Medicare is moving closer to a prospective payment system for the dialysis centers that supply ongoing care to beneficiaries with end-stage renal disease, or ESRD.
A report to Congress last week by the Centers for Medicare & Medicaid Services suggested that improvements in how Medicare pays the centers could enable them to more efficiently deliver services to beneficiaries.
"This analysis lays a solid foundation to implement a more accurate payment system, which would benefit these patients," said CMS acting administrator Kerry Weems. "We are currently 60 percent of the way to a proven prospective pricing system for ESRD."
The timeclock is ticking on developing a PPS system for ESRD. The president's budget for fiscal year 2009 contains a legislative proposal for implementing a fully bundled prospective payment system for ESRD beginning Jan. 1, 2011.
ESRD is one of the last segments of care that Medicare doesn't set prices for prospectively. These services are furnished on an outpatient basis in free-standing and hospital-based dialysis facilities.
Payments for these composite rate services represent about 60 percent of total Medicare payments to ESRD facilities. The remaining 40 percent is for separately billed items, such as drugs, but may also include laboratory services, supplies and blood products.
The report discusses establishing a base treatment payment rate for the services related to a dialysis treatment session, including the services in the current composite rate as well as items now billed separately.
Under the proposed plan, the base rate would be adjusted for case mix factors, such as the patient's age, gender, height and weight, and how long they have been on dialysis. By accounting for more patient characteristics, payments would be targeted to those facilities with the more costly patients.
"A fully bundled PPS would have a number of advantages over the current system," Weems said. "As with any prospective payment system, a fully bundled rate creates incentives to furnish dialysis services efficiently."
The report also describes the quality initiatives already under way in Medicare related to ESRD.