, the AKI payment rate is based on the finalized ESRD
PPS base rate. Specifically, the final CY 2021 ESRD PPS base rate is
$253.13. Accordingly, we are finalizing a CY 2021 payment rate of
$253.13 for renal dialysis services furnished by ESRD facilities to
individuals with AKI.
IV. End-Stage Renal Disease Quality Incentive Program (ESRD QIP)
A. Background
For a detailed discussion of the End-Stage Renal Disease Quality
Incentive Program's (ESRD QIP's) background and history, including a
description of the Program's authorizing statute and the policies that
we have adopted in previous final rules, we refer readers to the
following final rules:
CY 2011 ESRD PPS final rule (75 FR 49030),
CY 2012 ESRD PPS final rule (76 FR 628),
CY 2012 ESRD PPS final rule (76 FR 70228),
CY 2013 ESRD PPS final rule (77 FR 67450),
CY 2014 ESRD PPS final rule (78 FR 72156),
CY 2015 ESRD PPS final rule (79 FR 66120),
CY 2016 ESRD PPS final rule (80 FR 68968),
CY 2017 ESRD PPS final rule (81 FR 77834),
CY 2018 ESRD PPS final rule (82 FR 50738),
CY 2019 ESRD PPS final rule (83 FR 56922), and
CY 2020 ESRD PPS final rule (84 FR 60713).
We have also codified many of our policies for the ESRD QIP at 42
CFR 413.177 and 413.178.
B. Summary of the Proposed Provisions, Public Comments, Responses to
Comments, and Finalized Policies for the ESRD QIP
The proposed rule, titled ``Medicare Program; End-Stage Renal
Disease Prospective Payment System, Payment for Renal Dialysis Services
Furnished to Individuals with Acute Kidney Injury, and End-Stage Renal
Disease Quality Incentive Program'' (85 FR 42132 through 42208),
referred to as the ``CY 2021 ESRD PPS proposed rule,'' was published in
the Federal Register on July 13, 2020, with a comment period that ended
on September 4, 2020. In that proposed rule, we proposed updates to the
ESRD QIP for PY 2023, and included policies continuing for PY 2024. We
received a diverse range of public comments on our proposals, including
comments from large dialysis organizations, renal dialysis facilities,
national renal groups, nephrologists, patient organizations, patients
and care partners, health care systems, nurses, renal dietitians, and
other stakeholders.
In this final rule, we provide a summary of each proposed
provision, a summary of the public comments received and our responses
to them, and the policies we are finalizing for the ESRD QIP.
C. Updates to Requirements Beginning With the PY 2023 ESRD QIP
1. PY 2023 ESRD QIP Measure Set
Under our current policy, we retain all ESRD QIP measures from year
to year unless we propose through rulemaking to remove them or
otherwise provide notification of immediate removal if a measure raises
potential safety issues (77 FR 67475). Accordingly, the PY 2023 ESRD
QIP measure set will include the same 14 measures as the PY 2022 ESRD
QIP measure set. These measures are described in Table 6 of this final
rule. For the most recent information on each measure's technical
specifications for PY 2023, we refer readers to the CMS ESRD Measures
Manual for the 2021 Performance Period.\208\
---------------------------------------------------------------------------
\208\ https://www.cms.gov/files/document/esrd-measures-manual-v60.pdf.
[[Page 71466]]
Table 6--PY 2023 ESRD QIP Measure Set
------------------------------------------------------------------------
National quality forum (NQF) # Measure title and description
------------------------------------------------------------------------
0258.............................. In-Center Hemodialysis Consumer
Assessment of Healthcare Providers
and Systems (ICH CAHPS) Survey
Administration, a clinical measure.
Measure assesses patients' self-
reported experience of care through
percentage of patient responses to
multiple testing tools.
2496.............................. Standardized Readmission Ratio
(SRR), a clinical measure.
Ratio of the number of observed
unplanned 30-day hospital
readmissions to the number of
expected unplanned 30-day
readmissions.
Based on NQF #2979................ Standardized Transfusion Ratio
(STrR), a reporting measure.
Ratio of the number of observed
eligible red blood cell transfusion
events occurring in patients
dialyzing at a facility to the
number of eligible transfusions
that would be expected.
N/A............................... (Kt/V) Dialysis Adequacy
Comprehensive, a clinical measure.
A measure of dialysis adequacy where
K is dialyzer clearance, t is
dialysis time, and V is total body
water volume. Percentage of all
patient months for patients whose
delivered dose of dialysis (either
hemodialysis or peritoneal
dialysis) met the specified
threshold during the reporting
period.
2977.............................. Hemodialysis Vascular Access:
Standardized Fistula Rate clinical
measure.
Measures the use of an arteriovenous
(AV) fistula as the sole means of
vascular access as of the last
hemodialysis treatment session of
the month.
2978.............................. Hemodialysis Vascular Access: Long-
Term Catheter Rate clinical
measure.
Measures the use of a catheter
continuously for 3 months or longer
as of the last hemodialysis
treatment session of the month.
1454.............................. Hypercalcemia, a clinical measure.
Proportion of patient-months with 3-
month rolling average of total
uncorrected serum or plasma calcium
greater than 10.2 mg/dL.
1463.............................. Standardized Hospitalization Ratio
(SHR), a clinical measure.
Risk-adjusted SHR of the number of
observed hospitalizations to the
number of expected
hospitalizations.
Based on NQF #0418................ Clinical Depression Screening and
Follow-Up, a reporting measure.
Facility reports in CROWNWeb one of
six conditions for each qualifying
patient treated during performance
period.
N/A............................... Ultrafiltration Rate (UFR), a
reporting measure.*
Number of months for which a
facility reports elements required
for ultrafiltration rates for each
qualifying patient.
Based on NQF #1460................ National Healthcare Safety Network
(NHSN) Bloodstream Infection (BSI)
in Hemodialysis Patients, a
clinical measure.
The Standardized Infection Ratio
(SIR) of BSIs will be calculated
among patients receiving
hemodialysis at outpatient
hemodialysis centers.
N/A............................... NHSN Dialysis Event reporting
measure.
Number of months for which facility
reports NHSN Dialysis Event data to
the Centers for Disease Control and
Prevention (CDC).
N/A............................... Percentage of Prevalent Patients
Waitlisted (PPPW), a clinical
measure.
Percentage of patients at each
dialysis facility who were on the
kidney or kidney-pancreas
transplant waitlist averaged across
patients prevalent on the last day
of each month during the
performance period.
2988.............................. Medication Reconciliation for
Patients Receiving Care at Dialysis
Facilities (MedRec), a reporting
measure.
Percentage of patient-months for
which medication reconciliation was
performed and documented by an
eligible professional.
------------------------------------------------------------------------
Note: *After consideration of the comments, we are finalizing our
proposal to update the scoring methodology used to calculate the
Ultrafiltration Rate reporting measure so that facilities are scored
based on the number of eligible patient-months, instead of facility-
months, and refer readers to section IV.C.3 of this final rule for a
discussion of this new scoring methodology.
We did not propose to adopt any new measures for the PY 2023 ESRD
QIP measure set.
2. Performance Standards for the PY 2023 ESRD QIP
Section 1881(h)(4)(A) of the Social Security Act (the Act) requires
the Secretary to establish performance standards with respect to the
measures selected for the ESRD QIP for a performance period with
respect to a year. The performance standards must include levels of
achievement and improvement, as required by section 1881(h)(4)(B) of
the Act, and must be established prior to the beginning of the
performance period for the year involved, as required by section
1881(h)(4)(C) of the Act. We refer readers to the CY 2013 ESRD PPS
final rule (76 FR 70277) for a discussion of the achievement and
improvement standards that we have established for clinical measures
used in the ESRD QIP. We recently codified definitions for the terms
``achievement threshold,'' ``benchmark,'' ``improvement threshold,''
and ``performance standard'' in our regulations at Sec. 413.178(a)(1),
(3), (7), and (12), respectively.
In the CY 2020 ESRD PPS final rule (84 FR 60728), we set the
performance period for the PY 2023 ESRD QIP as CY 2021 and the baseline
period as CY 2019. In the CY 2021 ESRD PPS proposed rule (85 FR 42185
through 42186), we estimated the achievement thresholds, 50th
percentiles of the national performance, and benchmarks for the PY 2023
clinical measures in Table 7 using data from 2018.
[[Page 71467]]
Table 7--Estimated Performance Standards for the PY 2023 ESRD QIP Clinical Measures Using the Most Recently
Available Data
----------------------------------------------------------------------------------------------------------------
Achievement threshold Median (50th percentile Benchmark (90th
Measure (15th percentile of of national percentile of national
national performance) * performance) * performance) *
----------------------------------------------------------------------------------------------------------------
Vascular access type (VAT):
Standardized Fistula Rate........ 53.72% 64.96% 77.31%
Catheter Rate.................... 17.70% 10.50% 4.32%
Kt/V Comprehensive................... 93.56% 97.13% 99.24%
Hypercalcemia........................ 1.77% 0.58% (0.59%) 0.00%
Standardized Readmission Ratio....... 1.268 (1.269) 0.998 0.629 (0.641)
Standardized Transfusion Ratio \209\. 1.675 0.830 0.173
NHSN BSI............................. 1.365 0.604 0
Standardized Hospitalization Ratio... 1.248 0.967 (0.976) 0.670 (0.677)
PPPW................................. 8.12% 16.73% 33.90%
ICH CAHPS: Nephrologists' 58.12% 67.89% 78.52% (78.35%)
Communication and Caring............
ICH CAHPS: Quality of Dialysis Center 54.16 (53.87%) 62.47% 72.11%
Care and Operations.................
ICH CAHPS: Providing Information to 74.09% 80.48% 87.14%
Patients............................
ICH CAHPS: Overall Rating of 49.33% (47.92%) 62.22% (60.59%) 76.57% (75.16%)
Nephrologists.......................
ICH CAHPS: Overall Rating of Dialysis 49.12% (48.59%) 63.04% (62.99%) 77.49%
Center Staff........................
ICH CAHPS: Overall Rating of the 53.98% (53.46%) 68.59% 83.03%
Dialysis Facility...................
----------------------------------------------------------------------------------------------------------------
Note: We stated in the CY 2021 ESRD QIP proposed rule that if the PY 2023 final numerical value is worse than
the PY 2022 finalized value, we will substitute the PY 2023 final numerical value for the PY 2022 finalized
value. We also provided the PY 2023 finalized value as a reference in parentheses for clinical measures whose
PY 2023 estimated value is worse than the PY 2022 finalized value.
Data sources: VAT measures: 2018 CROWNWeb; SRR, SHR: 2018 Medicare claims; Kt/V: 2018 CROWNWeb; Hypercalcemia:
2018 CROWNWeb; NHSN: 2018 CDC; ICH CAHPS: CMS 2018; PPPW: 2018 CROWNWeb and 2018 OPTN.
We are now updating the achievement thresholds, 50th percentiles of
the national performance, and benchmarks for the PY 2023 clinical
measures as shown in Table 8, using the most recently available data,
which includes CY 2019 data.
---------------------------------------------------------------------------
\209\ The STrR measure was included in our table in the CY 2021
ESRD PPS proposed rule (84 FR 60728), however these thresholds do
not apply because this is a reporting measure, as is more fully
addressed in response to comment below.
Table 8--Finalized Performance Standards for the PY 2023 ESRD QIP Clinical Measures Using the Most Recently
Available Data
----------------------------------------------------------------------------------------------------------------
Achievement threshold Median (50th percentile Benchmark (90th
Measure (15th percentile of of national percentile of national
national performance) performance) performance)
----------------------------------------------------------------------------------------------------------------
Vascular access type (VAT):
Standardized Fistula Rate........ 53.29% 64.36% 76.77%
Catheter Rate.................... 18.35% 11.04% 4.69%
Kt/V Comprehensive................... 94.33% 97.61% 99.42%
Hypercalcemia........................ 1.54% 0.49% * 0.00%
Standardized Readmission Ratio....... * 1.268 * 0.998 * 0.629
NHSN BSI............................. 1.193 0.516 * 0
Standardized Hospitalization Ratio... * 1.248 * 0.967 * 0.670
PPPW................................. * 8.12% * 16.73% * 33.90%
ICH CAHPS: Nephrologists' 58.20% 67.90% 79.15%
Communication and Caring............
ICH CAHPS: Quality of Dialysis Center 54.64% 63.08% 72.66%
Care and Operations.................
ICH CAHPS: Providing Information to 74.49% 81.09% 87.80%
Patients............................
ICH CAHPS: Overall Rating of * 49.33% * 62.22% * 76.57%
Nephrologists.......................
ICH CAHPS: Overall Rating of Dialysis 50.02% 63.37% 78.30%
Center Staff........................
ICH CAHPS: Overall Rating of the 54.51% 69.04% 83.72%
Dialysis Facility...................
----------------------------------------------------------------------------------------------------------------
Note: Values marked with an asterisk (*) are also the final performance standards for those measures for PY
2022. In accordance with our longstanding policy, we are finalizing those numerical values for those measures
for PY 2023 because they are higher standards than the PY 2023 numerical values for those measures.
Data sources: VAT measures: 2019 CROWNWeb; SRR, SHR: 2019 Medicare claims; Kt/V: 2019 CROWNWeb; Hypercalcemia:
2019 CROWNWeb; NHSN: 2019 CDC; ICH CAHPS: CMS 2019; PPPW: 2019 CROWNWeb and 2019 OPTN.
In addition, we have summarized in Table 9 existing requirements
for successful reporting on reporting measures in the PY 2023 ESRD QIP.
[[Page 71468]]
Table 9--Requirements for Successful Reporting on the PY 2023 ESRD QIP
Reporting Measures
------------------------------------------------------------------------
Measure Reporting frequency Data elements
------------------------------------------------------------------------
Ultrafiltration............. 4 data elements are In-Center
reported for every Hemodialysis (ICHD)
HD Kt/V session Kt/V Date.
during the week of Post-
the monthly Kt/V Dialysis Weight.
draw, and Kt/V date Pre-
is reported monthly. Dialysis Weight.
Delivered
Minutes of BUN
Hemodialysis.
Number of
sessions of
dialysis delivered
by the dialysis
unit to the patient
in the reporting
Month.
MedRec...................... Monthly............. Date of the
medication
reconciliation.
Type of
eligible
professional who
completed the
medication
reconciliation:
[cir] Physician,
[cir] nurse,
[cir] ARNP,
[cir] PA,
[cir] pharmacist, or
[cir] pharmacy
technician
personnel.
Name of
eligible
professional.
Clinical Depression 1 of 6 conditions Screening
Screening and Follow-Up. reported annually. for clinical
depression is
documented as being
positive and a
follow-up plan is
documented.
Screening
for clinical
depression
documented as
positive, a follow-
up plan is not
documented, and the
facility possesses
documentation that
the patient is not
eligible.
Screening
for clinical
depression
documented as
positive, the
facility possesses
no documentation of
a follow-up plan,
and no reason is
given.
Screening
for clinical
depression
documented as
negative and no
follow-up plan
required.
Screening
for clinical
depression not
documented, but the
facility possesses
documentation
stating the patient
is not eligible.
Clinical
depression
screening not
documented, and no
reason is given.
NHSN Dialysis Event......... Monthly data Three types of
reported quarterly. dialysis events
reported:
IV
antimicrobial
start;
positive
blood culture; and
pus,
redness, or
increased swelling
at the vascular
access site.
STrR........................ .................... At least 10 patient-
years at risk
during the
performance period.
------------------------------------------------------------------------
We received a few comments on the PY 2023 ESRD QIP measure set.
Comment: One commenter expressed general agreement with CMS's
policy to maintain current structural ESRD QIP policies. The commenter
also expressed support for the proposed updates to the performance
standards applicable to PY 2023.
Response: We thank the commenter for its support.
Comment: One commenter requested clarification that the
Standardized Transfusion Ratio (STrR) measure will be a reporting
measure. The commenter noted that the measure was listed in the CY 2021
ESRD PPS proposed rule as a reporting measure in the PY 2023 measure
set but was included in the Estimated Performance Standards for PY 2023
Clinical Measures table.
Response: We appreciate the commenter bringing this issue to our
attention. We inadvertently included clinical performance standards for
the STrR measure in Table 7 of the CY 2021 ESRD PPS proposed rule. In
the CY 2020 ESRD PPS final rule (84 FR 60720 through 60723), we
finalized that beginning with the PY 2022 ESRD QIP, we would convert
the STrR clinical measure to a reporting measure and would score the
measure based on the performance standards listed in Table 6 of that
final rule, which provided that the applicable reporting performance
standard for the STrR reporting measure is calculated annually and
requires a facility to have at least 10 eligible patient-years at risk
over the course of the performance period (84 FR 60718). The reporting
requirements for the STrR measure are also included in Table 9 of this
final rule.
3. Update to the Scoring Methodology for the Ultrafiltration Rate
Reporting Measure
In the CY 2017 ESRD PPS final rule, we adopted the Ultrafiltration
Rate reporting measure under the authority of section 1881(h)(2)(B)(ii)
of the Act (81 FR 77912). The measure assesses the number of months for
which a facility reports all data elements required to calculate
ultrafiltration rates (UFR) for each qualifying patient. It is based
upon the NQF-endorsed Avoidance of Utilization of High Ultrafiltration
Rate (>/= 13 ml/kg/hr) (NQF #2701), which assesses the percentage of
patient-months for patients with a UFR greater than or equal to 13 ml/
kg/hr.
In the CY 2017 ESRD PPS final rule (81 FR 77917), we also finalized
a policy to score the Ultrafiltration Rate reporting measure using the
following equation, beginning in PY 2020 (81 FR 77917):
[[Page 71469]]
[GRAPHIC] [TIFF OMITTED] TR09NO20.000
In the CY 2021 ESRD PPS proposed rule (85 FR 42186 through 42187),
we proposed to replace the current Ultrafiltration Rate reporting
measure scoring equation with the following equation, beginning with PY
2023:
[GRAPHIC] [TIFF OMITTED] TR09NO20.001
We stated this proposed update would modify the scoring methodology
for the Ultrafiltration Rate reporting measure so that facilities would
be scored based on the number of eligible patient-months, as opposed to
facility-months. We explained that the facility-month scoring
methodology requires facilities to report every data element necessary
to calculate a UFR reporting rate for 100 percent of its eligible
patients each month in order to receive any credit for successfully
reporting the measure for that month. We stated that the facility-month
scoring approach then counts the number of months in the performance
period that the facility received credit for reporting over the course
of the performance period. For example, under the facility-scoring
methodology, if a facility has 10 eligible patients in January, the
facility must report all required UFR data elements for each of those
10 patients in order to receive any credit for January reporting. We
stated that if the facility only reports the required UFR data elements
for 9 of those 10 patients, the facility receives a zero for January.
In the CY 2021 ESRD PPS proposed rule, we stated that our concern with
this approach is that there may be circumstances, such as when an
eligible patient is hospitalized, when facilities cannot obtain UFR
data for a single patient, and as a consequence, cannot receive any
credit for the data it did report that month (85 FR 42187). When we
finalized the Ultrafiltration Rate reporting measure in the CY 2017
ESRD PPS final rule, stakeholders raised their concern regarding this
issue (81 FR 77914). At the time, we responded that because we defined
the population for this reporting measure by assignment to a facility
for a full month, the facility is still required to provide data even
in cases where a patient may spend part of that month hospitalized
since the data elements are products of ongoing dialysis treatment. We
stated that since we do not restrict facilities from coordinating with
hospitals to obtain relevant data, we believed that such coordination
is appropriate. However, our rationale for this was based on the
reporting requirements prescribed by a facility-month definition.
Furthermore, we stated that coordinating with hospitals to obtain
relevant data continues to be a stakeholder concern in reporting UFR
data. In the CY 2021 ESRD PPS proposed rule, we stated our belief that
the proposed patient-month scoring methodology is more objective
because it scores facilities based on the percentage of eligible
patients across the entire performance period for which they report all
UFR data elements (85 FR 42187). Thus, if a facility has 100 eligible
patients in CY 2020 and reports all data elements necessary to
calculate a UFR rate for 90 of them, we stated that the facility will
receive a rounded score based on a 90 percent reporting rate. We
believe that this methodology will give facilities more flexibility to
receive credit for UFR reporting throughout the 12-month performance
period.
In the CY 2021 ESRD PPS proposed rule, we stated that the
Ultrafiltration Rate reporting measure is intended to guard against
risks associated with high ultrafiltration (that is, rapid fluid
removal) rates for adult dialysis patients undergoing hemodialysis
(HD), because of indications that high ultrafiltration is an
independent predictor of mortality. We stated that faster
ultrafiltration may lead to a number of health risks resulting from
large volumes of fluid removed rapidly during each dialysis session,
with deleterious consequences for the patient both in the short and
longer term. The outcome of this reporting measure is the documentation
of the ultrafiltration measurements, which ultimately contributes to
the quality of the patient's ESRD treatment. We stated that we believe
that calculating the measure rates using the patient-month scoring
methodology better supports our goal of assessing performance on
whether the facility is documenting UFR for its eligible patients,
which we believe will lead to better patient-level outcomes (85 FR
42187).
We also stated our belief that this change is consistent with our
plan to re-evaluate our reporting measures for opportunities to more
closely align them with NQF measure specifications (see 84 FR 60724).
We stated that we believe that this proposed change would make the
Ultrafiltration Rate reporting measure more consistent with the NQF
measure upon which it is based, Avoidance of Utilization of High
Ultrafiltration Rate (>/= 13 ml/kg/hr) (NQF #2701), which reports
results using a ``patient-month'' construction. Although we stated that
we recognize that both the Anemia Management reporting measure and the
Serum Phosphorus reporting measure are also calculated using a
facility-month construction, we stated that we were not proposing to
change the scoring methodology used for either of those measures
because both measures are finalized for removal beginning with the PY
2021 ESRD QIP (83 FR 56986 through 56989). We stated that the proposed
update to the UFR reporting measure scoring methodology will make the
scoring methodology for that measure consistent with the scoring
methodology we are using to calculate the Medication Reconciliation
(MedRec) reporting measure (83 FR 57011). We stated that we also
believed that the utilization of this patient-month scoring methodology
for both the MedRec and the Ultrafiltration Rate reporting measures
better reflects our intent to score facilities based on actions taken
by the facility that impact patient experiences.
We sought comment on this proposal.
The comments on our proposal to update the scoring methodology for
the Ultrafiltration Rate reporting measure and our responses to those
comments are set forth below.
Comment: Several commenters expressed support for the proposal to
change the Ultrafiltration Rate reporting measure's scoring methodology
from facility-months to patient-months. Several commenters expressed
appreciation that the ``patient-months'' construction aligns with the
NQF's Ultrafiltration Rate measure specifications. A few commenters
expressed support for the proposed
[[Page 71470]]
update to the Ultrafiltration Rate reporting measure to use patient-
months because it would ensure the reliability of measure score
calculations and thus enable CMS to better evaluate facility
performance. A few commenters expressed support for the proposed update
to the Ultrafiltration Rate reporting measure, believing that it would
help address difficulties with measure requirements where all data on
all patients had to be included in order to receive credit for
reporting each month. One commenter stated that the proposed update
would score facilities based on actions that impact patient care and
appreciated the move away from ``all or nothing'' requirements.
Response: We thank the commenters for their support. We agree that
the proposed methodology is more outcomes focused, and better supports
our goal of assessing performance on whether the facility is
documenting UFR for its eligible patients, which we believe will lead
to better patient-level outcomes. We also agree that the proposed
update will give facilities more flexibility to receive credit for UFR
reporting throughout the 12-month performance period.
Comment: One commenter expressed support for the proposed update to
the Ultrafiltration Rate reporting measure, but also stated that it
would like to work with CMS on developing an outcome measure that
better assesses quality of care for ultrafiltration.
Response: We thank the commenter for its support and continue to
welcome feedback on ways to improve measures in the program.
Comment: A few commenters expressed concern that the
Ultrafiltration Rate reporting measure may penalize facilities that are
unable to comply with reporting requirements due to circumstances
beyond their control, such as patient non-compliance due to
hospitalization or missed treatments.
Response: We thank the commenters for their feedback. Under the
current facility-month scoring methodology, a facility is required to
report every data element necessary to calculate a UFR reporting rate
for 100 percent of its eligible patients each month in order to receive
any credit for successfully reporting the measure for that month. We
believe the update to the Ultrafiltration Rate reporting measure's
scoring methodology addresses situations in which facilities may
experience challenges collecting data when patients are hospitalized or
miss treatments because it does not require 100 percent reporting for
all patients. We believe that the patient-months construction gives
facilities more flexibility to receive credit for UFR reporting
throughout the performance period because it scores a facility based on
the facility reporting all UFR data elements for eligible patients
across the entire performance period, and does not require reporting
for all eligible patients each month in order to receive the maximum
score on the measure.
Final Rule Action: After considering the comments we received, we
are finalizing our proposal to update the scoring methodology for the
Ultrafiltration Rate reporting measure as proposed, beginning with PY
2023.
4. Eligibility Requirements for the PY 2023 ESRD QIP
Our current minimum eligibility requirements for scoring the ESRD
QIP measures are described in Table 10. We did not propose any changes
to these eligibility requirements for the PY 2023 ESRD QIP.
Table 10--Eligibility Requirements for Scoring on ESRD QIP Measures
----------------------------------------------------------------------------------------------------------------
Minimum data
Measure requirements CCN open date Small facility adjuster
----------------------------------------------------------------------------------------------------------------
Kt/V Comprehensive (Clinical)........ 11 qualifying patients. N/A.................... 11-25 qualifying
patients.
VAT: Long-term Catheter Rate 11 qualifying patients. N/A.................... 11-25 qualifying
(Clinical). patients.
VAT: Standardized Fistula Rate 11 qualifying patients. N/A.................... 11-25 qualifying
(Clinical). patients.
Hypercalcemia (Clinical)............. 11 qualifying patients. N/A.................... 11-25 qualifying
patients.
NHSN BSI (Clinical).................. 11 qualifying patients. Before October 1 prior 11-25 qualifying
to the performance patients.
period that applies to
the program year.
NHSN Dialysis Event (Reporting)...... 11 qualifying patients. N/A.................... 11-25 qualifying
patients.
SRR (Clinical)....................... 11 index discharges.... N/A.................... 11-41 index discharges.
STrR (Reporting)..................... 10 patient-years at N/A.................... 10-21 patient-years at
risk. risk.
SHR (Clinical)....................... 5 patient-years at risk N/A.................... 5-14 patient-years at
risk.
ICH CAHPS (Clinical)................. Facilities with 30 or Before October 1 prior N/A.
more survey-eligible to the performance
patients during the period that applies to
calendar year the program year.
preceding the
performance period
must submit survey
results. Facilities
will not receive a
score if they do not
obtain a total of at
least 30 completed
surveys during the
performance period.
Depression Screening and Follow-Up 11 qualifying patients. Before April 1 of the N/A.
(Reporting). performance period
that applies to the
program year.
Ultrafiltration (Reporting).......... 11 qualifying patients. Before April 1 of the N/A.
performance period
that applies to the
program year.
MedRec (Reporting)................... 11 qualifying patients. Before October 1 prior N/A.
to the performance
period that applies to
the program year.
PPPW (Clinical)...................... 11 qualifying patients. N/A.................... 11-25 qualifying
patients.
----------------------------------------------------------------------------------------------------------------
[[Page 71471]]
5. Clarification of the Timeline for Facilities To Make Changes to
Their NHSN Bloodstream Infection (BSI) Clinical Measure and NHSN
Dialysis Event Reporting Measure Data for Purposes of the ESRD QIP
In the CY 2021 ESRD PPS proposed rule (85 FR 42188), we stated that
under our current policy for the NHSN BSI clinical measure and NHSN
Dialysis Event reporting measure, facilities are required to submit
monthly data on a quarterly basis, and each quarter's data is due 3
months after the end of the quarter (81 FR 77879 through 77881). As an
example, we stated that data collected by facilities between January 1
and March 31, 2021 is due to NHSN by June 30, 2021, data collected
between April 1 and June 30, 2021 is due to NHSN by September 30, 2021,
and data collected between July 1 and September 30, 2021 is due to NHSN
by December 31, 2021. We further noted that after each quarterly data
submission deadline, the Centers for Disease Control and Prevention
(CDC) takes a snapshot of the facility's data for the quarter and
creates a permanent data file. Each quarterly permanent data file is
aggregated together to create the annual CMS ESRD QIP Final Compliance
File, which the CDC transmits to CMS for purposes of determining
whether the facility has met the reporting requirements for these
measures. We also noted that facilities may make changes to their
quarterly NHSN data for purposes of the ESRD QIP at any point up until
the applicable quarterly submission data deadline (85 FR 42188).
In the CY 2021 ESRD PPS proposed rule (85 FR 42188), we stated that
we have become aware that the NHSN system does not prevent facilities
from making changes to their data for purposes of CDC surveillance
after the applicable ESRD QIP quarterly submission deadline has passed.
We also clarified that any changes that a facility makes to its data
after the ESRD QIP deadline that applies to those data will not be
included in the quarterly permanent data file that the CDC generates
for purposes of creating the annual CMS ESRD QIP Final Compliance File.
As we noted in the proposed rule, each quarterly permanent data file
captures a snapshot of the facility's data as of the quarterly
submission deadline, and that file cannot be updated for purposes of
the ESRD QIP because of operational and timing issues.
We received a few comments on this clarification.
Comment: A few commenters expressed support for the clarification
of the timeline for facilities to make changes to NHSN Dialysis Event
and the NHSN BSI measure data. One commenter expressed support for the
clarification, noting the importance of providing accurate information
about bloodstream infections to patients and caregivers.
Response: We thank the commenters for their support.
6. Payment Reduction Scale for the PY 2023 ESRD QIP
Under our current policy, a facility will not receive a payment
reduction for a payment year in connection with its performance for the
ESRD QIP if it achieves a total performance score (TPS) that is at or
above the minimum TPS (mTPS) that we establish for the payment year. We
have defined the mTPS in our regulations at Sec. 413.178(a)(8) as,
with respect to a payment year, the TPS that an ESRD facility would
receive if, during the baseline period it performed at the 50th
percentile of national performance on all clinical measures and the
median of national ESRD facility performance on all reporting measures.
Our current policy, which is codified at Sec. 413.177 of our
regulations, is also to implement the payment reductions on a sliding
scale using ranges that reflect payment reduction differentials of 0.5
percent for each 10 points that the facility's TPS falls below the
minimum TPS (76 FR 634 through 635).
In the CY 2021 ESRD PPS proposed rule (85 FR 42189), for PY 2023 we
estimated based on available data that a facility must meet or exceed a
mTPS of 57 in order to avoid a payment reduction. We noted that the
mTPS estimated in the CY 2021 ESRD PPS proposed rule was based on data
from CY 2018 instead of the PY 2023 baseline period (CY 2019) because
CY 2019 data were not yet available.
We refer readers to Table 8 of this final rule for the PY 2023
finalized performance standards for each clinical measure. We stated in
the CY 2021 ESRD PPS proposed rule that under our current policy, a
facility that achieves a TPS below 57 would receive a payment reduction
based on the TPS ranges indicated in Table 9 (85 FR 42189). Table 11 of
this final rule, is a reproduction of Table 9 from the CY 2021 ESRD PPS
proposed rule.
Table 11--Estimated Payment Reduction Scale for PY 2023 Based on the
Most Recently Available Data
------------------------------------------------------------------------
Total performance score Reduction (%)
------------------------------------------------------------------------
100-57.................................................. 0
56-47................................................... 0.5
46-37................................................... 1.0
36-27................................................... 1.5
26-0.................................................... 2.0
------------------------------------------------------------------------
We stated our intention to update the mTPS for PY 2023, as well as
the payment reduction ranges for that payment year, in the CY 2021 ESRD
PPS final rule.
We have now finalized the payment reductions that will apply to the
PY 2023 ESRD QIP using updated CY 2019 data. The mTPS for PY 2023 will
be 57, and the finalized payment reduction scale is shown in Table 12.
Table 12--Finalized Payment Reduction Scale for PY 2023 Based on the
Most Recently Available Data
------------------------------------------------------------------------
Total performance score Reduction (%)
------------------------------------------------------------------------
100-57.................................................. 0
56-47................................................... 0.5
46-37................................................... 1.0
36-27................................................... 1.5
26-0.................................................... 2.0
------------------------------------------------------------------------
7. Reduction of the Number of Records That a Facility Selected for NHSN
Validation Must Submit
In the CY 2021 ESRD PPS proposed rule (85 FR 42189), we stated that
one of the critical elements of the ESRD QIP's success is ensuring that
the data submitted to calculate measure scores and TPSs are accurate.
The ESRD QIP currently includes two validation studies for this
purpose: The Consolidated Renal Operations in a Web-Enabled Network
(CROWNWeb) data validation study (OMB Control Number 0938-1289) and the
NHSN validation study (OMB Control Number 0938-1340). In the CY 2019
ESRD PPS final rule, we adopted the CROWNWeb data validation study as a
permanent feature of the Program (83 FR 57003). Under that policy, we
will continue validating CROWNWeb data in PY 2023 and subsequent
payment years, and we will deduct 10 points from a facility's TPS if it
is selected for validation but does not submit the requested records.
We also adopted a methodology for the PY 2022 NHSN validation
study, which targets facilities for NHSN
[[Page 71472]]
validation by identifying facilities that are at risk for under-
reporting. For additional information on this methodology, we referred
readers to the CY 2018 ESRD PPS final rule (82 FR 50766 through 50767).
In the CY 2020 ESRD PPS final rule, we finalized our proposal to
continue using this methodology for the NHSN validation study for PY
2023 and subsequent years (84 FR 60727). In that rule, we concluded
that to achieve the most reliable results for a payment year, we would
need to review approximately 6,072 charts submitted by 303 facilities,
and that this sample size would produce results with a 95 percent
confidence level and a 1 percent margin of error. Based on those
results and to ensure that dialysis event data reported to the NHSN for
purposes of the ESRD QIP are accurate, we finalized our proposal to
continue use of this methodology in the PY 2023 NHSN validation study
and for subsequent years.
Additionally, as we had previously finalized for CROWNWeb
validation, we finalized our proposal to adopt NHSN validation as a
permanent feature of the ESRD QIP with the methodology we first
finalized for PY 2022 and are continuing for PY 2023 and subsequent
years. We stated that we continued to believe that the purpose of our
validation programs is to ensure the accuracy and completeness of data
that are scored under the ESRD QIP, and that we believed that
validating NHSN data using this methodology achieves that goal.
In the CY 2019 ESRD PPS final rule, we finalized that a sample of
300 facilities will be selected for the NHSN validation study each
year, and that each facility will be required to submit 20 patient
records per quarter for each of the first two quarters of the calendar
year (83 FR 57001), for a total of 40 records. In the CY 2021 ESRD PPS
proposed rule (85 FR 42189 through 42190), we proposed to change this
requirement and allow facilities selected to participate in the NHSN
validation study to submit a total of 20 patient records for the
applicable calendar year. We also proposed to allow facilities to
submit patient records from any two quarters during the year, as long
as all of the records are from no more than two quarters. For example,
we stated that a facility could choose to submit two records from Q1
and 18 records from Q4, or six records from Q2 and 14 records from Q3,
but it could not submit four records from Q1, eight records from Q2,
and eight records from Q3.
We stated that we had concluded this revised approach would reduce
facility burden by decreasing the required number of patient records
and allowing more flexibility for facilities to choose what records to
submit, while continuing to maintain a sample size that is adequate for
our validation analysis. In reaching this conclusion, we stated that we
had been informed by the CDC's recommendations. We stated that based on
the sample estimation analysis, the CDC recommended the following
factors to improve the precision of estimation of accuracy of dialysis
events reported to NHSN: An expected 80 percent of dialysis events
reporting accuracy from facilities and setting the precision of the
NHSN validation study to a 95 percent confidence level and 1 percent
margin of error, which would require a total of 6,072 chart reviews.
Beginning with the CY 2017 and CY 2018 NHSN dialysis validation, we
stated that we have gradually increased the number of facilities
randomly selected for validation, as well as the number of charts for
review, in order to achieve the 6,000 chart threshold necessary for an
accurate review. Initially, 35 facilities were randomly selected and 10
charts per facility were reviewed. For CY 2019, 150 facilities were
randomly selected and each facility submitted a total of 20 records, to
achieve the total of 3,000 charts available for review. For CY 2020,
the goal was to increase from 150 to 300 facilities, where each
facility would submit a total of 20 records thereby achieving the total
of 6,000 charts available for review, as we had previously finalized
(83 FR 57001). Because a total of 20 records would achieve the 6,000
chart threshold necessary for an accurate review, we stated that we had
concluded that we could reduce the sample size from 40 records to 20
records. We stated that we believed a total of 20 medical records
across a 6-month validation study time frame for a calendar year,
rather than 20 records per quarter would provide a sufficiently
accurate sample size.
In the CY 2021 ESRD PPS proposed rule, we stated our belief that
the reduction in patient records still provides an adequate sample size
for the validation and reduces overall facility burden (85 FR 42190).
We also stated that a recent estimation analysis conducted by the CDC
supports our belief that a review of 20 charts per facility across a
specified validation timeline that are acquired by randomly selecting
approximately 300 facilities would continue to meet the medical record
selection criteria outlined in the NHSN Dialysis Validation
methodology. We stated that this would meet the CDC's recommended
sample estimate to achieve the 95 percent confidence level precision
and 1 percent margin of error, while also reducing facility burden.
We sought comments on this proposal.
The comments on our proposal to reduce the number of records that a
facility selected for NHSN validation must submit and our responses to
those comments are set forth below. We did not propose any changes to
the CROWNWeb validation study methodology.
Comment: Several commenters expressed support for the proposal to
reduce the number of patient records required for submission for the
NHSN validation study. Several commenters noted that the proposed
update will reduce provider burden. A few commenters noted that the
proposed 20 patient records requirement is an adequate sample size for
validation.
Response: We thank the commenters for their support.
Final Rule Action: After considering public comments, we are
finalizing our proposal to update the records submission requirements
for the NHSN data validation study as proposed, beginning with PY 2023.
D. Updates for the PY 2024 ESRD QIP
1. Continuing Measures for the PY 2024 ESRD QIP
In the CY 2021 ESRD PPS proposed rule (85 FR 42190), we stated
that, under our previously adopted policy, the PY 2023 ESRD QIP measure
set will also be used for PY 2024. We did not propose to adopt any new
measures beginning with the PY 2024 ESRD QIP.
2. Performance Period for the PY 2024 ESRD QIP
In the CY 2021 ESRD PPS proposed rule (85 FR 42190), we stated our
continued belief that 12-month performance and baseline periods provide
us sufficiently reliable quality measure data for the ESRD QIP. In the
CY 2020 ESRD PPS final rule, we finalized the performance and baseline
periods for the PY 2023 ESRD QIP (84 FR 60728). We also finalized our
proposal to adopt automatically a performance and baseline period for
each year that is 1 year advanced from those specified for the previous
payment year. Under this policy, CY 2022 will be the performance period
and CY 2020 will be the baseline period for the PY 2024 ESRD QIP.
3. Performance Standards for the PY 2024 ESRD QIP
Section 1881(h)(4)(A) of the Act requires the Secretary to
establish
[[Page 71473]]
performance standards with respect to the measures selected for the
ESRD QIP for a performance period with respect to a year. The
performance standards must include levels of achievement and
improvement, as required by section 1881(h)(4)(B) of the Act, and must
be established prior to the beginning of the performance period for the
year involved, as required by section 1881(h)(4)(C) of the Act. We
refer readers to the CY 2012 ESRD PPS final rule (76 FR 70277) for a
discussion of the achievement and improvement standards that we have
established for clinical measures used in the ESRD QIP. We recently
codified definitions for the terms ``achievement threshold,''
``benchmark,'' ``improvement threshold,'' and ``performance standard''
in our regulations at Sec. 413.178(a)(1), (3), (7), and (12),
respectively.
a. Performance Standards for Clinical Measures in the PY 2024 ESRD QIP
At this time, we do not have the necessary data to assign numerical
values to the achievement thresholds, benchmarks, and 50th percentiles
of national performance for the clinical measures because we do not
have CY 2020 data. In the CY 2021 ESRD PPS proposed rule, we stated our
intent to publish these numerical values, using CY 2020 data, in the CY
2022 ESRD PPS final rule (85 FR 42190). However, we acknowledge that CY
2020 data may be impacted by the nationwide Extraordinary Circumstances
Exception (ECE) we granted to facilities in response to the COVID-19
PHE, which excluded data from the first and second quarter of CY 2020.
We are considering ways to address this and will provide further
guidance in the CY 2022 ESRD PPS proposed rule.
b. Performance Standards for the Reporting Measures in the PY 2024 ESRD
QIP
In the CY 2019 ESRD PPS final rule, we finalized the continued use
of existing performance standards for the Screening for Clinical
Depression and Follow-Up reporting measure, the Ultrafiltration Rate
reporting measure, the NHSN Dialysis Event reporting measure, and the
MedRec reporting measure (83 FR 57010 through 57011). In the CY 2021
ESRD PPS proposed rule (85 FR 42190), we stated that we will continue
use of these performance standards in PY 2024.
4. Scoring the PY 2024 ESRD QIP
a. Scoring Facility Performance on Clinical Measures
In the CY 2014 ESRD PPS final rule, we finalized policies for
scoring performance on clinical measures based on achievement and
improvement (78 FR 72215 through 72216). In the CY 2019 ESRD PPS final
rule, we finalized a policy to continue use of this methodology for
future payment years (83 FR 57011) and we codified these scoring
policies at Sec. 413.178(e).
b. Scoring Facility Performance on Reporting Measures
Our policy for scoring performance on reporting measures is
codified at Sec. 413.178(e), and more information on our scoring
policy for reporting measures can be found in the CY 2020 ESRD PPS
final rule (84 FR 60728). We previously finalized policies for scoring
performance on the NHSN Dialysis Event reporting measure in the CY 2018
ESRD PPS final rule (82 FR 50780 through 50781), as well as policies
for scoring the Ultrafiltration Rate reporting measure, MedRec
reporting measure, and Clinical Depression Screening and Follow-up
reporting measure in the CY 2019 ESRD PPS final rule (83 FR 57011). We
also previously finalized the scoring policy for the STrR reporting
measure in the CY 2020 ESRD PPS final rule (84 FR 60721 through 60723).
In section IV.C.3 of this final rule, we finalized our proposal to use
patient-months instead of facility-months when scoring the
Ultrafiltration Rate reporting measure.
5. Weighting the Measure Domains and the TPS for PY 2024
Under our current policy, we assign the Patient & Family Engagement
Measure Domain a weight of 15 percent of the TPS, the Care Coordination
Measure Domain a weight of 30 percent of the TPS, the Clinical Care
Measure Domain a weight of 40 percent of the TPS, and the Safety
Measure domain a weight of 15 percent of the TPS.
In the CY 2019 ESRD PPS final rule, we finalized a policy to assign
weights to individual measures and a policy to redistribute the weight
of unscored measures (83 FR 57011 through 57012). In the CY 2020 ESRD
PPS final rule, we finalized a policy to use the measure weights we
finalized for PY 2022 for the PY 2023 ESRD QIP and subsequent payment
years, and also to use the PY 2022 measure weight redistribution policy
for the PY 2023 ESRD QIP and subsequent payment years (84 FR 60728
through 60729). We did not propose any updates to these policies. Under
our current policy, a facility must be eligible to be scored on at
least one measure in two of the four measures domains in order to be
eligible to receive a TPS (83 FR 57012).
V. Collection of Information Requirements
A. Legislative Requirement for Solicitation of Comments
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. We
solicited comments in the proposed rule, which published in the Federal
Register on July 13, 2020 (85 FR 42132 through 42208). For the purpose
of transparency, we are republishing the discussion of the information
collection requirements. All of the requirements discussed in this
section are already accounted for in OMB approved information requests.
B. Additional Information Collection Requirements
This final rule does not impose any new information collection
requirements in the regulation text. However, this final rule does make
reference to several associated information collections that are not
discussed in the regulation text contained in this document. The
following is a discussion of these information collections.
1. ESRD QIP-Wage Estimates
To derive wages estimates, we used data from the U.S. Bureau of
Labor Statistics' May 2019 National Occupational Employment and Wage
Estimates. In the CY 2016 ESRD PPS final rule (80 FR 69069), we stated
that it was reasonable to assume that Medical Records and Health
Information Technicians, who are responsible for organizing and
managing health information data, are the individuals tasked with
submitting measure data to CROWNWeb and NHSN, as well as compiling and
submitting patient records for purpose of the data validation studies,
rather than a Registered Nurse, whose duties are centered on providing
and coordinating care for patients. We stated that the median hourly
wage of a Medical Records and Health Information Technician is $20.50
per hour.\210\ We also stated that fringe benefit and overhead are
calculated at 100 percent. Therefore, using these assumptions, we
estimated an hourly labor cost of $41.00 as the basis of the wage
estimates for all collections of information calculations in the ESRD
[[Page 71474]]
QIP. We adjusted these employee hourly wage estimates by a factor of
100 percent to reflect current HHS department-wide guidance on
estimating the cost of fringe benefits and overhead. We stated that
these are necessarily rough adjustments, both because fringe benefits
and overhead costs vary significantly from employer to employer and
because methods of estimating these costs vary widely from study to
study. Nonetheless, we stated that there is no practical alternative
and we believe that these are reasonable estimation methods.
---------------------------------------------------------------------------
\210\ https://www.bls.gov/oes/current/oes292098.htm.
---------------------------------------------------------------------------
We used this updated wage estimate, along with updated facility and
patient counts to re-estimate the total information collection burden
in the ESRD QIP for PY 2023 that we discussed in the CY 2020 ESRD QIP
final rule (84 FR 60787 through 60788) and to estimate the total
information collection burden in the ESRD QIP for PY 2024. We provided
the re-estimated information collection burden associated with the PY
2023 ESRD QIP and the newly estimated information collection burden
associated with the PY 2024 ESRD QIP in sections IV.D.2 and IV.D.3 of
this final rule.
2. Estimated Burden Associated With the Data Validation Requirements
for PY 2023 and PY 2024
In the CY 2020 ESRD PPS final rule, we finalized a policy to adopt
the CROWNWeb data validation methodology that we previously adopted for
the PY 2016 ESRD QIP as the methodology we would use to validate
CROWNWeb data for all payment years, beginning with PY 2021 (83 FR
57001 through 57002). Under this methodology, 300 facilities are
selected each year to submit 10 records to CMS, and we reimburse these
facilities for the costs associated with copying and mailing the
requested records. The burden associated with these validation
requirements is the time and effort necessary to submit the requested
records to a CMS contractor. In this final rule, we are updating these
estimates using a newly available wage estimate of a Medical Records
and Health Information Technician. We estimate that it will take each
facility approximately 2.5 hours to comply with this requirement. If
300 facilities are asked to submit records, we estimate that the total
combined annual burden for these facilities will be 750 hours (300
facilities x 2.5 hours). Since we anticipate that Medical Records and
Health Information Technicians or similar administrative staff will
submit these data, we estimate that the aggregate cost of the CROWNWeb
data validation each year will be approximately $30,750 (750 hours x
$41.00), or an annual total of approximately $102.50 ($30,750/300
facilities) per facility in the sample. The decrease in our burden
estimate is due to using the median hourly wage instead of the mean
hourly wage for Medical Records and Health Information Technicians or
similar staff and is not the result of any policies finalized in this
final rule. The burden associated with these requirements is captured
in an information collection request (OMB control number 0938-1289).
In section IV.C.7 of this final rule, we finalized our proposal to
reduce the number of records that a facility selected to participate in
the NHSN data validation study must submit to a CMS contractor,
beginning with PY 2023. Under this finalized policy, a facility is
required to submit records for 20 patients across any two quarters of
the year, instead of 20 records for each of the first two quarters of
the year. The burden associated with this policy is the time and effort
necessary to submit the requested records to a CMS contractor. Applying
our policy to reduce the number of records required from each facility
participating in the NHSN validation study, we estimate that it would
take each facility approximately 5 hours to comply with this
requirement. If 300 facilities are asked to submit records each year,
we estimate that the total combined annual burden hours for these
facilities per year would be 1,500 hours (300 facilities x 5 hours).
Since we anticipate that Medical Records and Health Information
Technicians or similar staff would submit these data, using the newly
available wage estimate of a Medical Records and Health Information
Technician, we estimate that the aggregate cost of the NHSN data
validation each year would be approximately $61,500 (1,500 hours x
$41), or a total of approximately $205 ($61,500/300 facilities) per
facility in the sample. The reduction in our burden estimate is due to
a reduction in the number of medical records collected and the
utilization of the median hourly wage instead of the mean hourly wage.
The burden associated with these requirements is captured in an
information collection request (OMB control number 0938-1340).
3. CROWNWeb Reporting Requirements for PY 2023 and PY 2024
To determine the burden associated with the CROWNWeb reporting
requirements, we look at the total number of patients nationally, the
number of data elements per patient-year that the facility would be
required to submit to CROWNWeb for each measure, the amount of time
required for data entry, the estimated wage plus benefits applicable to
the individuals within facilities who are most likely to be entering
data into CROWNWeb, and the number of facilities submitting data to
CROWNWeb. In the CY 2020 ESRD PPS final rule, we estimated that the
burden associated CROWNWeb reporting requirements for the PY 2023 ESRD
QIP was approximately $211 million (84 FR 60651).
We did not propose any changes that would affect the burden
associated with CROWNWeb reporting requirements for PY 2023 or PY 2024.
However, we have re-calculated the burden estimate for PY 2023 using
updated estimates of the total number of dialysis facilities, the total
number of patients nationally, and wages for Medical Records and Health
Information Technicians or similar staff as well as a refined estimate
of the number of hours needed to complete data entry for CROWNWeb
reporting. We note that the burden estimate for PY 2023 has been
updated from the estimates in the CY 2021 ESRD PPS proposed rule due to
updated information about the total number of facilities participating
in the ESRD QIP and the total number of patients. In the CY 2020 ESRD
PPS final rule, we estimated that the amount of time required to submit
measure data to CROWNWeb was 2.5 minutes per element and used a rounded
estimate of 0.042 hours in our calculations (84 FR 60788). In this
final rule, we did not use a rounded estimate of the time needed to
complete data entry for CROWNWeb reporting. There are 229 data elements
for 532,931 patients across 7,610 facilities. At 2.5 minutes per
element, this yields approximately 668.21 hours per facility.
Therefore, the PY 2023 burden is 5,085,050 hours (668.21 hours x 7,610
facilities). (Using the wage estimate of a Medical Records and Health
Information Technician, we estimate that the PY 2023 total burden cost
is approximately $208 million (5,085,050 hours x $41). There is no net
incremental burden change from PY 2023 to PY 2024 because we are not
changing the reporting requirements for PY 2024.
VI. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review, Executive Order 13563 on
Improving Regulation and Regulatory
[[Page 71475]]
Review, the Regulatory Flexibility Act (RFA) (Pub. L. 96-354), section
1102(b) of the Social Security Act, section 202 of the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on
Federalism, the Congressional Review Act (5 U.S.C. 801 et seq.), and
Executive Order 13771 on Reducing Regulation and Controlling Regulatory
Costs.
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) Having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive order.
A regulatory impact analysis (RIA) must be prepared for major rules
with economically significant effects ($100 million or more in any 1
year). This rule has been designated by the Office of Information and
Regulatory Affairs as an economically significant rule as measured by
the $100 million threshold, and hence also been designated as a major
rule under the Congressional Review Act. Accordingly, we have prepared
a RIA that to the best of our ability presents the costs and benefits
of the rulemaking.
We solicited comments on the regulatory impact analysis provided.
With regard to the ESRD PPS, we did not receive any comments on the
RIA.
2. Statement of Need
a. ESRD PPS
This rule finalizes a number of routine updates and several policy
changes to the ESRD PPS for CY 2021. The routine updates include the CY
2021 wage index values, the wage index budget-neutrality adjustment
factor, and outlier payment threshold amounts. Failure to publish this
final rule would result in ESRD facilities not receiving appropriate
payments in CY 2021 for renal dialysis services furnished to ESRD
beneficiaries.
b. AKI
This rule also finalizes routine updates to the payment for renal
dialysis services furnished by ESRD facilities to individuals with AKI.
Failure to publish this final rule would result in ESRD facilities not
receiving appropriate payments in CY 2021 for renal dialysis services
furnished to patients with AKI in accordance with section 1834(r) of
the Act.
c. ESRD QIP
This final rule finalizes updates to the ESRD QIP beginning with PY
2023, including a modification to the scoring methodology for the
Ultrafiltration Rate reporting measure and an update to the reporting
requirements for facilities selected for NHSN data validation. This
final rule also clarifies the review and correction timeline for the
NHSN BSI clinical measure and NHSN Dialysis Event reporting measure.
3. Overall Impact
a. ESRD PPS
We estimate that the final revisions to the ESRD PPS will result in
an increase of approximately $250 million in payments to ESRD
facilities in CY 2021, which includes the amount associated with
updates to the outlier thresholds, payment rate update, updates to the
wage index, adoption of the 2018 OMB delineations with a transition
period, and including calcimimetics in the ESRD PPS base rate. These
figures do not reflect estimated increases or decreases in expenditures
based on our expansion of eligibility for the TPNIES to certain new and
innovative home dialysis machines when used in the home for a single
patient. The fiscal impact of this policy cannot be determined due to
the uniqueness of each new and innovative home dialysis machine and its
cost.
b. AKI
We estimate that the updates to the AKI payment rate would result
in an increase of approximately $4 million in payments to ESRD
facilities in CY 2021.
c. ESRD QIP
For PY 2023, we have re-estimated the costs associated with the
information collection requirements under the ESRD QIP with updated
estimates of the total number of dialysis facilities, the total number
of patients nationally, wages for Medical Records and Health
Information Technicians or similar staff, and a refined estimate of the
number of hours needed to complete data entry for CROWNWeb reporting.
We note that the estimated costs have been updated from the estimates
in the CY 2021 ESRD PPS proposed rule due to updated information about
the total number of facilities participating in the ESRD QIP and the
total number of patients. We have made no changes to our methodology
for calculating the annual burden associated with the information
collection requirements for the CROWNWeb validation study and CROWNWeb
reporting. We updated the annual burden associated with the NHSN
validation study to reflect our new policy to reduce the total number
of records collected. The finalized updates will reduce the collection
of information requirements associated with the NHSN validation study
by $65,460 per year across the facilities selected for validation that
year.
We also finalized the payment reduction scale using more recent
data for the measures in the ESRD QIP measure set and applying our
finalized proposal to modify the scoring methodology for the
Ultrafiltration Rate reporting measure beginning with the PY 2023 ESRD
QIP. We estimate approximately $208 million in information collection
burden, which includes the cost of complying with this rule, and an
additional $16 million in estimated payment reductions across all
facilities for PY 2023.
For PY 2024, we estimate that the finalized revisions to the ESRD
QIP would result in $208 million in information collection burden, and
$16 million in estimated payment reductions across all facilities, for
an impact of $224 million as a result of the policies we have
previously finalized and the policies we have finalized in this final
rule.
4. Regulatory Review Cost Estimation
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this final rule, we
should estimate the cost associated with regulatory review. Due to the
uncertainty involved with accurately quantifying the number of entities
that will review the rule, we assume that the total number of unique
commenters on the CY 2021 ESRD PPS proposed rule will be the number of
reviewers of this final rule. We acknowledge that this assumption may
understate or overstate the costs of reviewing this rule. It is
possible that
[[Page 71476]]
not all commenters reviewed CY 2021 ESRD PPS proposed rule in detail,
and it is also possible that some reviewers chose not to comment on the
CY 2021 ESRD PPS proposed rule. For these reasons we thought that the
number of past commenters would be a fair estimate of the number of
reviewers of this rule.
We also recognize that different types of entities are in many
cases affected by mutually exclusive sections of this final rule, and
therefore, for the purposes of our estimate we assume that each
reviewer reads approximately 50 percent of the rule. We sought comments
on this assumption in the CY 2021 ESRD PPS proposed rule but did not
receive comments.
Using the wage information from the Bureau of Labor Statistics
(BLS) for medical and health services managers (Code 11-9111), we
estimate that the cost of reviewing this rule is $110.74 per hour,
including overhead and fringe benefits https://www.bls.gov/oes/current/oes_nat.htm. Assuming an average reading speed, we estimate that it
would take approximately 6.25 hours for the staff to review half of
this final. For each entity that reviews the rule, the estimated cost
is $692.13 (6.25 hours x $110.74). Therefore, we estimate that the
total cost of reviewing this regulation rounds to $81,671. ($692.13 x
118 reviewers).
B. Detailed Economic Analysis
1. CY 2021 End-Stage Renal Disease Prospective Payment System
a. Effects on ESRD Facilities
To understand the impact of the changes affecting payments to
different categories of ESRD facilities, it is necessary to compare
estimated payments in CY 2020 to estimated payments in CY 2021. To
estimate the impact among various types of ESRD facilities, it is
imperative that the estimates of payments in CY 2020 and CY 2021
contain similar inputs. Therefore, we simulated payments only for those
ESRD facilities for which we are able to calculate both current
payments and new payments.
For this final rule, we used CY 2019 data from the Part A and Part
B Common Working Files as of July 31, 2020, as a basis for Medicare
dialysis treatments and payments under the ESRD PPS. We updated the
2019 claims to 2020 and 2021 using various updates. The updates to the
ESRD PPS base rate are described in section II.B.4.d of this final
rule. Table 13 shows the impact of the estimated CY 2021 ESRD PPS
payments compared to estimated payments to ESRD facilities in CY 2020.
Table 13--Impact of Finalized Changes in Payment to ESRD Facilities for CY 2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
Effect of
Number of 2021 Effect of Effect of Effect of Effect of Effect of
Number of treatments changes in changes in CBSA change bundling change for total 2021
Facility type facilities (in outlier wage index & 5% cap calcimimetics payment proposed
(A) millions) policy (C) data (D) % policy (E) into base rate update changes (H)
(B) % % rate (F) % (G) % %
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Facilities................................ 7,659 45.3 0.4 0.0 0.0 -0.1 1.6 2.0
Type:
Freestanding.............................. 7,270 43.5 0.4 0.0 0.0 0.0 1.6 2.0
Hospital based............................ 389 1.8 0.9 0.1 0.1 -2.9 1.6 -0.2
Ownership Type:
Large dialysis organization............... 5,890 35.3 0.4 0.0 0.0 0.9 1.6 2.9
Regional chain............................ 956 5.8 0.3 -0.1 -0.1 -3.7 1.6 -1.9
Independent............................... 509 2.9 0.5 0.3 0.3 -2.6 1.6 0.0
Hospital based \1\........................ 302 1.4 0.9 0.1 0.2 -2.6 1.6 0.2
Unknown................................... 2 0.0 1.5 0.0 -0.1 1.3 1.6 4.4
Geographic Location: 2 3
Rural..................................... 1,292 6.5 0.4 0.1 -1.2 0.1 1.6 1.0
Urban..................................... 6,367 38.8 0.4 0.0 0.2 -0.1 1.6 2.1
Census Region:
East North Central........................ 1,223 6.0 0.5 0.1 -0.1 0.5 1.6 2.6
East South Central........................ 606 3.3 0.4 0.0 0.0 -0.8 1.6 1.1
Middle Atlantic........................... 852 5.4 0.5 0.5 0.2 -0.7 1.6 2.1
Mountain.................................. 423 2.4 0.3 -0.5 -0.1 1.0 1.6 2.4
New England............................... 203 1.4 0.4 -0.7 -0.1 0.2 1.6 1.4
Pacific \4\............................... 922 6.5 0.4 -0.1 0.1 0.6 1.6 2.5
Puerto Rico and Virgin Islands............ 52 0.3 0.3 0.1 -0.1 1.1 1.6 2.9
South Atlantic............................ 1,758 10.8 0.5 0.0 0.0 -0.6 1.6 1.4
West North Central........................ 514 2.3 0.6 -0.4 -0.1 0.5 1.6 2.2
West South Central........................ 1,106 6.7 0.4 0.0 0.0 -0.4 1.6 1.6
Facility Size:
Less than 4,000 treatments................ 1,377 2.2 0.5 0.0 0.0 0.5 1.6 2.7
4,000 to 9,999 treatments................. 2,999 12.8 0.5 0.0 -0.1 0.0 1.6 2.1
10,000 or more treatments................. 3,261 30.2 0.4 0.0 0.0 -0.2 1.6 1.9
Unknown................................... 22 0.1 0.5 0.1 -0.1 -3.4 1.6 -1.3
Percentage of Pediatric Patients:
Less than 2%.............................. 7,551 45.0 0.4 0.0 0.0 -0.1 1.6 1.9
Between 2% and 19%........................ 37 0.3 0.4 0.2 -0.1 -0.5 1.6 1.6
Between 20% and 49%....................... 16 0.0 0.4 -0.3 0.0 3.1 1.6 4.9
More than 50%............................. 55 0.0 0.3 0.0 -0.1 3.8 1.6 5.6
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\1\ Includes hospital-based ESRD facilities not reported to have large dialysis organization or regional chain ownership.
\2\ Facility counts for Urban/Rural uses 2021 CBSA delineation. Under 2020 and previous CBSA delineation, facility counts for urban and rural are 6,355
and 1,304 respectively. For payment percent change columns, appropriate definition of Urban/Rural is used.
\3\ The 1.2 percent drop in total payments among rural facilities (and increase in total payments among urban facilities) is mostly due facilities
shifting from rural to urban status under new CBSA delineation. Controlling for old-CBSA urban/rural status, the change in payment is close to 0
percent.
\4\ Includes ESRD facilities located in Guam, American Samoa, and the Northern Mariana Islands.
Column A of the impact table indicates the number of ESRD
facilities for each impact category and column B indicates the number
of dialysis treatments (in millions). The overall effect of the final
changes to the outlier payment policy described in section II.B.4.c of
this final rule is shown in column C. For CY 2021, the impact on
[[Page 71477]]
all ESRD facilities as a result of the changes to the outlier payment
policy would be a 0.4 percent increase in estimated payments. All ESRD
facilities are anticipated to experience a positive effect in their
estimated CY 2021 payments as a result of the final outlier policy
changes.
Column D shows the effect of the annual update to the wage index,
as described in section II.B.4.b of this final rule. That is, this
column reflects the update from the CY 2020 ESRD PPS wage index using
older OMB delineations with a basis of the FY 2021 pre-floor, pre-
reclassified IPPS hospital wage index data in a budget neutral manner.
The total impact of this change is 0.0 percent, however, there are
distributional effects of the change among different categories of ESRD
facilities. The categories of types of facilities in the impact table
show changes in estimated payments ranging from a 0.7 percent decrease
to a 0.5 percent increase due to the annual update to the ESRD PPS wage
index.
Column E shows the effect of adopting the 2018 OMB delineations and
the transition policy as described in sections II.B.4.b.(2) and
II.B.4.b.(3), respectively, of this final rule. That is, the impact
represented in this column reflects the change from using the older OMB
delineations and basing the CY 2021 ESRD PPS wage index on the FY 2021
pre-floor, pre-reclassified IPPS hospital wage index data to the 2018
OMB delineations and a 5 percent cap on wage index decreases in CY
2021, in a budget neutral manner. The total impact of this change is
0.0 percent, however, there are distributional effects of the change
among different categories of ESRD facilities. The categories of types
of facilities in the impact table show changes in estimated payments
ranging from a 1.2 percent decrease to a 0.3 percent increase due to
these updates to the ESRD PPS wage index.
Column F shows the effect of the final addition to the ESRD PPS
base rate to include calcimimetics as described in section II.B.1 of
this final rule. That is, the impact represented in this column
reflects the change, under the ESRD PPS, for payment to ESRD facilities
for furnishing calcimimetics. Beginning January 1, 2018, ESRD
facilities received payment for calcimimetics under the TDAPA policy in
Sec. 413.234(c). Under our final policy, beginning January 1, 2021, we
will modify the ESRD PPS base rate by adding $9.93 to include
calcimimetics and no longer pay for calcimimetics using the TDAPA. In
addition, calcimimetics would become outlier eligible services under
Sec. 413.237. The categories of types of facilities in the impact
table show changes in estimated payments ranging from a 3.7 percent
decrease to a 3.8percent increase due to these policy modifications.
Column G shows the effect of the final CY 2021 ESRD PPS payment
rate update as described in section II.B.4.a of this final rule. The
final ESRD PPS payment rate update is 1.6 percent, which reflects the
ESRDB market basket percentage increase factor for CY 2021 of 1.9
percent and the final MFP adjustment of 0.3 percentage point.
Column H reflects the overall impact, that is, the effects of the
final outlier policy changes, the final updated wage index and
transition policy, the payment rate update, and the addition to the
ESRD PPS base rate to include calcimimetics. We expect that overall
ESRD facilities would experience a 2.0 percent increase in estimated
payments in CY 2021. The categories of types of facilities in the
impact table show impacts ranging from a 1.9 percent decrease to a 5.6
percent increase in their CY 2021 estimated payments.
b. Effects on Other Providers
Under the ESRD PPS, Medicare pays ESRD facilities a single bundled
payment for renal dialysis services, which may have been separately
paid to other providers (for example, laboratories, durable medical
equipment suppliers, and pharmacies) by Medicare prior to the
implementation of the ESRD PPS. Therefore, in CY 2021, we estimate that
the final ESRD PPS would have zero impact on these other providers.
c. Effects on the Medicare Program
We estimate that Medicare spending (total Medicare program
payments) for ESRD facilities in CY 2021 would be approximately $9.3
billion. This estimate takes into account a projected decrease in fee-
for-service Medicare dialysis beneficiary enrollment of 8.6 percent in
CY 2021.
d. Effects on Medicare Beneficiaries
Under the ESRD PPS, beneficiaries are responsible for paying 20
percent of the ESRD PPS payment amount. As a result of the projected
2.0 percent overall increase in the final CY 2021 ESRD PPS payment
amounts, we estimate that there would be an increase in beneficiary co-
insurance payments of 2.0percent in CY 2021, which translates to
approximately $60 million.
e. Alternatives Considered
(1) Inclusion of Calcimimetics Into the ESRD PPS Bundled Payment
In section II.B.1 of this final rule, we established that beginning
January 1, 2021, we will modify the ESRD PPS base rate by adding $9.93
to include calcimimetics and no longer pay for calcimimetics using the
TDAPA. In addition, calcimimetics would become ESRD outlier services
eligible for outlier payments under Sec. 413.237. With regard to the
methodology utilized to calculate the amount to be added the ESRD PPS
base rate, for the CY 2021 ESRD PPS proposed rule, we considered using
the Medicare expenditures reflecting payments made for the
calcimimetics in CYs 2018 and 2019, that is, approximately $2.3 billion
and dividing by total treatments furnished in both years to arrive at
an amount of $27.08. However, using the most recent calendar quarter of
ASP data available to calculate the ASP-based values as the proxy rate
incorporates the lower priced generic calcimimetics into the
calculation of the amount added for oral calcimimetics. We believe it
is appropriate for the ESRD PPS base rate to reflect generic drug
manufacturer ASP data since we believe that this aligns with how ESRD
facilities would purchase and furnish the oral calcimimetics in the
future.
For the final rule, we considered several alternative approaches:
(1) Using the most recent 12 months of claims data, which would result
in a base rate increase of $11.85; (2) using only 2019 claims data,
which would result in a base rate increase of $11.10; and (3) using
both CYs 2018 and 2019 claims data, which would result in a base rate
increase of $8.52. We believe a robust data set should reflect both the
slow uptake of the injectable calcimimetic and the ramping up of
utilization of generic oral calcimimetics. We view the use of 18 months
as a mid-point between the proposal to use both CYs 2018 and 2019 and
the most recent 12 months of claims data, as requested by commenters.
Accordingly, we have concluded that using 18 months of claims data
resulting in an increase of $9.93 to the base rate is the most
appropriate approach.
(2) Expansion of the TPNIES to Capital-Related Assets That Are Home
Dialysis Machines When Used in the Home for a Single Patient
In section II.B.3 of this final rule, we expanded the TPNIES policy
to allow capital-related assets that are home dialysis machines when
used in the home for a single patient to be eligible for the add-on
payment adjustment. Then, consistent with the policies finalized last
year for other renal dialysis equipment and supplies eligible for the
TPNIES, we would pay 65 percent of the pre-adjusted per
[[Page 71478]]
treatment amount for a period of 2 years. With regard to the duration
of applying the TPNIES for capital-related assets that are home
dialysis machines when used in the home for a single patient, we
considered paying the TPNIES for 3 years. However, we believe that the
expansion is consistent with the TDAPA and other Medicare fee-for-
service add-on payment programs (for example, the IPPS NTAP), and
supports innovation for dialysis in the home setting, the President's
Executive order on Advancing American Kidney Health, and current HHS
initiatives to support home dialysis, while taking into account the
potential increase in ESRD PPS expenditures.
(3) CY 2021 ESRD PPS Wage Index
In section II.B.4.b of this final rule, we adopted the 2018 OMB
delineations with a transition policy. That is, we are adopting the OMB
delineations based on the September 14, 2018 OMB Bulletin No. 18-04
and, to mitigate any potential negative impacts, we applied a 5 percent
cap on any decrease in an ESRD facility's wage index from the ESRD
facility's wage index from the prior calendar year. This transition
would be phased in over 2 years, such that the estimated reduction in
an ESRD facility's wage index would be capped at 5 percent in CY 2021
and no cap would be applied to the reduction in the wage index for the
second year, CY 2022. With regard to the transition policy, we
considered doing a 2-year 50/50 blended wage index approach consistent
with the adoption of OMB delineations in the CY 2015 ESRD PPS final
rule (79 FR 66142). However, we determined that the 5 percent cap on
any decrease policy would be an appropriate transition for CY 2021 as
it provides predictability in payment levels from CY 2020 to the
upcoming CY 2021 and additional transparency because it is
administratively simpler than the 50/50 blended approach.
2. Final Payment for Renal Dialysis Services Furnished to Individuals
With AKI
a. Effects on ESRD Facilities
To understand the impact of the changes affecting payments to
different categories of ESRD facilities for renal dialysis services
furnished to individuals with AKI, it is necessary to compare estimated
payments in CY 2020 to estimated payments in CY 2021. To estimate the
impact among various types of ESRD facilities for renal dialysis
services furnished to individuals with AKI, it is imperative that the
estimates of payments in CY 2020 and CY 2021 contain similar inputs.
Therefore, we simulated payments only for those ESRD facilities for
which we are able to calculate both current payments and new payments.
For this final rule, we used CY 2019 data from the Part A and Part
B Common Working Files as of July 31, 2020, as a basis for Medicare for
renal dialysis services furnished to individuals with AKI. We updated
the 2019 claims to 2020 and 2021 using various updates. The updates to
the AKI payment amount are described in section III.B of this final
rule. Table 14 shows the impact of the estimated CY 2021 payments for
renal dialysis services furnished to individuals with AKI compared to
estimated payments for renal dialysis services furnished to individuals
with AKI in CY 2020.
Table 14--Impact of Final Changes in Payment for Renal Dialysis Services Furnished to Individuals With AKI for CY 2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
Effect of
bundling Effect of Effect of
Number of Number of Effect of all calcimimetics changes in total 2021
Facility type facilities (A) treatments (in wage index in the ESRD payment rate final changes
thousands) (B) changes (C) % PPS base rate update (E) % (F) %
(D) %
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Facilities.......................................... 5,141 296.4 -0.1 4.2 1.6 5.7
Type:
Freestanding........................................ 5,013 290.7 -0.1 4.2 1.6 5.7
Hospital based...................................... 128 5.7 -0.1 4.2 1.6 5.8
Ownership Type:
Large dialysis organization......................... 4,280 250.7 -0.1 4.2 1.6 5.7
Regional chain...................................... 596 30.0 -0.1 4.2 1.6 5.7
Independent......................................... 185 12.1 0.1 4.2 1.6 6.0
Hospital based \1\.................................. 80 3.6 0.0 4.2 1.6 5.9
Unknown............................................. 0 0.0 0.0 0.0 0.0 0.0
Geographic Location: \2\
Rural............................................... 885 46.3 -0.1 4.2 1.6 5.7
Urban............................................... 4,256 250.0 -0.1 4.2 1.6 5.8
Census Region:
East North Central.................................. 892 54.3 0.0 4.2 1.6 5.8
East South Central.................................. 408 21.0 -0.2 4.2 1.6 5.6
Middle Atlantic..................................... 535 33.1 0.4 4.2 1.6 6.2
Mountain............................................ 294 17.4 -0.5 4.2 1.6 5.3
New England......................................... 159 8.6 -0.8 4.2 1.6 4.9
Pacific \3\......................................... 607 45.8 -0.1 4.2 1.6 5.7
Puerto Rico and Virgin Islands...................... 2 0.0 -0.1 4.2 1.6 5.8
South Atlantic...................................... 1,211 68.6 0.0 4.2 1.6 5.8
West North Central.................................. 352 14.2 -0.5 4.2 1.6 5.3
West South Central.................................. 681 33.2 0.0 4.2 1.6 5.8
Facility Size:
Less than 4,000 treatments.......................... 606 23.2 -0.1 4.2 1.6 5.7
4,000 to 9,999 treatments........................... 2,076 106.6 -0.1 4.2 1.6 5.8
10,000 or more treatments........................... 2,455 166.4 -0.1 4.2 1.6 5.7
Unknown............................................. 4 0.2 -0.5 4.2 1.6 5.3
Percentage of Pediatric Patients:
Less than 2%........................................ 5,141 296.4 -0.1 4.2 1.6 5.7
[[Page 71479]]
Between 2% and 19%.................................. 0 0.0 0.0 0.0 0.0 0.0
Between 20% and 49%................................. 0 0.0 0.0 0.0 0.0 0.0
More than 50%....................................... 0 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes hospital-based ESRD facilities not reported to have large dialysis organization or regional chain ownership.
\2\ Facility counts for Urban/Rural uses 2021 CBSA delineation. Under 2020 and previous CBSA delineation, facility counts for urban and rural are 4,246
and 895 respectively. For payment percent change columns, appropriate definition of Urban/Rural is used.
\3\Includes ESRD facilities located in Guam, American Samoa, and the Northern Mariana Islands.
Column A of the impact table indicates the number of ESRD
facilities for each impact category and column B indicates the number
of AKI dialysis treatments (in thousands).
Column C shows the effect of the final CY 2021 wage indices.
Column D shows the effect of the adjustment to the AKI dialysis
payment rate that reciprocates the modification to the ESRD PPS base
rate for CY 2021, consistent with Sec. 413.372. As discussed in
section II.B.1 of this final rule, we modified the ESRD PPS base rate
by adding $9.93 to include calcimimetics.
Column E shows the effect of the final CY 2021 ESRD PPS payment
rate update. The ESRD PPS payment rate update is 1.6 percent, which
reflects the final ESRDB market basket percentage increase factor for
CY 2021 of 1.9 percent and the final MFP adjustment of 0.3 percentage
point.
Column F reflects the overall impact, that is, the effects of the
updated wage index, the final addition to the ESRD PPS base rate, and
the payment rate update. We expect that overall ESRD facilities would
experience a 5.7 percent increase in estimated payments in CY 2021. The
categories of types of facilities in the impact table show impacts
ranging from an increase of 0.0 percent to 6.2 percent in their CY 2021
estimated payments.
b. Effects on Other Providers
Under section 1834(r) of the Act, as added by section 808(b) of
TPEA, we updated the payment rate for renal dialysis services furnished
by ESRD facilities to beneficiaries with AKI. The only two Medicare
providers and suppliers authorized to provide these outpatient renal
dialysis services are hospital outpatient departments and ESRD
facilities. The decision about where the renal dialysis services are
furnished is made by the patient and his or her physician. Therefore,
this update will have zero impact on other Medicare providers.
c. Effects on the Medicare Program
We estimate approximately $56 million would be paid to ESRD
facilities in CY 2021 as a result of AKI patients receiving renal
dialysis services in the ESRD facility at the lower ESRD PPS base rate
versus receiving those services only in the hospital outpatient setting
and paid under the outpatient prospective payment system, where
services were required to be administered prior to the TPEA.
d. Effects on Medicare Beneficiaries
Currently, beneficiaries have a 20 percent co-insurance obligation
when they receive AKI dialysis in the hospital outpatient setting. When
these services are furnished in an ESRD facility, the patients would
continue to be responsible for a 20 percent co-insurance. Because the
AKI dialysis payment rate paid to ESRD facilities is lower than the
outpatient hospital PPS's payment amount, we would expect beneficiaries
to pay less co-insurance when AKI dialysis is furnished by ESRD
facilities.
e. Alternatives Considered
As we discussed in the CY 2017 ESRD PPS proposed rule (81 FR
42870), we considered adjusting the AKI payment rate by including the
ESRD PPS case-mix adjustments, and other adjustments at section
1881(b)(14)(D) of the Act, as well as not paying separately for AKI
specific drugs and laboratory tests. We ultimately determined that
treatment for AKI is substantially different from treatment for ESRD
and the case-mix adjustments applied to ESRD patients may not be
applicable to AKI patients and as such, including those policies and
adjustment would be inappropriate. We continue to monitor utilization
and trends of items and services furnished to individuals with AKI for
purposes of refining the payment rate in the future. This monitoring
would assist us in developing knowledgeable, data-driven proposals.
3. ESRD QIP
a. Effects of the PY 2023 ESRD QIP on ESRD Facilities
The ESRD QIP is intended to prevent possible reductions in the
quality of ESRD dialysis facility services provided to beneficiaries.
The general methodology that we are using to determine a facility's TPS
is described in our regulations at Sec. 413.178(e).
Any reductions in the ESRD PPS payments as a result of a facility's
performance under the PY 2023 ESRD QIP will apply to the ESRD PPS
payments made to the facility for services furnished in CY 2023, as
codified in our regulations at Sec. 413.177.
For the PY 2023 ESRD QIP, we estimate that, of the 7,610 dialysis
facilities (including those not receiving a TPS) enrolled in Medicare,
approximately 24.3 percent or 1,790 of the facilities that have
sufficient data to calculate a TPS would receive a payment reduction
for PY 2023. After finalizing our proposal to update the scoring
methodology for the Ultrafiltration Rate reporting measure, the total
estimated payment reductions for all the 1,790 facilities expected to
receive a payment reduction in PY 2023 would decrease from
$18,247,083.76 to approximately $15,770,179.33. We note that the total
estimated payment reductions for PY 2023 have been updated from the
estimates in the CY 2021 ESRD PPS proposed rule due to updated
information about the total number of facilities expected to receive a
payment reduction. Facilities that do not receive a TPS do not receive
a payment reduction.
Table 15 shows the overall estimated distribution of payment
reductions resulting from the PY 2023 ESRD QIP.
[[Page 71480]]
Table 15--Estimated Distribution of PY 2023 ESRD QIP Payment Reductions
------------------------------------------------------------------------
Number of Percent of
Payment reduction (percent) facilities facilities *
------------------------------------------------------------------------
0.0..................................... 5,590 75.75
0.5..................................... 1,329 18.01
1.0..................................... 372 5.04
1.5..................................... 64 0.87
2.0..................................... 25 0.34
------------------------------------------------------------------------
* 230 facilities not scored due to insufficient data.
To estimate whether a facility would receive a payment reduction
for PY 2023, we scored each facility on achievement and improvement on
several clinical measures we have previously finalized and for which
there were available data from CROWNWeb and Medicare claims. Payment
reduction estimates are calculated using the most recent data available
(specified in Table 16) in accordance with the policies finalized in
this final rule. Measures used for the simulation are shown in Table
16. These estimates also incorporate the finalized update to the
scoring methodology for the Ultrafiltration Rate reporting measure.
Table 16--Data Used To Estimate PY 2023 ESRD QIP Payment Reductions
----------------------------------------------------------------------------------------------------------------
Period of time used to
calculate achievement
thresholds, 50th
Measure percentiles of the Performance period
national performance,
benchmarks, and
improvement thresholds
----------------------------------------------------------------------------------------------------------------
ICH CAHPS Survey..................... Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
SRR.................................. Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
SHR.................................. Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
PPPW................................. Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
Kt/V Dialysis Adequacy Comprehensive. Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
VAT:
Standardized Fistula Ratio....... Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
% Catheter....................... Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
Hypercalcemia........................ Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
----------------------------------------------------------------------------------------------------------------
For all measures except Standardized Hospitalization Ratio (SHR)
and Standardized Readmission Ratio (SRR), clinical measures with less
than 11 patients for a facility were not included in that facility's
TPS. For SHR and STrR, facilities were required to have at least 5
patient-years at risk and 11 index discharges, respectively, in order
to be included in the facility's TPS. Each facility's TPS was compared
to an estimated mTPS and an estimated payment reduction table that were
consistent with the proposals outlined in sections IV.C and IV.D of
this final rule. Facility reporting measure scores were estimated using
available data from CY 2019. Facilities were required to have at least
one measure in at least two domains to receive a TPS.
To estimate the total payment reductions in PY 2023 for each
facility resulting from this final rule, we multiplied the total
Medicare payments to the facility during the 1-year period between
January 2019 and December 2019 by the facility's estimated payment
reduction percentage expected under the ESRD QIP, yielding a total
payment reduction amount for each facility.
Table 17 shows the estimated impact of the finalized ESRD QIP
payment reductions to all ESRD facilities for PY 2023. The table also
details the distribution of ESRD facilities by size (both among
facilities considered to be small entities and by number of treatments
per facility), geography (both rural and urban and by region), and
facility type (hospital based and freestanding facilities). Given that
the performance period used for these calculations differs from the
performance period we are using for the PY 2023 ESRD QIP, the actual
impact of the PY 2023 ESRD QIP may vary significantly from the values
provided here.
Table 17--Estimated Impact of QIP Payment Reductions to ESRD Facilities for PY 2023
----------------------------------------------------------------------------------------------------------------
Number of Payment
Number of facilities reduction
Number of treatments Number of expected to (percent
facilities 2019 (in facilities receive a change in
millions) with QIP score payment total ESRD
reduction payments)
----------------------------------------------------------------------------------------------------------------
All Facilities.................. 7,610 44.8 7,380 1,790 -0.16
Facility Type:
Freestanding................ 7,224 43.1 7,035 1,684 -0.15
Hospital-based.............. 386 1.8 345 106 -0.25
Ownership Type:
Large Dialysis.............. 5,809 34.8 5,690 1,194 -0.12
Regional Chain.............. 944 5.7 923 280 -0.21
Independent................. 534 2.9 491 227 -0.36
Hospital-based (non-chain).. 299 1.3 264 85 -0.28
Unknown..................... 24 0.0 12 4 -0.25
Facility Size:
Large Entities.............. 6,753 40.6 6,613 1,474 -0.13
Small Entities \1\.......... 833 4.3 755 312 -0.33
Unknown..................... 24 0.0 12 4 -0.25
[[Page 71481]]
Rural Status:
(1) Yes..................... 1,292 6.5 1,239 180 -0.09
(2) No...................... 6,318 38.4 6,141 1,610 -0.17
Census Region:
Northeast................... 1,046 6.7 1,002 251 -0.15
Midwest..................... 1,734 8.3 1,664 424 -0.17
South....................... 3,452 20.6 3,370 877 -0.17
West........................ 1,318 8.7 1,285 199 -0.09
U.S. Territories \2\........ 60 0.4 59 39 -0.44
Census Division:
Unknown..................... 8 0.1 8 3 -0.25
East North Central.......... 1,220 6.0 1,172 354 -0.21
East South Central.......... 604 3.3 593 142 -0.13
Middle Atlantic............. 845 5.4 808 222 -0.17
Mountain.................... 419 2.4 406 61 -0.09
New England................. 201 1.4 194 29 -0.09
Pacific..................... 899 6.3 879 138 -0.09
South Atlantic.............. 1,746 10.7 1,703 454 -0.17
West North Central.......... 7,610 44.8 7,380 1,790 -0.16
West South Central.......... 7,224 43.1 7,035 1,684 -0.15
U.S. Territories \2\........ 47 0.3 47 46 -1.57
Facility Size (# of total 386 1.8 345 106 -0.25
treatments):
Less than 4,000 treatments.. 5,809 34.8 5,690 1,194 -0.12
4,000-9,999 treatments...... 2,644 11.9 2,620 488 -0.11
Over 10,000 treatments...... 944 5.7 923 280 -0.21
Unknown..................... 534 2.9 491 227 -0.36
----------------------------------------------------------------------------------------------------------------
\1\ Small Entities include hospital-based and satellite facilities, and non-chain facilities based on DFC self-
reported status.
\2\ Includes American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and Virgin Islands.
b. Effects of the PY 2024 ESRD QIP on ESRD Facilities
For the PY 2024 ESRD QIP, we estimate that, of the 7,610 dialysis
facilities (including those not receiving a TPS) enrolled in Medicare,
approximately 24.3 percent or 1,790 of the facilities that have
sufficient data to calculate a TPS would receive a payment reduction
for PY 2024. The total payment reductions for all the 1,790 facilities
expected to receive a payment reduction is approximately
$15,770,179.33. We note that the total payment reductions for PY 2024
have been updated from the estimates in the CY 2021 ESRD PPS proposed
rule due to updated information about the total number of facilities
expected to receive a payment reduction. Facilities that do not receive
a TPS do not receive a payment reduction.
Table 18 shows the overall estimated distribution of payment
reductions resulting from the PY 2024 ESRD QIP.
Table 18--Estimated Distribution of PY 2024 ESRD QIP Payment Reductions
------------------------------------------------------------------------
Number of Percent of
Payment reduction (percent) facilities facilities *
------------------------------------------------------------------------
0.0..................................... 5,590 75.75
0.5..................................... 1,329 18.01
1.0..................................... 372 5.04
1.5..................................... 64 0.87
2.0..................................... 25 0.34
------------------------------------------------------------------------
* Note: 230 facilities not scored due to insufficient data.
To estimate whether a facility would receive a payment reduction in
PY 2024, we scored each facility on achievement and improvement on
several clinical measures we have previously finalized and for which
there were available data from CROWNWeb and Medicare claims. Payment
reduction estimates were calculated using the most recent data
available (specified in Table 18) in accordance with the policies
finalized in this final rule. Measures used for the simulation are
shown in Table 19.
Table 19--Data Used To Estimate PY 2024 ESRD QIP Payment Reductions
----------------------------------------------------------------------------------------------------------------
Period of time used to
calculate achievement
thresholds, 50th
Measure percentiles of the Performance period
national performance,
benchmarks, and
improvement thresholds
----------------------------------------------------------------------------------------------------------------
ICH CAHPS Survey....................... Jan 2018-Dec 2018......... Jan 2019-Dec 2019.
SRR.................................... Jan 2018-Dec 2018......... Jan 2019-Dec 2019.
SHR.................................... Jan 2018-Dec 2018......... Jan 2019-Dec 2019.
PPPW................................... Jan 2018-Dec 2018......... Jan 2019-Dec 2019.
Kt/V Dialysis Adequacy Comprehensive... Jan 2018-Dec 2018......... Jan 2019-Dec 2019.
VAT:
Standardized Fistula Ratio......... Jan 2018-Dec 2018......... Jan 2019-Dec 2019
[[Page 71482]]
% Catheter......................... Jan 2018-Dec 2018......... Jan 2019-Dec 2019.
Hypercalcemia.......................... Jan 2018-Dec 2018......... Jan 2019-Dec 2019.
----------------------------------------------------------------------------------------------------------------
For all measures except SHR, SRR, and the STrR reporting measure,
measures with less than 11 patients for a facility were not included in
that facility's TPS. For SHR and SRR, facilities were required to have
at least 5 patient-years at risk and 11 index discharges, respectively,
in order to be included in the facility's TPS. For the STrR reporting
measure, facilities were required to have at least 10 patient-years at
risk in order to be included in the facility's TPS. Each facility's TPS
was compared to an estimated mTPS and an estimated payment reduction
table that incorporates the policies outlined in section IV.C and IV.D
of this final rule. Facility reporting measure scores were estimated
using available data from CY 2019. Facilities were required to have at
least one measure in at least two domains to receive a TPS.
To estimate the total payment reductions in PY 2024 for each
facility resulting from this final rule, we multiplied the total
Medicare payments to the facility during the 1-year period between
January 2019 and December 2019 by the facility's estimated payment
reduction percentage expected under the ESRD QIP, yielding a total
payment reduction amount for each facility.
Table 20 shows the estimated impact of the finalized ESRD QIP
payment reductions to all ESRD facilities for PY 2024. The table
details the distribution of ESRD facilities by size (both among
facilities considered to be small entities and by number of treatments
per facility), geography (both rural and urban and by region), and
facility type (hospital based and freestanding facilities). Given that
the performance period used for these calculations differs from the
performance period we are finalizing to use for the PY 2024 ESRD QIP,
the actual impact of the PY 2024 ESRD QIP may vary significantly from
the values provided here.
Table 20--Estimated Impact of QIP Payment Reductions to ESRD Facilities for PY 2024
----------------------------------------------------------------------------------------------------------------
Number of Payment
Number of facilities reduction
Number of treatments Number of expected to (percent
facilities 2019 (in facilities receive a change in
millions) with QIP score payment total ESRD
reduction payments)
----------------------------------------------------------------------------------------------------------------
All Facilities.................. 7,610 44.8 7,380 1,790 -0.16
Facility Type:
Freestanding................ 7,224 43.1 7,035 1,684 -0.15
Hospital-based.............. 386 1.8 345 106 -0.25
Ownership Type:
Large Dialysis.............. 5,809 34.8 5,690 1,194 -0.12
Regional Chain.............. 944 5.7 923 280 -0.21
Independent................. 534 2.9 491 227 -0.36
Hospital-based (non-chain).. 299 1.3 264 85 -0.28
Unknown..................... 24 0.0 12 4 -0.25
Facility Size:
Large Entities.............. 6,753 40.6 6,613 1,474 -0.13
Small Entities \1\.......... 833 4.3 755 312 -0.33
Unknown..................... 24 0.0 12 4 -0.25
Rural Status:
(1) Yes..................... 1,292 6.5 1,239 180 -0.09
(2) No...................... 6,318 38.4 6,141 1,610 -0.17
Census Region:
Northeast................... 1,046 6.7 1,002 251 -0.15
Midwest..................... 1,734 8.3 1,664 424 -0.17
South....................... 3,452 20.6 3,370 877 -0.17
West........................ 1,318 8.7 1,285 199 -0.09
U.S. Territories \2\........ 60 0.4 59 39 -0.44
Census Division:
Unknown..................... 8 0.1 8 3 -0.25
East North Central.......... 1,220 6.0 1,172 354 -0.21
East South Central.......... 604 3.3 593 142 -0.13
Middle Atlantic............. 845 5.4 808 222 -0.17
Mountain.................... 419 2.4 406 61 -0.09
New England................. 201 1.4 194 29 -0.09
Pacific..................... 899 6.3 879 138 -0.09
South Atlantic.............. 1,746 10.7 1,703 454 -0.17
West North Central.......... 514 2.3 492 70 -0.09
West South Central.......... 1,102 6.7 1,074 281 -0.17
U.S. Territories \2\........ 52 0.3 51 36 -0.48
Facility Size (# of total
treatments):
Less than 4,000 treatments.. 1,315 2.6 1,195 265 -0.18
[[Page 71483]]
4,000-9,999 treatments...... 2,803 12.2 2,771 530 -0.12
Over 10,000 treatments...... 3,246 29.7 3,240 961 -0.18
Unknown..................... 246 0.3 174 34 -0.16
----------------------------------------------------------------------------------------------------------------
\1\ Small Entities include hospital-based and satellite facilities, and non-chain facilities based on DFC self-
reported status.
\2\ Includes American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and Virgin Islands.
c. Effects on Other Providers
The ESRD QIP is applicable to dialysis facilities. We are aware
that several of our measures impact other providers. For example, with
the introduction of the SRR clinical measure in PY 2017 and the SHR
clinical measure in PY 2020, we anticipate that hospitals may
experience financial savings as dialysis facilities work to reduce the
number of unplanned readmissions and hospitalizations. We are exploring
various methods to assess the impact these measures have on hospitals
and other facilities, such as through the impacts of the Hospital
Readmissions Reduction Program and the Hospital-Acquired Condition
Reduction Program, and we intend to continue examining the interactions
between our quality programs to the greatest extent feasible.
d. Effects on the Medicare Program
For PY 2024, we estimate that the ESRD QIP would contribute
approximately $15,770,179.33 in Medicare savings. For comparison, Table
21 shows the payment reductions that we estimate will be applied by the
ESRD QIP from PY 2018 through PY 2024.
Table 21--Estimated Payment Reductions Payment Years 2018 Through 2024
------------------------------------------------------------------------
Payment year Estimated payment reductions
------------------------------------------------------------------------
PY 2024................................... $15,770,179.33.
PY 2023................................... 15,770,179.33.
PY 2022................................... 18,247,083.76 (84 FR 60794).
PY 2021................................... 32,196,724 (83 FR 57062).
PY 2020................................... 31,581,441 (81 FR 77960).
PY 2019................................... 15,470,309 (80 FR 69074).
PY 2018................................... 11,576,214 (79 FR 66257).
------------------------------------------------------------------------
e. Effects on Medicare Beneficiaries
The ESRD QIP is applicable to dialysis facilities. Since the
Program's inception, there is evidence on improved performance on ESRD
QIP measures. As we stated in the CY 2018 ESRD PPS final rule, one
objective measure we can examine to demonstrate the improved quality of
care over time is the improvement of performance standards (82 FR
50795). As the ESRD QIP has refined its measure set and as facilities
have gained experience with the measures included in the Program,
performance standards have generally continued to rise. We view this as
evidence that facility performance (and therefore the quality of care
provided to Medicare beneficiaries) is objectively improving. We are in
the process of monitoring and evaluating trends in the quality and cost
of care for patients under the ESRD QIP, incorporating both existing
measures and new measures as they are implemented in the Program. We
will provide additional information about the impact of the ESRD QIP on
beneficiaries as we learn more. However, in future years we are
interested in examining these impacts through the analysis of available
data from our existing measures.
f. Alternatives Considered
In section IV.C.7 of this final rule, we finalized our policy that
facilities selected to participate in the NHSN data validation study
can submit a total of 20 records across two quarters. In the CY 2021
ESRD PPS proposed rule, we stated that we considered retaining our
current reporting requirement, under which facilities must submit 20
records per quarter for each of the first two quarters of the CY, for a
total of 40 records (85 FR 42204). However, we concluded that the
reduction in patient records provides an adequate sample size for the
validation. After considering public comments, we finalized this
approach in this final rule because we believe that it will lower
administrative costs and will reduce the burden on facilities.
C. Accounting Statement
As required by OMB Circular A-4 (available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf), in Table 22, we have prepared an accounting statement showing
the classification of the transfers and costs associated with the
various provisions of this final rule.
Table 22--Accounting Statement: Classification of Estimated Transfers
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
ESRD PPS and AKI (CY 2021)
------------------------------------------------------------------------
Annualized Monetized Transfers............ $190 million.
From Whom to Whom......................... Federal Government to ESRD
providers.
Increased Beneficiary Co-insurance $60 million.
Payments.
From Whom to Whom......................... Beneficiaries to ESRD
providers.
------------------------------------------------------------------------
ESRD QIP for PY 2023
------------------------------------------------------------------------
Annualized Monetized Transfers............ -$16 million.
From Whom to Whom......................... Federal Government to ESRD
providers.
------------------------------------------------------------------------
ESRD QIP for PY 2024
------------------------------------------------------------------------
Annualized Monetized Transfers............ -$16 million.
From Whom to Whom......................... Federal Government to ESRD
providers.
------------------------------------------------------------------------
In accordance with the provisions of Executive Order 12866, this
final rule was reviewed by the Office of Management and Budget.
D. Regulatory Flexibility Act Analysis (RFA)
The Regulatory Flexibility Act requires agencies to analyze options
for regulatory relief of small entities, if a rule has a significant
impact on a substantial number of small entities. For purposes of the
RFA, small entities
[[Page 71484]]
include small businesses, nonprofit organizations, and small
governmental jurisdictions. Approximately 11 percent of ESRD dialysis
facilities are considered small entities according to the Small
Business Administration's (SBA) size standards, which classifies small
businesses as those dialysis facilities having total revenues of less
than $41.5 million in any 1 year. Individuals and states are not
included in the definitions of a small entity. For more information on
SBA's size standards, see the Small Business Administration's website
at http://www.sba.gov/content/small-business-size-standards (Kidney
Dialysis Centers are listed as 621492 with a size standard of $41.5
million).
We do not believe ESRD facilities are operated by small government
entities such as counties or towns with populations of 50,000 or less,
and therefore, they are not enumerated or included in this estimated
RFA analysis. Individuals and states are not included in the definition
of a small entity.
For purposes of the RFA, we estimate that approximately 11 percent
of ESRD facilities are small entities as that term is used in the RFA
(which includes small businesses, nonprofit organizations, and small
governmental jurisdictions). This amount is based on the number of ESRD
facilities shown in the ownership category in Table 13. Using the
definitions in this ownership category, we consider 509 facilities that
are independent and 302 facilities that are shown as hospital-based to
be small entities. The ESRD facilities that are owned and operated by
Large Dialysis Organizations (LDOs) and regional chains would have
total revenues of more than $41.5 million in any year when the total
revenues for all locations are combined for each business (individual
LDO or regional chain), and are not, therefore, included as small
entities.
For the ESRD PPS updates finalized in this rule, a hospital-based
ESRD facility (as defined by type of ownership, not by type of dialysis
facility) is estimated to receive a 0.2 percent increase in payments
for CY 2021. An independent facility (as defined by ownership type) is
estimated to receive no update in payments for CY 2021.
For AKI dialysis, we are unable to estimate whether patients would
go to ESRD facilities, however, we have estimated there is a potential
for $56 million in payment for AKI dialysis treatments that could
potentially be furnished in ESRD facilities.
For the ESRD QIP, we estimate that of the 1,790 ESRD facilities
expected to receive a payment reduction as a result of their
performance on the PY 2024 ESRD QIP, 267 are ESRD small entity
facilities. We present these findings in Table 18 (``Estimated
Distribution of PY 2024 ESRD QIP Payment Reductions'') and Table 20
(``Estimated Impact of QIP Payment Reductions to ESRD Facilities for PY
2024''). We note that these estimates have been updated from the CY
2021 ESRD PPS proposed rule due to updated information about both the
total number of facilities and the total number of small entity
facilities expected to receive a payment reduction. We estimate that
the payment reductions would average approximately $9,770.87 per
facility across the 1,790 facilities receiving a payment reduction, and
$10,748.02 for each small entity facility. We also estimate that there
are 833 small entity facilities in total, and that the aggregate ESRD
PPS payments to these facilities would decrease 0.33 percent in CY
2024.
Therefore, the Secretary has determined that this final rule would
not have a significant economic impact on a substantial number of small
entities. The economic impact assessment is based on estimated Medicare
payments (revenues) and HHS's practice in interpreting the RFA is to
consider effects economically ``significant'' only if greater than 5
percent of providers reach a threshold of 3 to 5 percent or more of
total revenue or total costs. We solicited comment on the RFA analysis
provided. We received no comments on this section.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has fewer than 100 beds. We do not believe this
final rule would have a significant impact on operations of a
substantial number of small rural hospitals because most dialysis
facilities are freestanding. While there are 126 rural hospital-based
dialysis facilities, we do not know how many of them are based at
hospitals with fewer than 100 beds. However, overall, the 126 rural
hospital-based dialysis facilities would experience an estimated 0.2
percent decrease in payments.
Therefore, the Secretary has determined that this final rule will
not have a significant impact on the operations of a substantial number
of small rural hospitals.
E. Unfunded Mandates Reform Act (UMRA)
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2020, that
threshold is approximately $156 million. This final rule does not
mandate any requirements for state, local, or tribal governments in the
aggregate, or by the private sector. Moreover, HHS interprets UMRA as
applying only to unfunded mandates. We do not interpret Medicare
payment rules as being unfunded mandates, but simply as conditions for
the receipt of payments from the Federal Government for providing
services that meet Federal standards. This interpretation applies
whether the facilities or providers are private, state, local, or
tribal.
F. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on state
and local governments, preempts state law, or otherwise has federalism
implications. We have reviewed this final rule under the threshold
criteria of Executive Order 13132, Federalism, and have determined that
it will not have substantial direct effects on the rights, roles, and
responsibilities of states, local or tribal governments.
G. Regulatory Reform Under Executive Order 13771
Executive Order 13771, titled Reducing Regulation and Controlling
Regulatory Costs was issued on January 30, 2017. It has been determined
that this is a transfer rule, which imposes no more than de minimis
costs. As a result, this rule is not considered a regulatory or
deregulatory action under Executive Order 13771.
H. Congressional Review Act
This final rule is subject to the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.) and has been transmitted to the Congress
and the Comptroller General for review.
[[Page 71485]]
VII. Files Available to the Public via the Internet
The Addenda for the annual ESRD PPS proposed and final rulemakings
will no longer appear in the Federal Register. Instead, the Addenda
will be available only through the internet and is posted on the CMS
website at http://www.cms.gov/ESRDPayment/PAY/list.asp. In addition to
the Addenda, limited data set files are available for purchase at
http://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/LimitedDataSets/EndStageRenalDiseaseSystemFile.html. Readers who
experience any problems accessing the Addenda or LDS files, should
contact [email protected].
List of Subjects in 42 CFR Part 413
Diseases, Health facilities, Medicare, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR chapter IV as follows:
PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR
END-STAGE RENAL DISEASE SERVICES; PROSPECTIVELY DETERMINED PAYMENT
RATES FOR SKILLED NURSING FACILITIES; PAYMENT FOR ACUTE KIDNEY
INJURY DIALYSIS
0
1. The authority citation for part 413 continues to read as follows:
Authority: 42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a),
(i), and (n), 1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww.
0
2. Section 413.232 is amended by--
0
a. Revising paragraphs (b) introductory text, (b)(1), (e), and (g)
introductory text; and
0
b. Adding paragraphs (g)(4) and (h).
The revisions and additions read as follows:
Sec. 413.232 Low-volume adjustment.
* * * * *
(b) A low-volume facility is an ESRD facility that, as determined
based on the documentation submitted pursuant to paragraph (g) of this
section:
(1) Furnished less than 4,000 treatments in each of the 3 cost
reporting years (based on as-filed or final settled 12-consecutive
month cost reports, whichever is most recent, except as specified in
paragraph (g)(4) of this section) preceding the payment year; and
* * * * *
(e) Except as provided in paragraph (f) of this section and unless
extraordinary circumstances justify an exception, to receive the low-
volume adjustment an ESRD facility must provide an attestation
statement, by November 1st of each year preceding the payment year, to
its Medicare Administrative Contractor (MAC) that the facility meets
all the criteria established in this section, except that:
(1) For payment year 2012, the attestation must be provided by
January 3, 2012;
(2) For payment year 2015, the attestation must be provided by
December 31, 2014;
(3) For payment year 2016, the attestation must be provided by
December 31, 2015; and
(4) For payment year 2021, the attestation must be provided by
December 31, 2020.
* * * * *
(g) To receive the low-volume adjustment, an ESRD facility must
include in their attestation provided pursuant to paragraph (e) of this
section a statement that the ESRD facility meets the definition of a
low-volume facility in paragraph (b) of this section. To determine
eligibility for the low-volume adjustment, the MAC on behalf of CMS
relies upon as filed or final settled 12-consecutive month cost
reports, except as specified in paragraph (g)(4) of this section, for
the 3 cost reporting years preceding the payment year to verify the
number of treatments, except that:
* * * * *
(4) For payment years 2021, 2022, and 2023, the attestation
specified in paragraph (e)(4) of this section must indicate that the
ESRD facility meets all the criteria specified in this section, except
that, for a facility that would not otherwise meet the number of
treatments criterion specified in paragraph (b)(1) of this section
because of the COVID-19 PHE, the facility may attest that it furnished
less than 2,000 treatments in any six months during the cost-reporting
period ending in 2020. For any facility that so attests--
(i) The facility must also attest that it furnished treatments
equal to or in excess of 4,000 in the payment year due to temporary
patient shifting as a result of the COVID-19 PHE; and
(ii) The MAC relies on the attestation and multiplies the total
number of treatments for the 6-month period by 2.
(h) When an ESRD facility provides an attestation in accordance
with paragraph (e) of this section, for the third eligibility year, the
MAC verifies the as-filed cost report and takes one of the following
actions:
(1) If the MAC determines an ESRD facility meets the definition of
a low-volume facility as described in paragraph (b) of this section,
CMS adjusts the low-volume facility's base rate for the entire payment
year; or
(2) If the MAC determines an ESRD facility does not meet the
definition of a low-volume facility as described in paragraph (b) of
this section, the MAC reprocesses claims and recoups low-volume
adjustments paid during the payment year.
0
3. Section 413.234 is amended by adding paragraph (f) to read as
follows:
Sec. 413.234. Drug designation process.
* * * * *
(f) Methodology for modifying the ESRD PPS base rate to account for
the costs of calcimimetics in the ESRD PPS bundled payment. Beginning
January 1, 2021, payment for calcimimetics is included in the ESRD PPS
base rate using the following data sources and methodology:
(1) The methodology specified in paragraph (f)(2) of this section
for determining the average per treatment payment amount for
calcimimetics that is added to the ESRD PPS base rate uses the
following data sources:
(i) Total units of oral and injectable calcimimetics and total
number of paid hemodialysis-equivalent dialysis treatments furnished,
as derived from Medicare ESRD facility claims, that is, the 837-
institutional form with bill type 072X, for the third and fourth
quarters of calendar year 2018 and for the full calendar year 2019.
(ii) The weighted average ASP based on the most recent
determinations by CMS.
(2) CMS uses the following methodology to calculate the average per
treatment payment amount for calcimimetics that is added to the ESRD
PPS base rate:
(i) Determines utilization of oral and injectable calcimimetics by
aggregating the total units of oral and injectable calcimimetics in
paragraph (f)(1) of this section.
(ii) Determines a price for each form of the drug by calculating
100 percent of the values from the most recent calendar quarter ASP
calculations available to the public for the oral and injectable
calcimimetic.
(iii) Calculates the total calcimimetic expenditure amount by
multiplying the utilization of the oral and injectable calcimimetics
determined in paragraph (f)(2)(i) of this section by their respective
prices determined in paragraph (f)(2)(ii) of this section and adding
the expenditure amount for both forms.
[[Page 71486]]
(iv) Calculates the average per treatment payment amount by
dividing the total calcimimetic expenditure amount determined in
paragraph (f)(2)(iii) of this section by the total number of paid
hemodialysis-equivalent dialysis treatments in the third and fourth
quarter of calendar year 2018 and the full calendar year 2019.
(v) Calculates the amount added to the ESRD PPS base rate by
reducing the average per treatment payment amount determined in
paragraph (f)(2)(iv) of this section by 1 percent to account for the
outlier policy under Sec. 413.237.
0
4. Section 413.236 is amended by--
0
a. Revising paragraphs (a), (b) introductory text, (b)(2), (4) through
(6), (c), (d) introductory text, and (d)(2); and
0
b. Adding paragraph (f).
The revisions and addition read as follows:
Sec. 413.236 Transitional add-on payment adjustment for new and
innovative equipment and supplies.
(a) Basis and definitions. (1) Effective January 1, 2020, this
section establishes an add-on payment adjustment to support ESRD
facilities in the uptake of new and innovative renal dialysis equipment
and supplies under the ESRD prospective payment system under the
authority of section 1881(b)(14)(D)(iv) of the Social Security Act.
(2) For purposes of this section, the following definitions apply:
Capital-related asset. Asset that an ESRD facility has an economic
interest in through ownership (regardless of the manner in which it was
acquired) and is subject to depreciation. Equipment obtained by the
ESRD facility through operating leases are not considered capital-
related assets.
Depreciation. The amount that represents a portion of the capital-
related asset's cost and that is allocable to a period of operation.
Home dialysis machines. Hemodialysis machines and peritoneal
dialysis cyclers in their entirety (meaning that one new part of a
machine does not make the entire capital-related asset new) that
receive FDA marketing authorization for home use and when used in the
home for a single patient.
Particular calendar year. The year in which the payment adjustment
specified in paragraph (d) of this section would take effect.
Straight-line depreciation method. A method in accounting in which
the annual allowance is determined by dividing the cost of the capital-
related asset by the years of useful life.
Useful life. The estimated useful life of a capital-related asset
is its expected useful life to the ESRD facility, not necessarily the
inherent useful or physical life.
(b) Eligibility criteria. CMS provides for a transitional add-on
payment adjustment for new and innovative equipment and supplies (as
specified in paragraph (d) of this section) to an ESRD facility for
furnishing a covered equipment or supply only if the item:
* * * * *
(2) Is new, meaning within 3 years beginning on the date of the
Food and Drug Administration (FDA) marketing authorization;
* * * * *
(4) Has a complete Healthcare Common Procedure Coding System
(HCPCS) Level II code application submitted, in accordance with the
HCPCS Level II coding procedures on the CMS website, by the HCPCS Level
II code application deadline for biannual Coding Cycle 2 for durable
medical equipment, orthotics, prosthetics and supplies (DMEPOS) items
and services as specified in the HCPCS Level II coding guidance on the
CMS website prior to the particular calendar year;
(5) Is innovative, meaning it meets the criteria specified in Sec.
412.87(b)(1) of this chapter; and
(6) Is not a capital-related asset, except for capital-related
assets that are home dialysis machines.
(c) Announcement of determinations and deadline for consideration
of new renal dialysis equipment or supply applications. CMS will
consider whether a new renal dialysis supply or equipment meets the
eligibility criteria specified in paragraph (b) of this section and
announce the results in the Federal Register as part of its annual
updates and changes to the ESRD prospective payment system. CMS will
only consider a complete application received by CMS by February 1
prior to the particular calendar year. FDA marketing authorization for
the equipment or supply must occur by the HCPCS Level II code
application deadline for biannual Coding Cycle 2 for DMEPOS items and
services as specified in the HCPCS Level II coding guidance on the CMS
website prior to the particular calendar year.
(d) Transitional add-on payment adjustment for new and innovative
equipment and supplies. A new and innovative renal dialysis equipment
or supply will be paid for using a transitional add-on payment
adjustment for new and innovative equipment and supplies based on 65
percent of the MAC-determined price, as specified in paragraph (e) of
this section. For capital-related assets that are home dialysis
machines, payment is based on 65 percent of the pre-adjusted per
treatment amount, as specified in paragraph (f)(1)(ii) of this section.
* * * * *
(2) Following payment of the transitional add-on payment adjustment
for new and innovative equipment and supplies, the ESRD PPS base rate
will not be modified and the new and innovative renal dialysis
equipment or supply will be an eligible outlier service as provided in
Sec. 413.237, except a capital-related asset that is a home dialysis
machine will not be an eligible outlier service as provided in Sec.
413.237.
* * * * *
(f) Pricing of new and innovative renal dialysis equipment and
supplies that are capital-related assets that are home dialysis
machines. (1) The MACs calculate a pre-adjusted per treatment amount,
using the prices they establish under paragraph (e) of this section for
a capital-related asset that is a home dialysis machine, as defined in
paragraph (a)(2) of this section, as follows:
(i) Calculate an annual allowance to determine the amount that
represents the portion of the cost allocable to 1 year, using the
straight-line depreciation method, by dividing the MAC-determined price
by its useful life of 5 years.
(ii) Calculate a per treatment amount for use in calculating the
pre-adjusted per treatment amount by dividing the annual allowance, as
determined in paragraph (f)(1)(i) of this section, by the expected
number of treatments.
(iii) Calculate a pre-adjusted per treatment amount to determine
the amount that is adjusted by the 65 percent under paragraph (d) of
this section, by subtracting the average per treatment offset amount
(as determined using the data sources and methodology specified in
paragraphs (f)(2) and (3) of this section, respectively, of this
section) from the per treatment amount (as determined in paragraph
(f)(1)(ii) of this section) to account for the costs already paid
through the ESRD PPS base rate for current home dialysis machines that
ESRD facilities already own.
(2) The methodology specified in paragraph (f)(3) of this section
for determining the average per treatment offset amount uses the
following data sources:
(i) Dialysis machine and equipment cost, total cost across all
dialysis modalities, the number of hemodialysis-equivalent home
dialysis treatment counts, and the number of hemodialysis-equivalent
total treatment
[[Page 71487]]
counts are obtained from renal facility cost reports (CMS form 265-11)
and hospital cost reports (CMS form 2552-10) using calendar years 2017-
2019 cost reports.
(A) Dialysis machine and equipment costs are obtained by summing
lines 8.01 through 17.02 from Worksheet B, Column 4 for renal facility
cost reports, and by summing lines 2 through 11 from Worksheet I-2 for
hospital cost reports.
(B) Total cost across all dialysis modalities are obtained by
summing lines 8.01 through 17.02 from Worksheet C, Column 2 for renal
facility cost reports, and by summing lines 1 through 10 from Worksheet
I-4, Column 2 for the hospital cost reports.
(C) Hemodialysis-equivalent total treatment counts are obtained by
summing lines 8.01 through 17.02 from Worksheet C, Column 1 for renal
facility cost reports, and by summing lines 1 through 10 from Worksheet
I-4, Column 1 for the hospital cost reports.
(D) Hemodialysis-equivalent home dialysis treatment counts are
obtained by summing lines 14.01 through 17.02 from Worksheet C, Column
1 for renal facility cost reports, and by summing lines 7 through 10
from Worksheet I-4, Column 1 for the hospital cost reports. In both
renal facility and hospital cost reports, home Continuous Ambulatory
Peritoneal Dialysis and home Continuous Cyclic Peritoneal Dialysis are
reported as patient weeks, so a conversion factor of 3 is applied to
obtain hemodialysis-equivalent treatment counts.
(ii) [Reserved]
(3) CMS uses the following methodology to calculate the average per
treatment offset amount for home dialysis machines that is subtracted
from the per treatment amount as determined in paragraph (f)(1)(ii) of
this section to determine the pre-adjusted per treatment amount
specified in paragraph (f)(1)(iii) of this section:
(i) Calculates annualized values for calendar year 2018 at the ESRD
facility level for the metrics specified in paragraph (f)(2)(i) of this
section by dividing the numbers of days the cost report spanned to
compute a per-day metric, then multiplying the resulting value by the
number of days in 2018 the cost report covered to compute the metrics
attributable to the period covered by the cost report in 2018. Next,
for ESRD facilities with multiple cost reports covering 2018 the
resulting metrics are aggregated. Finally, each ESRD facility's
aggregated metrics are annualized to cover the full calendar year 2018.
The annualization factor for an ESRD facility is the total number of
days in 2018 divided by the total days in 2018 covered by the ESRD
facility's cost report(s).
(ii) Calculates an estimated home dialysis machine and equipment
cost for each ESRD facility by multiplying the annualized dialysis
machine and equipment cost determined in paragraph (f)(3)(i) of this
section by the ESRD facility's hemodialysis-equivalent home dialysis
treatment percentage. The hemodialysis-equivalent home dialysis
treatment percentage for each facility is calculated by dividing
annualized hemodialysis-equivalent home treatment count determined in
paragraph (f)(3)(i) of this section by annualized hemodialysis-
equivalent treatment count across all modalities determined in
paragraph (f)(3)(i) of this section.
(iii) Calculates an average home dialysis machine and equipment
cost per home dialysis treatment for calendar year 2018 by dividing the
sum of the estimated home dialysis machine and equipment cost in
paragraph (f)(3)(ii) of this section across all ESRD facilities by the
sum of annualized hemodialysis-equivalent home treatment counts
determined in paragraph (f)(3)(i) of this section across all
facilities.
(iv) Calculates the amount subtracted from the pre-adjusted
treatment amount determined in paragraph (f)(1)(iii) of this section by
inflating the average home dialysis machine and equipment cost per home
dialysis treatment for calendar year 2018 determined in paragraph
(f)(3)(iii) to calendar year 2021. The average home dialysis machine
and equipment cost per home dialysis treatment for calendar year 2018
is inflated to calendar year 2021 by multiplying this value by the
payment rate update factor required under section 1881(b)(14)(F)(i) of
the Social Security Act for calendar years 2019, 2020, and 2021. This
value is then divided by a scaling factor to be converted to the ESRD
PPS payment scale. The scaling factor is calculated by dividing the
calendar year 2018 total cost per treatment inflated to calendar year
2021 by the average ESRD PPS payment per treatment projected for
calendar year 2021.
(v) Effective January 1, 2022, CMS annually updates the amount
determined in paragraph (f)(3)(iv) of this section by the ESRD bundled
market basket percentage increase factor minus the productivity
adjustment factor.
0
5. Section 413.237 is amended--
0
a. In paragraphs (a)(1)(i) through (iii) by removing the semicolon at
the end of the sentence and adding a period in its place;
0
b. In paragraph (a)(1)(iv) by removing ``; and'' and adding a period in
its place; and
0
c. By revising paragraph (a)(1)(v).
The revision reads as follows:
Sec. 413.237 Outliers.
(a) * * *
(1) * * *
(v) Renal dialysis equipment and supplies, except for capital-
related assets that are home dialysis machines (as defined in Sec.
413.236(a)(2)), that receive the transitional add-on payment adjustment
as specified in Sec. 413.236, after the payment period has ended.
* * * * *
Dated: October 28, 2020.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: October 28, 2020.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2020-24485 Filed 11-2-20; 4:15 pm]
BILLING CODE 4120-01-P