Medicare Program; End-Stage Renal Disease Prospective Payment System, Quality Incentive Program, and Bad Debt Reductions for All Medicare Providers, 67449-67531 [2012-26903]

Download as PDF Vol. 77 Friday, No. 218 November 9, 2012 Part II Department of Health and Human Services tkelley on DSK3SPTVN1PROD with RULES2 Centers for Medicare & Medicaid Services 42 CFR Parts 413 and 417 Medicare Program; End-Stage Renal Disease Prospective Payment System, Quality Incentive Program, and Bad Debt Reductions for All Medicare Providers; Final Rule VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 PO 00000 Frm 00001 Fmt 4717 Sfmt 4717 E:\FR\FM\09NOR2.SGM 09NOR2 67450 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Parts 413 and 417 [CMS–1352–F] RIN 0938–AR13 Medicare Program; End-Stage Renal Disease Prospective Payment System, Quality Incentive Program, and Bad Debt Reductions for All Medicare Providers Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Final rule. AGENCY: This final rule updates and makes revisions to the end-stage renal disease (ESRD) prospective payment system (PPS) for calendar year (CY) 2013. This rule also sets forth requirements for the ESRD quality incentive program (QIP), including for payment year (PY) 2015 and beyond. In addition, this rule implements changes to bad debt reimbursement for all Medicare providers, suppliers, and other entities eligible to receive Medicare payment for bad debt and removes the cap on bad debt reimbursement to ESRD facilities. (See the Table of Contents for a listing of the specific issues addressed in this final rule.) DATES: Effective Date: These regulations are effective on January 1, 2013. Applicability Date: The regulations setting forth the reductions in Medicare bad debt pursuant to section 3201 of the Middle Class Tax Extension and Job Creation Act of 2012 (Pub. L. 112–96) are applicable for cost reporting periods beginning October 1, 2012. FOR FURTHER INFORMATION CONTACT: Michelle Cruse, (410) 786–4533, for issues related to ESRD. Heidi Oumarou, (410) 786–7942, for issues related to the ESRD market basket. Anita Segar, (410) 786–4614, for issues related to the QIP. Kellie Shannon, (410) 786–0416 for information regarding Medicare bad debt. SUPPLEMENTARY INFORMATION: tkelley on DSK3SPTVN1PROD with RULES2 SUMMARY: Table of Contents To assist readers in referencing sections contained in this preamble, we are providing a Table of Contents. Some of the issues discussed in this preamble affect the payment policies, but do not require changes to the regulations in the Code of Federal Regulations (CFR). VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 I. Executive Summary A. Purpose 1. End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) 2. ESRD QIP 3. Reductions to Bad Debt Payments for All Medicare Providers and Elimination of the Cap on Bad Debt Reimbursement to ESRD Facilities B. Summary of Major Provisions 1. ESRD PPS 2. ESRD QIP 3. Reductions to Bad Debt Payments for All Medicare Providers and Elimination of the Cap on Bad Debt Reimbursement to ESRD Facilities C. Summary of Cost and Benefits 1. Impacts of the Final ESRD PPS 2. ESRD QIP 3. Impacts of Bad Debt Provisions II. Calendar Year (CY) 2013 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) A. Background on the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) B. Summary of the Proposed Provisions and Responses to Comments on the CY 2013 ESRD PPS C. Routine Updates and Proposed Policy Changes to the CY 2013 ESRD PPS 1. Composite Rate Portion of the ESRD PPS Blended Payment a. Update to the Drug Add-on to the Composite Rate Portion of the ESRD Blended Payment Rate i. Estimating Growth in Expenditures for Drugs and Biologicals in CY 2013 ii. Estimating Per Patient Growth iii. Applying the Growth Update to the Drug Add-On Adjustment iv. Update to the Drug Add-On Adjustment for CY 2013 2. ESRD PPS Base Rate 3. ESRD Bundled Market Basket a. Overview and Background b. Market Basket Update Increase Factor and Labor-Related Share for ESRD Facilities for CY 2013 c. Productivity Adjustment d. Calculation of the ESRDB Market Basket Update Adjusted for Multifactor Productivity for CY 2013 4. Transition Budget-Neutrality Adjustment for CY 2013 5. Updates to the Wage Index Values and Wage Index Floor for the Composite Rate Portion of the Blended Payment and the ESRD PPS Payment a. Reduction to the ESRD Wage Index Floor b. Policies for Areas With No Wage Data c. Wage Index Budget-Neutrality Adjustment d. ESRD PPS Wage Index Tables 6. Drug Policy Changes a. Daptomycin b. Alteplase and Other Thrombolytics c. Part B Drug Pricing 7. Revisions to the Outlier Policy a. Impact of Changes to the Outlier Policy b. Outlier Policy Percentage D. Clarifications Regarding the ESRD PPS 1. Reporting Composite Rate Items and Services 2. ESRD Facility Responsibilities for ESRDRelated Drugs and Biologicals PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 3. Use of AY Modifier E. Miscellaneous Comments III. End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP) for Payment Year (PY) 2015 A. Background B. Summary of the Proposed Provisions and Responses to Comments on the ESRD QIP for PY 2015 C. Considerations in Updating and Expanding Quality Measures Under the ESRD QIP for PY 2015 and Subsequent PYs 1. Value-Based Purchasing (VBP) Overview 2. Brief Overview of Proposals 3. Measures Application Partnership Review 4. PY 2014 Mineral Metabolism Measure D. Proposed Measures for the PY 2015 ESRD QIP and Subsequent PYs of the ESRD QIP 1. PY 2014 Measures Continuing for PY 2015 and Subsequent PYs a. Hemoglobin Greater Than 12 g/dL b. Vascular Access Type (VAT) Measure Topic c. In-Center Hemodialysis Consumer Assessment of Healthcare Providers and Systems (ICH CAHPS) 2. Expansion of Two PY 2014 Measures for PY 2015 and Subsequent PYs a. Expanded National Healthcare Safety Network (NHSN) Dialysis Event Reporting Measure b. Expanded Mineral Metabolism Reporting Measure 3. New Measures for PY 2015 and Subsequent PYs of the ESRD QIP a. Kt/V Dialysis Adequacy Measure Topic i. Adult Hemodialysis Adequacy ii. Peritoneal Dialysis Adequacy iii. Pediatric, In-center Hemodialysis Adequacy b. Hypercalcemia c. Anemia Management Reporting Measure 4. Measures Under Consideration for Future PYs of the ESRD QIP a. Standardized Hospitalization Ratio (SHR) b. Standardized Mortality Ratio (SMR) c. Public Reporting of SHR and SMR Measures 5. Other Potential Future Measures Under Development a. Thirty-Day Hospital Readmissions b. Efficiency c. Population/Community Health 6. Scoring Background and General Considerations for the PY 2015 ESRD QIP 7. Performance Period for the PY 2015 ESRD QIP 8. Performance Standards for the PY 2015 ESRD QIP a. Clinical Measure Performance Standards b. Performance Standards c. Performance Standards for the PY 2015 Reporting Measures 9. Scoring for the PY 2015 ESRD QIP Measures a. Scoring Facility Performance on Clinical Measures Based on Achievement b. Scoring Facility Performance on Clinical Measures Based on Improvement c. Calculating the Reporting Measure Scores E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations 10. Weighting the PY 2015 ESRD QIP Measures and Calculation of the PY 2015 ESRD QIP Total Performance Score a. Weighting Individual Measures To Compute Measure Topic Scores for the Kt/V Dialysis Adequacy Measure Topic and the Vascular Access Type Measure Topic b. Weighting the Total Performance Score c. Examples of the PY 2015 ESRD QIP Scoring Methodology 11. Minimum Data for Scoring Measures for the PY 2015 ESRD QIP a. Minimum Data for Scoring Clinical Measures for the PY 2015 ESRD QIP b. Minimum Data Requirements for Reporting Measures by New Facilities 12. Payment Reductions for the PY 2015 ESRD QIP 13. Data Validation 14. Scoring Facilities Whose Ownership has Changed 15. Public Reporting Requirements IV. Limitation on Payments to All Providers, Suppliers and Other Entities Entitled to Bad Debt A. Background B. Section 3201 of The Middle Class Tax Extension and Job Creation Act of 2012 (Pub. L. No. 112–96) C. Summary of Provisions of This Final Rule 1. Section 3201 of The Middle Class Tax Extension and Job Creation Act of 2012 (Pub. L. No. 112–96) 2. ESRD Bad Debt Cap and Remove and Reserve § 413.178 3. Technical Corrections D. Changes to Medicare Bad Debt Policy 1. Changes to 42 CFR 413.89(h) 2. Rationale for Removing 42 CFR 413.178 3. Technical Corrections to 42 CFR 417.536(f)(1) V. Collection of Information Requirements A. Legislative Requirement for Solicitation of Comments B. Requirements in the Regulation Text C. Additional Information Collection Requirements 1. ESRD QIP a. Display of Certificates for the PY 2015 ESRD QIP b. NHSN Dialysis Event Reporting Requirement for the PY 2015 ESRD QIP c. ICH CAHPS Survey Attestation Requirement for the PY 2015 ESRD QIP d. Data Validation Requirements 2. Reductions to Bad Debt Payments for All Medicare Providers VI. Economic Analyses A. Regulatory Impact Analysis 1. Introduction 2. Statement of Need 3. Overall Impact B. Detailed Economic Analysis 1. CY 2013 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) a. Effects on ESRD Facilities b. Effects on Other Providers c. Effects on the Medicare Program d. Effects on Medicare Beneficiaries e. Alternatives Considered 2. ESRD QIP a. Effects of the PY 2015 ESRD QIP b. Alternatives Considered for the PY 2015 ESRD QIP VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 3. Reductions to Bad Debt Payments for All Medicare Providers C. Accounting Statement VII. Regulatory Flexibility Act Analysis VIII. Unfunded Mandates Reform Act Analysis IX. Federalism Analysis X. Files Available to the Public via the Internet Regulations Text Acronyms Because of the many terms to which we refer by acronym in this final rule, we are listing the acronyms used and their corresponding meanings in alphabetical order below: AMCC Automated Multi-Channel Chemistry ASP Average Sales Price AV Arteriovenous BLS Bureau of Labor Statistics BMI Body Mass Index BSA Body Surface Area CAH Critical Access Hospital CBSA Core-Based Statistical Area CCN CMS Certification Number CDC Centers for Disease Control and Prevention CLABSI Central Line Access Bloodstream Infections CFR Code of Federal Regulations CIP Core Indicators Project CMHC Community Mental Health Center CMP Competitive Medical Plans CMS Centers for Medicare & Medicaid Services CPM Clinical Performance Measure CPT Current Procedural Terminology CROWNWeb Consolidated Renal Operations in a Web-Enabled Network CY Calendar Year DFC Dialysis Facility Compare DFR Dialysis Facility Report DME Durable Medical Equipment ESA Erythropoiesis stimulating agent ESRD End-Stage Renal Disease ESRDB End-Stage Renal Disease Bundled FDA Food and Drug Administration FI/MAC Fiscal Intermediary/Medicare Administrative Contractor FQHC Federally Qualified Health Center FY Fiscal Year GDP Gross Domestic Product HAI Healthcare-associated Infections HCPCS Healthcare Common Procedure Coding System HCPP Health Care Prepayment Plan HD Hemodialysis HHD Home Hemodialysis HMO Health Maintenance Organization ICD–9–CM International Classification of Diseases, 9th Edition, Clinical Modifications ICH CAHPS In-Center Hemodialysis Consumer Assessment of Healthcare Providers and Systems IGI IHS Global Insight IPPS Inpatient Prospective Payment System KDIGO Kidney Disease: Improving Global Outcomes KDOQI Kidney Disease Outcome Quality Initiative Kt/V A measure of dialysis adequacy where K is dialyzer clearance, t is dialysis time, and V is total body water volume PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 67451 LDO Large Dialysis Organization MAP Medicare Allowable Payment MCP Monthly Capitation Payment MIPPA Medicare Improvements for Patients and Providers Act of 2008 (Pub. L. 110– 275) MMA Medicare Prescription Drug, Improvement and Modernization Act of 2003 MMEA Medicare and Medicaid Extenders Act of 2010 Pub. L. 111–309 MFP Multifactor Productivity NHSN National Healthcare Safety Network NQF National Quality Forum PD Peritoneal Dialysis PFS Physician Fee Schedule PPS Prospective Payment System PSR Performance Score Report PY Payment Year QIP Quality Incentive Program REMIS Renal Management Information System RFA Regulatory Flexibility Act RHC Rural Health Clinic RRF Residual Renal Function RUL Reasonable Useful Lifetime SBA Small Business Administration SHR Standardized Hospitalization Ratio SIMS Standard Information Management System SMR Standardized Mortality Ratio SNF Skilled Nursing Facility SSA Social Security Administration TEP Technical Expert Panel The Act Social Security Act The Affordable Care Act The Patient Protection and Affordable Care Act URR Urea Reduction Ratio VAT Vascular Access Type VBP Value Based Purchasing I. Executive Summary A. Purpose 1. End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) This final rule updates and makes revisions to the End-Stage Renal Disease (ESRD) prospective payment system (PPS) for calendar year (CY) 2013. In accordance with 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), the Centers for Medicare & Medicaid Services (CMS) implemented a case-mix adjusted bundled PPS for Medicare outpatient ESRD dialysis services beginning January 1, 2011. The ESRD PPS replaced the basic case-mix adjusted composite payment system and the methodologies for the reimbursement of separately billable outpatient ESRD services. Also, section 1881(b)(14)(F) of the Act, as added by section 153(b) of MIPPA and amended by section 3401(h) of the Affordable Care Act (Pub. L. 111– 148), established that beginning CY 2012, and each subsequent year, the Secretary shall reduce the market basket increase factor by a productivity E:\FR\FM\09NOR2.SGM 09NOR2 67452 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. In addition, the application of the productivity adjustment may result in the increase factor being less than 0.0 percent for a year. 2. End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP) This final rule also sets forth requirements for the ESRD quality incentive program (QIP), including for payment year (PY) 2015. The program is authorized under section 153(c) of MIPPA, which added section 1881(h) to the Social Security Act (the Act). The ESRD QIP is the most recent step in fostering improved patient outcomes by establishing incentives for dialysis facilities to meet performance standards established by CMS. 3. Reductions to Bad Debt Payments for all Medicare Providers and Elimination of the Cap on Bad Debt Reimbursement to ESRD Facilities This final rule also implements the changes to the limitations on payments for bad debt reimbursement set forth in section 3201 of The Middle Class Tax Extension and Job Creation Act of 2012 (Pub. L. 112–96) by revising 42 CFR 413.89, Bad debts, charity, and courtesy allowances. Additionally, this rule will remove the cap on bad debt reimbursement to ESRD facilities. B. Summary of the Major Provisions tkelley on DSK3SPTVN1PROD with RULES2 1. ESRD PPS • Update to the composite and ESRD PPS base rate for CY 2013: For CY 2013, the ESRD PPS base rate is $240.36. This amount reflects the application of the ESRD bundled (ESRDB) market basket reduced by the productivity adjustment, or 2.3 percent, and the wage index budget-neutrality adjustment factor of 1.000613 to the CY 2012 ESRD PPS base rate of $234.81. The base rate is applicable to both the ESRD PPS portion of the blended payment under the transition and payments under the full PPS. During the transition, we are required to update the composite rate for ESRD facilities receiving a blended payment. For CY 2013, the composite base rate is $145.20. This amount reflects the CY 2012 composite rate of $141.94, increased by the ESRDB market basket reduced by the productivity adjustment. • Update to the composite rate drug add-on for CY 2013: There are no changes to the methodology used to compute the drug add-on for CY 2013; we are only updating the data used to calculate the drug add-on for CY 2013. Using 6 years of average sales price VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 (ASP) drug expenditure data and other data, we estimate a 2.9 percent decrease in aggregate drug expenditures and a 4.0 percent increase in enrollment. Using these estimates, we project a 6.6 percent decrease in per patient growth of drug expenditures for CY 2013. Thus, we are projecting that the combined growth in per patient utilization and pricing for CY 2013 will result in a decrease to the drug add-on equal to 0.9 percentage points. We will apply a zero update to the drug add-on adjustment and maintain the $20.33 per treatment drug add-on amount for CY 2013. Because the market basket minus productivity that is applied to the composite rate increases the composite rate, the add-on adjustment of 14.3 percent is reduced to 14.0 percent to maintain the drug addon at $20.33. • Market basket and productivity adjustment: Under section 1881(b)(14)(F) of the Act, beginning in CY 2012, ESRD PPS payment amounts and the composite rate portion of the transition blended payment amounts shall be annually increased by an ESRD market basket percentage increase factor reduced by a multi-factor productivity (MFP) adjustment. The CY 2013 ESRDB market basket increase factor is 2.9 percent. The current forecast of the CY 2013 MFP adjustment is 0.6 percent. The resulting final CY 2013 MFPadjusted ESRDB market basket update is equal to 2.3 percent. • The transition budget-neutrality adjustment factor: For CY 2013, we are applying the transition budgetneutrality adjustment methodology established in CY 2011. This results in a 0.1 percent adjustment. Therefore, for CY 2013, a 0.1 percent increase will be applied to both the blended payments made under the transition and payments made under the full ESRD PPS for renal dialysis services furnished January 1, 2013 through December 31, 2013. • Updates to the wage index and wage index floor: We adjust wage indices on an annual basis using the most current hospital wage data to account for differing wage levels in areas in which ESRD facilities are located. In CY 2013, we are not making any changes to the application of the wage index budget-neutrality adjustment factor and will continue to apply the budget-neutrality adjustment to the pre-floor, pre-reclassified wage index values for the composite rate portion of the blended payment and to the base rate for the ESRD PPS. Over the past several years, we have been gradually decreasing the wage index floor by 0.05 in an effort to gradually phase out the floor, and in CY 2013 we will continue to do so. Therefore, in CY PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 2013, we are reducing the wage index floor from 0.550 to 0.500. We also applied the wage index budgetneutrality adjustment factor to the wage index floor of 0.500, which results in an adjusted wage index floor of 0.501 (0.500 × 1.001141) for CY 2013. • Update to the outlier policy: We are updating the outlier services fixed dollar loss amounts and Medicare Allowable Payments (MAPs) for CY 2013 using 2011 data. Based on the use of more current data, the fixed dollar loss amount for pediatric patients will decrease from $71.64 to $47.32 and the MAP amount will decrease from $45.44 to $41.39 as compared to CY 2012 values. For adult patients, the fixeddollar loss amount drops from $141.21 to $110.22 and the MAP amount drops from $78.00 to $59.42. Because of the decline in utilization associated with the implementation of the expanded bundle, the 1 percent target for outlier payments was not achieved in CY 2011. Use of 2011 data to recalibrate the thresholds, reflecting lower utilization of epoetin and other outlier services, is expected to result in aggregate outlier payments close to the 1 percent target in CY 2013. We believe this update to the outlier MAPs and fixed dollar loss amounts for CY 2013 will increase payments for ESRD beneficiaries requiring higher resource utilization in accordance with a 1 percent outlier policy. • Policy reiteration (composite rate drugs and AY modifier): Under the composite and basic case-mix adjusted composite rate payment systems, certain drugs were included in the composite rate and were not eligible for separate payment. Our analyses of claims show that ESRD facilities are continuing to report composite rate drugs on ESRD claims. In this rule, we are reiterating that any item or service included in the composite rate should not be identified on ESRD claims. An AY modifier can be appended to claims for drugs and laboratory tests that are not ESRDrelated to allow for separate payment. Our analyses of claims show that there are ESRD facilities and laboratories that are appending the AY modifier to drugs and laboratory tests that we believe are ESRD-related, resulting in separate payment. In this rule, we reiterate the purpose of the AY modifier and emphasize that we are continuing our monitoring efforts. We also indicate that we may consider eliminating the AY modifier in future rulemaking if we believe that the AY modifier is not being used for the purpose intended. E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations 2. ESRD QIP This final rule also implements new requirements for the ESRD QIP. It will continue some of the previous ESRD QIP measures, add new measures, and expand the scope of some of the existing measures to cover the measure topics as follows: • To evaluate anemia management: Æ Hemoglobin Greater Than 12 g/dL, a clinical measure. Æ Anemia Management, a reporting measure.* • To evaluate dialysis adequacy: Æ A clinical Kt/V measure for adult hemodialysis patients.* Æ A clinical Kt/V measure for adult peritoneal dialysis patients. * Æ A clinical Kt/V measure for pediatric in-center hemodialysis patients. * • To determine whether patients are treated using the most beneficial type of vascular access: Æ Vascular Access Type, a clinical measure topic comprised of an arteriovenous fistula and a catheter measure. • To address effective bone mineral metabolism management: Æ Mineral Metabolism, a reporting measure. • To address safety: Æ National Healthcare Safety Network (NHSN) Dialysis Event reporting measure. • To assess patient and caregiver experience: Æ In-Center Hemodialysis Consumer Assessment of Healthcare Providers and Systems (ICH CAHPS) survey reporting measure. * Denotes that this measure is new to the ESRD QIP. This final rule also establishes CY 2013 as the performance period for the PY 2015 ESRD QIP. It also establishes performance standards for each measure and adopts scoring and payment reduction methodologies that are similar to those finalized for the PY 2014 ESRD QIP. tkelley on DSK3SPTVN1PROD with RULES2 3. Reductions to Bad Debt Payments for all Medicare Providers and Elimination of the Cap on Bad Debt Reimbursement to ESRD Facilities This rule also implements the statutory changes to the limitations on payments for bad debt reimbursement by revising 42 CFR 413.89, Bad debts, charity, and courtesy allowances. We are also moving 42 CFR 413.178(a) to 42 CFR 413.89(h)(3), and moving 42 CFR 413.178(d)(2) to 42 CFR 413.89(i)(2) and removing and reserving the remainder of 42 CFR 413.178. Additionally, we are making a technical correction to the VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 67453 cross reference in 42 CFR 417.536(f)(1) to Medicare bad debt reimbursement policy. Finally, this final rule will eliminate the cap on bad debt reimbursement to an ESRD facility at its unrecovered costs. collection of information are critical to better understanding the quality of care beneficiaries receive, particularly a patient’s experience of care, and will be used to incentivize improvements in the quality of care provided. C. Summary of Costs and Benefits In section VI.B of this final rule, we set forth a detailed analysis of the impacts that the changes will have on affected entities and beneficiaries. The impacts include the following: 3. Impacts of Bad Debt Provisions 1. Impacts of the Final ESRD PPS The impact chart in section VI.B of this final rule displays the estimated change in payments to ESRD facilities in CY 2013 as compared to estimated payments in CY 2012. The overall impact of the CY 2013 changes is projected to be a 3.0 percent increase in payments. Hospital-based ESRD facilities have an estimated 3.6 percent increase in payments compared with freestanding facilities with an estimated 2.9 percent increase. Urban facilities are expected to receive an estimated payment increase of 3.0 percent compared to an estimated 2.9 percent increase for rural facilities. We expect a 2.4 percent decrease in estimated payments as a result of wage index adjustments for Puerto Rico and the Virgin Islands. However, this decrease is offset primarily by the impact of the market basket increase, resulting in an estimated 0.6 percent increase in payment. The estimated 3.0 percent overall payment increase will result in a $250 million cost to Medicare and a $60 million cost to beneficiaries. In 2013, a 2.3 percent market basket increase will result in a $190 million cost to Medicare and a $50 million cost to beneficiaries. The outlier fixed dollar loss and MAP adjustments in CY 2013 will result in a $30 million cost to Medicare and a $10 million cost to beneficiaries. The difference in cost to Medicare is due to the effects of changing the blend of payments from 50/50 to 25/75 and the 0.1 percent transition budget-neutrality adjustment. 2. Impacts for ESRD QIP The overall economic impact of the ESRD QIP is an estimated $24.6 million for PY 2015. We expect the total payment reductions to be approximately $12.1 million, and the costs associated with the collection of information requirements for certain measures to be approximately $12.4 million. The estimated payment reduction will continue to incentivize facilities to provide higher quality care to beneficiaries. The reporting measures that result in costs associated with the PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 We are codifying the provisions of section 3201 of The Middle Class Tax Extension and Job Creation Act of 2012 that requires reductions in bad debt reimbursement to all providers eligible to receive bad debt reimbursement; these provisions are specifically prescribed by statute and thus, are generally self-implementing. There will be a $10.92 billion savings to the program over 10 years resulting from these self-implementing reductions in bad debt reimbursement. We are also removing the cap on reimbursement for bad debt to ESRD facilities for cost reporting periods beginning on or after January 1, 2013, which will result in a cost to the Medicare program of $170 million over 10 years. II. Calendar Year (CY) 2013 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) A. Background on the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) On August 12, 2010, we published in the Federal Register a final (75 FR 49030) titled, ‘‘End-Stage Renal Disease Prospective Payment System’’, hereinafter referred to as the CY 2011 ESRD PPS final rule. In the CY 2011 ESRD PPS final rule, we implemented a case-mix adjusted bundled PPS for Medicare outpatient ESRD dialysis services beginning January 1, 2011, in accordance with section 1881(b)(14) of the Act, as added by section 153(b) of MIPPA. On April 6, 2011, we published in the Federal Register an interim final rule with comment period (76 FR 18930) titled, ‘‘Changes in the End-Stage Renal Disease Prospective Payment System Transition Budget-Neutrality Adjustment’’, which revised the ESRD transition budget-neutrality adjustment for CY 2011. In the interim final rule, we revised the 3.1 percent transition budget-neutrality adjustment reduction to a zero percent transition budgetneutrality adjustment for renal dialysis services furnished on April 1, 2011 through December 31, 2011 (76 FR 18933). On November 10, 2011, we published in the Federal Register, a final rule (76 FR 70228 through 70316) titled, ‘‘Medicare Program; End-Stage Renal Disease Prospective Payment System and Quality Incentive Program; E:\FR\FM\09NOR2.SGM 09NOR2 67454 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations Ambulance Fee Schedule; Durable Medical Equipment; and Competitive Acquisition of Certain Durable Medical Equipment, Prosthetics, Orthotics and Supplies (hereinafter referred to as the CY 2012 ESRD PPS final rule). In that final rule, for the ESRD PPS, we made a number of routine updates for CY 2012, implemented the second year of the transition to the ESRD PPS, made several policy changes, clarifications, and technical changes. In the CY 2013 ESRD PPS proposed rule (77 FR 40956), we summarize the updates, changes, and clarifications that were finalized in the CY 2012 ESRD PPS final rule (76 FR 70228). B. Summary of the Proposed Provisions and Responses to Comments on the CY 2013 ESRD PPS The proposed rule, titled ‘‘Medicare Program; End-Stage Renal Disease Prospective Payment System, Quality Incentive Program, and Bad Debt Reductions for All Medicare Providers’’ (77 FR 40952), hereinafter referred to as the CY 2013 ESRD PPS proposed rule appeared in the Federal Register on July 11, 2012, with a comment period that ended on August 31, 2012. In that proposed rule, for the ESRD PPS, we proposed to (1) make a number of routine updates for CY 2013, (2) implement the third year of the transition, and (3) make several policy changes and clarifications. We received approximately 40 public comments on the ESRD PPS proposals, including comments from ESRD facilities; national renal, nephrologist and patient organizations; patients; manufacturers; health care systems; and nurses. 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 2013 ESRD PPS. tkelley on DSK3SPTVN1PROD with RULES2 C. Routine Updates and Proposed Policy Changes to the CY 2013 ESRD PPS 1. Composite Rate Portion of the ESRD PPS Blended Payment Section 1881(b)(14)(E)(i) of the Act requires a 4-year transition under the ESRD PPS. This final rule implements the third year of the transition for those ESRD facilities that did not elect to receive 100 percent of the payment amount under the ESRD PPS. For CY 2013, under 42 CFR 413.239(a)(3), facilities that are transitioning will receive a blended rate equal to the sum of 75 percent of the full ESRD PPS amount and 25 percent of the basic casemix adjusted composite payment amount. Accordingly, we continue to VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 update the composite rate portion of the blended payment during the transition, (that is, CY 2011 through 2013), which includes updates to the drug add-on adjustment required by section 1881(b)(12)(F) of the Act, discussed in section II.C.1.a of this final rule, as well as the wage index values (which includes a budget-neutrality factor) used to adjust the labor component of the composite rate discussed in section II.C.5 of this final rule. For CY 2013, we proposed to update the second part of the transition budget-neutrality adjustment to reflect updated data. The transition budget-neutrality adjustment is applied to both the blended payments under the transition and payments under the ESRD PPS. The discussion regarding the transition budgetneutrality adjustment can be found in section II.C.4 of this final rule. As discussed in the CY 2013 ESRD PPS proposed rule (76 FR 40957), section II.C.3 of this final rule, and in section 1881(b)(14)(F)(ii) of the Act, as added by section 153(b) of MIPPA and amended by section 3401(h) of the Affordable Care Act, for the years in which the transition applies, the composite base rate shall be annually increased by the ESRDB market basket and, for CY 2012 and each subsequent year, the ESRDB market basket shall be reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. In the CY 2013 ESRD PPS proposed rule (77 FR 40957), we proposed for CY 2013 a composite rate of $145.49, which reflected the CY 2012 composite rate of $141.94 increased by an ESRDB market basket of 3.2 reduced by the productivity adjustment of 0.7 percent, resulting in an update of 2.5 percent, based on the first quarter 2012 IGI forecast of the ESRDB market basket. We received four public comments supporting our proposal to increase the composite base rate by 2.5 percent for ESRD services furnished in CY 2013 and paid under the blended payment methodology during the transition period. In section II.C.3.b of this final rule, we finalize the CY 2013 ESRDB market basket update of 2.9 percent, and the MFP adjustment of 0.6 percent, which results in a forecasted rate of increase to the base rate of 2.3 percent. This final update is based on the third quarter 2012 IGI forecast of the ESRDB market basket. Consequently for CY 2013, we are finalizing the composite base rate under the ESRD PPS payment of $145.20 for ESRD services furnished during CY 2013 and paid under the blended payment methodology. This amount reflects the CY 2012 composite rate of $141.94 increased by the CY PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 2013 ESRD market basket increase factor of 2.9 percent reduced by the productivity adjustment of 0.6 percent. The resulting CY 2013 MFP-adjusted ESRD market basket update is 2.3 percent ($141.94 × 1.023 = $ 145.20). a. Update to the Drug Add-On to the Composite Rate Portion of the ESRD Blended Payment Rate Section 1881(b)(14)(E)(i) of the Act requires a 4-year transition under the ESRD PPS. Under 42 CFR 413.239, ESRD facilities were permitted to make a one-time election by November 1, 2010, to be excluded from the transition and receive full payment under the ESRD PPS. Under § 413.239(a)(3), in CY 2013, ESRD facilities that elected to receive payment under the transition will be paid a blended amount consisting of 25 percent of the basic case-mix adjusted composite payment system payment and 75 percent of the ESRD PPS payment. Thus, we must continue to update the composite rate portion of the blended payment amount during the ESRD PPS transition (CY 2011 through 2013), which includes an update to the drug add-on. As required under section 1881(b)(12) of the Act, the basic case-mix adjusted composite payment system includes the services in the composite rate and an add-on to the composite rate portion of the blended payment to account for the difference between pre-Medicare Modernization Act payments for separately billed drugs and the revised drug pricing specified in the statute. For the drug add-on for CY 2013 (77 FR 40957 through 40959), we did not propose any changes to the drug add-on methodology, but merely updated the data used in computing the drug add-on as described below. i. Estimating Growth in Expenditures for Drugs and Biologicals in CY 2013 Section 1881(b)(12)(F) of the Act specifies that the drug add-on increase must reflect ‘‘the estimated growth in expenditures for drugs and biologicals (including erythropoietin) that are separately billable * * *’’. By referring to ‘‘expenditures’’, we believe the statute contemplates that the update would account for both increases in drug prices, as well as increases in utilization of those drugs. As we indicated in the CY 2013 ESRD PPS proposed rule (77 FR 40957), we continue to estimate growth in drug expenditures based on the trends in available data. To account for increases in drug prices and utilization for CY 2013 we used the 6 years of available drug expenditure data based on ASP pricing. We then removed growth in E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations enrollment for the same time period from the expenditure growth so that the residual reflects the per patient expenditure growth (which includes price and utilization combined). To estimate drug expenditure growth using trend analysis, for CY 2013, we looked at the average annual growth in total drug expenditures between 2006 and 2011. First, we estimated the total drug expenditures for all ESRD facilities in CY 2011. We used the final CY 2006 through CY 2010 ESRD claims data and the latest available CY 2011 ESRD facility claims, updated through December 31, 2011 (that is, claims with dates of service from January 1 through December 31, 2011, that were received, processed, paid, and passed to the National Claims History File as of December 31, 2011). We indicated in the CY 2013 ESRD PPS proposed rule (77 FR 40958) that for the CY 2013 PPS final rule, we would use additional updated CY 2011 claims with dates of service for the same timeframe. This updated CY 2011 data file would include claims received, processed, paid, and passed to the National Claims History File as of June 30, 2012. We further stated that while the CY 2011 claims file used in the proposed rule was the most current available, we recognize that it does not reflect a complete year, as claims with dates of service towards the end of the year have not all been processed. To more accurately estimate the update to the drug add-on, completed aggregate drug expenditures are required. In the CY 2013 ESRD PPS proposed rule (77 FR 40958), we inflated the CY 2011 drug expenditures to estimate the June 30, 2012 update of the 2011 claims file. We used the relationship between the December 2010 and the June 2011 versions of 2010 claims to estimate the more complete 2011 claims that were available in June 2012 and applied that ratio to the 2011 claims data from the December 2011 claims file. The net adjustment to the CY 2011 claims data was an increase of 9.7 percent to the 2011 expenditure data. This adjustment allows us to more accurately compare the 2010 and 2011 drug expenditure data to estimate per patient growth. We further stated in the CY 2013 ESRD PPS proposed rule (77 FR 40958), that using the completed full-year 2011 drug expenditure figure, we calculated the average annual change in drug expenditures from 2006 through 2011. This average annual change showed a decrease of 3.0 percent in drug expenditures from 2006 through 2011. We used this 3.0 percent decrease to project drug expenditures for both 2012 and 2013. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 For this CY 2013 final rule, using the full year 2011 drug expenditure figure based on the June 2012 update of the CY 2011 National Claims History File, we calculated the average annual change in drug expenditure from 2006 through 2011. This average annual change showed a decrease of 2.9 percent in drug expenditures from 2006 through 2011. We used this 2.9 decrease to project drug expenditures for both 2012 and 2013. We note that the decrease in the drug expenditures percentage is a result of our use of updated data. ii. Estimating Per Patient Growth In the CY 2013 ESRD PPS proposed rule (77 FR 40958), we explained that once we had the projected growth in drug expenditures from 2012 to 2013, we calculated per patient growth between CYs 2012 and 2013 by removing the estimated growth in enrollment data between CYs 2012 and 2013. We had estimated a 4.6 percent growth in fee-for-service Medicare dialysis beneficiary enrollment between CYs 2012 and 2013. To obtain the perpatient estimated growth in expenditures, we divided the total drug expenditure change of a 3 percent decrease between 2012 and 2013 (0.97) by enrollment growth of 4.6 percent (1.046) for the same timeframe. The result was a per-patient growth factor equal to 0.927 (0.97/1.046 = 0.927). Thus, we are projecting a 7.3 percent decrease (¥7.3% = ¥.073 = 0.927 ¥1) in per patient growth in drug expenditures between CYs 2012 and 2013. For this final rule, we estimate a 4.0 percent estimated growth in enrollment between CYs 2012 and 2013. To obtain the per-patient estimated growth in expenditures, we divided the total drug expenditure change of a 2.9 percent decrease between CYs 2012 and 2013 (0.971) by enrollment growth of 4.0 percent (1.04) for the same timeframe. The result is a per-patient growth factor equal to 0.934 (.971/1.04=.934). Thus, in this final rule, for CY 2013 we are projecting a 6.6 percent decrease (¥6.6% percent =¥.063=.934¥1) in per patient growth in drug expenditures between CYs 2012 and 2013. iii. Applying the Proposed Growth Update to the Drug Add-On Adjustment We explained in the CY 2013 ESRD PPS proposed rule (77 FR 40958), that in the CY 2012 ESRD PPS proposed and final rules, we provided an incorrect citation to the CY 2006 PFS final rule with comment in the discussion of the application of the projected growth update percentages. The correct citation to this discussion in the CY 2006 PFS PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 67455 final rule with comment is 70 FR 70166 and 70167. In the CY 2006 rule, we applied the projected growth percentage to the total amount of drug add-on dollars established for CY 2005 to establish a dollar amount for the CY 2006 growth. In addition, we projected the growth in dialysis treatments for CY 2006 based on the projected growth in ESRD enrollment. We divided the projected total dollar amount of the CY 2006 growth by the projected total dialysis treatments to develop the per treatment growth update amount. This growth update amount, combined with the CY 2005 per treatment drug add-on amount, resulted in a 14.7 percent adjustment to the composite rate for CY 2006. We further explained in the CY 2013 ESRD PPS proposed rule (77 FR 40958), that subsequent to the publication of the CY 2006 PFS final rule with comment, the Deficit Reduction Act (DRA) of 2005 (Pub. L. 109–171) was enacted on February 8, 2006. Section 5106 of the DRA amended section 1881(b)(12) of the Act to require the Secretary to increase the amount of the composite rate component of the basic case-mix adjusted system for dialysis services furnished on or after January 1, 2006 by 1.6 percent above the amount of the composite rate for such services furnished on December 31, 2005. We issued Change Request 4291, Transmittal 849, entitled, ‘‘Update to the ESRD Composite Payment Rates’’ on February 10, 2006 to instruct contractors to implement this change. We stated in Change Request 4291 that because the drug add-on adjustment is determined as a percentage of the composite rate, it was necessary to adjust the drug add-on percentage to account for the 1.6 percent increase in the composite payment rate. Therefore, the total drug add-on adjustment to the composite payment rate for 2006 was 14.5 percent instead of 14.7 percent. Finally, we explained in the CY 2013 ESRD PPS proposed rule (77 FR 40958) that in the CY 2007 PFS final rule with comment period (71 FR 69683 and 69684), we revised our update methodology by applying the growth update to the per treatment drug add-on amount. That is, for CY 2007, we applied the growth update factor of 4.03 percent to the $18.88 per treatment drug add-on amount resulting in an updated per treatment drug add-on amount of $19.64 per treatment (71 FR 69684). For CY 2008, the per treatment drug add-on amount was updated to $20.33. In the CYs 2009, 2010, and 2011 PFS final rule with comment period (73 FR 69755 through 69757, 74 FR 61923, and 75 FR 73485, respectively) and the CY 2012 E:\FR\FM\09NOR2.SGM 09NOR2 67456 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 ESRD PPS final rule (76 FR 70239), we applied a zero update to the per treatment drug add-on amount resulting in a per treatment drug add-on amount of $20.33. For CY 2013, we did not make any update to the per treatment drug add-on amount of $20.33 established in CY 2008. As discussed in detail below, in this final rule, for CY 2013, we are finalizing a zero update to the per treatment drug add-on amount of $20.33 established in CY 2008. iv. Update to the Drug Add-On Adjustment for CY 2013 As discussed above, in the CY 2013 ESRD PPS proposed rule (77 FR 40958), we estimated a 3.0 percent decrease in drug expenditures between CYs 2012 and 2013. Combining this decrease with a 4.6 percent increase in enrollment, as described above, we projected a 7.3 percent decrease in per patient growth of drug expenditures between CYs 2012 and CY 2013. Therefore, in the CY 2013 ESRD PPS proposed rule, we projected that the combined growth in per patient utilization and pricing for CY 2013 would result in a decrease to the drug add-on equal to 1.0 percentage points (out of the revised 14.0 percent add-on for 2013). This figure was derived by applying the 7.3 percent decrease to the CY 2012 drug add-on of $20.33. This resulted in a revised drug add-on of $18.85, which is 13.0 percent of the proposed CY 2013 base composite rate of $145.49. We indicated that if we were to apply no decrease to the drug add-on of $20.33, this would result in a 14.0 percent drug add-on. However, similar to last year and as indicated above, we proposed a zero update to the drug addon adjustment. We believe this approach is consistent with the language under section 1881(b)(12)(F) of the Act, which states in part that ‘‘the Secretary shall annually increase’’ the drug add-on amount based on the growth in expenditures for separately billed ESRD drugs. Therefore, we proposed to apply a zero update and maintain the $20.33 per treatment drug add-on amount for CY 2013. We sought comment on our proposed zero update to the drug add-on. We further stated in the CY 2013 ESRD PPS proposed rule (77 FR 40959), that the current $20.33 per treatment drug add-on reflected a 14.3 percent drug add-on adjustment to the composite rate in effect for CY 2012. As discussed in section II.3.a of the CY 2013 ESRD PPS proposed rule, section 1881(b)(14)(F) of the Act requires that an ESRDB market basket minus productivity adjustment be used to update the composite rate portion of the VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 ESRD PPS payment resulting in a decrease to the CY 2013 drug add-on adjustment from 14.3 to 14.0 percent, to maintain the drug add-on at $20.33. This decrease occurs because the drug add-on adjustment is a percentage of the composite rate. Since the proposed CY 2013 composite rate is higher than the CY 2012 composite rate and since the drug add-on remains at $20.33, the percentage decreases. Therefore, we proposed a drug add-on adjustment to the composite rate for CY 2013 of 14.0 percent. We did not receive any comments on our proposals to use a zero update to the drug add-on or on the proposed drugadd on adjustment to the composite rate for CY 2013 of 14.0 percent. In this final rule, for CY 2013, we estimate a 2.9 percent decrease in drug expenditures between CYs 2012 and 2013. Combining this increase with a 4.0 percent increase in enrollment, we project a 6.6 percent decrease in per patient growth of drug expenditures between CYs 2012 and 2013. Therefore, we project that the combined growth in per patient utilization and pricing for CY 2013 results in a decrease to the drug add-on equal to 0.9 percentage points. This figure is derived by applying the 6.6 percent decrease to the CY 2012 drug add-on of $20.33. This results in a revised drug add-on of $18.98, which is 13.1 percent of the final CY 2013 base composite rate of $145.20. Applying no decrease to the drug add-on of $20.33 results in a 14.0 percent drug add-on. Similar to last year and as discussed above, for CY 2013, we are finalizing a zero update to the drug add-on and maintaining the $20.33 per treatment drug add-on amount. The current $20.33 per treatment drug add-on reflected a 14.3 percent drug add-on adjustment to the composite rate in effect for CY 2012. Using the latest ESRDB market basket minus productivity adjustments to update the composite rate portion of the ESRD PPS payment (forecast of 2.3 percent in CY 2013 effective January 1, 2013, as discussed in section II.C.3 of this final rule), results in a decrease to the CY 2013 drug add-on adjustment from 14.3 to 14.0 percent in order to maintain the drug add-on amount of $20.33. This decrease occurs because the drug addon adjustment is a percentage of the composite rate. Because the final CY 2013 composite rate is higher than CY 2012 composite rate, and since the drug add-on remains at $20.33, the percentage decreases. Therefore, we are finalizing for CY 2013 the drug add-on adjustment of 14.0 to the composite rate. PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 2. ESRD PPS Base Rate In the CY 2013 ESRD PPS proposed rule (77 FR 40959) and CY 2012 ESRD PPS final rule (76 FR 70231), we discussed the development of the ESRD PPS per treatment base rate that is codified in the Medicare regulations at 42 CFR 413.220 and 413.230. We explained that the CY 2011 ESRD PPS final rule (75 FR 49071 through 49082) 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), updated to CY 2011, and represented the average per treatment Medicare Allowable Payment (MAP) for composite rate and separately billable services. We further explained that in accordance with 42 CFR 413.230, the ESRD PPS base rate is adjusted for the patient-specific case-mix adjustments, applicable facility adjustments, geographic differences in area wage levels using an area wage index, as well as any outlier payment or training payments (if applicable). For CY 2012, the ESRD PPS base rate was $234.81 (76 FR 70231). We also indicated in the CY 2013 ESRD PPS proposed rule (77 FR 40959) that 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, provides that, beginning in 2012, the ESRD PPS payment amounts are required to be annually adjusted by the rate of increase in the ESRD market basket, reduced by the productivity adjustment. Accordingly, in the CY 2013 ESRD PPS proposed rule, we applied the 2.5 percent increase to the CY 2012 ESRD PPS base rate of $234.81, which resulted in a proposed CY 2013 ESRD PPS base rate of $240.68 ($234.81 × 1.025 = $240.68). The ESRD PPS base rate is applicable to both the ESRD PPS portion of the blended payment under the transition and payments under the full ESRD PPS. In addition, for CY 2013, we proposed a wage index budget-neutrality adjustment factor of 1.000826 to be applied to the CY 2013 ESRD PPS base rate (that is, $240.68), which yielded a proposed CY 2013 ESRD PPS wage index budget-neutrality adjusted base rate of $240.88 ($240.68 × 1.000826 = $240.88). E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations Comment: All commenters supported our CY 2013 ESRD PPS wage index budget-neutrality adjusted base rate. Two commenters thanked CMS for providing an update to the base rate, and one commenter specifically appreciated the base rate increase at a time when the Medicare ESRD program is undergoing significant changes and noted that it is important to retain savings where applicable. Response: We thank the commenters for their support. In this final rule, using updated data for CY 2013, we applied the 2.3 percent increase (ESRDB market basket update less productivity) to the CY 2012 ESRD PPS base rate of $234.81, which results in an ESRD PPS base rate for CY 2013 of $240.21 ($234.81 × 1.023 = $240.21). In addition, we applied the wage index budget-neutrality adjustment factor of 1.000613 to the updated base rate of $240.21, yielding an ESRD PPS wage index budgetneutrality adjusted base rate for CY 2013 of $240.36 ($240.21 × 1.000613 = $240.36). tkelley on DSK3SPTVN1PROD with RULES2 3. ESRD Bundled Market Basket a. Overview and Background 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 bundled payment amounts are required to be annually increased by an ESRD market basket increase factor that is reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. The application of the productivity adjustment described 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 further 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. Under section 1881(b)(14)(F)(ii) of the Act, as added by section 153(b) of MIPPA and amended by section 3401(h) of the Affordable Care Act, the ESRDB market basket increase factor will also be used to update the composite rate portion of ESRD payments during the ESRD PPS transition period from CYs 2011 through 2013; though beginning in CY 2012, such market basket increase factor will be reduced by the productivity adjustment. Therefore, a full market basket was applied to the composite rate portion of the blended payment in CY 2011 during the first year of the transition. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 b. Market Basket Update Increase Factor and Labor-related Share for ESRD Facilities for CY 2013 As required under section 1881(b)(14)(F) of the Act, CMS developed an all-inclusive ESRDB input price index (75 FR 49151 through 49162). Although ‘‘market basket’’ technically describes the mix of goods and services used to produce ESRD care, 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 that 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 same methodology described in the CY 2011 ESRD PPS final rule (75 FR 49151 through 49162) to compute the CY 2013 ESRDB market basket increase factor and labor-related share based on the best available data (76 FR 40503). Consistent with historical practice, we estimated the ESRDB market basket update based on IHS Global Insight (IGI), Inc.’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 the IGI forecast for the third quarter of 2012 of the CY 2008-based ESRDB market basket (with historical data through the second quarter of 2012), and consistent with our historical practice of estimating market basket increases based on the best available data, the CY 2013 ESRDB market basket increase factor is 2.9 percent. For the CY 2013 ESRD payment update, we will continue to use a laborrelated share of 41.737 percent for the ESRD PPS payment and the ESRD PPS portion of the blended payment, which was finalized in the CY 2011 ESRD final rule (75 FR 49161). We will also continue to use a labor-related share of 53.711 percent for the ESRD composite rate portion of the blended payment for all years of the transition. This laborrelated share was developed from the labor-related components of the 1997 ESRD composite rate market basket that was finalized in the CY 2006 Physician Fee Schedule (PFS) final rule (70 FR 70168), and is consistent with the mix of labor-related services paid under the composite rate, as well as the method finalized in the CY 2011 ESRD PPS final rule (75 FR 49116). PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 67457 c. Productivity Adjustment The ESRDB market basket must be annually adjusted by changes in economy-wide productivity. Specifically, under section 1881(b)(14)(F)(i) of the Act, as amended by section 3401(h) of the Affordable Care 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 statute defines the productivity adjustment to be equal to the 10-year moving average of changes in annual economy-wide private nonfarm business multifactor productivity (MFP) (as projected by the Secretary for the 10year period ending with the applicable fiscal year, year, cost reporting period, or other annual period) (the ‘‘MFP adjustment’’). The Bureau of Labor Statistics (BLS) is the agency that publishes the official measure of private nonfarm business MFP. Please see https://www.bls.gov/mfp to obtain the BLS historical published MFP data. CMS notes that the methodology for calculating and applying the MFP adjustment to the ESRD payment update is similar to the methodology used in other payment systems, as required by section 3401 of the Affordable Care Act. The projection of MFP is currently produced by IGI. The details regarding the methodology for forecasting MFP and how it is applied to the market basket was finalized in the CY 2012 ESRD PPS final rule (76 FR 70232 through 70234). Using this method and the IGI forecast for the third quarter of 2012 of the 10-year moving average of MFP, the CY 2013 MFP factor is 0.6 percent. d. Calculation of the ESRDB Market Basket Update, Adjusted for Multifactor Productivity for CY 2013 Under section 1881(b)(14)(F) of the Act, beginning in CY 2012, ESRD PPS payment amounts and the composite rate portion of the transition blended payment amounts shall be annually increased by an ESRD market basket percentage increase factor reduced by a productivity adjustment. We proposed to follow the same methodology for calculating the ESRDB market basket updates adjusted for MFP that was finalized in the CY 2012 ESRD PPS final rule (76 FR 70234). Thus, in accordance with section 1881(b)(14)(F)(i) of the Act, the market basket increase factor for CY 2013 for the ESRDB market basket is based on the 3rd quarter 2012 forecast of the CY 2008-based ESRDB market basket E:\FR\FM\09NOR2.SGM 09NOR2 67458 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 update, which is estimated to be 2.9 percent. This market basket percentage is then reduced by the MFP adjustment (the 10-year moving average of MFP for the period ending CY 2013) of 0.6 percent, which is based on IGI’s 3rd quarter 2012 forecast. The resulting MFP-adjusted ESRDB market basket update for CY 2013 is equal to 2.3 percent, or 2.9 percent less 0.6 percentage point. We received two comments in support of the market basket update. We are finalizing the update to the ESRDB market basket of 2.3 percent for CY 2013. 4. Transition Budget-Neutrality Adjustment for CY 2013 Section 1881(b)(14)(E)(i) of the Act requires the Secretary to provide a 4year phase-in of the payments under the ESRD PPS for renal dialysis services furnished on or after January 1, 2011, with payments under the ESRD PPS fully implemented for renal dialysis services furnished on or after January 1, 2014. Although the statute uses the term ‘‘phase-in,’’ we use the term ‘‘transition’’ in our discussions in order to be consistent with other Medicare payment systems. Section 1881(b)(14)(E)(ii) of the Act permitted ESRD facilities to make a onetime election to be excluded from the transition. An ESRD facility that elected to be excluded from the transition receives payment for renal dialysis services furnished on or after January 1, 2011, based on 100 percent of the payment rate under the ESRD PPS rather than a blended payment based in part on the payment under the basic case-mix adjusted composite payment system and in part on the payment under the ESRD PPS. Section 1881(b)(14)(E)(iii) of the Act also requires that we make an adjustment to payments during the transition so that the estimated total amount of payments under the ESRD PPS, including payments under the transition, equals the estimated total amount of payments that would otherwise occur under the ESRD PPS without such a transition. We refer to this provision as the transition budget-neutrality adjustment. In the CY 2012 ESRD PPS final rule (76 FR 70235), we discussed the two parts that comprise the transition budget-neutrality adjustment factor. For the first part, we created a one-time payment adjustment to the composite rate portion of the blended payment during the transition to account for the per treatment costs of ESRD drugs with an injectable equivalent that were paid under Part D. We finalized the one-time addition of the CY 2011 Part D per VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 treatment amount of $0.49 to the composite rate (76 FR 70231). For the second part, we explained that we computed a factor that would make the estimated total amount of payments under the ESRD PPS, including payments under the transition, equal to the estimated total amount of payments that would otherwise occur without such a transition. Given that the transition budgetneutrality adjustment required under section 1881(b)(14)(E)(iii) of the Act applies in each year of the transition, we must update the transition budgetneutrality adjustment for CY 2013, the third year of the transition. As discussed in detail below, and in accordance with section 1881(b)(14)(E)(iii) of the Act, an adjustment is made to payments so that estimated total payments under the transition equal estimated total payment amounts without such a transition. In the CY 2013 ESRD PPS proposed rule, we did not propose to change the methodology used to calculate either part of the transition budget-neutrality adjustment factor. We did, however, propose to use updated data to calculate the second part of the transition budgetneutrality adjustment factor. The first part, which is the Part D payment amount added to the composite rate, is updated annually by the ESRDB market basket reduced by the productivity adjustment. The second part is updated as described below. For CY 2013, we started with 2011 utilization data from claims, as 2011 is the latest complete year of claims data available. In the CY 2013 ESRD PPS proposed rule, we used the December 2011 claims file. In this final rule, we used the June 2012 claims file. We updated the CY 2011 utilization data to CYs 2012 and 2013 payments by using the price growth factors for CYs 2012 and 2013, as discussed in the impact analysis in section VI.C of this final rule. We then took the estimated payments under the full CY 2013 ESRD PPS and the blended payments under the transition based on actual facility election data and compared these estimated payments to the total estimated payments in CY 2013 as if all facilities had elected to receive payment under the ESRD PPS. We then calculated the transition budgetneutrality factor to be 1 minus the ratio of estimated payments under the ESRD PPS as if there were no transition to the total estimated payments under the transition, which results in a zero percent reduction factor for CY 2013. In the CY 2013 ESRD PPS proposed rule, we proposed a zero percent reduction to all payments made to ESRD facilities (that is, the zero percent adjustment PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 would be applied to both the blended payments made under the transition and payments made under the 100 percent ESRD PPS) for renal dialysis items and services furnished January 1, 2013 through December 31, 2013 (77 FR 40957). We solicited comments on the proposed second part of the CY 2013 transition budget-neutrality adjustment. We received three comments as set forth below. Comment: All of the commenters supported using updated data and maintaining a zero percent budgetneutrality transition adjustment for CY 2013. Response: We thank the commenters for their support of our proposed use of updated data and a transition budgetneutrality factor of zero percent for renal dialysis services furnished during January 1, 2013 through December 31, 2013. As we indicated above, for the proposed rule, we used the December 2011 claims file to compute the transition budget-neutrality adjustment factor. For this final rule, we used the June 2012 claims file. As a result of using the June 2012 claims file, we calculated the transition budgetneutrality factor to be a reduction of 1 minus the ratio of estimated payments under the ESRD PPS as if there were no transition to the total estimated payments under the transition, which results in a 0.1 percent increase factor for CY 2013. We believe the claims data we used to perform our analysis resulted in the change in the transition budget-neutrality adjustment factor from the zero factor used in previous years to the 0.1 percent increase factor for CY 2013. We note that in past years, the transition budget-neutrality factor has not always been an absolute zero, but was rounded to zero percent. The June 2012 claims file represents 2011 data, the first year of the PPS. In 2011, the utilization for separately billable drugs, laboratory tests and other items dropped significantly. For ESRD facilities that are paid under the transition, the decrease in utilization contributed to the payment for the composite rate portion of the blended payment being lower than the payment for the ESRD PPS portion of the blended payment. Therefore, total payments for all facilities under the transition were lower than what payments would have been under the ESRD PPS, if there were no transition. This widening difference resulted in the transition budgetneutrality adjustment rounding to 0.1 for CY 2013. We are finalizing for CY 2013 a transition budget-neutrality adjustment of 0.1 percent. E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations 5. Updates to the Wage Index Values and Wage Index Floor for the Composite Rate Portion of the Blended Payment and the ESRD PPS Payment Section 1881(b)(14)(D)(iv)(II) of the Act provides that the ESRD PPS may include such other payment adjustments as the Secretary determines appropriate, such as a payment adjustment by a geographic wage index, such as the index referred to in section 1881(b)(12)(D) of the Act. In the CY 2011 ESRD PPS final rule (75 FR 49117), we finalized the use of the OMB’s corebased statistical area (CBSA) based geographic area designations to define urban/rural areas and corresponding wage index values. In the CY 2012 ESRD PPS final rule (76 FR 70241), we finalized the wage index policy that is used under the ESRD PPS. Under the ESRD PPS, we have adopted the same method and source of wage index values used previously to compute the wage index values for the basic case-mix adjusted composite payment system. Specifically, we finalized our policies to continue to utilize the methodology established under the composite payment system for updating the wage index values using the OMB’s CBSAbased geographic area designations to define urban and rural areas and corresponding wage index values; the gradual reduction of the wage index floor during the transition; and the policies for areas with no hospital data. For CY 2013, we did not propose any changes to the methodology finalized in the CY 2012 final rule and will update the wage index values using the FY 2013 Inpatient Prospective Payment System (IPPS) pre-floor, pre-reclassified hospital wage data. In the CY 2012 ESRD PPS final rule (76 FR 70242), we explained that we would continue to use the labor-related share of 53.711 finalized in the 2005 PFS final rule (70 FR 70168) for the composite rate portion of the blended payment during the transition and continue to use a labor-related share of 41.737 for the ESRD PPS payment for CY 2012. We also discussed that the wage data used to construct the wage index under the ESRD PPS is updated annually, based on the most current data available and based on the Office of Management and Budget’s (OMB’s) urban and rural definitions and corresponding wage index values. Additional discussion on the laborrelated share can be found in section II.c.3 of this final rule. For CY 2013, we did not propose to change the laborrelated shares, as finalized in the CY 2012 rule, as discussed in section II.C.3 of this final rule. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 In the CY 2012 ESRD PPS final rule (76 FR 70240), we discussed that during the transition we would continue to update the composite rate portion of the ESRD PPS blended payment, including adjusting payments for geographic differences in area wage levels, as noted above. We also discussed the application of the wage index budgetneutrality adjustment factor to the area wage index values for the composite rate portion of the ESRD PPS blended payment. In the proposed rule, for CY 2013 we did not propose any changes to the methodology for the wage index used to adjust the composite rate portion of the ESRD PPS blended payment. a. Reduction to the ESRD Wage Index Floor In the CY 2012 ESRD PPS final rule (76 FR 70239 through 70241), we finalized that we will continue to reduce the wage index floor by 0.05 for each of the remaining years of the transition. That is, we finalized the 0.05 reduction to the wage index floor for CYs 2012 and 2013, resulting in a wage index floor of 0.550 and 0.500, respectively. The wage index floor value is used in lieu of wage index values below the floor. The wage index floor is applied to both the composite rate portion of the blend and to the ESRD PPS. In the CY 2013 ESRD PPS proposed rule, we did not propose any changes to the wage index floor methodology or reduction. Consequently, for CY 2013 we indicated in the proposed rule that we would continue to reduce the wage index floor by 0.05, which will reduce the wage index value for the wage index floor from 0.550 to 0.500. For CY 2013, the wage index floor of 0.500 only applies to areas located in Puerto Rico because those are the only areas that have wage index values below the wage index floor value of 0.500. In the CY 2012 ESRD PPS final rule (76 FR 70241), we explained that continuing to artificially adjust the wage index values after the transition by substituting a wage index floor is not an appropriate method to address low wages in certain geographic locations. Therefore, we would no longer apply a wage index floor beginning January 1, 2014. b. Policies for Areas With No Wage Data In the CY 2012 ESRD PPS final rule (76 FR 70241), we explained that we adopted the CBSA designations for the basic case-mix adjusted composite rate payment system and for the ESRD PPS. We also discussed and finalized the methodologies we use to calculate wage index values for ESRD facilities that are PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 67459 located in urban and rural areas where there are no hospital data. That is, for urban areas with no hospital data we compute the average wage index value of all urban areas within the State and 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. For rural Puerto Rico, we use the wage index floor as the wage index value, since all rural Puerto Rico areas are below the floor. We further explained that for rural Massachusetts, we determined that the borders of Dukes and Nantucket Counties are contiguous with Barnstable and Bristol counties. Under the methodology, the values for these counties are averaged to establish the wage index value for rural Massachusetts. After the CY 2012 ESRD PPS final rule was published, we determined that for CY 2012 there was a rural hospital with wage data on which to base an area wage index for rural Massachusetts. We note that the wage index value for rural Massachusetts was correctly identified on the wage index table for CY 2012 based on the wage data for that rural hospital. Consequently, in the CY 2013 ESRD PPS proposed rule we corrected the statement in the CY 2012 final rule that ‘‘For rural Massachusetts, we determined that the borders of Dukes and Nantucket Counties are contiguous with Barnstable and Bristol counties. Under the methodology, the values for these counties are averaged to establish the wage index value for rural Massachusetts’’ (76 FR 70241). Therefore, for CY 2012 and subsequent years, the area wage index value for rural Massachusetts is based on wage data of the rural hospital. For CY 2013, we will continue to use the statewide urban average based on the average of all urban areas within the state for urban areas without hospital data. We note that Yuba City, California now has hospital data to calculate a wage index. Therefore, the methodology for computing a wage index for urban areas without hospital data no longer applies to that area. The only urban area without wage index data is HinesvilleFort Stewart, GA. c. Wage Index Budget-Neutrality Adjustment In the CY 2012 ESRD PPS final rule (76 FR 70241 and 70242), we explained that we have broad discretion under section 1881(b)(14)(D)(iv)(II) of the Act to develop a geographic wage index. We explained that in addition to being E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67460 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations given broad discretion, the section cites the wage index under the basic case-mix adjusted composite payment system as an example. We have previously interpreted the statutory requirement in section 1881(b)(12)(D) of the Act for the geographic adjustment for the basic case-mix adjusted composite payment system as requiring that the geographic adjustment be made in a budget-neutral manner. In the CY 2012 ESRD PPS final rule (76 FR 70241 and 70242), we finalized the policy to apply the wage index in a budget-neutral manner under the ESRD PPS using a wage index budgetneutrality adjustment factor. We further explained that in the first year of the ESRD PPS, CY 2011, we did not apply a wage index budget-neutrality adjustment factor under the ESRD PPS because budget-neutrality was achieved through the overall 98 percent budgetneutrality requirement in section 1881(b)(14)(A)(ii) of the Act. In the CY 2012 ESRD PPS final rule (76 FR 70242), we finalized that for CYs 2012 and 2013 we will apply the wage index budgetneutrality adjustment to the wage index values for the composite rate portion of the blended payment and that for CY 2012 and subsequent years we will apply the wage index budget-neutrality adjustment to the ESRD PPS base rate for purposes of the ESRD PPS portion of the blended payment during the transition and the ESRD PPS payment. We did not propose any changes to the wage index budget-neutrality adjustment methodology for CY 2013. In the CY 2012 ESRD PPS final rule (76 FR 70242), we also finalized the methodology for computing the wage index budget-neutrality adjustment factor for CY 2012 and subsequent years. For CY 2013, we did not propose any changes to the methodology. Consequently, for the CY 2013 wage index budget-neutrality adjustment factors, we use the fiscal year (FY) 2013 pre-floor, pre-reclassified, nonoccupational mix-adjusted hospital data to compute the wage index values, 2011 outpatient claims (paid and processed as of December 31, 2011), and geographic location information for each facility, which can be found through Dialysis Facility Compare (DFC). The DFC can be found at the Dialysis Facility Compare Web page on the Medicare.gov Web site at www. Medicare.gov/Dialysis. The FY 2013 hospital wage index data for each urban and rural locale by CBSA may also be accessed on the CMS Web site at https://www.cms.hhs.gov/ AcuteInpatientPPS/WIFN/list.asp. The wage index data are located in the section entitled, ‘‘FY 2013 Proposed VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 Rule Occupational Mix Adjusted and Unadjusted Average Hourly Wage and Pre-Reclassified Wage Index by CBSA’’. To compute the CY 2013 wage index budget-neutrality adjustment factor for this final rule, we used treatment counts from the 2011 claims and facilityspecific CY 2012 payment rates; we computed the estimated total dollar amount that each ESRD facility would have received in CY 2012. The total of these payments became the target amount of expenditures for all ESRD facilities for CY 2013. Next, we computed the estimated dollar amount that would have been paid for the same ESRD facilities using the final ESRD wage index for CY 2013. The total of these payments becomes the new CY 2013 amount of wage-adjusted expenditures for all ESRD facilities. After comparing these two dollar amounts (target amount divided by the new CY 2013 amount), we calculated two wage index budget-neutrality adjustment factors that, when multiplied by the applicable CY 2013 estimated payments, would result in aggregate payments to ESRD facilities that would remain budget-neutral when compared to the target amount of expenditures. The first factor was applied to the ESRD PPS base rate. The second factor was applied to the wage index values for the composite rate portion of the blended payment. Therefore, in this final rule, we are finalizing for CY 2013, the wage index budget-neutrality adjustment factor for the composite portion of the ESRD PPS blended payment of 1.001141, which is applied directly to the ESRD wage index values. For the ESRD PPS (that is, for the full ESRD PPS payments and the ESRD PPS portion of the blended payments during the transition), we are finalizing the wage index budgetneutrality adjustment factor of 1.000613 that will be applied to the ESRD PPS base rate. Because we apply the wage index budget-neutrality adjustment factor to the wage index values to ensure budget-neutrality under the composite rate portion of the blended payment, we also apply the wage index budget-neutrality adjustment factor to the wage index floor. We note that this would apply to areas in Puerto Rico, subject to the floor. Therefore, for the composite rate portion of the blended payment, we are finalizing for CY 2013, to apply the wage index budgetneutrality adjustment factor to the wage index floor of 0.500 which results in an adjusted wage index floor of 0.501 (1.001141 × 0.500) because under the composite rate, the wage index budgetneutrality adjustment is applied to the wage index value. Under the ESRD PPS, PO 00000 Frm 00012 Fmt 4701 Sfmt 4700 the wage index budget-neutrality adjustment factor is applied to the base rate. d. ESRD PPS Wage Index Tables The CY 2013 ESRD PPS proposed wage index tables, referred to as Addendum A (ESRD facilities located in urban areas), and Addendum B (ESRD facilities located in rural areas) are posted on the CMS Web site at https:// www.cms.gov/vESRDPayment/PAY/list. asp. The wage index tables list two separate columns of wage index values. One column represents the wage index values for the composite rate portion of the blended payment to which the wage index budget-neutrality adjustment factor has been applied. The other column lists the wage index values for the ESRD PPS, which does not reflect the application of the wage index budget-neutrality adjustment factor, because we finalized for CY 2012 and subsequent years that we will apply the wage index budget-neutrality adjustment factor to the ESRD PPS base rate. We received one comment. The comment and our response are set forth below. Comment: We received a comment from an LDO that expressed concern about the negative impact of the wage index floor on dialysis providers in Puerto Rico. The commenter expressed concern that wages for dialysis facilities in Puerto Rico are not accurately captured by the current hospital wage index methodology. The commenter urged CMS to determine an alternate basis for calculating the wage index floor in Puerto Rico, stating that it does not believe that the wage index as reported for Puerto Rico is representative of the wage levels of dialysis providers in Puerto Rico relative to a sample of other states. Specifically, the commenter provided its own analysis of its random sampling of cost report salaries comparing ESRD facilities in Puerto Rico with ESRD facilities in Florida, Georgia, Ohio, South Carolina and Virginia. The commenter recommended that reimbursement for Puerto Rico be based on ‘‘some measure other than the hospital wage index, such as basing the wage index on cost report salaries relative to other state salaries.’’ The commenter further explained that Puerto Rico requires that only registered nurses (RN) provide dialysis therapy, and therefore, in the dialysis setting, the occupational mix would be weighted more toward RNs than the mix for hospital. Response: We understand that the commenter is concerned about wage E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations index values in Puerto Rico, however, it is our policy to use wage indices for all ESRD facilities that are based on the IPPS pre-floor, pre-reclassified hospital wage data. We discuss this in detail above. We believe that this is an appropriate mechanism for obtaining wage index values to be used to geographically adjust the ESRD PPS base rate for all ESRD facilities. It has been the same method that we have used previously for the basic case-mix adjusted composite rate payment system. We refer the commenter to the discussion on the methodology used to determine wage index values in the CY 2013 IPPS final rule (77 FR 53365 through 55367). We will, however, consider the commenter’s recommended approach if we determine in the future that a change to the methodology for determining geographic wage index values is warranted. In the CY 2012 ESRD PPS proposed rule (76 FR 40509 and 40510), we proposed to continue to reduce the wage index floor by 0.50 for each of the remaining years of the transition (that is, CYs 2012 and 2013). We also stated that ‘‘we continue to believe that artificially adjusting wage index values by substituting a wage index floor is not an appropriate method to address low wages in certain geographic locations’’ and that, accordingly, we will no longer apply a wage index floor beginning January 1, 2014 (76 FR 70241). We will include in the CY 2014 ESRD PPS proposed rule, the methodology we propose to use to address wages in rural Puerto Rico when we no longer apply the wage index floor. Therefore, we are finalizing the wage index floor value of 0.500 for CY 2013. 6. Drug Policy Changes tkelley on DSK3SPTVN1PROD with RULES2 a. Daptomycin In the CY 2011 ESRD PPS final rule (75 FR 49050 through 49052), we stated that antibiotics used for the treatment of vascular access infections and peritonitis are renal dialysis services under the ESRD PPS. Payments for antiinfective drugs in injectable forms (covered under Part B) and oral or other forms of administration (formerly covered under Part D) used for the treatment of ESRD, were included in computing the final ESRD PPS base rate and, therefore, would not be separately paid under the ESRD PPS. We further stated that any anti-infective drug or biological used for the treatment of ESRD-related conditions would be considered a renal dialysis service and not eligible for separate payment. We noted that this policy also applies to any VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 drug or biological that may be developed in the future. In the CY 2012 ESRD PPS final rule (76 FR 70243), we explained that subsequent to the publication of the CY 2011 ESRD PPS final rule, we received numerous comments indicating that vancomycin is indicated in the treatment of both ESRD and non-ESRD conditions, such as skin infections. In the CY 2012 ESRD PPS final rule (76 FR 70243), we allowed ESRD facilities to receive separate payment for vancomycin when furnished to treat non-ESRD related conditions. When ESRD facilities furnish vancomycin to treat non-ESRD related conditions, they place the AY modifier on the claim. We stipulated that in accordance with ICD– 9–CM guidelines as described in the CY 2011 ESRD PPS final rule (75 FR 49107), an ESRD facility must report on the claim the diagnosis code for which vancomycin is indicated. We also reiterated that treatment of any skin infection that is related to renal dialysis access management would be considered a renal dialysis service paid under the ESRD PPS, and that no separate payment would be made (76 FR 70243). Finally, in response to comments, we stated that we would consider allowing separate payment for daptomycin (76 FR 70243). In the CY 2013 ESRD PPS proposed rule (77 FR 40963), we explained that after consultation with our medical experts, we proposed to allow ESRD facilities to receive separate payment for daptomycin when furnished to treat non-ESRD related conditions for CY 2013 and subsequent years. When ESRD facilities furnish daptomycin to treat non-ESRD-related conditions, they would place the AY modifier on the claim. We also explained that if ESRD facilities submitted claims for daptomycin with the AY modifier, then the ESRD facility would also be required to report the diagnosis code for which the daptomycin is indicated in accordance with ICD–9–CM diagnostic coding guidelines. We sought public comments on our proposal to permit separate payment for daptomycin when furnished to treat non-ESRD-related conditions. As we discussed in the proposed rule, we will continue to monitor the use of anti-infectives furnished by ESRD facilities including those that are identified as non-ESRD related (77 FR 40963). The comments we received and our responses are set forth below. Comment: We received eight comments in support of our proposal to allow for separate payment for daptomycin when furnished for nonESRD related conditions. One PO 00000 Frm 00013 Fmt 4701 Sfmt 4700 67461 commenter encouraged CMS to consider the appropriateness of other antiinfective drugs and biologicals which could be used in the future for both ESRD and non-ESRD conditions, with the primary goal to help reduce drug resistance in this compromised and susceptible patient population. Response: We thank the commenters for their support. We believe that the commenter is suggesting that CMS should frequently consider whether other drugs should be included in the ESRD PPS. We will consider allowing separate payment for other anti-infective drugs and biologicals as we may determine appropriate. We are finalizing the proposal to eliminate the restriction on daptomycin to allow ESRD facilities to receive separate payment by placing the AY modifier on the claim for daptomycin when furnished to treat non-ESRD related conditions. In accordance with ICD–9–CM diagnostic coding guidelines as described in the CY 2011 ESRD PPS final rule (75 FR 49107), the ESRD facility must indicate on the claim the diagnosis code for which the daptomycin is indicated. During our monitoring of claims we have noted that there are ESRD facilities that are indicating a type of organism rather than a diagnosis that would indicate that the anti-infective was furnished for non-ESRD-related conditions. We reiterate that the diagnosis code for which vancomycin or daptomycin is used must be indicated on the claim. We also reiterate that treatment of any skin infection that is related to renal dialysis access management will be considered a renal dialysis service and will continue to be paid under the ESRD PPS, and no separate payment will be made. We will continue to monitor the use of antiinfectives furnished by ESRD facilities including those that are identified as non-ESRD related to ensure proper billing of these drugs. b. Alteplase and Other Thrombolytics In the CY 2012 ESRD PPS final rule (76 FR 70246 through 70247), we explained that after the CY 2011 ESRD PPS final rule was published, our clinical review of the 2007 ESRD claims used to develop the ESRD PPS revealed that dialysis facilities routinely used alteplase and other thrombolytic drugs for access management purposes. We explained that under the Medicare Benefit Policy Manual, Pub. 100–02, chapter 11, section 30.4.1, drugs used as a substitute for any of the listed items or used to accomplish the same effect were covered under the composite rate. We further explained that because E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67462 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations heparin is a composite rate drug and could be used for access management, any drug or biological used for the same purpose may not be separately paid. Medicare regulations at 42 CFR 413.237(a)(2) through (a)(6), and (b) specify the methodology used to calculate outlier payments. 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 discussion on the outlier policy is in section II.C.7 of this final rule. Section 413.237(a)(1) provides the definition of ESRD outlier services. Specifically, § 413.237(a)(1)(i) includes ‘‘ESRD related drugs and biologicals that were or would have been, prior to January 1, 2011, separately billable under Medicare Part B.’’ Because outlier payments are restricted under § 413.237(a) to those items or services that were or would have been separately billable prior to January 1, 2011, in the CY 2012 ESRD PPS final rule (76 FR 70249), we excluded thrombolytic drugs from the outlier policy and we recomputed the outlier MAP amounts to reflect this change. However, we noted in the CY 2012 ESRD PPS final rule (76 FR 70249), that for CY 2012 we had not proposed to exclude separate payment of thrombolytic drugs under the composite rate portion of the blended payment and therefore, separate payment would be made for thrombolytics for the composite rate portion of the blended payment in CY 2012. For CY 2013, we proposed that thrombolytic drugs would not be considered eligible for separate payment under the composite rate portion of the blended payment for those ESRD facilities that are receiving a blended payment under the transition (77 FR 40963). We believe that this is consistent with the changes we made to our outlier policy regarding excluding thrombolytic drugs from outlier eligibility as discussed above. We note that these conclusions are specific to ESRD. We solicited comments on our proposal to exclude thrombolytic drugs from separate payment under the composite rate portion of the blended payment during the transition. The comments and our responses are set forth below. Comment: We received five comments pertaining to our proposal to no longer provide separate payment for thrombolytic drugs under the composite VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 rate portion of the blended payment in CY 2013. In general, commenters agreed with CMS that both heparin and alteplase or other thrombolytic drugs are used for access management, but a few commenters disagreed with our assertion that heparin and alteplase are used for the same purpose. Some commenters specifically noted that CMS’s proposal not to allow separate payment for alteplase and thrombolytic drugs under the composite rate portion of the blended payment during the transition period for CY 2013 is flawed because the drugs are used to achieve different clinical results and utilize different mechanisms of action. In particular, the commenters noted that heparin is used to prevent clotting whereas alteplase is used to avoid a poorly functioning catheter. Some commenters provided examples of the efficacy of alteplase and thrombolytics, as compared to heparin. Some commenters, including a renal organization and a pharmaceutical manufacturer, disagreed that heparin can be used as a substitute for alteplase, citing the different mechanisms of action for the two drugs. One commented that because heparin and thrombolytics achieve different clinical results, they should not be treated as substitutes for payment purposes. Response: We believe alteplase and heparin are used for the same renal dialysis-related purpose, namely, vascular access management. In the CY 2012 ESRD PPS final rule (76 FR 70246 through 70249), we addressed similar comments regarding the use of alteplase and heparin in the context of our proposal to eliminate thrombolytics from the outlier policy. We noted that in the development of the ESRD PPS, we recognized that alteplase and heparin were pharmacologically different (that one is a thrombolytic that lyses clots and the other is an anticoagulant that prevents clots, respectively) (76 FR 70248). We further stated, however, that we believed that both drugs enable the catheter or graft to function either through clot prevention or clot degradation, thereby providing effective dialysis vascular access. We further believe that, for purposes of payment for renal dialysis services, it is sufficient that these products can be used for the purpose of providing dialysis vascular access. Consistent with the ESRD Benefit Policy Manual, Pub. 100–02, chapter 11, section 30.4.1, drugs used as substitutes for any of the listed items, or used to accomplish the same effect, are covered under the composite rate and are not separately payable. Because heparin is a PO 00000 Frm 00014 Fmt 4701 Sfmt 4700 composite rate drug and thrombolytics are used to achieve the same renal dialysis-related clinical outcome, we believe it is appropriate to exclude thrombolytic drugs from separate payment under the composite rate portion of the blended payment during the transition. Comment: One ESRD facility commented that the high cost of alteplase compared to heparin would prevent substitution of alteplase for heparin. The commenter argued that CMS’s policy in the ESRD Benefit Policy Manual, Pub. 100–02, chapter 11, section 30.4.1 of covering under the composite rate drugs used as substitutes for composite rate drugs, or used to accomplish the same effect, is without regard to innovation, cost, effectiveness, and efficiencies, and may result in increased cost to the Medicare program. The commenter also noted that the cost of thrombolytics is included in the ESRD PPS for those not in the transition and that elimination of separate payment for those in the transition would negatively impact reimbursement. A pharmaceutical company stated that the proposed changes may negatively affect catheter care because disallowing outlier payments and separate payment for thrombolytics creates a financial incentive for facilities to avoid restoring patency with alteplase. Response: In the CY 2012 ESRD PPS final rule (76 FR 70247), we explained that the ESRD PPS provides an opportunity for ESRD facilities to make decisions based on the medical needs of patients and not on the basis of financial gain. We further explained that we are not implying that thrombolytics or any access management drug should not be used when clinically indicated. We noted that Medicare payment policy is not intended to dictate, determine, or influence clinical practice or favor one course of treatment over another. Rather, by accounting in the ESRD PPS base rate for the cost of drugs and biologicals that had been separately payable under the composite rate system, we believe that we provide adequate payment to maintain patency of the access site regardless of whether patency is maintained using heparin or a thrombolytic. For additional information regarding this issue, we refer the commenters to the comment responses in the CY 2012 ESRD PPS final rule (76 FR 70247 through 70249). We disagree with the commenter that ESRD facilities receiving blended payments during the transition are unfairly disadvantaged because they will not receive separate payment for thrombolytics for the portion of the E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 blended payment based on the composite rate. Even when the composite rate system was in place before the ESRD PPS was implemented, it was our policy not to pay separately for drugs that could be used to accomplish the same effect as composite rate drugs. Accordingly, it is consistent with that policy not to provide separate payment for thrombolytics for the composite rate portion of blended payments during the remainder of the transition. For all of the reasons stated above, we continue to believe that alteplase and other thrombolytics should not be eligible for separate payment under the composite rate portion of the blended payment. After consideration of public comments, we are finalizing our CY 2013 proposal to exclude alteplase and other thrombolytics from separate payment, which we believe is consistent with the CY 2012 ESRD PPS changes made to the outlier policy to exclude thrombolytic drugs from outlier payments. c. Part B Drug Pricing In the CY 2011 ESRD PPS proposed rule (74 FR 49991), with respect to estimating the imputed MAP amounts of ESRD outlier services that are separately billable under Part B, we proposed to use Average Sales Price (ASP) data for Part B ESRD-related drugs (which is updated quarterly). We did not make any changes to this proposed methodology in the CY 2011 final rule. In the CY 2012 ESRD PPS final rule (76 FR 70243), we explained that ESRD facilities receiving blended payments under the transition would receive payments based on ASP for separately billable ESRD drugs and biologicals for the composite rate portion of the blend. In the CY 2012 ESRD PPS final rule (76 FR 70244), we stated that under the outlier policy, we will use the ASP methodology. In the CY 2013 ESRD PPS proposed rule (77 FR 40963), we proposed for CY 2013 and subsequent years to continue to use the ASP methodology, including any modifications finalized in the PFS final rules, to compute our outlier MAP amounts, the drug add-on, and any other policy that requires the use of payment amounts for drugs and biologicals that would be separately paid absent the ESRD PPS and for the composite rate portion of the blended payment during the transition. We explained that we would use this methodology for payment analyses that CMS may perform. We did not receive public comments on our proposal to apply the ASP methodology or any modifications to the ASP for these VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 purposes, as updated in the PFS rule or in updating the ASP pricing. Therefore, we are finalizing that for CY 2013 and subsequent years we will continue to use the ASP methodology, including any modifications finalized in the Physician Fee Schedule (PFS) final rules, to compute outlier MAP amounts, the drug add-on, and any other policy that requires the use of payment amounts for drugs and biologicals that would be separately paid absent the ESRD PPS and for the composite rate portion of the blended payment during the transition. 7. Revisions 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 erythropoiesis stimulating agents (ESAs) necessary for anemia management. Our regulations at 42 CFR 413.237(a)(1) provide that ESRD outlier services include: (i) ESRD-related drugs and biologicals that were or would have been, prior to January 1, 2011, separately billable under Medicare Part B; (ii) ESRD-related laboratory tests that were or would have been, prior to January 1, 2011, separately billable under Medicare Part B; (iii) medical/ surgical supplies, including syringes used to administer ESRD-related drugs, that were or would have been, prior to January 1, 2011, separately billable under Medicare Part B; and (iv) renal dialysis service drugs that were or would have been, prior to January 1, 2011, covered under Medicare Part D, excluding ESRD-related oral-only drugs. In the CY 2011 ESRD PPS final rule, 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 on the monthly claim (75 FR 49142). In the CY 2013 ESRD PPS proposed rule (77 FR 40964), we explained that drugs, laboratory tests, and medical/ surgical supplies that we would recognize as outlier services are specified in Attachment 3 of Change Request 7064, Transmittal 2033 issued August 20, 2010 and rescinded and replaced by Transmittal 2094, dated November 17, 2010. We also explained that with respect to the outlier policy, Transmittal 2094 identified additional drugs and laboratory tests that may be eligible for ESRD outlier payment. Transmittal 2094 was rescinded and replaced by Transmittal 2134, dated PO 00000 Frm 00015 Fmt 4701 Sfmt 4700 67463 January 14, 2011 which was issued to correct the subject on the Transmittal page and made no other changes. In the CY 2012 ESRD PPS final rule (76 FR 70246), we finalized our proposal to stop issuing a specific list of eligible outlier service drugs which were or would have been separately billable under Medicare Part B prior to January 1, 2011. We stated in that rule that we planned to use separate guidance to continue to identify renal dialysis service drugs which were or would have been covered under Part D for outlier eligibility purposes in order to provide unit prices for calculating imputed outlier services. In the CY 2013 ESRD PPS proposed rule (77 FR 40964), we explained that we planned to identify, through our monitoring efforts, those items and services that are incorrectly being identified as eligible outlier services. Any updates to the list of renal dialysis items and services that qualify as outlier services will be made through administrative issuances, if necessary. We indicated in the CY 2013 ESRD PPS proposed rule (77 FR 40964), that Medicare regulations at 42 CFR 413.237(a)(2) through (a)(6), and (b) specify the methodology used to calculate outlier payments. We explained that 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. We further explained that 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. We also stated that the threshold is equal to the ESRD facility’s predicted ESRD outlier services MAP amount per treatment (which is case-mix adjusted) plus the fixed dollar loss amount. Finally, we explained that in accordance with 42 CFR 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 and that ESRD facilities are eligible to receive outlier payments for treating both adult and pediatric dialysis patients. In the CY 2011 ESRD PPS final rule, using 2007 data, we established the outlier percentage at 1.0 percent of total payments (75 FR 49142 through 49143). We also established the fixed dollar loss amounts that are added to the predicted outlier services MAP amounts. The outlier services MAP amounts and fixed dollar loss amounts are different for adult and pediatric patients due to E:\FR\FM\09NOR2.SGM 09NOR2 67464 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations 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 and 49139), the predicted outlier services MAP amounts for a patient would be determined by multiplying the adjusted average outlier services MAP amount by the product of the patient-specific casemix adjusters applicable using the outlier services payment multipliers developed from the regression analysis to compute the payment adjustments. The average outlier services MAP amount per treatment for CY 2011 was based on payment amounts reported on 2007 claims and adjusted to reflect projected prices for 2011. For CY 2012, the outlier services MAP amounts and fixed dollar loss amounts were based on 2010 data (76 FR 70250). That is, for CYs 2011 and 2012, the MAP and fixed dollar loss amounts were computed based on pre-ESRD PPS claims data and utilization. Comment: Several commenters agreed that no changes need to be made to the methodology and commended CMS for its transparency regarding the data and methodology used to update the MAP and fixed dollar loss thresholds. Some commenters expressed appreciation of CMS’s clear explanation of eligible outlier services. Response: We thank the commenters for their support. We will continue to issue guidance regarding the renal dialysis items and services that could qualify for outlier payment. a. Impact of Changes to the Outlier Policy In the CY 2013 ESRD PPS proposed rule (77 FR 40964), we explained that we did not propose any changes to the methodology used to compute the MAP or fixed dollar loss amounts. Rather, we explained that we were updating the outlier services MAP amounts and fixed dollar loss amounts to reflect the utilization of outlier services reported on the 2011 claims using the December 2011 claims file. In this final rule, for CY 2013, we used the June 2012 update of the CY 2011 National Claims History File to update the outlier services MAP amounts and fixed dollar loss amounts. That is, for CY 2013, the MAP and fixed dollar loss amounts are based on utilization data from the 2011 ESRD PPS claims. For this final rule, the impact of this update is shown in Table 1, which compares the outlier services MAP amounts and fixed dollar loss amounts used for the outlier policy in CY 2012 with the updated estimates. The estimates for the CY 2013 outlier policy, which are included in Column III of Table 1, were inflation-adjusted to reflect projected 2013 prices for outlier services. TABLE 1—OUTLIER POLICY: IMPACT OF USING UPDATED DATA TO DEFINE THE OUTLIER POLICY Column I Outlier policy for CY2012 (based on 2010 data price inflated to 2012) * Age < 18 Average outlier services MAP amount per treatment 1 ... Adjustments Standardization for outlier services 2 ........................ MIPPA reduction ....................................................... Adjusted average outlier services MAP amount 3 .... Fixed dollar loss amount that is added to the predicted MAP to determine the outlier threshold 4 ..................... Patient months qualifying for outlier payment ................. Age > = 18 Column II Updated outlier estimates based on 2011 data price inflated to 2012 * Age < 18 Age > = 18 Column III Final outlier policy for CY2013 (based on 2011 data price inflated to 2013) * Age < 18 Age > = 18 $46.26 $81.73 $37.84 $59.49 $38.65 $61.38 1.0024 0.98 $45.44 0.9738 0.98 $78.00 1.0927 0.98 $40.52 0.9878 0.98 $57.59 1.0927 0.98 $41.39 0.9878 0.98 $59.42 $71.64 5.7% $141.21 5.4% $44.16 7.8% $103.47 5.2% $47.32 7.6% $110.22 5.1% tkelley on DSK3SPTVN1PROD with RULES2 * The outlier services MAP amounts and fixed dollar loss amounts were inflation adjusted to reflect updated prices for outlier services (that is, 2012 prices in Columns I and II and projected 2013 prices in Column III). 1 Excludes patients for whom not all data were available to calculate projected payments under an expanded bundle. The outlier services MAP amounts are based on 2011 data. The medically unbelievable edits of 400,000 units for epoetin and 1,200 mcg for Aranesp that are in place under the ESA claims monitoring policy were applied. 2 Applied to the average outlier MAP per treatment. Standardization for outlier services is based on existing Case Mix Adjusters for adult and pediatric patient groups. 3 This is the amount to which the separately billable (SB) payment multipliers are applied to calculate the predicted outlier services MAP for each patient. 4 The fixed dollar loss amounts were calculated using 2011 data to yield total outlier payments that represent 1% of total projected payments for the ESRD PPS. As seen in Table 1, the estimated fixed dollar loss amounts that determine the 2013 outlier threshold amounts (Column III) are lower than those used for the 2012 outlier policy (Column I). The main reason for these reductions is the lower utilization of epoetin and other outlier services in CY 2011, the first year of the PPS. This can be seen by comparing the outlier service MAP amounts in Column I (which are based on 2010 data) with the outlier service MAP amounts in Column II (which are based on 2011 data). VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 The fixed dollar loss amounts which are added to the predicted MAP amounts per treatment to determine the outlier thresholds are being updated from the CY 2012 amount. Based on the use of the most recently available data, the fixed-dollar loss amount for pediatric patients will decrease from $71.64 to $47.32 and the MAP amount will decrease from $45.44 to $41.39 as compared to CY 2012 values. For adult patients, the fixed-dollar loss amount drops from $141.21 to $110.22 and the MAP amount drops from $78.00 to $59.42. PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 We estimate that the percentage of patient months qualifying for outlier payments under the current policy will be 5.1 percent and 7.6 percent for adult and pediatric patients, respectively, based on our use of 2011 data. The pediatric outlier MAP and fixed dollar loss amounts continue to be lower for pediatric patients than adults due to the continued lower use of outlier services (primarily reflecting lower use of epoetin and other injectable drugs). Comment: All of the commenters supported CMS’s decision to lower the threshold for both the fixed dollar loss E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations and MAP amounts for pediatric and adult patients. The commenters stated that they believed that outlier payment mechanisms are fundamental to the long-term success of prospective payment systems to ensure patients get the care they need, even when there are financial disincentives. The commenters further expressed that it is important for CMS to ensure that the information it uses to determine the outlier thresholds each year is as current as possible and agreed with CMS in using the 2011 ESRD claims and utilization for CY 2013. Response: We thank the commenters for their support. Comment: Several commenters expressed concern that some ESRD facilities may not have the necessary resources available to identify outlier services on the claim, and therefore are not receiving the outlier payments to which they are entitled. One commenter suggested that CMS make available data indicating that the outlier policy is beneficial to small ESRD facilities. The commenter further explained that this policy could be detrimental to small facilities because, although the facilities’ base rate is reduced by 1 percent to account for outlier services, the facilities may be unable recoup this amount because of resource limitations. Response: Outlier services are the items and services that were separately paid prior to the implementation of the ESRD PPS and are also separately paid under the composite rate portion of the blended payment for those ESRD facilities under the transition. We do not believe that it should be difficult for small facilities to identify outlier services on claims because these facilities should have had experience identifying these items on claims before the PPS was implemented. Specifically, the items eligible for outlier payments under the ESRD PPS are the same items that had been separately paid under the basic case-mix adjusted composite rate system and are separately paid under the composite rate portion of the blended payment for ESRD facilities receiving payment under the transition. Consequently, we believe that identifying items eligible for outlier payment is not an additional burden nor do we believe that it is difficult for small ESRD facilities. In terms of demonstrating that the outlier policy is beneficial to small ESRD facilities, we note that the outlier policy is intended to account for the cost of beneficiaries with high resource utilization; it is not intended to account for facility size. Instead, our low-volume adjustment accounts for facility size by adjusting for the cost of treating a low VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 volume of ESRD patients. Although we will continue to monitor the impact of our outlier policy, as noted above, we believe that all facilities, regardless of size, should be able to identify outlier services on claims and be compensated for the cost of treating beneficiaries with high resource utilization. b. Outlier Policy Percentage In the CY 2013 ESRD PPS proposed rule (77 FR 40965), we explained that 42 CFR 413.220(b)(4) stipulates that the per treatment base rate is reduced by 1 percent to account for the proportion of the estimated total payments under the ESRD PPS that are outlier payments. We further explained that because of the decrease in utilization associated with the implementation of the ESRD PPS, the 1 percent target for outlier payments was not achieved in CY 2011. For this final rule, using the June 2012 update of the CY 2011 National Claims History File, we found that outlier payments represented approximately 0.3 percent of total payments. That is, the historical data previously used to set the outlier thresholds for CY 2011 projected greater use of outlier services than was observed under the expanded ESRD PPS, leading to lower outlier payments than expected. Use of 2011 data to recalibrate the thresholds, reflecting lower utilization of epoetin and other outlier services, will result in aggregate outlier payments close to the 1 percent target in CY 2013. We believe this update to the outlier MAP and fixed dollar loss amounts for CY 2013 will increase payments for ESRD beneficiaries requiring higher resource utilization in accordance with a 1 percent outlier policy. We note that recalibration of the fixed dollar loss amounts in this final rule for CY 2013 outlier payments results in no change in payments to ESRD facilities for beneficiaries with renal dialysis items and services that are not eligible for outlier payments, but raises payments to providers for beneficiaries with renal dialysis items and services that are eligible for outlier payments. Therefore, beneficiary co-insurance obligations would increase for renal dialysis services eligible for outlier services and would remain unchanged for those not eligible. Comment: One commenter recommended that CMS estimate and publish the amount of the shortfall in outlier payments paid during CY 2011. The commenters recommended that CMS develop a mechanism to return these funds to the ESRD facilities so that these funds may be used to offset the costs associated with numerous ‘‘unfunded mandates’’ imposed on these PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 67465 facilities. One commenter suggested that CMS set less than 1 percent aside for outliers and allocate the leftover funds to the ESRD PPS base rate. Response: We disagree that the shortfall in outlier payments should be used to make additional payments to ESRD facilities to account for not achieving the 1 percent threshold. The 1 percent outlier policy is a prospective payment mechanism in which thresholds are established and adjusted on a yearly basis based on historical data. In the FY 1997 Inpatient Prospective Payment System (IPPS) final rule (61 FR 46229 and 46230), we explained that we believe our outlier policies are consistent with the statute and the goals of the prospective payment system. Many of the factors used to set prospective payment amounts for a given year are based on estimates. These factors include not only the outlier thresholds, but also the market basket rate of increase, the update factors and the required budgetneutrality provisions. We do not believe that Congress intended that the standardized amounts should be adjusted (upward or downward) to reflect differences between projected and actual outlier payments for a given year. Moreover, retroactive adjustments would be extremely difficult or impracticable (if not impossible) to administer. We further explained that the thresholds for a given year reflect certain levels of costs, so that if costs are held down, fewer cases qualify for outlier payments and outlier payments are lower than expected. We believe that the same explanation applies to the ESRD PPS. D. Clarifications Regarding the ESRD PPS 1. Reporting Composite Rate Items and Services In the CY 2011 ESRD PPS final rule (75 FR 49036), we explained that section 1881(b)(14)(B)(i) of the Act requires that the ESRD PPS payment bundle include composite rate items and services. The basic case-mix adjusted composite payment system represented a limited PPS for a bundle of routine outpatient maintenance renal dialysis services. We defined composite rate services at § 413.171 as ‘‘items and services used in the provision of outpatient maintenance dialysis for the treatment of ESRD and included in the composite payment system established under section 1881(b)(7) [of the Act] and the basic case-mix adjusted composite payment system established under section 1881(b)(12) of the Act.’’ In 42 CFR 413.171 we also defined renal E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67466 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations dialysis services as including, ‘‘items and services included in the composite rate for renal dialysis services as of December 31, 2010.’’ We further explained that currently services that are billed on the ESRD claim do not provide any detail of the composite rate items and services that are furnished to the patient. We indicated that, as we discussed in the Medicare Claims Processing Manual, Pub. 100–04, chapter 8, sections 50.1 and 50.2, laboratory tests and drugs covered under the facility’s composite rate may not be billed separately (75 FR 49173). We stated in the CY 2013 ESRD PPS proposed rule that the composite rate represented the routine items and services provided to Medicare beneficiaries for outpatient maintenance dialysis and therefore was full payment for those items and services. Therefore, it would not have been appropriate for ESRD facilities to bill for items and services in the composite rate because this would result in duplicate payments by Medicare (77 FR 40965). We also explained in the CY 2011 ESRD PPS final rule (75 FR 49048), that in our analysis of the ESRD claims we identified drugs and biologicals that were included in the composite payment rate but for which ESRD facilities received separate payment in addition to the composite rate payment. Because these composite rate drugs and biologicals were listed separately on the ESRD claims, separate payment was inadvertently made. We further explained that we excluded those inadvertent payments from the final ESRD PPS base rate calculation. We also noted that the Medicare Benefit Policy Manual, Pub. 100–02, chapter 11, section 30.4.1 lists the drugs and fluids that were included under the composite payment system and explicitly states, ‘‘* * * drugs used in the dialysis procedure are covered under the facility’s composite rate and may not be billed separately. Drugs that are used as a substitute for any of these items, or are used to accomplish the same effect, are also covered under the composite rate.’’ The manual further provides that ‘‘administration of these items (both the staff time and supplies) is covered under the composite rate and may not be billed separately’’ (75 FR 49048). In the CY 2012 ESRD PPS final rule (76 FR 70243), with regard to antibiotics, we provided for separate payment for vancomycin when furnished to treat non-ESRD related conditions. We also eliminated the payment distinction for antibiotics furnished in an ESRD facility or in the home used to treat access infections or peritonitis. We finalized that antibiotics VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 furnished in the home to treat access site infections and peritonitis would be eligible for outlier payment (76 FR 70246). In the CY 2013 ESRD PPS proposed rule (77 FR 40963), we proposed to allow for separate payment for daptomycin if furnished for nonESRD-related conditions and finalized in section II.C.6.2 of this final rule. As described at 42 CFR 413.239, there are ESRD facilities receiving reimbursement under the transition, that is, receiving a blended payment of the basic case-mix adjusted composite rate payment system and the ESRD PPS. If an ESRD facility receives payment under the transition and reports a drug, biological, or laboratory test that was included in the composite rate on the ESRD claim, it could inadvertently receive separate payment for that item or service within the portion of the blended payment that is based on the basic case-mix adjusted composite payment system. As mentioned above and defined at 42 CFR 413.237, ESRD-related drugs, biologicals, and laboratory tests that were or would have been separately payable under the basic case-mix adjusted composite payment system qualify as eligible outlier services. In the CY 2012 ESRD PPS final rule (76 FR 70246), we finalized that as of CY 2012, we would no longer issue a specific list of eligible outlier service drugs which were or would have been separately billable under Medicare Part B prior to January 1, 2011. If an ESRD facility reports a drug or biological that was included in the basic case-mix adjusted composite payment system on the ESRD claim, it would inappropriately be applied toward an outlier calculation because all drugs and biologicals with a rate available on the ASP pricing file when the modifier AY is not present may be eligible for outlier consideration. We explained in the CY 2013 ESRD PPS proposed rule, that as a result of our monitoring efforts, we continue to find composite rate drugs reported on ESRD claims and reiterated that composite rate items and services are not to be reported on the ESRD facility claims. We noted that we are instituting measures to ensure that composite rate drugs are prevented from being applied to the outlier payment. These measures will be discussed through administrative issuances, as appropriate. We also noted that we would continue to monitor the reporting of composite rate items and services on ESRD claims and plan to take actions to recoup inappropriate and duplicative payments. Finally, we noted that if the inclusion of composite rate items and services such as laboratory tests, drugs PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 and supplies on claims will be required to be reported, we will discuss this requirement in future rulemaking (77 FR 40966). We received one comment on this issue. The comment and our response are set forth below. Comment: One commenter concluded that any action to recoup inappropriate and duplicative payments for reporting composite rate items and services should be pursued on a going forward basis rather than retrospectively. Response: CMS has a fiduciary responsibility to ensure that accurate payments are made. If we were to identify inappropriate payments that had been made because composite rate items and services were reported on claims for the purpose of receiving separate payment we would pursue recoupment of those payments in accordance with applicable laws and regulations. 2. ESRD Facility Responsibilities for ESRD-Related Drugs and Biologicals In the CY 2013 ESRD PPS proposed rule (77 FR 40966), we indicated that we had become aware that some ESRD facilities are requiring ESRD beneficiaries to purchase renal dialysis drugs from the ESRD facility and are instructing beneficiaries not to use their Part D plan for their purchases. We explained that section 1866(a)(1)(A) of the Act, as codified in regulations at 42 CFR 489.21, prohibits providers from billing beneficiaries for services for which the beneficiary would have been entitled to have payment made under Medicare if the provider appropriately filed claims for those services. Furthermore, section 1881(b)(2)(A) of the Act states that payments shall be made to an ESRD facility only if it agrees to accept such payments as payment in full for covered services except for the beneficiary co-insurance and deductible amounts. Furthermore, in the CY 2011 ESRD PPS final rule (75 FR 49045), we explained that the ESRD PPS bundled base rate reflects Medicare payment for the average ESRD patient. We stated that we had incorporated payments under the basic case-mix adjusted composite rate payment system as well as payments for separately billable items and services into the ESRD PPS base rate. As a result, we believe the ESRD PPS payments are sufficient and reflect the average cost of providing care to the average patient with ESRD and therefore, we expect that, on average, high cost patients would be offset by low cost patients. In the CY 2011 ESRD PPS final rule (75 FR 49045), we also explained that we had provided for E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations higher acuity patients with patient casemix adjusters and outlier payments for high-cost patients. We further cited 42 CFR 494.90 of the ESRD Conditions for Coverage which requires the development of an individualized patient plan of care to address patient needs and concluded that we believe ESRD facilities should make medical decisions based on patient needs and not solely on a financial basis. In the CY 2011 ESRD PPS final rule (75 FR 49050), we stipulated that any drug or biological (that is, injectable, oral or other forms of administration) furnished for the purpose of access management, anemia management, vascular access or peritonitis, cellular management or bone and mineral metabolism would be considered renal dialysis services under the ESRD PPS. Any drug or biological used as a substitute for a drug or biological that was included in the ESRD PPS bundled base rate would also be a renal dialysis service and would not be eligible for separate payment. Antiemetics, antiinfectives, antipruritics, anxiolytic, excess fluid management, fluid and electrolyte management and pain management drugs and biologicals could be used for dialysis purposes and therefore, are considered ESRD-related when used for those purposes. We indicated that we presumed these drugs and biologicals to be renal dialysis services in whatever form they are furnished, unless indicated on the claim that they are used for non-ESRD-related conditions. Drugs and biologicals paid under Part D that are furnished by an ESRD facility for ESRD-related purposes are considered renal dialysis services (75 FR 49050 and 49051). In the CY 2013 ESRD PPS proposed rule, we reiterated that ESRD facilities are responsible for furnishing renal dialysis items and services that are required to meet patient needs. This would include oral or other forms of administration of injectable drugs and biologicals that are furnished for ESRDrelated conditions. We also expect that ESRD facilities will not restrict access to necessary drugs for financial purposes by requiring patients to purchase medically necessary drugs and biologicals. We expect that ESRD facilities will furnish drugs and biologicals that had been considered medically necessary prior to the implementation of the ESRD PPS and not exclude them because the ESRD facility is now financially responsible for these drugs and biologicals. Because of the reasons cited above, ESRD facilities may not require, induce or coerce beneficiaries to purchase any renal dialysis item or service. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 We received no comments on the clarification of our policy regarding ESRD facility responsibilities for ESRDrelated drugs and biologicals. 3. Use of AY Modifier As we indicated in the CY 2013 ESRD PPS proposed rule (77 FR 40967), in the CY 2011 ESRD PPS final rule, we developed a mechanism to be used by ESRD facilities to identify and be paid separately for non-ESRD-related items and services, such as drugs, biologicals, and equipment and supplies (75 FR 49052 and 75 FR 49168). We provided this mechanism in order to support a Medicare beneficiary’s need for nonESRD-related items and services (that is, predominantly drugs and laboratory tests) during a dialysis treatment and to mitigate the need for the beneficiary to receive additional injections or health care visits. We further stated that in the event that supplies or equipment are not ESRD-related, ESRD facilities would be required to place a modifier on the claim for those supplies and equipment, signifying that they were used for services that were not ESRD-related and eligible for separate payment outside of the ESRD PPS (75 FR 49168). Change Request 7064, Transmittal 2033, titled ‘‘End Stage Renal Disease (ESRD) Prospective Payment System (PPS) and Consolidated Billing for Limited Part B Services’’, issued on August 20, 2010, re-issued November 17, 2010 under Transmittal 2094, and re-issued January 14, 2011 under Transmittal 2134, provided instructions on the use of the modifier. In that Change Request, we indicated that the claim lines for laboratory tests and drugs provided to a beneficiary for reasons other than the treatment of ESRD must be submitted with the AY modifier to signal separate payment outside of the ESRD PPS. In the CY 2012 ESRD PPS final rule, we provided for the use of the AY modifier with vancomycin if used for non-ESRDrelated conditions and with the requirement that the ESRD facilities include the diagnosis code of the condition on the claim (76 FR 70243). In the CY 2013 ESRD PPS proposed rule (77 FR 40967), we proposed to allow the use of the AY modifier for separate payment when daptomycin is furnished by an ESRD facility to an ESRD Medicare beneficiary for non-ESRD related conditions. We are finalizing this policy above. ESRD facilities are required to indicate an appropriate diagnosis code on the claim that reflects the condition requiring the use of daptomycin. We explained in the CY 2013 ESRD PPS proposed rule (77 FR 40967) that our monitoring activities have identified PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 67467 that ESRD facilities and clinical laboratories are appending the AY modifier for items that we believe are ESRD-related. We noted in the proposed rule (77 FR 40967) that some ESRD facilities and clinical laboratories appear to be appending the AY modifier on many items and services reported on claims. We reiterated in the proposed rule that the purpose of the AY modifier is to allow beneficiaries the convenience to receive non-ESRD-related items (for example, drugs and laboratory tests) during their dialysis treatment and to allow the ESRD facility to receive a separate payment for furnishing those items. The AY modifier is also intended to allow separate payment to laboratories in the event an ESRDrelated laboratory test is required for non-ESRD-related conditions. The AY modifier is not intended to be used to receive a separate payment for items that are ESRD-related and therefore included in the ESRD PPS base rate. We further stated that we would continue to monitor the use of the AY modifier and intend to take steps to recoup inappropriate payments. In the event that we believe the AY modifier is not being used for the purpose intended, we may be forced to discontinue the AY modifier and cease to provide separate payment for any non-ESRD-related drug or laboratory test furnished. We received several comments on our clarification of this policy and our responses are set forth below. Comment: We received six comments regarding the AY modifier. Commenters supported maintaining the AY modifier for non-ESRD conditions. Several commenters provided reasons for supporting the AY modifier. For example, some commenters concurred that the AY modifier is intended to allow Medicare beneficiaries the convenience of receiving non-ESRD related items and services during the course of dialysis treatment; and to allow the ESRD facility or laboratory to receive a separate payment when furnishing non-ESRD items or services. It also enables optimal coordinated care to Medicare beneficiaries by minimizing their need for additional doctor visits and duplicative or unnecessary lab tests. Five commenters largely encouraged CMS to continue the use of the modifier for reporting non-ESRD related items or services for payment and to furnish supporting data on AY modifier misuse. A few commenters suggested that CMS should consider drafting guidance on the appropriate use of the AY modifier. A few commenters expressed concern over the possible elimination of the AY modifier and identified possible resulting hardships for Medicare ESRD E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67468 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations beneficiaries. One commenter noted that the elimination of the AY modifier would force facilities to send dialysis patients to labs or infusion centers to receive IV medications that would risk the vascular access and add transportation and time burdens for the beneficiary. Response: We thank commenters for their support of the use of the AY modifier. We agree that the elimination of the AY modifier could result in additional hardships for ESRD beneficiaries. Comment: One commenter suggested that, rather than eliminating the AY modifier, CMS should rely upon the contractors to educate providers, audit payments for AY items, and request documentation when appropriate. Another commenter encouraged CMS to provide data on the exact abuses or the scope of modifier misuse noting that patients should not suffer because of modifier abuse, but rather CMS should work with facilities and providers to ensure policy compliance. Response: With regard to the suggestion that the responsibility for AY modifier monitoring education should rest on the CMS contractors (that is, the Medicare Administrative Contractors (MACs)), we note that we do provide education and instructions to the A/B MACs through administrative issuances and MedLearn articles that they can then use to educate providers. For example, CMS Change Request #7064 and subsequent Medicare Learning Network Matters (MLN) article # MM7064, published on January 14, 2011, notifies contractors that ESRDrelated laboratory services, drugs and supplies will be subject to Part B consolidated billing edits and no longer separately payable when furnished to ESRD beneficiaries. However, these consolidated billing edits do not apply when the items and services are not ESRD-related. When items and services are furnished to an ESRD beneficiary for conditions other than ESRD, the AY modifier must be present on the claim to bypass billing edits and allow for a separate payment outside of the ESRD PPS. CMS MLN #MM7064 may be viewed at https://www.cms.gov/ Outreach-and-Education/MedicareLearning-Network-MLN/ MLNMattersArticles/Downloads/ MM7064.pdf. Finally, we are in the process of updating the ESRD Benefit Policy Manual, Pub 100–02, chapter 11, to reflect the policy requirements under the ESRD PPS, including the use of the AY modifier. With regard to the comment concerning monitoring the use of the AY modifier and the suggested VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 functions to be performed by the MACs, as we discussed in the CY 2013 ESRD PPS proposed rule (77 FR 40967), we are continuing to monitor the use of the AY modifier and intend to take steps to recoup inappropriate payments. Although we are updating our manual, we believe that we have provided adequate instructions as to the appropriate use of the AY modifier. We expect that the contractors will convey information regarding the proper use of the AY modifier to the ESRD facilities, and will also audit payments and request documentation as necessary. However, CMS has the responsibility to ensure that payments are made appropriately. Therefore, we will continue to monitor the use of the AY modifier. If we believe that the AY modifier is not being used as intended, or it is being used in order to receive separate payment for renal dialysis items and services that are in the bundled payment, we will be forced to reconsider its use. E. Miscellaneous Comments We received thirty-five comments from Medicare beneficiaries, family members, ESRD facilities, nurses, physicians, professional organizations, renal organizations, and manufacturers related to issues that were not specifically addressed in the CY 2013 ESRD PPS proposed rule. Comment: We received comments from patients, their families, renal associations and manufacturers requesting changes in how CMS pays for home dialysis and home dialysis training. Many of these commenters described the benefits of home dialysis. Most commenters asked CMS to increase the number of weekly allowable dialysis sessions and eliminate the medical justification requirement for additional sessions. One commenter questioned why payment for in-facility dialysis was the same as for home dialysis, noting the differences between staff and supply use between in-facility and home dialysis. Some commenters contended that patient requests for home dialysis are being denied. Commenters also stated that beneficiaries with ESRD are not provided with the same home training opportunities as beneficiaries whose care is covered by other payment sources. Many of the commenters stated that payment for home dialysis training is insufficient and does not reflect the true cost of training. Some commenters indicated various ranges of time required for home training in terms of time per day and number of training sessions. One home dialysis organization stated that ESRD facilities PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 only receive payment for 18, rather than 25, training sessions for new patients. Response: CMS developed a reimbursement mechanism with the 2011 implementation of the ESRD PPS that we believe supports home-based dialysis. That is, the ESRD PPS payment, which includes drugs, laboratory tests, staff time, supplies, patient-level adjustments, facility-level adjustments and outlier payments, is the same regardless of the location where the dialysis services are furnished or the dialysis modality, which we believe supports beneficiaries’ ability to elect to receive dialysis at home, where appropriate. It is not, however, CMS’s intent to encourage, discourage or require any particular dialysis modality. Rather, we believe that decisions regarding whether to receive dialysis and which dialysis modality to use should be made by beneficiaries in consultation with their physicians. This includes the decision whether to receive home hemodialysis or home peritoneal dialysis, rather than in-facility dialysis. We believe that the decision to perform home dialysis includes determining the beneficiary’s abilities, the beneficiary’s desire to perform home dialysis and the beneficiary’s physical and emotional status. With regard to the comment asking why the payment is the same for infacility as home dialysis, we believe that our policy to pay the same amount, including the patient-level and facilitylevel adjustments, as well as the outlier policy for home and in-facility dialysis, provides adequate payment to account for the short-term increase in staff time necessary to train beneficiaries for home dialysis. Training costs are included in the ESRD PPS base rate, however, we also provide an add-on adjustment for each training session that represents one hour of nursing time to conduct one-onone training treatments for each training treatment furnished by a Medicare certified home dialysis training facility. The add-on payment for one hour of training per training session does not imply that it takes only one hour per training session to properly educate a beneficiary to perform home dialysis. We believe that our payment is adequate for training and home dialysis. We have been and will continue to monitor and analyze trends in home dialysis and home dialysis training. We have seen a continuing increase in overall home dialysis since mid-2009, including in 2011. In particular, we have observed an increase in home hemodialysis and a decline in home peritoneal dialysis with an overall higher rate of home peritoneal dialysis. In addition, our monitoring shows that E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations ESRD facilities receive payments for more treatments for home hemodialysis than for in-facility hemodialysis. We also have seen an increase in home training in 2011, particularly in retraining. Consequently, we do not believe that the ESRD PPS and our training adjustment discourage beneficiaries from receiving home dialysis. Commenters also requested that we increase the maximum number of dialysis sessions and eliminate the medical justification requirement for dialysis treatments after a beneficiary has received three sessions in one week. We note that, although three is the maximum number of sessions that we will cover without a showing of medical necessity, we will cover additional sessions where those sessions are medically necessary. We are aware that there are observational studies that support additional weekly dialysis treatments and that there is some industry support for additional treatments. We have and will continue to monitor and analyze the number of dialysis treatments that Medicare beneficiaries receive to determine whether a change in this longstanding policy is warranted. In addition, in the CY 2011 ESRD PPS final rule (75 FR 49064) we stated in response to a MedPAC comment that we would consider whether it would be appropriate to utilize a larger unit of payment, rather than a per treatment payment, after the transition period. We further stated that ‘‘we may evaluate whether the ERSD PPS has resulted in improved outcomes, the degree to which home dialysis has increased, and whether interested stakeholders would favor an alternative to the per treatment approach.’’ We will continue to monitor the impact of the ESRD PPS and will take these comments into consideration if we determine that any changes to the per treatment payment approach are warranted. With regard to the comment that ESRD facilities receive payment for 18 rather than 25 training treatments for new patients, we believe that the commenter is confusing the adjustment for beneficiaries who are receiving home dialysis training but are not in their first four months of dialysis, with beneficiaries who have been newly diagnosed with ESRD and are receiving their first four months of dialysis. The home dialysis training adjustment applies to those beneficiaries who are not in their first four months of dialysis treatments. This adjustment does not apply for those beneficiaries newly diagnosed with ESRD. Instead, facilities receive the onset of dialysis adjustment VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 for these beneficiaries. As we explained in the CY 2011 ESRD PPS final rule (75 FR 49094), we believe that the costs associated with the onset of dialysis adjustment and the training add-on adjustment overlap (that is, costs for services could be accounted for in both adjustments). Accordingly, we finalized a policy that ESRD facilities will not receive the home dialysis training adjustment when they are receiving the onset of dialysis adjustment. This does not mean that an ESRD facility may not furnish home training services during the onset period. Rather, the onset of dialysis payment adjustment of 51 percent per treatment accounts for the administrative and labor costs associated with new patients, including the costs to train patients. We are unable to address the comment contending that ESRD beneficiaries are not offered the same home dialysis training opportunities as those offered to ESRD beneficiaries covered by private payers because we are not familiar with these payment sources. Comment: One patient support group recommended that CMS use revenue code 0820 when reporting home dialysis instead of revenue code 0821, which is currently used to describe both infacility and home dialysis services. The commenter contends that this will correctly identify patients on home dialysis in Medicare claims data. Response: Our current Medicare policy for reporting home dialysis services with revenue code 0821 appended with ESRD condition code 74 (Dialysis in the Home) allows us to distinguish beneficiaries receiving dialysis at home from those receiving treatment in an ESRD facility. Comment: We received twelve comments regarding the Agency’s plan to include oral-only drugs in the ESRD PPS bundled payment for CY 2014. Commenters expressed concern about the administrative burden, compliance with state laws, and associated costs in furnishing oral-only drugs within the scope of the ESRD service. A few commenters requested that CMS ask for community input so that the inclusion of the oral-only drugs will be an uneventful transition for patients. ESRD industry associations cautioned that the inclusion of oral-only drugs into the ESRD PPS CY 2014 bundled payment may limit patient access to the most clinically appropriate drugs and threaten optimal health outcomes for ESRD Medicare beneficiaries. Some commenters recommended that CMS include patient protections to ensure patient care is not compromised and that oral-only drugs continue to be PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 67469 furnished at the recommended doses. Many commenters requested that the Agency share advance information about the methodology and data sources that the Agency will use to calculate the reimbursement rates for drugs and therapies and encouraged CMS to use the most recent year of available data to establish a payment rate for oral-only drugs. Other commenters requested that CMS adopt a methodology that measures the actual utilization on a per treatment basis and includes costs associated with drug administration when reimbursing oral-only drugs as part of the ESRD PPS. Response: We thank the commenters for their comments. In the CY 2011 ESRD PPS final rule (75 FR 49038 through 49044), we responded to comparable comments regarding the inclusion of oral-only drugs in CY 2014. We received many suggestions from stakeholders on how oral-only drugs should be included in the ESRD PPS bundled payment. We have reviewed and will continue to review all of the comments, which we will consider as we formulate our proposals on this issue. We intend to address the inclusion of oral-only drugs in the ESRD PPS in the CY 2014 ESRD PPS proposed rule. Comment: We received three comments from industry associations requesting that CMS release the ratesetting file to allow the industry to test the Agency’s assumptions and complete its own analysis of the payment policies set forth in the CY 2013 ESRD PPS proposed rule. One commenter encouraged CMS to make data available to the public generally, not just dialysis facilities in particular, to allow for a more complete assessment of the ESRD PPS program. Response: We received comparable requests and comments in response to the CY 2012 ESRD PPS proposed rule and responded to those comments in the CY 2012 ESRD PPS final rule (76 FR 70254 to 70255). We believe that we have provided and will provide data sufficient to analyze the payment policies included in the proposed rule, by posting the impact file for CY 2012 on the ESRD PPS Payment Web site. We will also post a provider-level impact file and the wage index file for CY 2013 shortly after publication of this final rule. We also explained that we have not made the rate setting file available ‘‘because the release of patient identifiable data is not necessary to accomplish the purpose of analyzing our proposals. Applicable Federal privacy laws and regulations, including the Privacy Act and HIPPA Privacy Rule only permit us to disclose personal E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67470 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations identifiable information when it is necessary to administer the program, or for health care operations and payment.’’ Comment: We received 8 comments requesting modification to the standardization factor methodology and calculation for CY 2013. Many of these commenters encouraged CMS to use the most current data available in order to establish the standardization factor, rather than historical estimates. Some commenters indicated that because we had adjusted the outlier fixed dollar loss and MAP amounts to account for outlier payments below the 1 percent threshold in CY 2011, we should provide a comparable adjustment to the standardization factor and the ESRD PPS base rate to account for payments for patient- and facility-level adjusters that were not utilized. Some commenters continue to contend that the ESRD PPS base rate established in CY 2011 is incorrect and that CMS should return the payment amounts removed from the base rate to account for the adjusters, thereby increasing the base rate. Other commenters stated that the ESRD PPS base rate should be adjusted to account for payments allocated for the patient- and facilitylevel adjusters that had not ultimately been paid to the ESRD facilities. A few commenters requested that CMS modify the payment for case-mix and comorbidity adjustments. Response: In the CY 2011 ESRD PPS final rule, we described the data sources that were used in constructing the ESRD PPS payment bundle, the development of the ESRD PPS base rate, and the payment adjusters (75 FR 49064 through 49127). In the CY 2013 ESRD PPS proposed rule, we proposed to update the base rate by the rate of increase in the ESRD market basket, reduced by the productivity adjustment (77 FR 40959). The base rate was developed using 2007 claims, in accordance with section 1881(b)(14)(A)(ii) of the Act, which requires CMS to use the lowest per patient utilization year. We also explained the methodology used to determine the case-mix adjustment amount, including co-morbidities (75 FR 49087 through 49116). In the CY 2013 ESRD PPS proposed rule, we stated that we were not proposing any changes to the methodology used to compute the MAP or fixed dollar loss amounts, but were updating the outlier services MAP amounts and fixed dollar loss amounts to reflect the utilization of outlier services reported on the 2011 claims, using the December 2011 claims file (77 FR 40964). The methodology for calculating and updating the base rate was finalized last year through notice VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 and comment rulemaking, as were the methodologies for updating the outlier threshold. In the CY 2013 ESRD PPS proposed rule, we did not propose to change how the base rate is calculated or updated. We also did not propose in the CY 2013 ESRD PPS proposed rule to modify the payment adjusters. We do not believe that because we lowered the MAP and fixed dollar loss amounts to adjust for outlier payment expenditures that were below the 1 percent target, we must adjust the standardization factor for the ESRD PPS base rate. We will, however, continue to monitor our payments and consider if any changes need to be made in the future. Comment: One commenter requested clarification when billing Medicare for Lipid Profile laboratory services furnished to ESRD beneficiaries. Another commenter encouraged CMS to furnish guidance for blood draws and laboratory collections under the ESRD PPS. Response: ESRD-related laboratory tests may not be billed with the AY modifier and no separate payment shall be made when an ESRD facility or laboratory furnishes ESRD-related laboratory tests to an ESRD beneficiary. We discuss laboratory tests furnished under the PPS in our CY 2011 and CY 2012 ESRD PPS final rules (75 FR 49053 through 49056 and 76 FR 70249 through 70250, respectively). Furthermore, the Lipid Profile laboratory test is appropriately included in the ESRD PPS payment bundle when Lipid abnormalities result from, or are related to the beneficiary’s ESRD. For example, some forms of dialysis, particularly peritoneal dialysis, are associated with increased cholesterol and triglyceride levels, and a Lipid Profile laboratory test to assess these levels would be included in the bundled payment. If, however, the Lipid Profile laboratory test is furnished for reasons other than for the treatment of ESRD, the laboratory services may be billed with the AY modifier and are eligible for separate payment. With regard to the comment requesting guidance for blood draws and laboratory collections, we refer the commenter to Change Request 7617, Transmittal 150, entitled, ‘‘Implementation of Changes in End Stage Renal Disease Payment for Calendar Year 2012’’ issued on November 16, 2011. Comment: One commenter requested that CMS consider the implementation of pediatric co-morbidities to the pediatric case mix adjustments, while another commenter requested consideration of a case-mix adjustment for race. One association called for CMS to establish a new technology adjuster PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 in a non-budget-neutral manner, stating that new technologies have the potential to lead to better diagnosis, treatment, and patient outcomes. Response: We thank the commenters for their suggestions, but note that we did not propose to implement these adjusters in the CY 2013 ESRD PPS proposed rule. We refer the commenters to the CY 2011 ESRD PPS final rule (75 FR 49128 through 49134; 75 FR 49108 and 49115; 75 FR 49174), in which we explained the methodology used to develop the ESRD PPS for the pediatric population, discussed the reasons for not including a patient-level case mix adjuster for race, and responded to comments suggesting that we provide separate payment for new and innovative drugs and technologies. Comment: Some commenters requested that the cost reports be amended to reflect the actual cost of care. Some of the recommendations included that the cost report should provide flexibility to allow for innovation, eliminate the limitation on medical director fees, recognize the cost of supporting the ESRD networks, and allow immediate recognition on cost reports of ‘‘new or innovative items/ services,’’ Response: We thank the commenters for their suggestions. We plan to analyze the cost reports to determine if there are any changes required and will consider the suggestions provided. We received a number of other comments on a variety of topics that we believe are outside the scope of the proposed rule. The commenters requested that ESRD beneficiaries be able to maintain disability benefits while employed; expressed concern about the ‘‘corporate practice of medicine’’ by dialysis facilities; noted that securing the necessary documentation for acute co-morbidities is problematic and urged CMS to furnish co-morbidity claims data from the CMS database; advocated for inclusion of their product in the ESRD PPS payment; and disputed over payment changes to its product under Part D. We appreciate the comments; however, because these comments were not in response to any proposals or discussions in the proposed rule, they are beyond the scope of this final rule. We refer the commenters to the CY 2011 ESRD PPS final rule, where we believe that we addressed many of these issues (75 FR 49030). E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations III. End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP) for Payment Year (PY) 2015 tkelley on DSK3SPTVN1PROD with RULES2 A. Background For over 30 years, monitoring the quality of care provided to end-stage renal disease (ESRD) patients by dialysis providers or facilities (hereinafter referred to collectively as ‘‘facility’’ or ‘‘facilities’’) has been an important component of the Medicare ESRD payment system. The ESRD quality incentive program (QIP) is the most recent step in fostering improved patient outcomes by establishing incentives for dialysis facilities to meet or exceed performance standards established by CMS. The ESRD QIP is authorized by section 153(c) of MIPPA, which added section 1881(h) to the Act. CMS established the ESRD QIP for PY 2012, the initial year of the program in which ESRD payment reductions based on quality performance are being made to dialysis facilities, in two rules published in the Federal Register on August 12, 2010 and January 5, 2011 (75 FR 49030 and 76 FR 628, respectively). On November 10, 2011, CMS published a final rule in the Federal Register outlining the PY 2013 and PY 2014 ESRD QIP (76 FR 70228). Section 1881(h) of the Act requires the Secretary to establish an ESRD QIP, which we have implemented by (i) selecting measures; (ii) establishing the performance standards that apply to the individual measures; (iii) specifying a performance period with respect to a year; (iv) developing a methodology for assessing the total performance of each facility based on the performance standards with respect to the measures for a performance period; and (v) applying an appropriate payment reduction to facilities that do not meet or exceed the established Total Performance Score. In this final rule, we describe each of these elements, as applicable, and our final policies for their application to PY 2015 and future payment years of the ESRD QIP. B. Summary of the Proposed Provisions and Responses to Comments on the ESRD QIP for PY 2015 A proposed rule, entitled ‘‘Medicare Program; End-Stage Renal Disease Prospective Payment System, Payment System, Quality Incentive Program, and Bad Debt Reductions for All Medicare Providers’’ (77 FR 40952), hereinafter referred to as the CY 2013 ESRD PPS proposed rule, appeared in the Federal Register on July 11, 2012, with a comment period that ended on August 31, 2012. In that proposed rule, we made proposals for the ESRD QIP, VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 including introducing and expanding measures, refining the scoring methodology, modifying the program’s public reporting requirements, establishing how the ESRD QIP payment reduction applies to facilities whose ownership has changed, and initiating a data validation pilot program. We received approximately 55 public comments on these proposals from many interested parties including dialysis facilities, organizations representing dialysis facilities, nephrologists, nurses, dietitians, home health advocacy groups, pharmaceutical manufacturers, patients, advocacy groups, and the Medicare Payment Advisory Commission (MedPAC). In this section of the final rule, we provide a summary of each proposed requirement, a summary of the public comments received on these requirements, our responses to these comments, and the final policies that we will adopt for the program. C. Considerations in Updating and Expanding Quality Measures Under the ESRD QIP for PY 2015 and Subsequent PYs 1. Value-Based Purchasing (VBP) Overview Throughout the past decade, Medicare has been transitioning from a program that pays for healthcare based solely on the number of services furnished to a beneficiary to a program that ties payments to providers and suppliers to the quality of care of the services they deliver. By paying for the quality of care, rather than merely the quantity of care, we believe we are strengthening the healthcare system while also advancing the National Quality Strategy and the three part aim which promote (i) better care for the individual thereby (ii) advancing the health of the entire population while also (iii) reducing costs. CMS specifies the domains and specific measures of quality for our VBP programs and we are working to link the aims of the National Quality Strategy with our payment policies on a national scale. There are currently six domains of measurement for our VBP programs, based on the six priorities of the National Quality Strategy: (i) Care coordination; (ii) population/ community health; (iii) efficiency and cost reduction; (iv) safety; (v) patientand caregiver-centered experience and outcomes; and (vi) clinical care. Together these domains not only encourage better care at the facility level, but also encourage different care settings to interface to comprehensively improve healthcare overall. Although PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 67471 currently none of the VBP programs measure quality across all of the six domains, we are working to ensure that each program considers measures supporting the six national priorities where feasible. Furthermore, we are working in partnership with facilities, beneficiaries, the National Quality Forum (NQF), the Measures Application Partnership, sister agencies in the Department of Health and Human Services (HHS), and other stakeholders to develop new measures where gaps exist, refine measures requiring adjustment, and remove measures when appropriate. We are also working with stakeholders to ensure that the ESRD QIP serves the needs of our beneficiaries and also advances the goals of the National Quality Strategy. We believe that the development of an ESRD QIP that is successful in promoting the delivery of high quality healthcare services in dialysis facilities is paramount. We seek to adopt measures for the ESRD QIP that promote high-quality, safer, and more efficient care. In addition to the priorities of the National Quality Strategy, our measure development and selection activities for the ESRD QIP take into account other national priorities, such as those established by the National Priorities Partnership (https://www.qualityforum. org/npp/), HHS Strategic Plan (https:// www.hhs.gov/secretary/about/priorities/ priorities.html), the National Strategy for Quality Improvement in Healthcare (https://www.healthcare.gov/center/ reports/quality03212011a.html), and the HHS National Action Plan to Prevent Healthcare Associated Infections (HAIs) (https://www.hhs.gov/ash/initiatives/hai/ esrd.html). To the extent practicable, we have sought to adopt measures that have been endorsed by a national consensus organization, recommended by multistakeholder organizations, and developed with the input of facilities, purchasers/payers, beneficiaries, and other stakeholders. 2. Brief Overview of Proposals For PY 2014, we adopted measures for the ESRD QIP that fall under three of the six VBP measure priority domains based on the National Quality Strategy: • Safety: National Healthcare Safety Network (NHSN) Dialysis Event reporting; • Patient- and caregiver-centered experience: In-Center Hemodialysis Consumer Assessment of Healthcare Providers and Systems (ICH CAHPS) survey reporting; and • Clinical quality of care: (i) Hemoglobin Greater Than 12 g/dL; (ii) Hemodialysis Adequacy (Urea Reduction Ratio (URR)); (iii) Vascular E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67472 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations Access Type; (iv) and Mineral Metabolism reporting (76 FR 70228). For PY 2014, we also proposed to change the requirements for the Mineral Metabolism reporting measure. For PY 2015, we proposed to add new measures in the clinical quality of care domain and to expand the scope of the NHSN Dialysis Event reporting measure (safety domain) and the Mineral Metabolism reporting measure (clinical quality of care domain). We believe that the PY 2015 ESRD QIP should not only promote the health of ESRD patients, but also uphold the goals of the National Quality Strategy (NQS). To that end, we proposed to include 11 measures in the PY 2015 ESRD QIP. We also proposed to include these measures and measure topics in subsequent payment years. The proposed measures would evaluate facilities on the following topics that fall under the NQS clinical quality of care measure domain: • For purposes of evaluating anemia management: Æ Hemoglobin Greater Than 12 g/dL, a clinical measure. Æ Anemia Management, a reporting measure.* • To evaluate dialysis adequacy: Æ A clinical Kt/V measure for adult hemodialysis patients.* Æ A clinical Kt/V measure for adult peritoneal dialysis patients.* Æ A clinical Kt/V measure for pediatric hemodialysis patients.* • To determine whether patients are treated using the most beneficial type of vascular access: Æ An arteriovenous fistula measure. Æ A catheter measure. • To address effective bone mineral metabolism management: Æ Hypercalcemia, a clinical measure.* Æ Mineral Metabolism, a reporting measure (expansion proposed). Additionally, we proposed to expand a previously adopted reporting measure addressing safety: • NHSN Dialysis Event reporting measure. We also proposed to continue using a previously adopted reporting measure assessing patient- and caregivercentered experience: • ICH CAHPS survey reporting measure. *Indicates that the measure is new to the ESRD QIP. Although we did not propose to adopt measures that address care coordination, population/community health, or efficiency and cost of care, we solicited comments in the proposed rule on potential measures that would fall into each of these areas. We discussed VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 the following measures that are under consideration for possible adoption in subsequent payment years: a 30-Day Hospital Readmission measure to address care coordination; an access to care measure to address population/ community health; and an efficiency measure. We also discussed the Standardized Hospitalization Ratio Admissions (SHR) measure and the Standardized Mortality Ratio (SMR) measure that we are considering for program adoption in future years. We welcomed, and continue to welcome, further comments on these and other potential measures for future payment years. 3. Measures Application Partnership Review In addition to the considerations discussed above, in selecting measures for the PY 2015 ESRD QIP, we considered input from the multistakeholder group, the Measures Application Partnership (https://www. qualityforum.org.map/). Section 1890A(a)(1) of the Act, as added by section 3014(b) of the Affordable Care Act, requires the entity with a contract under section 1890(a) of the Act, currently NQF, to convene multistakeholder groups to provide input to the Secretary on the selection of quality and efficiency measures for use in certain programs. Section 1890A(a)(2) of the Act requires the Secretary, not later than December 1 of each year, to make available to the public a list of quality and efficiency measures that are under consideration for use in certain programs. Section 1890A(a)(3) of the Act requires the entity with a contract under section 1890(a) of the Act to transmit the input of the multistakeholder groups to the Secretary not later than February 1 of each year, beginning in 2012. Section 1890A(a)(4) of the Act requires the Secretary to take into consideration the input of the multi-stakeholder groups in selecting quality and efficiency measures. The Measures Application Partnership is the public-private partnership comprised of multi-stakeholder groups convened by NQF for the primary purpose of providing input on measures as required by sections 1890A(a)(1) and (3) of the Act. The Measures Application Partnership’s input on the quality and efficiency measures under consideration for adoption in CY 2012 was transmitted to the Secretary on February 1, 2012 and is available at (https://www.qualityforum. org/WorkArea/linkit.aspx?Link Identifier=id&ItemID=69885). As required by section 1890A(a)(4) of the Act, we considered these recommendations in selecting quality PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 and efficiency measures for the ESRD QIP. Four proposed measures for the PY 2015 ESRD QIP (that is, three for dialysis adequacy and one for hypercalcemia) were made publicly available in accordance with section 1890A(a)(2) of the Act and were reviewed by the Measures Application Partnership. The Measures Application Partnership gave support to two of the proposed measures, NQF #1454: Proportion of patients with hypercalcemia and NQF #1423: Minimum spKt/V for Pediatric Hemodialysis Patients. The Measures Application Partnership supported the direction of a proposed composite measure comprised of two NQFendorsed measures, NQF #0249: Hemodialysis Adequacy Clinical Performance Measure III: Hemodialysis Adequacy—HD Adequacy—Minimum Delivered Hemodialysis Dose and NQF #0318: Peritoneal Dialysis Adequacy Clinical Performance Measure III— Delivered Dose of Peritoneal Dialysis Above Minimum. The Measures Application Partnership recommended that the composite measure comprised of the two NQF dialysis adequacy measures be tested to ensure feasibility. We took these comments into consideration when we proposed measures for the PY 2015 ESRD QIP. 4. PY 2014 Mineral Metabolism Measure In the CY 2012 ESRD PPS final rule, we adopted the Mineral Metabolism reporting measure for the PY 2014 ESRD QIP which requires each facility to attest that it monitored serum calcium and serum phosphorus at least once a month for each Medicare ESRD patient (76 FR 70271). We have since realized, however, that it may be difficult for some facilities to make this attestation if, for example, a patient is seen at the beginning of the month, his or her blood is not drawn, and then he or she is hospitalized or transient for the remainder of the month. While it is our intention to encourage facilities to put systems and processes into place to ensure at least monthly serum calcium and phosphorus monitoring, we believe it is reasonable to give consideration to situations where the monthly blood draw does not happen within the dialysis facility given these scenarios. Therefore, for PY 2014, we proposed to change the Mineral Metabolism reporting requirement. We considered proposing to require facilities to report the required information for less than 100 percent of their patients. There are circumstances, however, that are beyond a facility’s control wherein it may not be able to E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations draw a sample for this patient. Therefore, for purposes of scoring the measure, we proposed to modify the PY 2014 measure to require that, in order for a facility to receive 10 points on the PY 2014 Mineral Metabolism measure, it must attest that it monitored on a monthly basis the serum calcium and serum phosphorus levels for every Medicare ESRD patient provided that: (i) The patient is alive for the entirety of the applicable month; (ii) if the patient is treated in-center, that patient was treated at that facility at least twice during the claim month; and (iii) if the patient receives dialysis at home, a facility must report this information regardless of the number of treatments, provided that a claim is submitted for that patient. We also proposed that if a patient is hospitalized or transient during a claim month, the facility could monitor the serum calcium and serum phosphorus readings for that patient for the month if a patient has labs drawn by another provider/facility, those labs are evaluated by an accredited laboratory (a laboratory that is accredited by, for example, Joint Commission, College of American Pathologists, AAB (American Association of Bioanalysts), or State or Federal agency), and the dialysis facility reviews the serum calcium and serum phosphorus readings. We stated our belief that these proposals will provide more flexibility for facilities and will also prevent facilities from drawing blood, even when not necessary, each time a patient visits for fear that he or she will fail to come to the facility again during that month. We requested comment on this proposal. We also requested comment on our consideration to lower the attestation to monthly monitoring of 98 percent of Medicare ESRD patients. We chose 98 percent in order to encourage improvement, and to ensure that we do not undermine the current level of highreporting (based on the CROWNWeb pilot data). We recognize that 100 percent might not be appropriate due to some individual cases that may not fit specified criteria. Additionally, for purposes of clarification, we noted that the PY 2014 attestations for both the Mineral Metabolism and ICH CAHPS measures will become available in CROWNWeb in December 2012. As noted in the CY 2012 ESRD PPS final rule, these attestations must be made before January 31, 2013 (76 FR 70269, 70271). We received the following comments on these proposals: Comment: Many commenters were appreciative of our willingness to revisit our requirements for the PY 2014 Mineral Metabolism attestation. Some VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 commenters suggested that we modify the exclusion to include the following patients: (i) Beneficiaries who are regularly treated at the facility and who fit into one of these categories: (a) Beneficiaries who die within the applicable month; (b) beneficiaries that receive fewer than 7 treatments in a month; and (c) beneficiaries receiving home dialysis therapy who miss their in-center appointments when there is a documented, good faith effort to have them participate in such a visit during the applicable month; (ii) transient dialysis patients; (iii) pediatric patients (unless the measure is specific to this population); and (iv) kidney transplant recipients with a functioning graft. Commenters stated that these exclusions are consistent with our own measures, CROWNWeb, and the URR reporting specifications; additionally, these exclusions seek to hold facilities accountable only for those beneficiaries to whom they regularly give care and for whose care they can affect. One commenter believed that home dialysis patients should only be included if they attend their monthly visit. One commenter requested that we use NQF inclusion criteria for purposes of defining the exclusions of the Mineral Metabolism reporting measure. Response: Upon further review, we agree with commenters who believe that the exclusions should be modified. We recognize that treating a patient twice may not provide enough time to effectuate quality patient care. We agree with the commenters who suggested that an in-center hemodialysis patient should be excluded if treated by a facility fewer than seven times during the month, regardless of whether the patient is officially admitted to that facility. With seven treatments, we believe that a facility should have had adequate opportunities to draw blood necessary to measure serum calcium and phosphorus levels. We also believe that the threshold of seven will discourage unnecessary testing of incenter hemodialysis patients by facilities because they will know that, since in-center patients are typically treated three times per week, a patient must have been treated by the facility for at least two weeks to be included; thus, the facility need not feel pressure to draw blood for every in-center patient during the first few visits of the month. Based on these considerations, we will not finalize our proposal to exclude only in-center patients who have been treated fewer than two times by the facility during the claim month. Instead, we will exclude any patient who is PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 67473 treated by the facility fewer than seven times during the reporting month. We do not believe that it is necessary to specifically exclude transient patients from this measure because, as noted, any patient that is treated by the facility at least seven times during the applicable reporting month is present at the facility for enough time that the facility should be held accountable for that patient. Likewise, for the same reasons mentioned above, we do not believe we need to separately exclude patients who are deceased at the end of the reporting month. Provided that the patient is treated by the facility at least seven times during that month, the facility should be able to draw blood necessary to monitor serum calcium and serum phosphorus levels even if the patient is deceased at the end of the month. We continue to believe that facilities should be required to attest that they monitored the serum calcium and phosphorus levels of home dialysis patients irrespective of whether those patients attend a monthly appointment. We believe that it is incumbent upon a facility to make home dialysis patients aware that they must attend monthly appointments to be properly treated. In addition, since the mechanisms that cause cardiovascular and bone disease do not differ between home and incenter hemodialysis patients, we believe that the inclusion of home dialysis patients in the Mineral Metabolism reporting measure is appropriate. Therefore we will finalize our proposal that we will include any home hemodialysis patient for which a facility submits a claim with respect to the reporting month in this measure. We also believe it is important to include transplant patients until they are officially discharged from a facility; regular monitoring can help ensure that a transplant remains effective and that the facility is continuing to provide the best care possible. We believe it is important to monitor serum calcium and serum phosphorus levels in adult and pediatric patients alike because improper bone mineral metabolism management can lead to serious, negative outcomes, including death, in both populations. Although we are aware that specific target values for calcium and phosphorus have not been set for the pediatric population, we still believe that this measure will lead to better observation of mineral metabolism in these patients if one or both of these values are unusually high or low. Additionally, we believe that the inclusion of pediatric patients in this measure is consistent with current guidelines on the frequency of mineral E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67474 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations metabolism testing as reported in KDIGO guidelines chapter 3 ‘‘Diagnosis of CKD–MBD: biochemical abnormalities.’’ Thus, we believe that this measure is appropriate for both adult and pediatric patients. Finally, we do not believe that we must use NQF inclusion criteria for this measure. Although we seek to align our measures and our selection criteria with NQF as much as possible, as we stated in the CY 2011 ESRD PPS Final Rule, we believe it is appropriate, at this time to employ a measure that has not been NQF-endorsed (76 FR 70271 through 72). For the reasons stated above, we are finalizing that to earn 10 points on the Mineral Metabolism reporting measure, facilities must attest in CROWNWeb that they have monitored the serum calcium and serum phosphorus levels on a monthly basis for (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. Comment: Several commenters encouraged us to not adopt a percentage reporting threshold because it does not distinguish between beneficiaries legitimately excluded and those that were merely missed. Other commenters requested that we use both exclusions and a threshold, recognizing that there are some circumstances preventing blood draws that facilities cannot control; one commenter suggested a threshold of 90 percent or an allowance of two patients to ensure that small facilities are not disproportionally affected. Another commenter recommended that we use a threshold of 95 percent. Another commenter stated that requiring 98 percent reporting may make it difficult for patients to travel because dialysis facilities may encourage them otherwise to ensure compliance with the measure. Response: We agree with the commenters who argued that, even with exclusions, there are circumstances in which facilities cannot attest to monitoring the serum calcium and serum phosphorus levels for every patient at least once per month. For example, a facility may wait until later to draw blood from a patient because it believes that patient will be treated by the facility for the entirety of the month, but learns that the patient has been hospitalized unexpectedly for all or part of the applicable month. Therefore, we believe that we should not require an attestation of 100 percent monitoring. Based on data from the CROWNWeb pilot, we believe that facilities report serum calcium and serum phosphorus VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 levels for approximately 96 percent of their patients. Therefore, we will finalize that facilities must attest to monitoring calcium and phosphorus on a monthly basis for at least 96 percent, in total, of (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim.1 We are concerned that small facilities may be disproportionately impacted by this 96 percent reporting threshold because, for example, a facility with 10 patients could miss monitoring for only one patient and fail to meet the threshold. We have previously stated that, to disincentivize cherry picking, we seek to ensure that one patient does not skew a facility’s score. We do, however, seek to ensure the highest quality of care regardless of the facility size. Taking these two competing interests into consideration, we believe that it is appropriate to allow facilities that treat less than 11 Medicare patients during the performance period to attest that they have met the requirements for this measure if they monitored the serum calcium and serum phosphorus levels on a monthly basis for at least all but one of its (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. We believe 11 is the appropriate cut-off because, as we explain below, a case minimum of 11 allows us to include as many facilities as possible while also taking into account privacy and reliability. We believe that one is the appropriate number because, as noted above, although we seek to ensure the highest quality of care regardless of facility size, we also seek to mitigate cherry-picking by ensuring that one patient does not skew a facility’s score. Comment: Many commenters noted that it is impractical for facilities to obtain labs from other providers because other providers are not required to measure these data, do not share data with dialysis facilities, and, even if facilities could obtain these data, they could not be sure that the labs were consistent or reported under the same standards. Response: We recognize that it may be difficult for facilities to coordinate with hospitals and other care providers in order to obtain lab values. Accordingly, we are not mandating facilities to do so. In the proposed rule (77 FR 40969), we 1 We note that the reporting requirements are somewhat different for CROWNWeb. All patients must be reported for CROWNWeb purposes, even if those patients would not be included in the measure for purposes of the ESRD QIP. PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 stated that facilities may obtain lab values from other providers. This proposal was specifically designed to afford facilities more flexibility in acquiring serum calcium and phosphorus values. Facilities are highly encouraged to coordinate with other providers, but this measure does not mandate them to do so. We believe that the commenters’ concerns about inconsistent lab data are mitigated by the requirement that the lab must be accredited. Facilities can use these values for the purpose of monitoring the serum calcium and phosphorus levels of their patients; additionally, collecting these data may encourage providers to engage one another about the patient’s conditions and care. Comment: Several commenters asked for clarification on the following points: (1) Are only Medicare patients included in the denominator, (2) are Medicare Railroad and Medicare Advantage (MA) patients included in the denominator, (3) could CMS give an example of an accurate application of the exclusions and/or threshold, (4) if CMS institutes a threshold, would it be rounded, (5) if a patient is excluded from the measure for attestation purposes, must his or her values still be reported in CROWNWeb, and (6) how does CMS plan on counting the number of treatments for home patients. Response: We will address these questions in turn. First, a facility treating at least 11 Medicare patients during the performance period is required to monitor serum calcium and serum phosphorus on a monthly basis for all (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. These patients include Medicare Advantage and Medicare Railroad beneficiaries. As an example of the application of the exclusions and threshold, assume the following: (i) A facility treats 30 Medicare patients in month X; (ii) patient A is an in-center hemodialysis patient who was treated by the facility seven times during the first two weeks of month X, but the facility failed to obtain a blood draw during this period, and the patient is in the hospital for the next two weeks of month X but the facility monitors the patient’s serum phosphorus and calcium by obtaining these values from the hospital; (iii) patient B and C are both in-center hemodialysis patients who were treated by the facility at least seven times during month X, but the facility fails to monitor the serum calcium and serum phosphorus of these patients during E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 month X; (iv) patient D was visiting the facility and was treated by the facility only 4 times during month X; and (v) the facility monitors the serum calcium and serum phosphorus on a monthly basis for every other (i) in-center Medicare patient who had been treated at least seven times by the facility during month X; and (ii) home hemodialysis Medicare patient for whom the facility submitted a claim during month X. The facility is considered to have monitored the serum calcium and serum phosphorus during month X for every patient except B and C because patient D was only treated four times during the month and the facility obtained the values for patient A from another provider. The facility’s monitoring rate for month X is 27/29, or 93.1 percent (rounded to 93 percent). A facility with 30 patients must attest that it monitored on a monthly basis the serum calcium and serum phosphorus for all (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. Therefore, this facility could not attest that it successfully monitored the serum calcium and serum phosphorus in total for at least 96 percent of its (i) in-center Medicare patients who had been treated at least 7 times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submitted a claim.2 For purposes of this measure, facilities may round up to a whole percentage point when calculating whether they met the 96 percent threshold. Finally, for the reasons discussed above, facilities will be required to monitor the serum calcium and serum phosphorus at least once per month for every home hemodialysis patient for whom it submits a claim regardless of the number of treatments during that month. Comment: Many commenters requested that we revisit various aspects of the PY 2014 ESRD QIP. Response: The PY 2014 ESRD QIP was finalized on November 1, 2011 (76 FR 70228). Although we requested comment regarding the PY 2014 Mineral Metabolism reporting measure in the proposed rule, we did not propose to reconsider any other elements of the PY 2 Note that, for ease, we provided an example for only one month. However, to make the attestation, a facility must monitor for the duration of the performance period the serum calcium and serum phosphorus levels on a monthly basis for all (i) incenter Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 2014 program. Therefore, we consider these comments to be outside the scope of the proposed rule. We refer readers to the 2012 ESRD PPS final rule for more information on the finalized PY 2014 ESRD QIP (76 FR 70228). For the reasons stated above, we finalize that a facility treating at least 11 Medicare patients during the performance period can attest to meeting the requirements of the PY 2014 Mineral Metabolism reporting measure if it monitors on a monthly basis the serum calcium and serum phosphorus for at least 96 percent in total of all (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. We also finalize that a facility treating fewer than 11 Medicare patients during the performance period can attest to meeting the requirements of the PY 2014 Mineral Metabolism reporting measure if it monitors on a monthly basis the serum calcium and serum phosphorus levels for at least all but one of its (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. D. Proposed Measures for the PY 2015 ESRD QIP and Subsequent PYs of the ESRD QIP Similar to our other quality reporting and pay for performance programs, we proposed that once a quality measure is selected and finalized for the ESRD QIP through rulemaking, the measure would continue to remain part of the program for all future years, unless we remove or replace it through rulemaking or notification (if the measure raises potential safety concerns). We believe that this will streamline the rulemaking process, provide continuity of quality measurement, and allow ESRD facilities to plan both quality reporting and quality improvement activities. In general, we anticipate considering quality measures for removal or replacement if: (1) Measure performance among the majority of ESRD facilities is so high and unvarying that meaningful distinctions in improvements or performance can no longer be made; (2) performance or improvement on a measure does not result in better or the intended patient outcomes; (3) a measure no longer aligns with current clinical guidelines or practice; (4) a more broadly applicable (across settings, populations, or conditions) measure for the topic becomes available; (5) a measure that is more proximal in time to desired patient outcomes for the PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 67475 particular topic becomes available; (6) a measure that is more strongly associated with desired patient outcomes for the particular topic becomes available; or (7) collection or public reporting of a measure leads to negative unintended consequences. If there is reason to believe that a measure raises potential safety concerns, we proposed that we would take immediate action to remove the measure from the ESRD QIP and not wait for the annual rulemaking cycle. We proposed that such measures would be promptly removed from the measure set, and we would confirm the removal in the next ESRD QIP rulemaking cycle. ESRD facilities and the public would be immediately notified of our decision to remove a measure that raises potential safety concerns through the usual ESRD program communication channels, including memos, email notification, and web postings. Many of the quality measures used in different Medicare and Medicaid reporting programs are endorsed by NQF. As part of its regular maintenance process for endorsed performance measures, the NQF requires measure stewards to submit annual measure maintenance updates and undergo maintenance of endorsement review every 3 years. Under the measure maintenance process, the measure steward (owner/developer) is responsible for updating and maintaining the currency and relevance of the measure and confirming specification changes to NQF on an annual basis. NQF solicits information from measure stewards for annual reviews in order to review measures for continued endorsement in a specific 3year cycle. Non-NQF-endorsed measures may also go through similar maintenance by their measure stewards; such maintenance includes reviewing and updating measures. Through the measure maintenance process, measures are sometimes updated to incorporate changes that we believe do not substantially change the nature of the measures. Examples could be changes to exclusions to the patient population, changes to definitions, or extension of the measure endorsement to apply to other settings. We believe these types of maintenance changes are distinct from more substantive changes to measures that result in what are considered new or different measures, and that they do not trigger the same agency obligations under the Administrative Procedure Act. We proposed that if a measure that we have adopted for the ESRD QIP is updated in a manner that we consider to not substantially change the nature of the measure, we would use a E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67476 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations subregulatory process to incorporate those updates to the measure specifications that apply to the program. Specifically, we would revise our previously adopted measure specifications to clearly identify the updates made by the NQF or other measure steward and either post the updates directly on the CMS Web site or provide links to where the updates can be found. We would also provide sufficient lead time for facilities to implement the changes where changes to the data collection systems would be necessary. We proposed to continue to use the rulemaking process to adopt changes to a measure that we consider to substantially change the nature of the measure. We stated our belief that this proposal adequately balances our need to incorporate updates to ESRD QIP measures in the most expeditious manner possible, while preserving the public’s ability to comment on updates that so fundamentally change an endorsed measure that it is no longer the same measure that we originally adopted. We invited public comment on this proposal and on our proposal that once a quality measure is adopted, it is retained for use in the subsequent ESRD QIP payment years unless we remove or replace it as discussed above. The comments we received on these proposals and our responses are set forth below. Comment: Commenters requested clarification regarding the removal or replacement criteria for measures, specifically the criteria listed in (2) and (5) and the process for removal or replacement. Commenters suggested that CMS provide illustrative scenarios and consider convening an emergency technical expert panel (TEP) to identify and analyze removal or replacement issues. Commenters also encouraged us to add two criteria for removal or replacement: (i) Negative unintended consequences to the Medicare ESRD system as a whole; and (ii) if data for a measure cannot be collected reliably and accurately or if collecting the data places an undue burden on facilities. One commenter asked that CMS confirm that we will use rulemaking to retire or remove measures from the ESRD QIP. Finally, the commenters stated that some of the measures proposed meet the replacement and removal criteria and suggested that CMS implement only new measures that meet the proposed criteria. Response: We thank those commenters who provided suggestions regarding the criteria and process for measure replacement or removal from the ESRD QIP. We concur with those VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 commenters who argue in favor of implementing measures that meet the proposed criteria. We do not believe that an emergency technical expert panel (TEP) is an appropriate part of the removal process, as we typically convene TEPs in order to obtain expert stakeholder input as part of the measure development process. These TEPs are convened as needed during the measure maintenance cycle and can provide any necessary comment regarding the clinical appropriateness of implemented measures. Emergency TEPs would also be difficult and expensive to employ quickly, such as in response to public comments in support of measure removal. We will consider the inclusion of additional removal criteria such as those suggested by commenters through future rulemaking, but will finalize the proposed criteria to remain consistent with similar criteria implemented for other quality reporting and pay-forperformance programs, such as the Hospital Inpatient Quality Reporting Program and Hospital Outpatient Quality Reporting Program. The second criterion we proposed, the availability of alternative measures with a stronger relationship to patient outcomes, is intended to allow us to implement new measures in the ESRD QIP that have a stronger association with relevant health outcomes. Such measures may better assess the quality of care provided by dialysis facilities and in such cases, we believe it would be appropriate to reflect this in the ESRD QIP. Our use of the fifth criterion is consistent with this principal, and would be applied in those circumstances where we believe existing measures are not as temporally proximal to health outcomes of interest as are newly available measures. We believe that in such cases, it would be appropriate to remove these measures, rather than simply increase the volume of quality measures for which dialysis facilities are responsible under the ESRD QIP. Except for measures that raise potential safety concerns, any decisions to remove or replace measures under the ESRD QIP will be made through the rulemaking process. Each year, we will assess whether any measures should be removed or replaced under the ESRD QIP, and we will make appropriate proposals during the rulemaking cycle. Stakeholders will then have the opportunity to provide feedback regarding the proposed removal or replacement of these measures, and the rationale behind our proposals. Any measure removal will then be finalized as part of the ESRD PPS final rule. We take the suggestion that we implement only new measures that meet PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 the proposed criteria to mean that we should implement only measures that do not meet the proposed removal criteria. We recognize the potential value in taking these criteria into consideration for measure implementation, and believe we do so to the extent practicable. However, we believe that we must take into consideration additional criteria, such as statutory requirements governing the ESRD QIP and emergent public health and safety issues, when determining what measures to propose and finalize for the program. In some cases, it is possible that these issues will take precedence over the criteria proposed for measure removal. Comment: Several commenters urged us to adopt measure specifications and data definitions that are clear, modifying this information through rulemaking alone. Commenters argued that it is only appropriate to use subregulatory processes to aid facilities in interpreting the specifications and definitions, and suggested that we develop a regular and transparent process for collecting and responding to these questions, ideally on a quarterly basis with a schedule set forth in rules. Response: We thank those commenters who provided feedback to our proposal to update NQF-endorsed measures using a subregulatory process. We concur that measure specifications and data definitions should be clear. However, we believe that using a subregulatory process to make certain types of updates to measures is appropriate. The NQF regularly maintains its endorsed measures through annual and triennial reviews, which may result in the NQF making updates to the measures. We believe that it is important to have in place a subregulatory process to incorporate non-substantive updates made by the NQF to the measure specifications we have adopted for the ESRD QIP so that these measures remain up-to-date and clinically relevant. We also recognize that some changes the NQF might make to its endorsed measures are substantive in nature and might not be appropriate for adoption using a subregulatory process. Therefore, we are finalizing a policy under which we will use a subregulatory process to make nonsubstantive updates to NQF-endorsed measures used for the ESRD QIP. With respect to what constitutes substantive versus non-substantive changes, we expect to make this determination on a case-by-case basis. Examples of nonsubstantive changes might include updated diagnosis or procedure codes, medication updates for categories of medications, broadening of age ranges, E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations and exclusions for a measure (such as the addition of a hospice exclusion to the 30-day mortality measures used in the Hospital IQR Program). We believe that non-substantive changes may include updates to NQF-endorsed measures based upon changes to guidelines upon which the measures are based. We will continue to use rulemaking to adopt substantive updates made by the NQF to the endorsed measures we have adopted for the ESRD QIP. Examples of changes that we might consider to be substantive would be those in which the changes are so significant that the measure is no longer the same measure, or when a standard of performance assessed by a measure becomes more stringent (for example, changes in the acceptable timing of medication, procedure/process, or test administration). Another example of a substantive change would be where the NQF has extended its endorsement of a previously endorsed measure to a new setting, such as extending a measure from the inpatient setting to hospice. These policies regarding what is considered substantive versus nonsubstantive would apply to all ESRD QIP measures. We also note that the NQF process incorporates an opportunity for public comment and engagement in the measure maintenance process. We aim to be as transparent as possible in implementing the ESRD QIP. Occasionally, questions arise related to measures that have been adopted. We plan to publish these questions and answers on a publicly available Web site. We will consider standardizing a timeline for submission of and answers to these questions as the program evolves. For the reasons discussed above, we are finalizing our proposal regarding continued use of measures in the ESRD QIP unless we remove or replace them. We are also adopting a policy under which we will use a subregulatory 67477 process to make non-substantive updates to measures, and will use the rulemaking process to make substantive updates to measures. 1. PY 2014 Measures Continuing for PY 2015 and Subsequent PYs We previously finalized six measures including one measure with two measure sub-components (see Table 2 below) for the PY 2014 ESRD QIP (76 FR 70228). We proposed to continue to use five of these measures for the PY 2015 ESRD QIP; however, we also proposed to augment two (NHSN Dialysis Event reporting and Mineral Metabolism reporting) of these five measures used in PY 2014 to continue to promote improvement in the PY 2015 ESRD QIP. We proposed to remove the PY 2014 URR Dialysis Adequacy measure. In addition, we proposed to add three new measures of dialysis adequacy, an anemia management reporting measure, and a hypercalcemia clinical measure (Table 3). TABLE 2—MEASURES ADOPTED FOR THE PY 2014 ESRD QIP NQF No. Measure title N/A ....................................... Percent of Patients with Hemoglobin Greater Than 12 g/dL* N/A ....................................... URR Hemodialysis Adequacy N/A for composite measure Vascular Access Type ........ N/A1 ...................................... NHSN Dialysis Event Reporting*+ Enroll and report 3 months of dialysis event data. Hemodialysis Vascular Access-Maximizing Placement of Arterial Venous Fistula (AVF)* (NQF#0257). Hemodialysis Vascular Access-Minimizing use of Catheters as Chronic Dialysis Access* (NQF#0256). N/A2 ...................................... In-Center Hemodialysis Consumer Assessment of Healthcare Providers and Systems (ICH CAHPS) Survey Reporting* Facilities are required to attest that they administered the ICH CAHPS survey via a third party during the performance period. N/A3 ...................................... Mineral Metabolism Reporting Facilities are required to attest that they have monitored each of their Medicare patient’s phosphorus and calcium levels monthly throughout the performance period.*+ 1 We note that an NQF-endorsed bloodstream infection measure (NQF#1460) exists, and data for this measure is collected as part of dialysis event reporting in NHSN. It is our intention to use this measure in future years of the ESRD QIP. We believe that a reporting measure is a necessary step in reaching our goal to use NQF#1460. 2 We note that a related measure utilizing the results of this survey has been NQF-endorsed (#0258), and it is our intention to use this measure in future years of the ESRD QIP. We believe that a reporting measure is a necessary step in reaching our goal to use NQF#0258. 3 We note that the NQF has previously endorsed phosphorus and calcium monitoring measures (#0261 and #0255) upon which this measure is based. NQF has since withdrawn its endorsement of the calcium measure. * Indicates a measure we are proposing for PY 2015 and future years of the ESRD QIP. + Indicates a measure we are proposing to augment for PY 2015 and future years of the ESRD QIP. TABLE 3—NEW MEASURES PROPOSED FOR THE ESRD QIP PY 2015 AND FUTURE YEARS OF THE PROGRAM tkelley on DSK3SPTVN1PROD with RULES2 NQF No. Measure title N/A .............. 0249 ............ Anemia Management Reporting. Hemodialysis Adequacy Clinical Performance Measure III: Hemodialysis Adequacy—HD Adequacy—Minimum Delivered Hemodialysis Dose. Peritoneal Dialysis Adequacy Clinical Performance Measure III—Delivered Dose of Peritoneal Dialysis Above Minimum. Minimum spKt/V for Pediatric Hemodialysis Patients. Proportion of Patients with Hypercalcemia. 0318 ............ 1423 ............ 1454 ............ VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 E:\FR\FM\09NOR2.SGM 09NOR2 67478 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 We proposed to continue using two measures and one measure topic adopted in PY 2014 for the PY 2015 ESRD QIP and subsequent payment years of the program. For the reasons stated in the CY 2012 ESRD PPS final rule (76 FR 70262, 70264 through 65, 70269), we proposed to continue using: (i) The Hemoglobin Greater than 12 g/ dL measure; (ii) the Vascular Access Type measure topic comprised of two measures, (a) the Hemodialysis Vascular Access-Maximizing Placement of AVF (NQF #0257) measure, and (b) the Hemodialysis Vascular AccessMinimizing use of Catheters as Chronic Dialysis Access (NQF #0256) measure; and (iii) the ICH CAHPS survey reporting measure. The technical specifications for these measures can be found at https://www.dialysisreports.org/ pdf/esrd/public-measures/Anemia Management-HGB-2015-NPRM.pdf; https://www.dialysisreports.org/pdf/esrd/ public-measures/VascularAccessCatheter-2015-NPRM.pdf; https://www. dialysisreports.org/pdf/esrd/publicmeasures/VascularAccess-Fistula-2015NPRM.pdf; and https://www.dialysis reports.org/pdf/esrd/public-measures/ ICHCAHPS-2015-NPRM.pdf. We requested comment on the proposed continuation of these measures. The comments we received on these proposals and our responses are set forth below. We will separately discuss each of the measures and the comments received on these measures. a. Hemoglobin Greater Than 12 g/dL Comment: Many commenters strongly supported the continuation of this measure, specifically because proper anemia management can prevent patients from developing serious, life threatening conditions. Other commenters, however, asked that we consider removing the measure or reducing its weight since high hemoglobin and ESA overuse no longer pose a realistic concern because of the economic incentives of the ESRD PPS payment bundle and the new clinical evidence and FDA-approved label for ESAs (https://www.fda.gov/Drugs/ DrugSafety/ucm259639.htm). One commenter noted that the TREAT study and its own research indicate that large ESA doses, rather than high hemoglobin levels, result in adverse effects. Finally, one commenter believes that the Hemoglobin Greater Than 12 g/dL measure leads to confusion because physicians begin increasing ESA dosage only after hemoglobin levels have fallen far below 12 g/dL, resulting in an increase in patients with low hemoglobin levels. The same commenter noted that it is difficult to VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 incentivize clinics to provide proper ESA dosage with the ESRD PPS payment bundle and the Hemoglobin Greater than 12 g/dL measure combined. Finally, one commenter urged us to individualize anemia management measures. Response: We appreciate feedback relating to the use of the Hemoglobin Greater Than 12 g/dL measure in the ESRD QIP. We recognize that changes in the incentive structure for ESA therapy may have consequences for ESA utilization. We feel, however, that because of the negative clinical outcomes that can result from high hemoglobin levels in the ESRD population, this measure is still important in ensuring that facilities provide quality care. We also appreciate the need to consider dosage and clinical practice when ascertaining the potential adverse effects of ESA therapy. We have begun to develop additional anemia management measures that account for ESA dose. These measures are focused on utilization of ESAs and transfusion avoidance to further incentivize proper care. We intend to propose to adopt one or more of these measures for the ESRD QIP in future rulemaking. Finally, we agree that it is important to individualize care for each beneficiary. We believe that the Hemoglobin Greater than 12 g/dL measure both allows facilities discretion to properly manage hemoglobin levels in each patient and prevents adverse patient outcomes associated with hemoglobin levels that are too high. However, we recognize that greater individualization may be possible and are currently working to develop additional anemia management measures that will enhance this aspect of the ESRD QIP. Comment: Several commenters supported the measure, generally, but asked us to make refinements. One commenter suggested that we measure hemoglobin on a three or 6-month rolling basis rather than monthly because monthly measurement does not provide a comprehensive assessment of the care patients are receiving; studies show that although hemoglobin levels can fluctuate greatly within short periods of time, the mean hemoglobin level can remain in the measure target range. Another commenter stated that, as the measure is currently conceived, facilities cannot act on its results. Because it takes time for hemoglobin levels to change, one commenter recommended excluding patients who have been on ESA therapy for one month or less and patients whose ESA therapy was promptly discontinued PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 once the facility became aware that their hemoglobin levels were over 12 g/dL. Finally, one commenter noted that hemoglobin levels at high altitude facilities are more likely to be greater than 12 g/dL. Response: We thank the commenters who made suggestions regarding the refinement of the Hemoglobin Greater Than 12 g/dL measure. Addressing the concern commenters raised with the high degree of variability in hemoglobin from month to month, the measure rate is calculated using the average hemoglobin of a patient over 4–12 months. For example, if a patient is treated for 4 months, then we use the average of the 4-month period to calculate the measure rate. If a patient is treated for 5 months, we use the average from that 5-month period and so on. Relevant to concerns raised about the exclusion of patients who have just begun ESA therapy, the measure currently excludes new patients (less than 90 days since ESRD onset), and excludes claims for which there is no evidence of ESA use. We believe these exclusions address the commenters’ concerns. Regarding the comment that hemoglobin levels at high altitude facilities are more likely to reach the measure threshold, we do not currently employ risk adjustment for the measure for this or other environmental factors that could conceivably have similar impacts. However, we plan to conduct monitoring and surveillance of our quality measures for issues such as geographical variation. Comment: One commenter argued that using patients’ yearly averages for measures fails to test the actionability of the measures because it is difficult to identify areas of improvement until the end of the year. Instead, the commenter suggests ‘‘per-facility averaging,’’— averaging of end-of-month hemoglobin results for each facility’s patients, each month, then averaging up to 12 of those facility monthly averages, which this commenter argued allows facilities to know their year-to-date numerators and denominators, fostering ongoing quality incentive and process improvement. Response: We appreciate the commenter’s suggestion regarding perfacility averaging and all feedback to improve the usefulness of our quality measures to facilities. However, we believe that averaging hemoglobin over multiple patients in a facility would be inconsistent with medical guidance, which deals with patient specific situations. We believe that facilities should strive to provide the best care to each patient treated by the facility. Comment: One commenter requested confirmation that patients who are not E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations on ESA therapy are not included in the Hemoglobin Greater than 12 g/dL measure. Response: The measure rate is calculated using claims that include a hemoglobin level and ESA dosing information. Comment: Several commenters requested that we include a measure in the ESRD QIP that establishes a floor for hemoglobin, specifically noting that, because of the bundle, there may be a perceived financial incentive to underutilize ESAs. They argued that studies have shown that as hemoglobin drops below 10, mortality and hospitalization increase, and that hemoglobin levels affect a patient’s quality of life (both empirically and anecdotally). Some commenters stated that we should reinstate the Hemoglobin Greater than 10 g/dL measure that we used in the PY 2012 ESRD QIP, arguing that the measure is reliable and is consistent with the FDA-approved labeling which recognizes the importance of transfusion avoidance and recommends that initiation of ESA therapy be considered when the hemoglobin level falls below 10 g/dL. One commenter argued that patients should be allowed to make decisions about their quality of life and safety, even if that means keeping the hemoglobin level higher than recommended. Other commenters noted that patients with hemoglobin less than 10 g/dL are increasing, as are the rate of transfusions, and increased transfusions can decrease the chances of a successful transplant; in turn, failed transfusions can increase the cost of care since patients with transplants cost less than those on dialysis. One commenter stated that we should specifically consider reinstituting a hemoglobin floor if the United States Renal Data Service information shows that transfusion rates have risen significantly. Other commenters suggested that even if we do not adopt a measure for low hemoglobin, we report hemoglobin levels, transfusion rates, and ESA dosage on DFC and include the Hemoglobin Less than 10 g/dL measure on DFC. Finally, other commenters urged us to continue to monitor and support metrics such as transfusions, quality of life, reactivity to antibodies preventing transfusions, and underutilization of ESAs. Response: We thank the commenters for bringing to us their concerns about the ESRD PPS payment bundle potentially increasing the risk for underutilization of ESA therapy. As noted in the CY 2012 ESRD PPS final rule (76 FR 70257), we could not at the time identify a specific hemoglobin VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 lower bound level that has been proven safe for all patients treated with ESAs, and the state of evidence supporting such a lower bound remains weak. For these reasons, we believe that the rationale for removing the Hemoglobin Less Than 10 g/dL measure from the ESRD QIP measure set remains valid. However, we recognize that the potential for ESA underutilization is an important issue. As noted in the CY 2012 ESRD PPS final rule (76 FR 70257), we will continue to monitor the Medicare ESRD population for evidence of underutilization of ESAs, a rise in blood transfusions, and the replacement of ESA therapy with transfusions. Although we are no longer including the Hemoglobin Less than 10 g/dL measure in the ESRD QIP (and will no longer be publicly reporting it on DFC beginning January 2013), the results will be available via a downloadable file for facilities to provide for continued monitoring of the measure. Finally, we continue to work with stakeholders through a consensus-based measure development process to produce measures capable of addressing ESA underutilization and blood transfusions, while remaining consistent with the existing relevant guidelines and evidence base. We also appreciate comments encouraging us to move toward implementing quality of life and other patient-centered measures that address anemia management. These measurement domains are important to us and we plan to develop appropriate measures to be implemented in the ESRD QIP during future rulemaking. For the reasons stated above, we will continue to use the Hemoglobin Greater than 12 g/dL measure for PY 2015 and future years of the ESRD QIP. The technical specifications for this finalized measure can be found at https://www.dialysisreports.org/pdf/esrd/ public-measures/AnemiaManagementHGB-2015-FR.pdf b. Vascular Access Type (VAT) Measure Topic Comment: Many commenters strongly supported our continued inclusion of the VAT measure topic in the PY 2015 ESRD QIP. Many commenters, however, also expressed concern that the composite measure over-emphasizes fistulae, underemphasizes grafts, and, therefore, promotes inappropriate care in some cases. Commenters noted that fistulae are not suitable for some patients, fistulae take time to mature, and grafts are sometimes the most clinically appropriate. Several commenters asked us to decrease the emphasis on fistulae by developing a PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 67479 graft measure and, in the meantime, weight the catheter measure at 2⁄3 of the VAT measure topic and the fistula measure at 1⁄3 of the VAT measure topic. Other commenters urged us to take a ‘‘fistula first, catheter last’’ approach that would award some points for patients with grafts. Commenters were also concerned that the fistula standards are too stringent and could cause unintended consequences such as ‘‘cherry-picking’’ patients who are not eligible for a fistula. Commenters suggested that we exclude or allow doctors to exclude certain patients from the measure’s denominator providing for more individualized care, noting that studies show that facilities are unlikely to ‘‘game’’ such an exception. Response: As discussed in the CY 2011 ESRD PPS Final Rule, we continue to believe that the VAT measure topic and its respective weights incentivize the best care for ESRD beneficiaries (76 FR 70265, 70275). Catheters are undesirable due to their high rate of complications, such as infections, and we discourage their use through the catheter measure. We believe that the preferred type of vascular access is an AV fistula due to lower rates of complications, which we promote through the fistula measure. Although grafts do decrease the risk of infections and complications when compared to catheters, grafts do not decrease these risks as much as fistulae. We, therefore, do not believe that grafts are either beneficial enough to be specifically rewarded or harmful enough to be specifically penalized. Furthermore, we do not believe it is in the best interest of patients to weight the fistula measure more than the catheter measure because our primary goal is to promote fistula use; we believe that both measures are equally important in promoting the best clinical practices with respect to VAT. We recognize that the catheter measure could incentivize ‘‘cherrypicking’’ of patients, leading to access to care issues for patients with catheters. We are actively monitoring access to care and other potential issues associated with ‘‘cherry-picking,’’ and it is our intent to engage the community as we monitor these issues. Comment: One commenter encouraged us to promote fistulae in pediatric patients as well as adults. Response: We thank the commenter who encouraged the promotion of fistulae use in pediatric patients. The NQF-endorsed fistula measure excluded pediatric patients. Children on chronic dialysis have a fundamentally different psychosocial profile than adults. Fistula use, with its attendant frequent painful needle sticks are less commonly used in E:\FR\FM\09NOR2.SGM 09NOR2 67480 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 children than adults. In addition, there are technical issues that make fistula creation more difficult in children. We will continue to investigate whether there are measures in existence or that could be developed for the purpose of appropriately addressing vascular access among pediatric patients and may propose to adopt one or more of these measures in future rulemaking. For the reasons listed above, we will continue to use the VAT measure topic for PY 2015 and future years of the ESRD QIP. The technical specifications for the finalized measures in this measure topic can be found at https:// www.dialysisreports.org/pdf/esrd/ public-measures/VascularAccessCatheter-2015-FR.pdf and https:// www.dialysisreports.org/pdf/esrd/ public-measures/VascularAccessFistula-2015-FR.pdf. c. In-center Hemodialysis Consumer Assessment of Healthcare Providers and Systems (ICH CAHPS) Comment: Many commenters supported the measure in its entirety. Many commenters supported monitoring patients’ experiences, but believe the ICH CAHPS survey, with 57 questions, is too burdensome and lengthy for beneficiaries to complete. These commenters requested that we minimize this burden and suggested that the ICH CAHPS survey be parsed into three parts, with each patient receiving one of these parts and a group of core questions. Commenters also suggested that CMS allow facilities to give patients the survey and allow patients to return surveys via a ‘‘dropbox’’ at the facility or by mail to the third-party administrator; commenters believe this approach will improve the response rate as patients are less likely to ignore the survey and one commenter noted that, without such an approach, the experiences of homeless patients will not be recorded. Response: As we noted in the 2012 ESRD PPS Final Rule, we continue to believe that assessing the experiences of patients is vital to quality care (76 FR 70269 through 70). Patient surveys can, and should, draw a facility’s attention to issues that can only be raised by those receiving care. Although commenters may consider the survey to be burdensome to patients, the CAHPS tool went through extensive testing during development including focus groups and one-on-one patient sessions which assessed this burden and created specifications accordingly. Furthermore, we believe that concerns about patient burden can be at least partially mitigated without decreasing the number of questions on the survey or VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 how the survey is administered. For example, as the specifications indicate,3 patients may take a break during the administration of the survey or take the survey in multiple sittings if they feel that the number of questions is too great to answer at one time. Finally, we do not believe that facilities should be permitted to give patients the survey at the facility and allow patients to submit these surveys via a ‘‘drop box’’ or any other method. We believe that patients are much more likely to truthfully respond to the surveys if they are perceived to be in no way connected to the facility; providing the surveys at the facility and allowing patients to return them by any means may lead to the patient to believe that his or her answers can be traced to him or her, and this thought may bias the surveys. Thus, we believe that this survey as it is currently specified is the best method available at this time to measure patient experience. We thank commenters for bringing to our attention the hardships homeless patients may face in accessing the survey. Although we believe that the survey most accurately represents patients’ experiences of care at this time, we will continue to evaluate how we can accurately capture all patient populations, including the homeless. Comment: One commenter suggested that CMS define a threshold for patients at which a facility would not need to administer the survey. Response: We recognize that there are many small dialysis facilities for which hiring a third-party administrator to fulfill the ICH CAHPS survey requirements is impractical or prohibitively costly. Therefore, beginning PY 2015, we will exempt any facilities that have treated (whether that patient was visiting the facility or otherwise) 10 patients during the performance period or fewer that are qualified to take the survey. Patients are qualified to take the survey if they are adult, in-center hemodialysis patients. We believe that 11 patients (regardless of the number of times these patients were treated) is an appropriate threshold for applying the measure because it is consistent with the policy that we are finalizing for all measures in which we recognize that facilities with 10 or fewer patients in the denominator of a measure should be exempt from that measure. Although we are not requiring facilities to submit actual ICH CAHPS data at this time, we are considering collecting it in the future. We also intend to use the information collected from reporting measures for 3 See https://www.cahps.ahrq.gov/content/ products/ICH/PROD_ICH_Intro.asp?p=1022&s=222. PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 purposes of scoring clinical measures based on the same data in subsequent payment years and want to adopt a minimum reporting threshold that we can apply to all measures. For these reasons, we are finalizing that facilities must attest to administering the ICH CAHPS survey if they treat during the performance period at least 11 adult, incenter hemodialysis patients. We also finalize that we will consider a facility to have met the 11 patient threshold unless it affirmatively attests in CROWNWeb that it treated 10 or fewer in-center, adult hemodialysis patients during the performance period. If a facility does not affirmatively attest to having treated 10 or fewer in-center, adult hemodialysis patients during the performance period, we will score it on this measure. Additionally, we are applying this policy to the NHSN Dialysis Event reporting measure, discussed below, because we intend to use the data from that measure to adopt a clinical measure in subsequent payment years. Unlike the ICH CAHPS measure, the NHSN measure applies to both adult and pediatric in-center hemodialysis patients. Therefore, we finalize that a facility must treat at least 11 in-center hemodialysis patients (whether adult or pediatric) during the performance period to be scored on the NHSN Dialysis Event reporting measure. To be considered a facility which has treated 10 or fewer in-center hemodialysis patients (whether adult or pediatric) during the performance period, the facility must make an attestation in CROWNWeb to this effect. If a facility does not make this attestation, we will score it on this measure. Comment: One commenter expressed concern that patients often do not answer the surveys honestly for fear of retaliation and the validity of the survey should be questioned. Response: We recognize that patients may feel pressure to answer questions in the survey favorably. We believe, however, this concern is mitigated because under the measure specifications, a third-party must administer the survey. These third-party administrators are not associated with facilities and do not report patientspecific data to the facilities. Therefore, the facility would have no knowledge of patient’s answers. Comment: Several commenters expressed concern about CROWNWeb’s ability to provide an adequate reporting system for this measure. Response: CROWNWeb was launched nationally in June of 2012, and we recognize that some facilities may still be familiarizing themselves with the E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations new system. As discussed, facilities are not required to report ICH CAHPS data to CROWNWeb or any other system; they are only required to make an attestation that they administered the surveys according to the specifications. The attestations for the ICH CAHPS measure for PY 2015 are not due until the end of January 2014. We have no reason to believe that the attestation function will not be ready by the end of January 2013, the PY 2014 deadline. We believe that by this time, facilities’ transition period should have ended, and facilities will be able to successfully submit their attestations. Therefore, because the attestations should be ready in CROWNWeb by January 2013 for the PY 2014 ESRD QIP, they should also be available in CROWNWeb for the PY 2015 program. Comment: Many commenters noted that the ICH CAHPS measure’s thirdparty administration requirement imposes significant costs on facilities and that facilities should be allowed to include these costs in their cost reports. Response: Facilities may report allowable operating expenses in their Medicare cost reports. We believe that it is consistent with this payment policy for facilities to include the ICH CAHPS costs on their cost reports because they are allowable operating expenses. Comment: Several commenters urged us to adopt the ICH CAHPS measure as an outcome measure rather than a reporting measure. One commenter believes that, if we cannot implement the measure as an outcome measure for PY 2015, we should do the following in order to facilitate our adoption of an ICH CAHPS outcome measure as soon as possible: (i) Develop a standardized protocol and quality assurance guidelines for survey administration that are more detailed than the AHRQ requirements; (ii) contract with an experienced organization that can provide oversight for the ICH CAHPS program; and (iii) approve survey vendors. Another commenter argued that the survey should be limited to questions about the facility rather than the physician. Response: Currently, we are not able to include the ICH CAHPS survey as an outcome measure because we do not possess data from which we can set performance standards. We believe that it is important to adopt an outcomebased measure as soon as possible, and we are diligently working to ensure that it is a part of the program as soon as possible. To that end, we will be working to set up a survey vendor approval program; we believe that the specifications are appropriately detailed, but we will continue to assess VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 whether they should be refined before we propose to adopt this survey as an outcome-based measure. Regarding the survey questions, the majority of the survey is limited to questions about the facility. Only seven of the 58 core questions are about the patients’ nephrologists. There are 22 questions about the staff at the facility (not including the doctor), three about the center, and nine about treatment; the remaining questions capture demographic information. The continuous care received by dialysis patients makes them keenly aware of their primary doctors’ involvement. To the extent that the questions are about the physician, we believe that they are appropriate because they are targeted at the nephrologist who is most involved in the patient’s dialysis care. Comment: Commenters requested that we develop new measures of patient’s experiences. One commenter argued that a measure should be developed that evaluates a patient’s experience during each dialysis session because each experience can vary, and further argued that this type of evaluation would allow facilities to better assess why patients do not stay for entire treatments or miss treatments. Many commenters requested that we develop a CAHPS measure for home hemodialysis and peritoneal dialysis patients. Commenters also suggested that we make the responses to the surveys public. Response: We remain dedicated to developing and adopting measures of patient experiences of care in the ESRD QIP, specifically those patients who are treated at home. At this time we cannot operationally make the responses to the ICH CAHPS survey public because, as noted above, we do not possess the data; however, we will consider making these surveys public in future years if facilities are required to submit their ICH CAHPS data to CMS. For the reasons discussed above, we are finalizing the ICH CAHPS reporting measure for use in the PY 2015 ESRD QIP and future years of the program. We are also finalizing that the measure applies to facilities that treat a minimum of 11 in-center, adult hemodialysis patients during the performance period. We will consider a facility to have met the 11 in-center, adult hemodialysis patient threshold unless it affirmatively attests in CROWNWeb to having treated 10 or fewer adult, in-center hemodialysis patients during the performance period. If a facility does not make the attestation, we will score it accordingly. The technical specifications for this finalized measure can be found at https://www.dialysisreports.org/pdf/esrd/ PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 67481 public-measures/ICHCAHPS-2015FR.pdf. 2. Expansion of Two PY 2014 Measures for PY 2015 and Subsequent PYs As stated earlier, we believe it is important to continue using measures from one payment year to the next payment year of the program to encourage continued improvements in patient care. Therefore, we proposed to expand the requirements under two reporting measures that we adopted for the PY 2014 ESRD QIP. These proposed expanded requirements would apply to the measures for PY 2015 and subsequent payment years of the ESRD QIP. a. Expanded National Healthcare Safety Network (NHSN) Dialysis Event Reporting Measure Hospital Acquired Infections (HAIs) are a leading cause of preventable mortality and morbidity across different settings in the healthcare sector, including dialysis facilities. In a national effort to reduce HAIs outcome, HHS agencies, including CMS and the Centers for Disease Control and Prevention (CDC) are working together to encourage facilities to report to the NHSN as a way to track and facilitate action intended to reduce HAIs. The NHSN is currently a secure, internetbased surveillance system that integrates patient and healthcare personnel safety surveillance systems managed by the Division of Healthcare Quality Promotion at the CDC. NHSN has been operational since 2006 and tracks data from acute care hospitals, long-term care hospitals, psychiatric hospitals, rehabilitation hospitals, outpatient dialysis centers, ambulatory surgery centers, and long term care facilities. We believe that reporting dialysis events to the NHSN by all facilities supports national goals for patient safety, particularly goals for the reduction of HAIs. For the reasons stated above, we proposed to retain the NHSN Dialysis Event reporting measure that we adopted for the PY 2014 ESRD QIP (76 FR 70268 through 70269), but with an expanded reporting period. For PY 2014, ESRD facilities were required to: (i) Enroll in the NHSN and complete any training required by the CDC related to reporting dialysis events via the NHSN system; and (ii) submit three or more consecutive months of dialysis event data to the NHSN. For the PY 2015 ESRD QIP and future payment years, we proposed to retain the NHSN measure and expand the reporting period to a full 12 months of dialysis event data. Although we expect most E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67482 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations facilities to have enrolled and trained in the NHSN dialysis event system by the end of CY 2012, we proposed that facilities that have not done so by January 1, 2013 or facilities that receive a CMS certification number (CCN) during 2013 must enroll and complete this training before reporting the data in order to fulfill the requirements of this reporting measure. The information reported to NHSN would be provided by the CDC to CMS for use in the ESRD QIP. As discussed in more detail below, we proposed that the performance period for the PY 2015 ESRD QIP would be CY 2013. We proposed that facilities must report dialysis event data monthly to the NHSN for this measure. We also proposed that facilities be granted a ‘‘grace period’’ of one month to report these data. For further information regarding the NHSN’s dialysis event reporting protocols, please see https:// www.cdc.gov/nhsn/psc_da_de.html. This link provides general information and links to more detailed, specialized information. We note that this proposed measure only applies to facilities treating patients in-center. For purposes of the NHSN Dialysis Event reporting measure, we determine whether a facility treats patients in-center by referencing the facility’s information in CMS data sources (that is, SIMS and CROWNWeb). Facilities report the types of patients that they serve in these data sources. If a facility lists in-center services, we proposed that the facility would be required to comply with the NHSN dialysis event reporting measure. Section 1881(h)(2)(B)(i) of the Act requires that, unless the exception set forth in section 1881(h)(2)(B)(ii) of the Act applies, the measures specified for the ESRD QIP under section 1881(h)(2)(A)(iii) of the Act must have been endorsed by the entity with a contract under section 1890(a) of the Act (which is currently NQF). Under the exception set forth in 1881(h)(2)(B)(ii) of the Act, in the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under section 1890(a) of the Act, the Secretary may specify a measure that is not so endorsed so long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. An NQF-endorsed bloodstream infection measure (NQF#1460) exists and is collected by the CDC as part of dialysis event reporting in NHSN. This measure assesses the number of hemodialysis patients with positive VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 blood cultures. This measure differs from the dialysis event reporting measure that we adopted for the PY 2014 ESRD QIP and proposed to expand beginning with the PY 2015 program because it evaluates the number of hemodialysis outpatients with positive blood cultures over a specified time period. By contrast, the NHSN Dialysis Event reporting measure that we proposed assesses facilities based on whether they enroll and report dialysis event data to the NHSN, not based on what the data reported are. We intend to propose to adopt NQF #1460 once facilities have reported enough data to enable us to compute performance standards, achievement thresholds, improvement thresholds, and benchmarks for the measure. For the reasons stated in the CY 2012 ESRD PPS final rule (76 FR 70268 through 69), we proposed to retain the measure and expand the reporting period for PY 2015 and future payment years of the program. We requested comment on this proposal, and noted that the technical specifications for this measure are located at https://www. dialysisreports.org/pdf/esrd/publicmeasures/NHSNDialysisReporting2015-NPRM.pdf. The comments we received on these proposals and our responses are set forth below. Comment: Many commenters supported the expansion of the NHSN Dialysis Event reporting measure, stating that monitoring the number of patients with access-related infections for an entire year will help the community better understand ways to reduce infection rates. Some commenters expressed concern with certain aspects of the measure. Several commenters expressed their concern about the burden of this measure, specifically highlighting the burden of manual data-entry and the staff hours demanded for this entry and oversight; one commenter noted that NQF criteria related to feasibility favor electronic collection and data collected during the course of care. Commenters argued further that manual data entry affects reliability, further affecting the baseline calculations for future measures. Many commenters suggested a batch download system. Some commenters noted that the CDC intends to make a Clinical Document Architecture (CDA) system available for batch entries, but expressed concern that the CDC CDA system will be available for individual facilities only (rather than for an entire corporation); others stated that they did not believe the CDA system will be ready for data entry by the end of CY 2012. Commenters also stated that the PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 NHSN system is yet another Web site to which ESRD facilities must report, reducing time staff can spend caring for patients. Finally, some commenters support the expansion of the measure, but only if the required monthly reporting is at the facility rather than the patient level. Response: We do not believe that this measure is unnecessarily burdensome. Monitoring vascular access infections following uniform definitions and utilizing the comparative rate data to evaluate and improve performance is part of providing good patient care. Although enrollment and training can be time-consuming, approximately 90 percent of all hemodialysis centers have already enrolled in NHSN. Furthermore, we believe that any burden a facility may face is outweighed by the importance of this measure since infections can often lead to serious complications, including death. Further to help decrease the burden, the CDC began allowing facilities to report to NHSN through imported CDA files on September 14, 2012. Using this function, any individual with Administrative Rights for a facility will be able to import that facility’s specific CDA files that meet NHSN’s formatting requirements. This includes large dialysis organizations that have given Administrative Rights to a single person for purposes of the entire (or some portion of) the organization. However, at this time each facility’s files must be submitted separately. Because we are aware that large dialysis organizations (as well as many other dialysis companies) have given Administrative Rights to a single representative of the organization, we recognize that they will eventually be able to submit CDA data for a number of individual facilities, from a single central location, all through a single batch submission process. This batch data submission process is expected to be available in August 2013. Finally, the monthly reporting required by the NHSN is at the facility level. Facility-level review of the data in NHSN is expected, whether the data are reported by facility staff or by a corporate representative. We believe that facilities have a direct role in preventing infections by collecting the NHSN Dialysis Event data, actively assessing their data, and regularly feeding back this information to clinical staff to improve practices. Comment: One commenter argued that the NHSN Dialysis Event reporting measure will not improve care because the system is not efficient and is not correlated to CROWNWeb. Many commenters urged us to synchronize NHSN and CROWNWeb data E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations requirements. Commenters also requested that CMS continue to use the same reporting schedule for PY 2015 as it will for PY 2014, allowing facilities to report quarterly with all data being required by March 31, 2014. Commenters noted that quarterly reporting is important because this timeframe will allow facilities ample time to submit data correctly, stating that some infections take more than a month to identify and capture. One commenter recommended that we modify the requirements of this provision to allow a facility to report a full 12 months of data by January 31, 2014. Other commenters urged us to ensure that the NHSN Dialysis Event reporting measure allows the NHSN system to remain a surveillance system. Response: We disagree with the comment that the NHSN Dialysis Event reporting measure will not improve care. Requiring facilities to report through the NHSN will allow us to monitor and better understand the causes of infections. Additionally, as we stated in the proposed rule (77 FR 40971 through 72), we intend to use the information gathered by this reporting measure to adopt a clinical measure in future years; this measure will encourage facilities to decrease the circumstances which lead to infections. Although we intend to use data from the NHSN to adopt a clinical measure, we will work with the CDC to ensure that the ESRD QIP does not unnecessarily limit the surveillance purposes of the NHSN system. Commenters are correct in that the NHSN Dialysis Event reporting measure data is not correlated to CROWNWeb. We recognize that CROWNWeb and the NHSN are two distinct systems which require reporting. At this time, we do not require infection reporting in CROWNWeb. We believe that it is more beneficial for both facilities and CMS to require infection reporting through the NHSN. The NHSN is a well-established secure, internet-based surveillance system that integrates patient and healthcare personnel safety surveillance systems managed by the Division of Healthcare Quality Promotion at the CDC; it is used by many other types of providers to report infections. We believe that NHSN’s history and widespread surveillance make it the best mode of reporting dialysis events at this time. We do not agree with commenters’ suggestions to extend the reporting timeline for the PY 2015 NHSN Dialysis Event reporting measure. The NHSN system recommends monthly reporting, and we believe it is important to adhere to the NHSN requirements as much as VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 possible. However, to maximize data completeness and accuracy, facilities will be allowed to add to and modify the reported data until the performance period reporting deadline. Data for the entire performance period must be reported by April 15, 2014. We chose April 15, 2014 because this date allows facilities a full quarter after the performance period to review their data for completeness and accuracy. After consulting with the CDC, we believe that such a timeframe will maximize the reliability of the data and allow facilities to report any infections that developed during the performance period but that are identified after the performance period has ended. Comment: One commenter is concerned with the proposed expansion of this measure if NHSN data is not validated or audited for completeness. This commenter expressed specific concern that there could be surveillance bias in interpreting submitted data. Response: We recognize that bias exists because some facilities may be more likely to identify and report dialysis events than others. Varying degrees of completeness of the data could lead to inaccurate comparisons between facilities. The CDC and CMS are beginning to formulate a strategy to validate data for purposes of the ESRD QIP; we are committed to rigorous validation to identify inaccuracies and ensure reliability of the data. Comment: One commenter suggested that CDC standardize and clarify data definitions to ensure ‘‘apples-to-apples’’ comparisons and allow corporate oversight of data entered into the system for verification and reliability purposes. Another commenter stated that it does not support the adoption of a future NHSN Dialysis Event clinical measure because facility policies and procedures and physician practices vary widely with respect to the circumstances under which blood cultures are obtained and results are reported; this commenter requested that reporting be standardized before the measure is adopted. Response: The CDC develops protocols, definitions, and criteria for the purposes of standardizing reporting, and expects that all NHSN users strictly adhere to the protocol guidance for data that are reported into NHSN. The dialysis event surveillance reporting protocol is available on CDC’s NHSN Web site and includes data definitions (https://www.cdc.gov/nhsn/PDFs/ pscManual/ 8pscDialysisEventcurrent.pdf). Users may contact the NHSN help desk (NHSN@cdc.gov) for clarifications to these data definitions. We will continue to work with the CDC to monitor these PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 67483 concerns while we consider adopting a measure based on NHSN data for future years of the program. Comment: One commenter requested clarification regarding whether facilities are required to report infections occurring in the dialysis unit only, exempting the facilities for infections that result from care in other environments. Response: The measure specifications, which are available at (https:// www.cdc.gov/nhsn/PDFs/pscManual/ 8pscDialysisEventcurrent.pdf), provide that positive blood cultures occurring within one calendar day after a hospital admission must also be reported. For further clarification on reportable event definitions and considerations surrounding attribution, please contact the NHSN help desk (NHSN@cdc.gov). Comment: One commenter asked us to confirm that, as long as the census data is reported every month, the facility may attest to having met the requirements for the NHSN measure. Response: For the reasons discussed above, we finalize that a facility may attest for purposes of being exempt from reporting for the NHSN dialysis event measure if it treats fewer than 11 incenter hemodialysis patients during the performance period. If a facility treats 11 or more in-center hemodialysis patients, we will score the facility based on whether it reported data to the NHSN. Comment: One commenter urged us to develop a measure which targets the cause of the infections. Another commenter suggested that CMS consider adding NHSN dialysis specific indicators, perhaps in stages, such as local access site infection, access-related bloodstream infection, and vascular access infection to the NHSN surveillance data. Response: We thank commenters for these suggestions. We acknowledge that preventing and monitoring infections is crucial to patient care. We will continue to work with the dialysis community to include robust infection measures in the ESRD QIP. Comment: Many commenters support our proposed transition of the NHSN Dialysis Event reporting measure to a clinical measure using the NQFendorsed measure #1460. Some commenters urged us to adopt the clinical measure in PY 2015. Other commenters, however, suggested that we allow sufficient time to ensure that NHSN data can be reported without additional burden to providers. One commenter suggested that, once the measure is adopted as a clinical measure, we interpret the rate of positive blood cultures against the E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67484 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations facility’s rate of empiric antibiotic treatment, since some facilities treat empirically rather than through taking blood cultures. Response: We thank commenters for supporting our proposal to adopt the NQF-endorsed infection measure for future years of the program. We are unable to adopt the NQF-endorsed clinical measure for PY 2015 because we have not yet gathered data on which we can base performance standards. For purposes of the ESRD QIP, facilities began reporting to the NHSN during 2012; to receive full points on the measure for PY 2014, facilities need only to report three months of data. We do not believe it is appropriate to base performance standards on three months of data for purposes of an infection measure because infections can vary by season. We believe that using a 12month period for setting these standards will prove more accurate. Because we are requiring 12 months of data for the PY 2015 ESRD QIP, we believe we can use this information to adopt standards for a clinical measure in future years. Additionally, we agree with the commenters who believe that it may be necessary for facilities to become more familiar with the NHSN system before we adopt a clinical measure. We thank the commenter who suggested that we interpret the rate of positive blood cultures against the facility’s rate of empiric antibiotic treatments to account for facilities that might treat patients empirically for infection without drawing cultures. The NHSN collects information on IV antimicrobial starts, in part, for this reason. Providers are expected to adhere to standards of clinical practice, which include obtaining blood cultures prior to antibiotic administration for suspected bloodstream infections. Comment: One commenter stated its support for the adoption of an MRSA standardized infection rate clinical measure. Response: We thank the commenter for providing this suggestion and will take it into consideration in future measure development and rulemaking. For the reasons stated above, we finalize the NHSN Dialysis Event reporting measure as proposed except for the following; a facility must treat at least 11 in-center hemodialysis patients (both adult and pediatric) during the performance period to be scored on the NHSN Dialysis Event reporting measure, as noted above. To be considered a facility which has treated 10 or fewer incenter hemodialysis patients during the performance period, the facility must make an attestation in CROWNWeb to this effect. If a facility does not make VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 this attestation, we will score it accordingly. Additionally, we recommend that facilities report monthly to the NHSN. Data for the entire performance period must be reported by April 15, 2014. The technical specifications for this finalized measure can be found at https://www.dialysisreports.org/pdf/esrd/ public-measures/ NHSNDialysisReporting-2015-FR.pdf. b. Expanded Mineral Metabolism Reporting Measure Undertreatment of bone mineral metabolism disease can cause severe consequences for ESRD patients. For PY 2014, it was not yet feasible for us to adopt a clinical measure evaluating facilities based on their patients’ bone mineral metabolism rates because facilities did not report serum phosphorus and serum calcium values during the baseline and performance periods that we finalized with respect to that year. Instead, for PY 2014, we finalized a measure assessing whether facilities routinely monitored the serum calcium and serum phosphorus levels in their patients. For PY 2015, we proposed to expand this measure by requiring facilities to report a serum calcium and serum phosphorus level for each qualifying patient each month according to the requirements in CROWNWeb. Facilities would be required to enter these values into CROWNWeb on a monthly basis. Facilities would be granted a ‘‘grace period’’ of one month to enter the data. For example, we would require a facility to report serum calcium and serum phosphorus data for January 2013 on or before February 28, 2013. The final month of data from the performance period would be reported on or before January 31, 2014. We do not intend for this measure to encourage unnecessary testing or unduly burden a facility. Consequently, for purposes of scoring the measure, we considered proposing to require facilities to report the required information for less than 100 percent of their patients. Specifically, we considered lowering the threshold to reporting 98 percent of patients for a month in order to receive credit for that month. We chose 98 percent in order to encourage improvement, and to ensure that we do not undermine the current level of high-reporting (based on the CROWNWeb pilot data). We recognize that 100 percent might not be appropriate due to some individual cases that may not fit specified criteria. We ultimately proposed that a facility should be required to take and report these values for every patient at least PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 once per month so that each beneficiary receives the highest standard of care. We noted, however, that there are circumstances beyond a facility’s control wherein it may not be able to draw a sample for this patient. Therefore, we did not propose that the facility itself must draw the serum phosphorus and serum calcium levels. If, for example, a patient is hospitalized or transient during a claim month, we proposed that the facility may report the serum calcium and serum phosphorus readings for the patient for a month if a patient has labs drawn by another provider/facility and those labs are evaluated by an accredited laboratory (a laboratory that is accredited by, for example, the Joint Commission, the College of American Pathologists, the AAB (American Association of Bioanalysts), or State or Federal agency), and the dialysis facility obtains the serum calcium and serum phosphorus readings. Additionally, we proposed to only consider a patient qualified for this measure (i) if the patient is alive at the end of the month; (ii) if the patient is treated in-center, that patient was treated at that facility at least twice during the claim month; and (iii) if the patient receives dialysis at home, a claim is submitted for that patient. We stated our belief that that these proposals will provide more flexibility for facilities and will also discourage facilities from drawing blood, even when not necessary, for fear that the patient will fail to come to the facility again during that month. We requested comment on these proposals. We also requested comment on whether facilities should only have to report data for 98 percent of their patients. Section 1881(h)(2)(B)(i) of the Act requires that, unless the exception set forth in section 1881(h)(2)(B)(ii) applies, the measures specified for the ESRD QIP under section 1881(h)(2)(A)(iii) of the Act must have been endorsed by the entity with a contract under section 1890(a) of the Act (which is currently NQF). Under the exception set forth in 1881(h)(2)(B)(ii) of the Act, in the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under section 1890(a) of the Act, the Secretary may specify a measure that is not so endorsed so long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. An NQF-endorsed measure assessing hypercalcemia exists (NQF #1454) and we proposed to adopt this measure for the PY 2015 ESRD QIP and subsequent E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations payment years, as further discussed below. The NQF-endorsed hypercalcemia measure, however, does not score facilities based only on whether or not that facility reported serum calcium values. The Mineral Metabolism reporting measure, unlike the Hypercalcemia measure, would assess only whether facilities report serum calcium and serum phosphorus values. It would not score facilities based on the actual values that they report. We stated our belief that it is important to continue to encourage reporting independent of a measure that scores based on the actual values reported because we need such values to monitor aspects of bone mineral metabolism, for example phosphorus management, independent of hypercalcemia; we noted that this information will allow us to develop comprehensive bone mineral metabolism measures for use in future years of the ESRD QIP. In the CY 2012 ESRD PPS final rule, we discussed the basis for the Mineral Metabolism reporting measure (76 FR 70270 through 71). We stated that ‘‘the NQF has previously endorsed phosphorus and calcium monitoring measures (NQF #0261 and NQF #0255) and, in 2008, we adopted serum calcium and serum phosphorus monitoring as Clinical Performance Measures (https:// www.dialysisreports.org/ ESRDMeasures.aspx).’’ The NQF measures referenced above call for monitoring these serum calcium and serum phosphorus values, but they do not require actual reporting of these values, as is the intent of the Mineral Metabolism reporting measure. For these reasons, we proposed to expand the Mineral Metabolism reporting measure for PY 2015 and subsequent payment years under 1881(h)(2)(B)(ii) of the Act. The technical specifications for this measure can be found at https:// www.dialysisreports.org/pdf/esrd/ public-measures/MineralMetabolismReporting-2015-NPRM.pdf. We further noted that requiring the reporting of serum calcium and serum phosphorus levels for the PY 2015 ESRD QIP will allow us to develop mineral metabolism measures based on clinical data in the future. We requested comment on these proposals to expand the Mineral Metabolism reporting measure. The comments we received on these proposals and our responses are set forth below. Comment: Many commenters generally supported this measure, but requested that we make modifications to our proposed exclusions. These commenters suggested that we exclude, VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 for all of the reporting measures, the following patients: (i) Beneficiaries who are regularly treated at the facility and who fit into one of these categories: (a) Beneficiaries who die within the applicable month; (b) beneficiaries that receive fewer than 7 treatments in a month; and (c) beneficiaries receiving home dialysis therapy who miss their in-center appointments when there is a documented, good faith effort to have them participate in such a visit during the applicable month; (ii) transient dialysis patients; (iii) pediatric patients (unless the measure is specific to this population); and (iv) kidney transplant recipients with a functioning graft. Commenters stated that these exclusions are consistent with our own measures reported on DFC. Additionally, commenters stated that these exclusions seek to hold facilities accountable only for those beneficiaries to whom they regularly give care and for whose care they can affect. Another commenter, however, stated that we should not implement other commenters’ suggestions that we exclude beneficiaries receiving home dialysis therapy who miss their in-center appointments when there is a documented, good faith effort to have them participate in such a visit during the applicable month; this commenter stated that it is the responsibility of the facilities to educate patients on the importance of making and keeping appointments. Additionally the commenter argued that ‘‘good faith’’ is too vague; commenter requested that, if we did adopt this exclusion, we clearly define a ‘‘good faith effort.’’ Response: Upon further review, we agree with commenters who believe that the exclusions should be modified. We recognize that treating a patient twice may not provide enough time to effectuate quality patient care. We agree with the commenters who suggested that an in-center hemodialysis patient should be excluded if treated by a facility fewer than seven times during the month, regardless of whether the patient is officially admitted to that facility. With seven treatments, we believe that a facility should have had adequate opportunities to draw blood necessary to report serum calcium and phosphorus levels. We also believe that the threshold of seven will discourage unnecessary testing of in-center hemodialysis patients by facilities because they will know that, since incenter patients are typically treated three times per week, a patient must have been treated by the facility for at least two weeks to be included; thus, the facility need not feel pressure to draw PO 00000 Frm 00037 Fmt 4701 Sfmt 4700 67485 blood for every patient for the first few visits of the month. Based on these considerations, we will not finalize our proposal to exclude only in-center patients who have been treated fewer than two times by the facility during the claim month. Instead, we will exclude any in-center patient who is treated by the facility fewer than seven times during the reporting month. We do not believe that it is necessary to specifically exclude transient patients from this measure because, as noted, any patient that is treated by the facility at least seven times during the applicable reporting month is present at the facility for enough time that the facility should be held accountable for that patient. Likewise, for the same reasons mentioned above, we do not believe we need to separately exclude patients who are deceased at the end of the reporting month. Provided that the patient is treated by the facility at least seven times during that month, the facility should be able to draw blood necessary to report serum calcium and serum phosphorus levels even if that patient is deceased at the end of the month. We continue to believe that facilities should be required to report the serum calcium and phosphorus levels of home dialysis patients irrespective of whether those patients attend a monthly appointment. We believe that it is incumbent upon a facility to make home dialysis patients aware that they must attend monthly appointments to be properly treated. In addition, since the mechanisms that cause cardiovascular and bone disease do not differ between home and in-center hemodialysis patients, we believe that the inclusion of home dialysis patients in the Mineral Metabolism reporting measure is appropriate. Therefore we will finalize our proposal that we will include any home hemodialysis patient for which a facility submits a claim with respect to the reporting month in this measure. We also believe it is important to include transplant patients until they are officially discharged from a facility; regular monitoring can help ensure that a transplant remains effective and that the facility is continuing to provide the best care possible. We believe it is important to monitor serum calcium and serum phosphorus levels in adult and pediatric patients alike because improper bone mineral metabolism management can lead to serious, negative outcomes, including death, in both populations. Although we are aware that specific target values for calcium and phosphorus have not been set for the pediatric population, we still believe that this measure will lead to E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67486 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations better observation of mineral metabolism in these patients if one or both of these values are unusually high or low. Additionally, we believe that the inclusion of pediatric patients in this measure is consistent with current guidelines on the frequency of mineral metabolism testing as reported in KDIGO guidelines chapter 3 ‘‘Diagnosis of CKD–MBD: biochemical abnormalities.’’ Thus, we believe that this measure is appropriate for both adult and pediatric patients. For the reasons stated above, we finalize that facilities must report in CROWNWeb the serum calcium and serum phosphorus levels on a monthly basis for (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. Comment: Several commenters encouraged us to not adopt a percentage reporting threshold because it would not distinguish between beneficiaries legitimately excluded and those that were merely missed. Other commenters requested that we use both exclusions and a threshold; one commenter suggested a threshold of 90 percent or an allowance of two patients to ensure that small facilities are not disproportionally affected. Another commenter stated that requiring 98 percent reporting may make it difficult for patients to travel because dialysis facilities may encourage them otherwise to ensure compliance with the measure. One commenter requested that we provide guidance regarding the standardization of blood-draws so that data can be reliable before we implement a reporting threshold. Response: We agree with the commenters who argued that, even with exclusions, there are circumstances in which facilities cannot report the serum calcium and serum phosphorus levels for every patient at least once per month. For example, a facility may wait to draw blood from a patient because it believes that the patient will be treated for the entirety of the month, but learns that the patient has been hospitalized unexpectedly for all or part of the applicable month. Therefore, we believe that we should not require an attestation of 100 percent monitoring. Based on data from the CROWNWeb pilot, we believe that facilities are generally able to report serum calcium and serum phosphorus for approximately 96 percent of their patients. As commenters have argued, the information in CROWNWeb, however, was voluntarily reported which may mean that the data is biased toward facilities that value reporting; additionally, the data from VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 the CROWNWeb pilot was mainly supplied by LDOs that may be more likely to have more resources and corporate policies that require reporting compliance. Furthermore, such a high percentage requirement may disadvantage small facilities. For example, if a facility has 10 patients, failure to report for one patient will drop that facility’s reporting rate to below 90 percent. Taking all of these issues into consideration, we finalize a normative reporting threshold for this measure; facilities will be required to report at the rate of the 50th percentile of all facilities in 2013 for each month of the performance period in order to gain 10 points on the measure. However, if the 50th percentile of all facilities in 2013 is greater than 97 percent, facilities will only be required to report monthly for 97 percent, in total, of their (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. This floor ensures that facilities are not penalized as long as they improve by one percent above the reporting rates in the CROWNWeb pilot; that is, facilities know that, provided they reach 97 percent for each month of the performance period, they will meet the requirements of the measure. We believe that it is important to adopt a reporting rate of 97 percent in PY 2015 to ensure continued improvement. We believe that this methodology fairly balances the concerns that the reporting in CROWNWeb is skewed with our desire to encourage continued improvement in the community. We are concerned that small facilities may be disproportionately impacted by the reporting threshold because, for example, a facility with 10 patients could fail to report for only one patient and, therefore, fail to meet the threshold. As we have stated, we intend to use the information collected from reporting measures for purposes of scoring clinical measures based on the same data in subsequent payment years. Therefore, we will not require a facility to report this measure if it treats fewer than 11 (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. If a facility does not treat at least 11 of these patients during the performance period, it will be required to attest to this fact via CROWNWeb. If a facility does not make the attestation, we will score it accordingly. Comment: Some commenters did not support including this measure in PY PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 2015. One commenter argued that it is inappropriate to adopt this measure because it is not-NQF endorsed, nor. One commenter stated that it is inappropriate to adopt this measure under the exception set forth in the statute for measures which are not NQFendorsed; this commenter stated that the NQF process ensures that measures have gone through a rigorous evaluation process, including reliability and validity. Some commenters argued that this measure should be deferred because we have not articulated the intent of the data collection or explained the measure for which we intend to ultimately use these data. Several commenters do not support this measure because facilities already collect these data so the measure is unlikely to improve care, and they requested that we adopt a measure based on outcomes. One commenter does not support adoption of this measure because, it contends, Kidney Disease: Improving Global Outcomes (KDIGO) has not indicated that serum calcium and serum phosphorus must be reported on a monthly basis. Further, the commenter argues that although it is customary to measure serum calcium and phosphorus monthly, there is no evidence that it indicates quality care. Response: KDIGO recommends monthly measurements (see Table 13 on internet document titled ‘‘Kidney Disease Improving Global Outcomes Clinical Practice Guideline for the Diagnosis, Evaluation, Prevention, and Treatment of Chronic Kidney DiseaseMineral and Bone Disorder (CKD– MBD)’’ at https://www.kdigo.org/ guidelines/mbd/guide3.html#chap31)). KDIGO also emphasizes the importance of following trends versus single measurements, thus supporting relatively frequent measurements (for example, monthly). There is evidence that calcium and phosphorus levels may be associated with clinical outcomes. Monthly measurements will serve to identify elevated levels of serum calcium and phosphorus and trigger therapeutic interventions, thus contributing to high quality care. Because of these important considerations, and for the reasons stated above, we believe that it is important to adopt this measure even though it is not NQF-endorsed. We disagree that it is inappropriate to adopt a measure not endorsed by NQF under the exception set forth in the statute. We believe the exception language was intended for such a circumstance where an endorsed measure is not available for implementation to address key issues described in the statute, such as mineral E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations metabolism. We will continue to work toward the development and implementation of appropriate, NQFendorsed measures to support the ESRD QIP. Comment: Many commenters noted that it is impractical for facilities to obtain lab values from other providers because other providers are not required to measure these data, do not share data with dialysis facilities, and, even if facilities could obtain these data, they could not be sure that the lab values were consistent or reported under the same standards. Finally, these commenters stated that CROWNWeb does not permit facilities to submit data obtained from other providers if the lab result is outside the admission or discharge date. Response: We recognize that it may be difficult for facilities to coordinate with hospitals and other care providers in order to obtain lab values. Therefore, we are not mandating facilities to do so. In the CY 2013 ESRD PPS proposed rule (77 FR 40969), we stated that facilities may obtain lab values from other providers. This proposal was specifically designed to afford facilities more flexibility in acquiring and reporting serum calcium and serum phosphorus values. As discussed previously in this preamble, facilities are highly encouraged to coordinate with other providers, but the ESRD QIP does not mandate them to do so. We believe that the commenters’ concerns about inconsistent lab data are mitigated by the requirement that the lab must be accredited. Finally, the commenter is right in that CROWNWeb does not allow facilities to submit data obtained from other providers if the lab result is outside the admission or discharge date. As long as the patient is treated at least seven times by the facility during the applicable reporting month, however, the facility will be required to report the patient’s serum phosphorus and calcium levels regardless of whether the patient also has blood drawn elsewhere (for example, as a result of a hospitalization) during the month. Comment: Many commenters encouraged us to monitor, in addition to phosphorus and calcium, serum levels of parathyroid hormone (PTH), arguing that proper bone mineral management must take all three factors into account. Commenters also encouraged us to adopt measures in all of these areas. Response: We thank those commenters who advocated the monitoring of PTH. We recognize the important role played by parathyroid hormone in mineral metabolism in the ESRD population, and will pursue avenues by which we may monitor VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 serum levels of parathyroid hormone in the future. As explained above, we are modifying our proposed exclusions and finalizing that any facility must report serum calcium and serum phosphorus levels for all (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim least once per month via CROWNWeb at the lesser of the 50th percentile of facilities in 2013 or 97 percent per month to receive 10 points on the measure. We also finalize that we will only apply this measure to facilities with at least 11 (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. Facilities who treat less than 11 of these patients during the performance period must attest to this fact in CROWNWeb. If they do not make this attestation, we will score them accordingly. The technical specifications for this finalized measure can be found at https:// www.dialysisreports.org/pdf/esrd/ public-measures/MineralMetabolismReporting-2015–FR.pdf. 3. New Measures for PY 2015 and Subsequent PYs of the ESRD QIP As the program evolves, we believe it is important to continue to evaluate and expand the measures selected for the ESRD QIP. Therefore, for the PY 2015 ESRD QIP and subsequent payment years, we proposed to adopt five new measures. The proposed new measures include: Three measures of dialysis adequacy (together comprising one dialysis adequacy measure topic); one measure of hypercalcemia; and one reporting measure related to hemoglobin and ESA dosages for all patients. a. Kt/V Dialysis Adequacy Measure Topic Section 1881(h)(2)(A)(i) states that the ESRD QIP must evaluate facilities based on measures of ‘‘dialysis adequacy.’’ For PYs 2012 through 2014, the ESRD QIP included a hemodialysis adequacy measure evaluating the number of patients with a URR of at least 65 percent. For the PY 2015 ESRD QIP, and future payment years, we proposed to remove the URR Hemodialysis Adequacy measure. In its place, we proposed to adopt three measures of dialysis adequacy (together comprising one dialysis adequacy measure topic) based on Kt/V (K = clearance, t = dialysis time, and V = volume of distribution) for the PY 2015 ESRD QIP and future payment years of the PO 00000 Frm 00039 Fmt 4701 Sfmt 4700 67487 program. Kt/V is a widely accepted measure of dialysis adequacy in the ESRD community because it takes into account the amount of urea removed with excess fluid. Further, while the URR Hemodialysis Adequacy measure only applies to in-center hemodialysis patients, we stated that the proposed Kt/ V measures will allow us to evaluate dialysis adequacy in adult hemodialysis (HD) patients (in-center and home hemodialysis (HHD)) receiving three treatments weekly, adult peritoneal dialysis (PD) patients, and pediatric HD patients receiving three to four treatments weekly. We proposed to adopt the following NQF-endorsed Kt/V measures of dialysis adequacy, each one applicable to a different patient population: (i) NQF #0249: Hemodialysis Adequacy Clinical Performance Measure III: Hemodialysis Adequacy— HD Adequacy—Minimum Delivered Hemodialysis Dose; (ii) NQF #0318: Peritoneal Dialysis Adequacy Clinical Performance Measure III—Delivered Dose of Peritoneal Dialysis Above Minimum; and (iii) NQF #1423: Minimum spKt/V for Pediatric Hemodialysis Patients. The proposed measures assess whether Medicare dialysis patients (PD, HD, and pediatric hemodialysis) meet the modality specific Kt/V threshold. Performance on the measures is expressed as a proportion of patientmonths meeting the measure threshold. The technical specifications for these measures can be found at https://www. dialysisreports.org/pdf/esrd/publicmeasures/PediatricHemodialysis Adequacy-ktv-2015-NPRM.pdf; https:// www.dialysisreports.org/pdf/esrd/ public-measures/PeritonealDialysis Adequacy-ktv-2015-NPRM.pdf; and https://www.dialysisreports.org/pdf/esrd/ public-measures/Hemodialysis Adequacy-ktv-2015-NPRM.pdf. We requested comment on these proposals. The comments we received on these proposals and our responses are set forth below. i. Adult Hemodialysis Adequacy Comment: The majority of commenters strongly supported the adoption of this measure and the removal of URR as a measure of dialysis adequacy, stating that the measure is more accurate and used more widely by the dialysis community. Other commenters, however, stated that URR is a more appropriate measure of dialysis adequacy because Kt/V is dependent upon many factors, including mid-week sampling, accurate urine collection, and dialysis E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67488 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations prescriptions, whereas URR needs only pre- and post-blood draws. One commenter did not support a Kt/V measure because it only promotes ‘‘adequacy’’ rather than optimal health, urea is not associated with toxicity, it does not take into account ultrafiltration, and it is only a point in time measurement. Some commenters supported the adoption of Kt/V as a measure of dialysis adequacy for hemodialysis patients, but requested that we delay implementation until PY 2016 so that we can ensure the data we are using to calculate achievement thresholds, benchmarks, and performance standards were calculated using consistent methodology. One commenter suggested that we include Kt/V in PY 2015, but calculate rates for performance standards, benchmarks, and thresholds based on data from January 1, 2012–June 30, 2012 since these dates would include only data that were calculated using the NQFendorsed formulae. Finally, one commenter stated that we should request raw data from facilities and calculate Kt/V to ensure consistency. Response: We thank those commenters who supported the implementation of these measures. We note that the published literature suggests there is insufficient evidence to support the superiority of alternative measures of small solute clearance over spKt/V. The KDOQI Clinical Practice Guideline for Methods for Measuring and Expressing Hemodialysis Dose (CPG 2) also state that ‘‘the delivered Kt/V determined by single-pool urea kinetic modeling continues to be preferred as the most precise and accurate measure of dialysis’’ (page 12, KDOQI 2006 Update). Furthermore, the minimum delivered hemodialysis dose for both adult and pediatric patients, spKt/ V>=1.2, was endorsed by NQF in 2007. Regarding concerns about the use of consistent methodology in the calculation of performance standards, beginning in January 2012, the measure specifications for adult and pediatric hemodialysis Kt/V state that single-pool Kt/V be measured using Daugirdas II or Urea Kinetic Modeling. We anticipate that these specifications will provide valid and consistent spKt/V values. We thank the commenter for the suggestion of utilizing data from January 1, 2012–June 30, 2012 to set achievement thresholds, benchmarks, and performance standards. We believe, however, that whenever possible, these values should be based on a full year of data since these data, although not necessarily calculated using the same NQF-endorsed methodology, represent any changes that may occur as a result VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 of seasonality. Additionally, utilizing this timeframe will enable us to post the numerical values of the performance standards as soon as they are available in December 2012 or January 2013. We thank the commenter for the suggestion of collecting raw data rather than calculated spKt/V values. At this time, we are not operationally able to request these elements on claims. We will consider this suggestion in future years of the program. Comment: Several commenters supported the measure but requested that we refine it to specify that the calculated spKt/V include estimates of residual renal function (RRF) to avoid incentivizing improper, longer dialysis sessions for these patients; one commenter recommended that, consistent with KDOQI guidance, RRF be included in spKt/V only if the urine collection used to measure it was within the previous 90 days. Commenters also requested that we exclude patients dialyzing four or more times per week or overnight and include patients with Kt/V less than 2.5 since many patients achieve these values. Response: Consistent with the 2006 KDOQI Clinical Guidelines for hemodialysis adequacy, we do not find published, medical evidence to support the inclusion of RRF in defining the minimum target spKt/V. Additionally, effective January 2012, the Medicare claims processing instructions specifically state that the reported spKt/ V should not include RRF. We currently exclude patients dialyzing four or more times per week from the adult HD measure because this exclusion was NQF-endorsed. According to the measure specifications, overnight dialysis patients are included in the HD spKt/V measure unless they are dialyzing less than two or greater than four times per week, or if they are in the first 90 days of ESRD treatment. We do not currently have the ability to identify patients who are receiving thrice weekly in-center nocturnal hemodialysis and do not have a measure specific to this population. We are currently working with stakeholders to develop adequacy measures to address frequent, home, and nocturnal hemodialysis patients for future years of the ESRD QIP. Finally, patients with spKt/V less than 0.5 or greater than 2.5 are excluded from the Kt/V adult hemodialysis dialysis adequacy measure. Patients with HD spKt/V values greater than 2.5 are excluded from the measure calculation as these values are considered implausible for most hemodialysis patients. PO 00000 Frm 00040 Fmt 4701 Sfmt 4700 Comment: Commenter stated that spKt/V does not reflect patients on short daily, frequent, and nocturnal dialysis and should be updated accordingly. Another commenter requested that we develop a spKt/V measure for home dialyzers. Response: We are currently working with stakeholders to develop adequacy measures to address other members of the ESRD population (i.e. frequent, home, and nocturnal hemodialysis patients) for future years of the ESRD QIP. Comment: One commenter requested that we specify that the lab draw for this measure should be done mid-week to better reflect patients’ actual conditions. Response: Under the measure specifications for the Kt/V adult hemodialysis adequacy measure, facilities are required to report the last spKt/V measurement of the month. The NQF-endorsed measures for minimum dialysis adequacy for both pediatric and adult patients do not adjust for the day of the week; a minimum target value of spKt/V greater than or equal to 1.2 should be achieved regardless of when this is measured. We appreciate your suggestion and will take it under consideration during our ongoing measure maintenance. Comment: One commenter stated that ‘‘dialysis adequacy’’ is a misnomer because it does not provide a full picture of dialysis adequacy. Instead, the commenter suggests it be called a measure of ‘‘urea removal,’’ encouraging stakeholders to develop measures that are more comprehensive of dialysis adequacy. Another commenter asked us to recognize that ‘‘adequacy’’ is not synonymous with optimal levels. Response: ‘‘Dialysis adequacy’’ is used in the ESRD QIP to represent the quantification of urea removal by dialysis, one widely accepted measurement of adequacy of this treatment. We recognize there are other aspects of dialysis adequacy, and we are currently working with stakeholders to develop additional measures for future years of the ESRD QIP. Additionally, we emphasize that these minimum spKt/V target levels may not be optimal levels for all patients. Therefore we encourage clinicians to consider targeting higher spKt/V targets on an individual patient basis as clinically indicated. ii. Peritoneal Dialysis Adequacy Comment: Many commenters supported the adoption of this measure and asked us to finalize the measure along with the formula and methodology for its calculation. One commenter explicitly asked us to finalize a methodology for obtaining E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations dialysate, blood, and urine sampling. Other commenters, however, did not support the measure, stating that we have not yet specified a consistent reporting methodology. These commenters suggested that we finalize this measure as a reporting measure only for PY 2015, define a methodology for calculating the values in the final rule, and use data from CY 2013 for purposes of adopting this measure as a clinical measure in future years. One commenter stated that we should request raw data from facilities and calculate Kt/V to ensure consistency. Finally, some commenters stated that they did not support the measure. Response: We thank the commenters who supported the adoption of this measure. There is more than one method that may be used by facilities to calculate PD Kt/V. Methods for reporting PD Kt/V on Medicare claims were specified prior to the start of data collection in July 2010 and are based on measure specifications endorsed by the National Quality Forum in 2007. Measurement of peritoneal dialysis Kt/ V is based on timed (24 hour) dialysate collection to measure urea clearance (k). Time (t) is specified in the definition (week or per week). The only component of Kt/V measurement in peritoneal dialysis that is formula-based is the estimation of total body water (V). V is estimated from either of two formulae (Watson or Hume) predictive equations that are based on patient anthropometric and demographic information. We will consider the standardization of estimating total body water as part of our annual ongoing measure maintenance process, but we note that we believe it is appropriate to adopt this measure without this standardization because the Watson and Hume formulae yield substantially similar results. Moreover, NQF approved the measure with the specification to use the Watson or Hume formula to estimate ‘‘V.’’ We choose to collect reported Kt/V, rather than the data elements for Kt/V, due to the limitations of collecting data on Medicare claims and to minimize burden on facilities. Comment: One commenter supported the use of Kt/V as a measure of dialysis adequacy for peritoneal dialysis patients, but suggested that we refine it in the final rule. This commenter stated that we need to: (i) Clarify in the technical measure specifications that a patient is only included in the measure population if he/she has been on peritoneal dialysis for 90 days or more so that a patient transferring from hemodialysis to peritoneal dialysis will not be immediately counted in the VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 measure; and (ii) exclude patients in the first month they are eligible to be included in the denominator if no Kt/V measurement is taken until the fourth month since the measure specifies Kt/V need only be measured once every 4 months. One commenter noted that a monthly measurement period for the measure is problematic because Kt/V is assessed throughout the month in home training clinics; this commenter suggested that there be a 30-day window from the time of the adequacy measure to adjust the prescription and repeat the adequacy measure. Response: We thank commenters for their feedback regarding the exclusion criteria for Kt/V for adult peritoneal ESRD patients. To the first point, patients are excluded from this measure if they are in the first 90 days of treatment for ESRD. If a patient changes from hemodialysis to peritoneal dialysis during a month, the patient would be included in both the HD and PD Kt/V measure calculations. The 2006 KDOQI Clinical Practice Guidelines for peritoneal dialysis adequacy (Guideline 2.1.2) state ‘‘the total solute clearance (residual kidney and peritoneal, in terms of Kt/V) should be measured within the first month after initiating dialysis therapy and at least once every 4 months thereafter.’’ While this measure is consistent with the guideline, we acknowledge that a patient may be included in the PD Kt/ V measure calculation in the same month their modality changed to PD. However, after switching from hemodialysis to peritoneal dialysis, peritoneal dialysis clearance typically is not measured right away or even in the same month as the PD catheter insertion, as the peritoneal membrane is in a state of flux and its membrane transport characteristics are unstable for a few weeks. In several clinical scenarios it may not be appropriate to measure PD Kt/V within the first several weeks after initiation of peritoneal dialysis. Therefore, we believe that the PD unit personnel will not have measured PD adequacy in the 30 days following the transition from HD to PD. With regard to the comment on excluding patients from the denominator for the first month if no measurement is taken until the fourth month, we use the data reported in conjunction with Medicare dialysis facility claims value code D5: Result of last Kt/V reading and occurrence code 51: Date of last Kt/V reading. The claims reporting instructions indicate that for PD patients this should be within the last 4 months of the claim date of service. All monthly claims with valid PO 00000 Frm 00041 Fmt 4701 Sfmt 4700 67489 PD Kt/V values will be used in the calculation. In response to the monthly measurement period comment, for PD patients, facilities are only required to report Kt/V once every 4 months. Comment: One commenter urged us to develop a pediatric peritoneal dialysis adequacy measure in collaboration with stakeholders. Response: We are currently working with stakeholders to develop a pediatric peritoneal dialysis adequacy measure as part of a consensus-based measure development process, and we will consider implementing such a measure through future rulemaking. iii. Pediatric In-Center Hemodialysis Adequacy Comment: Several commenters supported the adoption of a Kt/V hemodialysis adequacy measure for pediatric patients even if we do not adopt the adult Kt/V measures. Other commenters, however, argued that we should not finalize the pediatric incenter hemodialysis adequacy measure because (i) the measure does not exclude RRF patients; and (ii) the measure applies to 4 times per week hemodialysis. These commenters believe that adoption of the proposed measure would, in effect, raise the pediatric dialysis dose above the adult dialysis dose in a substantial number of children who either have a significant RRF or are treated with dialysis four days a week; they caution that we should avoid incentivizing improper, longer dialysis sessions for these patients. Some commenters urged us to harmonize the adult and pediatric spKt/ V hemodialysis adequacy measures, specifically regarding the required number of dialysis sessions for inclusion in the measure and the inclusion of RRF. Another commenter stated that we should consider changing the measure so that it is based on weekly dose. Other commenters stated, generally, that spKt/V is not appropriate for pediatric patients and encouraged us to work with stakeholders to develop a suitable pediatric dialysis measure. Response: We thank the commenters who supported the implementation of the spKt/V hemodialysis adequacy measure for pediatric patients and those who provided feedback for its implementation. The measure methodology was developed through a consensus-based process incorporating the input of a Technical Expert Panel and was endorsed by NQF in 2011. The pediatric hemodialysis adequacy measure differs from the corresponding adult adequacy measure in that the measure applies to patients receiving four dialysis treatments a week. E:\FR\FM\09NOR2.SGM 09NOR2 67490 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 Analysis of 2007 claims data suggest that in 5.6 percent of patient-weeks, dialysis sessions occurred four times per week for pediatric patients. Given that this is a significant proportion, the TEP concluded that these patients should be included in this measure. As seen in Table 4 below, there were three or four dialysis sessions in approximately 88 percent of patient-weeks. Based on these results, the TEP concluded that by defining the denominator as hemodialysis patients receiving dialysis three or four times weekly, the measure will be applicable to most pediatric hemodialysis patients. https://www.dialysisreports.org/pdf/esrd/ public-measures/ PediatricHemodialysisAdequacy-ktv2015–FR.pdf (pediatric in-center hemodialysis). b. Hypercalcemia Section 1881(h)(2)(A)(iii) of the Act states that the measures specified for the ESRD QIP shall include other measures as the Secretary specifies, including, to the extent feasible, measures of bone mineral metabolism. Abnormalities of bone mineral metabolism are exceedingly common and contribute significantly to morbidity and mortality in patients with advanced Chronic TABLE 4—DIALYSIS SESSIONS PER PA- Kidney Disease (CKD). Numerous TIENT WEEK AMONG ALL HD PEDI- studies have associated disorders of mineral metabolism with morbidity, ATRIC PATIENTS < 20 YEARS OLD including fractures, cardiovascular disease, and mortality. Therefore, we Sessions Number of Percent believe it is necessary to adopt a clinical per week patient-weeks measure that encourages proper bone 1 ................ 211 2.6 mineral metabolism management. 2 ................ 614 7.5 One indicator of bone mineral 3 ................ 6712 82.2 metabolism management is ensuring 4 ................ 533 6.5 normal calcium levels in the blood. 5 ................ 60 0.7 6 ................ 36 0.4 Therefore, we proposed to use the NQF7 ................ 3 0.04 endorsed measure, NQF #1454: Proportion of patients with hypercalcemia, to evaluate ESRD N=312 patients with first Medicare facilities for the PY 2015 and future dialysis claim on or before January 1, payment years of the ESRD QIP. This 2007. measure assesses the number of patients With regard to the incorporation of with uncorrected serum calcium greater RRF in the calculation of adequacy, the than 10.2 mg/dL for a 3-month rolling TEP did not agree that RRF should be average. ‘‘Uncorrected’’ means not added to the measure description for corrected for serum albumin several reasons: (i) Published studies concentration. Performance on this evaluating dialysis adequacy in the measure is expressed as a proportion of pediatric population do not include residual renal function; (ii) RRF changes patient-months for which the 3-month rolling average exceeds the measure continuously with age in the pediatric threshold. Because the NQF-endorsed population; and (iii) RRF is difficult to measure calls for a 3-month rolling measure among pediatric patients. average, we also proposed that the first Neither the NQF-endorsed measure specifications nor the KDOQI guidelines measure rate for this measure would be calculated using the first 3 months of support measuring spKt/V in pediatric data collected during the proposed patients based on a weekly dose. performance period (that is, there would Furthermore there is no evidence to be no measure rate for the first 2 months support a minimum target value for a of the performance period; we would weekly Kt/V dose. We will continue to consider other measurements of dialysis calculate the first measure rate for the performance period using the first 3 adequacy for the pediatric population; months of data and would then at this time, we believe that this calculate a rate each successive month, measure is the most suitable. For the reasons stated above, we are dropping the oldest month and adding adopting the Kt/V measure topic as the newest month). Because we proposed. The technical specifications proposed to adopt this measure not only for each of the finalized measures in this for PY 2015, but also subsequent measure topic can be found at https:// payment years, we also proposed that, www.dialysisreports.org/pdf/esrd/ beginning with the PY 2016 program, public-measures/ we would measure hypercalcemia HemodialysisAdequacy-ktv-2015– beginning in January of the applicable FR.pdf (adult hemodialysis), https:// performance period. This would allow www.dialysisreports.org/pdf/esrd/ us to have a 3-month rolling average for public-measures/ all months in the performance period. PeritonealDialysisAdequacy-ktv-2015– We proposed that the 3-month rolling FR.pdf (adult peritoneal dialysis), and average rate for January would be VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 PO 00000 Frm 00042 Fmt 4701 Sfmt 4700 calculated using the rates from November and December of the previous year as well as January of that year. Likewise, we proposed that the rate for February would be calculated using the rates from December, January and February to calculate the 3-month rolling average, and so on. Technical specifications for this measure can be found at https://www.dialysisreports.org/ pdf/esrd/public-measures/ MineralMetabolism-Hypercalcemia2015–NPRM.pdf. The comments we received on these proposals and our responses are set forth below. Comment: Several commenters supported this measure, noting that it is consistent with KDIGO guidelines and is especially necessary given that we will include oral-only drugs in the bundle beginning in PY 2014; some commenters specifically argued that that there is sufficient validity and reliability of the data collected in CROWNWeb to establish an appropriate clinical measure for PY 2015, and noted that this measure is in keeping with Congress’ intent to include a measure of bone mineral metabolism in the ESRD QIP. Other commenters, however, stated their belief that, despite its NQFendorsement, the measure is not aligned with clinical standards, is contrary to KDIGO guidelines, and does not advance the aims of the National Quality Strategy. Additionally, several commenters, both those supporting and opposing the measure, argued that it is inappropriate to use CROWNWeb data to define performance standards, achievement thresholds, and benchmarks because the data underrepresents small- and mid-sized dialysis organizations, does not account for the differences in reporting which may exist when data are voluntarily reported (and data were voluntarily reported in the CROWNWeb pilot), was submitted with the understanding that it was test data and would not be used by CMS programs, and because it suffers from serious data collection problems, a lack of definitions, and a lack of reporting requirements in CROWNWeb. Many commenters suggested that we adopt this measure as a reporting measure only for PY 2015. Several other commenters believe that the proposed hypercalcemia measure is only appropriate if we include similar clinical measures for serum phosphorus, parathyroid hormone (PTH), and other mineral metrics because a hypercalcemia measure alone represents a piecemeal approach to bone and mineral metabolism that will not be sufficient to ensure quality care for ESRD patients and may even incentivize E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations inappropriate care. Finally, commenters recommended that CMS monitor secondary parathyroid hormone and not include oral-only drugs in the bundle until such measures and monitoring are in place. Response: Commenters rightly state that the performance standards, achievement thresholds, and benchmarks for the proposed Hypercalcemia measure were not calculated using data from all facilities. Because it is possible that these calculations could contain a systemic bias, and we have no effective means of addressing that bias in the ESRD QIP as this time, we will not finalize a clinical measure for hypercalcemia, as discussed above, until valid data from all facilities are accessible for the purpose of establishing performance standards, achievement thresholds, and benchmarks. We are not finalizing a clinical Hypercalcemia measure at this time. We do, however, continue to believe that hypercalcemia is an important indicator of bone mineral metabolism, and we intend to use this measure in subsequent payment years. Comment: One commenter stated that, generally, we should not use data from CROWNWeb for the ESRD QIP until the validity of CROWNWeb data is confirmed. Commenters also urged us to find solutions for the CROWNWeb issues which the community has been experiencing in order to ensure that, as measures increasingly rely on CROWNWeb data, there is no question as to the data’s validity. Response: We thank the commenters who expressed concern regarding the use of CROWNWeb data for the ESRD QIP. Given the potential risk to validity of ESRD QIP clinical measures calculated using CROWNWeb data, we will not finalize the proposed clinical measure for hypercalcemia that depends on those data, as noted above. Comment: One commenter urged us to exclude patients who have hypercalcemia for reasons other than ESRD treatment (for example, medication and malignancy) from the Hypercalcemia measure. The commenter requests confirmation that the Hypercalcemia measure includes all patients rather than just Medicare patients, and is concerned with CMS’ move to include the total facility population in the measure collection process. One commenter seeks clarification regarding whether a lower or higher rate is desirable for the Hypercalcemia measure. Response: We thank the commenters for raising these issues with the Hypercalcemia measure, and we will incorporate them in discussions during VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 future rulemaking, when the Hypercalcemia measure is considered as a measure for the ESRD QIP in future payment years. For the reasons discussed above, we will not finalize the Hypercalcemia measure for use in the PY 2015 ESRD QIP or subsequent years until indicated otherwise in rulemaking. c. Anemia Management Reporting Measure Section 1881(h)(2)(A)(i) requires ‘‘measures on anemia management that reflect the labeling approved by the Food and Drug Administration (FDA) for such management.’’ Although the current FDA-approved label for ESAs only specifically addresses hemoglobin levels greater than 11 g/dL, previous FDA-approved labels suggested patients on ESAs maintain a hemoglobin level of 10–12 g/dL. As we noted in the CY 2012 ESRD PPS final rule, upon further research, the FDA determined that there is no evidence suggesting a lower target level at which hemoglobin does not cause increased risks of death, serious adverse cardiovascular reactions, and stroke and, therefore, changed its approved label on June 24, 2011 (76 FR 70257). As a result of the changes in the FDA approved-label and the implementation of the ESRD QIP, we are monitoring trends and indicators of anemia management for the Medicare ESRD population. We have found that the average monthly blood transfusion rate increased from 2.7 percent in 2010 to 3.2 percent in 2011. We are working through our ESRD QIP monitoring and evaluation program to further assess the effect of the ESRD PPS. We believe that it is important that we continue monitoring hemoglobin levels in patients to ensure that anemia is properly treated, and we, therefore, proposed to adopt a measure for PY 2015, and future payment years, which requires facilities to report ESA dosage (if applicable) and hemoglobin and/or hematocrit levels for patients on at least one monthly claim. In addition to this measure, proposed below, we plan to continue to monitor the rate of transfusions and may consider the adoption of relevant quality measures through future rulemaking if necessary. Since January 1, 2012, facilities have been required to report hemoglobin or hematocrit 4 levels for each patient on every claim (CR 7640). Beginning April 1, 2012, if a hemoglobin or hematocrit value is not included in the claim, the 4 Hematocrit values are used to calculate hemoglobin levels by taking the hematocrit value and dividing by three. PO 00000 Frm 00043 Fmt 4701 Sfmt 4700 67491 claim is returned to the facility (CR 7593). If a hemoglobin or hematocrit value is not available for a patient, a facility can enter a default value of 99.99 on the claim and the claim will not be returned, provided the facility is not billing for an ESA. The default value is not acceptable when the claim includes an ESA, in such a case, the claim will be returned to the facility. We stated in the proposed rule that we are concerned that our current policy of paying claims that include a default hemoglobin or hematocrit value of 99.99 could lead to the underreporting of patients’ hemoglobin or hematocrit levels and ESA dosage by facilities; we are specifically concerned that we will not receive complete and accurate hemoglobin/hematocrit readings for those patients not receiving ESAs because a default value of 99.99 can be reported on claims, and these claims will be paid, if no ESA is administered to the patient. Additionally, we believe that facilities might choose to strategically not report certain patients’ hemoglobin or hematocrit levels on certain claims— those where the patient’s hemoglobin levels are greater than 12 g/dL—in order to make the performance rate of their Hemoglobin Greater Than 12 g/dL measure seem better and reduce the likelihood of a payment reduction under the ESRD QIP. Because it is possible that facilities could under-report hemoglobin or hematocrit levels, we proposed to adopt an Anemia Management reporting measure for the PY 2015 ESRD QIP, and future payment years of the program. For this measure, we proposed to require facilities to report a hemoglobin or hematocrit value and, as applicable, an ESA dosage for all Medicare patients at least once per month via claims. We proposed to consider claims with 99.99 values as not meeting the requirements of this measure (that is, claims reporting 99.99 will be counted as if the hemoglobin or hematocrit value were left blank). We stated that we do not intend for this proposed measure to encourage unnecessary testing or unduly burden a facility. Consequently, for purposes of scoring the measure, we considered proposing to require facilities to report the required information for less than 100 percent of their patients. Specifically, we considered lowering the threshold to reporting 98 percent of patients for a month in order to receive credit for that month. We ultimately proposed that a facility should be required to take and report these values for every patient at least once per month so that each beneficiary receives the E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67492 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations highest standard of care. We realize, however, that there are circumstances beyond a facility’s control wherein it may not be able to draw a sample for this patient. Therefore, we did not propose that the facility itself must draw blood for each patient. If, for example, a patient is hospitalized or transient during a claim month, the facility may report the hemoglobin/hematocrit readings and ESA dosage (if applicable) for the patient for a month if a patient has labs drawn by another provider/ facility and those labs are evaluated by an accredited laboratory (a laboratories that is accredited by, for example, the Joint Commission, the College of American Pathologists, the AAB (American Association of Bioanalysts), or State or Federal agency), and the dialysis facility obtains the hemoglobin/ hematocrit readings and ESA dosage. Additionally, we proposed to only consider a patient qualified for this measure (i) if the patient is alive at the end of the month; (ii) if the patient is treated in-center, that patient was treated at that facility at least twice during the claim month; and (iii) if the patient receives dialysis at home, a claim is submitted for that patient. We believe that these proposals will provide more flexibility for facilities and will also discourage facilities from drawing blood, even when not necessary for fear that the patient will fail to come to the facility again during that month. We requested comment on this proposal. We also requested comment on whether facilities should only have to report data for 98 percent of their patients. The proposed Anemia Management reporting measure was not included in the list of measures under consideration in accordance with section 1890A(a)(2) of the Act because we had not yet fully assessed the impact of the new FDAapproved ESA labeling on the ESRD population. We have since received and analyzed more, but still incomplete, anemia management data; we believe it is necessary to require facilities to provide complete data so that we may fully understand the effect of the changes to ESA labeling and other factors. The proposed Anemia Management reporting measure will play a critical role in patient safety. As noted above, our monitoring activities indicate that there has been a slight but noticeable increase in transfusions since the adoption of the ESRD PPS. Additionally, a United States Renal Data System analysis presented in May 2012 found an increase in blood transfusion rates among ESRD patients concurrent with the implementation of the ESRD PPS. Although the association of VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 changes in transfusion rates with the ESRD PPS, FDA labeling changes, and other factors are not yet known, we believe proactive facility engagement in regular monitoring of patient hemoglobin or hematocrit levels regardless of ESA use is critical to maintaining safe care, protecting the safety of beneficiaries, and monitoring the program effectively. We further believe that the data collected from the proposed measure are necessary for measure development in a clinical area of critical significance to patient safety—anemia and transfusion. A delay in proposing to adopt this reporting measure may prevent us from creating clinical measures for use in future years of the program and pose a risk to patients. Finally, we noted that section 1881(h) of the Act specifically highlights the importance of anemia management measures, and we do not believe it would be in the best interest of the program to wait an additional year to propose this measure. For the reasons stated above, we proposed to adopt an Anemia Management reporting measure for the PY 2015 ESRD QIP and subsequent payment years. We provided the technical specifications for this measure, at https:// www.dialysisreports.org/pdf/esrd/ public-measures/AnemiaManagementReporting-2015–NPRM.pdf. We requested public comment on these proposals. The comments we received on these proposals and our responses are set forth below. Comment: Some commenters supported the measure, stating that they believe this measure will allow us to closely monitor the underutilization of ESAs and the increase in transfusions. Commenters also stated that they believe that this measure will assist in explaining and monitoring timely ESA discontinuation and studying the potential effect of altitude on patients. Many commenters supported this measure, but requested that we make modifications to our proposed exclusions. These commenters suggested that we exclude, for all of the reporting measures, the following patients: (i) Beneficiaries who are regularly treated at the facility and who fit into one of these categories: (a) beneficiaries who die within the applicable month; (b) beneficiaries that receive fewer than 7 treatments in a month; and (c) beneficiaries receiving home dialysis therapy who miss their in-center appointments when there is a documented, good faith effort to have them participate in such a visit during the applicable month; (ii) transient PO 00000 Frm 00044 Fmt 4701 Sfmt 4700 dialysis patients; (iii) pediatric patients (unless the measure is specific to this population); and (iv) kidney transplant recipients with a functioning graft. Commenters stated that these exclusions would be consistent with our own measures reported on DFC; commenters also stated that these exclusions seek to hold facilities accountable only for those beneficiaries to whom they regularly give care and for whose care they can affect. Another commenter, however, stated that we should not implement other commenters’ suggestions that we exclude beneficiaries receiving home dialysis therapy who miss their in-center appointments when there is a documented, good faith effort to have them participate in such a visit during the applicable month; this commenter stated that it is the responsibility of the facilities to educate patients on the importance of making and keeping appointments. Additionally this commenter argued that ‘‘good faith’’ is too vague; commenter requested that, if we did adopt this exclusion, we clearly define a ‘‘good faith effort.’’ Another commenter stated that peritoneal dialysis patients do not need to be seen at a facility once per month and the measure should be accordingly revised. Response: Consistent with the Mineral Metabolism reporting measure, we agree with commenters who believe that the exclusions should be modified. We recognize that treating a patient twice may not provide enough time to effectuate quality patient care. We agree with the commenters who suggested that an in-center hemodialysis patient should be excluded if treated by a facility fewer than seven times during the month, regardless of whether the patient is officially admitted to that facility. With seven treatments, we believe that a facility should have had adequate opportunities to draw blood necessary to report hemoglobin/ hematocrit. We also believe that the threshold of seven will discourage unnecessary testing of in-center hemodialysis patients by facilities because they will know that, since incenter patients are typically treated three times per week, a patient must have been treated by the facility for at least two weeks to be included; thus, the facility need not feel pressure to draw blood for every patient during the first few visits of the month. Based on these considerations, we will not finalize our proposal to only exclude in-center patients who have been treated fewer than two times by the facility during the claim month. Instead, we will exclude any patient who is treated by the facility E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations fewer than seven times during the reporting month. We do not believe that it is necessary to specifically exclude transient patients from this measure because, as noted, any patient that is treated by the facility at least seven times during the applicable reporting month is present at the facility for enough time that the facility should be able to measure that patient’s hemoglobin/hematocrit. Likewise, for the same reasons, we do not believe we need to separately exclude patients who are deceased at the end of the reporting month. Provided that the patient was treated by the facility at least seven times during that month, the facility should be able to draw blood necessary to obtain hemoglobin/hematocrit values even if the patient is deceased at the end of the month. Additionally, we do not agree that facilities should not be held accountable for drawing blood from home dialysis patients who fail to attend a monthly appointment. We believe that it is incumbent upon a facility to make home dialysis patients aware that they must attend monthly appointments to be properly treated. Therefore, we will finalize our proposal that we will include any home hemodialysis patient for which a facility submits a claim with respect to the reporting month in this measure. Finally, we believe it is important to include transplant patients until they are officially discharged from a facility; regular monitoring can help ensure that a transplant remains effective and the facility is continuing to provide the best care possible. For the reasons stated above, we will modify our proposals for the exclusions for this measure and finalize that, for the PY 2015 ESRD QIP, facilities must report hemoglobin/hematocrit at least once per month via claims for (i) incenter Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. If the facility administers an ESA to these patients, it must also report the HCPCS code and corresponding unit for that patient. We will interpret an empty HCPCS field to mean that no ESA was administered. Comment: Several commenters encouraged us to not adopt a percentage reporting threshold because it does not distinguish between beneficiaries legitimately excluded and those that were merely missed. Other commenters requested that we use both exclusions and a threshold; one commenter suggested a threshold of 90 percent or an allowance of two patients to ensure VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 that small facilities are not disproportionally affected. Another commenter stated that requiring 98 percent reporting may make it difficult for patients to travel because dialysis facilities may encourage them otherwise in order to ensure compliance with the measure. One commenter requested that we provide guidance regarding the standardization of blood-draws so that data can be reliable before we implement a reporting threshold. Response: We agree with the commenters who argued that, even with exclusions, there are circumstances in which facilities cannot report the hemoglobin/hematocrit and ESA dosage, as applicable, for every patient at least once per month. It is possible that these exclusions alone may hold a facility responsible for a patient who was technically treated by the facility but who did not receive actual treatment from the facility during the applicable month. For example, a facility may wait to draw blood from a patient because it believes that the patient will be treated there for the entirety of the month, but learns that the patient has been hospitalized unexpectedly for all or part of the applicable month. Therefore, we believe that we should not require facilities to report for 100 percent of their patients. Based on data from CROWNWeb, we believe that facilities report hemoglobin/hematocrit and ESA dosage for approximately 99 percent of their patients on a monthly basis. We believe it is appropriate to assume that a similar percentage was reported via claims. Although, as commenters have argued with regard to the Mineral Metabolism reporting and the Hypercalcemia measures, this information in CROWNWeb was voluntarily reported which may mean that the data is biased toward facilities that value reporting; additionally, the data from the CROWNWeb pilot was mainly supplied by LDOs that may be more likely to have more resources and corporate policies that require reporting compliance. Taking all of these issues into consideration, we finalize a normative reporting threshold for this measure; facilities will be required to report at the lesser of the 50th percentile of all facilities in 2013 or 99 percent, in total, of their (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. This floor ensures that facilities are not penalized as long as they report at a high rate that is consistent with CROWNWeb data; that is, facilities know that, provided they reach 99 PO 00000 Frm 00045 Fmt 4701 Sfmt 4700 67493 percent for each month of the performance period, they will meet the requirements of the measure. We believe that this methodology fairly balances the concerns that the reporting in CROWNWeb is skewed with our desire to encourage continued excellence in the community. We are concerned that small facilities may be disproportionately impacted by the reporting threshold because, for example, a facility with 10 patients could fail to report for only one patient and, therefore, fail to meet the threshold. As we discuss below, we believe that 11 cases is an appropriate minimum for purposes of scoring clinical measures. As we have stated, we intend to use the information collected from reporting measures for purposes of scoring clinical measures based on the same data in subsequent payment years. Therefore, we will not require a facility to report this measure if it treats less than 11 (i) in-center Medicare patients who have been treated at least seven times by the facility; or (ii) home hemodialysis Medicare patients for whom the facility submits a claim. If a facility does not treat at least 11 of these patients during the performance period, it will be required to attest to this fact via CROWNWeb. If a facility does not make the attestation, we will score it accordingly. Comment: Several commenters do not support this measure because facilities already collect these data so the measure is unlikely to improve care. Some of these commenters asked us to require facilities to report this information separate from the ESRD QIP on at least one monthly claim to ensure anemia is properly treated. Response: As we noted in the proposed rule (77 FR 40974), we believe that this measure will discourage underreporting of ESAs and hemoglobin. Currently, facilities may report a value of 99.99 as default hemoglobin for claims that do not include an ESA. Since the bundle includes ESAs, it may not be financially beneficial for a facility to report an ESA, especially if a patient’s hemoglobin is greater than 12—negatively affecting its Hemoglobin Greater than 12 g/dL measure score. Additionally, we are concerned that the 99.99 value will be overutilized and will not allow us to properly monitor hemoglobin levels across the ESRD population. If we are able to closely and accurately monitor ESA dosage and hemoglobin, we believe we will be able to improve care by using this information to monitor the effects of the bundle and the ESRD QIP on beneficiaries; we also believe we may E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67494 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations utilize these data in the future to develop an anemia management clinical measure. Comment: Many commenters noted that it is impractical for facilities to obtain lab values from other providers because other providers are not required to measure these data, do not share data with dialysis facilities, and, even if facilities could obtain these data, they could not be sure that the labs were consistent or reported under the same standards. Additionally, one commenter argued that hemoglobin levels from other facilities will be of little use without further information regarding why the patient was at that facility. One commenter agreed that hemoglobin/ hematocrit values can be supplied by another provider provided the labs are evaluated by an accredited facility. Response: We recognize that it may be difficult for facilities to coordinate with hospitals and other providers in order to obtain lab values. We, however, are not mandating facilities to do so. In the proposed rule (77 FR 40974), we stated that facilities may obtain lab values from other providers. This proposal was specifically designed to afford facilities more flexibility in acquiring and reporting hemoglobin and hematocrit values, as well as ESA dosage. Facilities are highly encouraged to coordinate with other providers, but this measure does not mandate them to do so. We believe that the commenters’ concerns about inconsistent lab data are mitigated by the requirement that the lab must be accredited. Further, we do not believe that data from another provider will be of little use. We can use these values to monitor hemoglobin and hematocrit levels of ESRD patients, as well as ESA dosage; additionally, collecting these data may encourage providers to engage one another about the patient’s conditions and care. Comment: One commenter noted that hemoglobin values on claims are from the prior month; therefore the 99.99 is used for the claim in the first month of a patient’s dialysis or if a patient had a transplant. The commenter requested clarification on what it should report in these circumstances. Other commenters argued that 99.99 should be available without penalty to facilities because in some instances, it is appropriate. One commenter supported disincentivizing 99.99 reporting in order to stop facilities from not reporting patients with high hemoglobin. Response: The commenter is correct in that the Erythropoietin Monitoring VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 Policy (2006) 5 requests that the hemoglobin/hematocrit reading reported on claims be defined as ‘‘the most recent reading taken before the start of this billing period. For patients beginning dialysis, use the most recent value prior to the onset of treatment.’’ We recognize that, for some patients, specifically those new to dialysis, this hemoglobin/ hematocrit values may not be available. Therefore, we will not require a facility to report a hemoglobin/hematocrit value for a patient if that patient has been on dialysis for less than one month (including when dialysis is resumed after a transplant); facilities may report the default value without being penalized in this circumstance. We remind facilities that if an ESA is reported on a claim, the facility must also report a hemoglobin/hematocrit level, regardless of whether that patient is new to dialysis (CR 7460). Comment: One commenter asked us to include Omontys, an ESA new to the market, in this measure. Other commenters generally requested that we monitor new ESAs and their effects on hemoglobin levels. Response: We intend to monitor ESA dosage for all ESAs used by dialysis facilities. Using HCPCS codes, a facility must indicate which ESA it administered, including Omontys. Comment: One commenter noted that it supports the reporting of hemoglobin, but not hematocrit because the data set should be standardized to require only hemoglobin reporting. Response: Facilities can report either hemoglobin or hematocrit on claims. Either will count for the purpose of this measure. (For the Hemoglobin Greater than 12 g/dL measure, hematocrit values are changed to hemoglobin by dividing by 3). As of 2011, only 14 percent of facilities reported hemoglobin, while 70 percent reported hematocrit. We believe that requiring 70 percent of all facilities to alter their reporting method would generate undue burden on the dialysis facility community, for relatively little gain, as we have an established method for incorporating both hemoglobin and hematocrit into the measure calculation. Comment: Some commenters asked us to state the purposes of the anemia management reporting measure with more specificity. Some commenters requested that we clarify how we intend to report and make publicly available hemoglobin/hematocrit levels and ESA dosages. Commenters asked us to clarify the plans for the use of the information 5 https://www.cms.gov/Outreach-and-Education/ Medicare-Learning-Network-MLN/ MLNMattersArticles/downloads/MM4135.pdf. PO 00000 Frm 00046 Fmt 4701 Sfmt 4700 and how we will account for patient weight in our analyses. Response: We believe that the anemia management reporting measure emphasizes the importance of anemia management for the ESRD population and will support efforts to establish more meaningful, evidence-based clinical measures of anemia management in the future. We intend to publicly report the anemia management reporting measure rates in the same manner that we use to publicly report other measure rates under the ESRD QIP but will not score facilities based on those rates. Facilities will be able to preview the reporting data to be publicly reported before we post it on DFC. At present, the Anemia Management reporting measure does not take patient weight into account, but we will consider whether this type of adjustment is appropriate for future years of the ESRD QIP. We would also like to clarify that we will use HCPCS codes that indicate ESA administration and their corresponding units for assessing whether an ESA was administered. We will interpret an empty HCPCS field to mean that no ESA was administered. Comment: One commenter supports this measure but suggests that the data be captured in CROWNWeb since hemoglobin levels are only reported on claims with ESA doses. Response: The commenter is correct that CROWNWeb only requires a hemoglobin/hematocrit if an ESA is entered. Since January 1, 2012, however, facilities have been required to report hemoglobin/hematocrit on claims regardless of whether an ESA dose was administered (CR 7460). Facilities are expected to report the anemia management reporting measure on their claims. Comment: One commenter supports the measure but only for patients with hemoglobin less than 10 g/dL. It is more likely, the commenter argues, that one will identify a patient with a low hemoglobin (even if that patient is not on ESAs) if a new reporting measure is instituted. The commenter believes that reporting hemoglobin for patients not on ESAs who have a hemoglobin greater than 12 g/dL is not necessary because these patients are not at risk for the complications that arise from targeting high hemoglobin levels using ESAs. Response: It is our intention to use the data we collect from this reporting measure to develop an anemia management clinical measure and monitor anemia management trends. In order to better understand the ESRD population as a whole and collect a E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations robust data set, we believe it is important to collect hemoglobin/ hematocrit levels for patients regardless of their values or if an ESA was administered. Using this information, we can, among other things, assess trends across the entire population and use these data for measure development and monitoring purposes. As explained above, we are modifying our proposed exclusions and finalizing that a facility must report hemoglobin/ hematocrit and ESA dosage (via HCPCS codes and their units) for the lesser of the 50th percentile of facilities in 2013 or 99 percent, in total, of its (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. We will interpret an empty HCPCS field to mean that no ESA was administered. We also finalize that we will only apply this measure to facilities with at least 11 (i) in-center Medicare patients who have been treated at least seven times by the facility; and (ii) home hemodialysis Medicare patients for whom the facility submits a claim. Facilities who treat less than 11 of these patients during the performance period must attest to this fact in CROWNWeb. If they do not make this attestation, we will score them accordingly. Additionally, we will not penalize facilities for using the default 99.99 value for a patient in his/her first month of treatment at that facility. The technical specifications for this finalized measure can be found at https://www.dialysisreports.org/pdf/esrd/ public-measures/AnemiaManagementReporting-2015-FR.pdf. 4. Measures Under Consideration for Future PYs of the ESRD QIP tkelley on DSK3SPTVN1PROD with RULES2 In addition to the PY 2015 ESRD QIP, we noted in the proposed rule that we are considering measures for future payment years of the program. We are specifically considering whether we should propose in future rulemaking to adopt the following two measures, • NQF #1463: Standardized Hospitalization Ratio for Admissions (SHR) and • NQF #0369: Dialysis Facility Riskadjusted Standardized Mortality Ratio (SMR). We stated that we intend to adopt these measures for future payment years of the ESRD QIP, possibly beginning with the PY 2018 program. We notified facilities of our intent and solicited comments on incorporating these measures into future payment years of the ESRD QIP. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 a. Standardized Hospitalization Ratio (SHR) Hospitalizations are an important indicator of patient quality of life and morbidity. The SHR is an NQF-endorsed (#1463), risk-adjusted measure of hospitalization for dialysis patients. The measure is claims-based and describes, as a ratio, the number of ESRD Medicare patient actual admissions versus expected hospitalizations adjusted for the facility’s Medicare patient case mix. Please refer to the NQF Web site (www.qualityforum.org) to obtain more detail about this measure. b. Standardized Mortality Ratio (SMR) The SMR measure is an NQFendorsed (#0396) critical patientcentered, outcome measure of overall patient care furnished by facilities. We believe that the SMR measure would encourage appropriate overall patient care by facilities and incentivize facilities to examine the holistic health of the patient rather than treating the patient based on an individual measureby-measure basis. The SMR measure describes, as a ratio, the number of ESRD Medicare patient actual deaths versus expected deaths adjusted for the facility’s Medicare patient case mix. Please refer to the NQF Web site (www.qualityforum.org) to obtain more detail about this measure. c. Public Reporting of SHR and SMR Measures Although the SHR and SMR measures may not be adopted for the ESRD QIP until a future payment year, we intend to publicly report these measure ratios to the public via Dialysis Facility Compare (DFC) to encourage facilities to improve their care. Section 4558(b) of the Balanced Budget Act of 1997 (Pub. L. 105–33) (BBA) directs the Secretary to develop, not later than January 1, 1999, and implement, not later than January 1, 2000, a method to measure data reflective of the quality of renal dialysis services provided under the Medicare program. Under this authority, we began reporting the SMR measure on DFC in January, 2001 as a survival measure and used three categories to rate facility performance: ‘‘as expected,’’ ‘‘worse than expected,’’ and ‘‘better than expected.’’ The SMR measure that we are considering adopting for the ESRD QIP was developed in 1999 and facilities are required to submit these data via form 2746. The SHR measure that we are considering adopting for the ESRD QIP was developed in 1995, presented to a Technical Expert Panel after modifications to risk adjustment and statistical modeling in 2007, and PO 00000 Frm 00047 Fmt 4701 Sfmt 4700 67495 received NQF-endorsement in 2011. The data needed to calculate the SHR measure have been regularly reported to DFR since 1995 and have been used by facilities for quality improvement activities. We plan to add the SHR data to the DFC effective January 2013; additionally we will report the actual SMR rates/ratio on the DFC beginning January 2013. We originally proposed to adopt the SHR measure for the PY 2014 ESRD QIP, but did not finalize the proposal, in part, because commenters voiced concerns regarding the accuracy of the co-morbidity data used in the calculation of the measures. Details on public comments and why we did not adopt the SHR measure are articulated in the CY 2012 ESRD PPS final rule (76 FR 70267). Since that time, we have identified that the claim form UB 92 with the type of bill (TOB) field 72x allows a facility to input up to 17 comorbid conditions per claim submission. We acknowledge that patient co-morbidities can change with time and since the capability already exists on the UB 92 TOB, we believe the best means for facilities to update patient co-morbidities is through the ESRD 72x claims form. Details on this form can be found in the Medicare Claims Processing Manual, Chapter 8— Outpatient ESRD Hospital, Independent Facility, and Physician/Supplier Claims (https://www.cms.gov/manuals/ downloads/clm104c08.pdf). In addition, because the NQFendorsed SHR and SMR measures are risk-adjusted for ESRD patients that reside in nursing homes, in order to calculate the measure rates on DFC, we will utilize data from the Minimum Data Set (MDS) to identify those individuals in nursing homes. We would use these data not only for reporting the measure rates on DFC at present, but also for calculating the measures if we adopted them for use in future years of the ESRD QIP. The Omnibus Budget Reconciliation Act (OBRA) of 1987 requires that all Medicare and Medicaid certified nursing homes complete MDS assessments on all of their patients. We requested comment regarding the feasibility of adopting these measures for future payment years of the ESRD QIP. The comments we received on these proposals and our responses are set forth below. Comment: Although most commenters agreed that measures for hospitalization are important for quality reporting purposes, many commenters strongly opposed that the SHR measure be included in the ESRD QIP in subsequent payment years. These E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67496 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations commenters argued that the SHR measure is a measure over which facilities have little control because patients often follow the advice of their primary care physician or visit a hospital without consulting the facility to receive treatments that could be furnished in the outpatient setting. Commenters expressed concern that the measure could lead to cherry-picking, disincentivize appropriate hospitalization, and is not transparent enough for facilities to make improvements in this area because of they are confused about the riskadjustment methodology. Other commenters stated that the measure needs further refinement and validation, specifically regarding risk adjustment for frail patients such as those in nursing homes, cultural factors, socioeconomic factors, and health factors specific to the ESRD population. Commenters asked that these adjusters be made public. One commenter believes that this measure would create a bias for facilities on the basis of location. Some commenters suggested that, instead of implementing this measure, CMS consider a coordinated care model. Other commenters requested that we adopt a pilot for this measure wherein only aggregate data is reported until the measure can be further assessed and validated. Several commenters suggested that we implement an SHR measure focused on admissions that could have been prevented by interventions from dialysis facilities; one commenter suggested that the SHR measure be modified to calculate a ‘‘risk-adjusted standardized hospitalization ratio for dialysis accessrelated infections and fluid overload,’’ since these are elements facilities can control. Response: We thank commenters for these opinions. We will take these comments into consideration as we further assess the appropriateness of adopting the SHR measure for the ESRD QIP. Comment: Many commenters strongly supported the consideration of SHR for future years of the ESRD QIP. One commenter requested that we implement the measure as soon as possible. Commenters also supported reporting measure rates on DFC beginning in CY 2013. One commenter supports the addition of SHR data to DFC as long as a caveat is included explaining that dialysis facilities can influence but do not control hospitalization rates. This commenter also requested that the ‘‘expected,’’ ‘‘better than expected,’’ and ‘‘less than expected’’ categories remain on DFC. One commenter argued that there is not VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 enough data on SHR to report rates on DFC. Response: We thank the commenters who supported the future consideration of the SHR for implementation. We intend to begin public reporting of the SHR on DFC as of January 2013 to indicate the relative performance of facilities. We believe that dialysis facilities own partial responsibility for the rate at which their patients are hospitalized, in particular when that rate is substantially higher than at other peer facilities and may not be explained by variation in the illness of patients. We do acknowledge that care provided by dialysis facilities is not the sole determinant of the hospitalization of ESRD patients and this measure would not support the assertion that they are. The SHR is only shown for patients with at least 5 patient years at risk, which corresponds to approximately 10 expected hospitalizations. The confidence interval for the SHR will also be reported on DFC to show the uncertainty in the value due to random variation, which will help to address the issue of limited data for the SHR. We appreciate these suggestions and will take them into consideration as we further assess the appropriateness of adopting the SHR measure for the ESRD QIP. Comment: Some commenters strongly support using the 72x claims as indicators of risk factors for facilities and patients. One commenter suggested that this information could be used in creating an access to care measure/ adjustment in the future. Other commenters, however, believe that reporting comorbidities on the 72x claim could be a huge administrative burden for facilities, including time associated with validating that the data they submit on these claims is valid. Response: We recognize that reporting co-morbidities on 72x claims could be burdensome to some facilities. We believe, however, that this information is valuable, specifically in the context of future measure development. We will continue to assess the best means available for risk-adjustment for both the SHR and SMR measures, taking both the benefits of the information and the burden to facilities into account, should we propose to adopt these measures in future rulemaking. Comment: One commenter argued that SHR is not a measure whereby facilities can make meaningful improvement because the measure’s rates cannot be calculated in real-time; the commenter asked that claims be made available to the facility in a timely manner if the measure is adopted so that they can become aware of PO 00000 Frm 00048 Fmt 4701 Sfmt 4700 hospitalizations and other comorbidities and calculate their SHR in real-time. Response: We will consider this suggestion if we decide to propose to adopt the SHR measure for the ESRD QIP in future rulemaking. Comment: One commenter noted that the SHR measure should be at least a two to three year measure as 1 year of data is not sufficient for an accurate assessment. Response: We recognize that the NQFspecifications call for a measurement period that is longer than 1 year, and we continue to assess how to implement such an extended measure period effectively in the ESRD QIP if we propose to adopt the SHR measure in future rulemaking. Comment: Many commenters opposed the use of SMR in future years for reasons similar to that of SHR. Commenters expressed concern that the measure could lead to cherry-picking and is not transparent enough for facilities to make improvements in this area because of they are confused about the risk-adjustment methodology. Other commenters stated that the measure needs further refinement and validation, specifically regarding risk adjustment for frail patients such as those in nursing homes, cultural factors, socioeconomic factors, and health factors specific to the ESRD population. Commenters asked that these adjusters be made public. One commenter believes that this measure would create a bias for facilities on the basis of location. Another commenter argued that the measure should only account for catheter/dialysis complications and should not include ‘‘sudden deaths.’’ One commenter stated that literature suggests that the measure is invalid in small facilities and only valid in large facilities when averaged over several years. Some commenters suggested that, instead of implementing this measure, CMS consider a coordinated care model. Other commenters requested that we adopt a pilot for this measure wherein only aggregate data is reported until the measures can be further assessed and validated. Response: We thank the commenters who shared concerns and provided suggestions regarding the future consideration of the SMR for implementation in the ESRD QIP. We will continue to consider these suggestions as we decide whether to propose to adopt the SMR measure. In the DFR, we limit reporting to facilities with at least 3 expected events for the time period. Similarly, we only calculated SHR based on at least 5 patient years at risk, which corresponds E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations to approximately 10 expected hospitalizations. We incorporated these limitations on the measures to account for potentially imprecise estimates resulting from small facility size. Comment: One commenter stated that the SMR measure should not be adopted until CMS can articulate how it fits into the ESRD QIP’s strategic vision. Response: While we recognize that the ESRD population is at high risk for mortality by definition, we believe that mortality rates are susceptible to the quality of care provided by dialysis facilities. We believe the SMR may help distinguish the quality of care offered by dialysis facilities as determined by mortality, a key health care outcome used to assess quality of care in other settings, such as hospitals. We believe the SMR may also fill an important gap in the ESRD QIP by assessing the outcome of all ESRD care provided at the dialysis facilities, rather than individual processes of care. For these reasons, we will continue to consider the inclusion of the SMR in future rulemaking cycles. Comment: Many commenters strongly supported the consideration of SMR for future program years, noting that death is the most important measurement of negative outcomes. One commenter requested that we implement the measure as soon as possible. One commenter suggested that the measure specifically focus on patients within their first 90–120 days of dialysis since these patients are generally more likely to die. Commenters also supported reporting measure rates on DFC beginning in CY 2013. Response: We thank commenters for their support of this measure. At this time, we do not believe it should be included in the PY 2015 ESRD QIP due to the concerns voiced by other commenters. We will consider the measure’s assessment of patients in their first months of dialysis for future rulemaking. Finally, we will begin reporting the SMR measure rates on DFC in 2013 and are attempting to address potential shortcomings pointed out by commenters that we described in the CY 2012 ESRD PPS final rule (76 FR 70267) prior to proposing the measure for ESRD QIP. Comment: One commenter argued that SMR is not a measure whereby facilities can make meaningful improvement because the measure’s rates cannot be calculated in real-time; the commenter asked that claims be made available to the facility in a timely manner if the measure is adopted so that they can become aware of hospitalizations and other co- VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 morbidities and may calculate their SMR in real-time. Response: We will consider this suggestion if we decide to propose to adopt the SMR measure for the ESRD QIP in future rulemaking. Comment: One commenter noted that the SMR measure should be at least a two to three year measure as 1 year is not sufficient for an accurate assessment. Response: We recognize that the NQFspecifications call for a measurement period that is longer than 1 year, and we continue to assess how to implement this measurement period effectively in the ESRD QIP if we decide to propose to adopt the SMR measure. Comment: One commenter requested clarification regarding whether the facility’s rates would be compared to current or past national averages when assessing the number of expected deaths. Response: The SMR measure estimates the relative death rate ratio for a facility, as compared to the national death rate. The relative death rate ratio and the national results are all determined during the same (current) time period. In response to comments, we will continue to consider the SMR and SHR measures for future years of the program. We will, as proposed, begin displaying the rates/ratios for these measures on DFC beginning in early 2013. 5. Other Potential Future Measures Under Development As part of our effort to continuously improve the ESRD QIP, we are working on developing additional, robust measures that provide valid assessments of the quality of care furnished to ESRD patients by ESRD facilities. Some areas of measure development are discussed below. In addition, we are considering the feasibility of developing quality measures in other areas such as kidney transplantation, quality of life, health information technology for quality improvement at the point of care and the electronic exchange of information for care coordination, and transfusions. We requested comment on these potential areas of future measurement and welcomed suggestions on other topics for measure development. The comments we received on these proposals and our responses are set forth below. Comment: We received suggestions for many future measures. These included: (i) A CAHPS/experience of care measure for home dialysis and predialysis patients; (ii) a measure assessing catheter access site infections; PO 00000 Frm 00049 Fmt 4701 Sfmt 4700 67497 (iii) a measure for adequate serum albumin; (iv) a measure promoting immunizations; (v) measures assessing iron management; (vi) patient fluid management measures; (vii) measures incentivizing home hemodialysis; (viii) an NHSN measure for home patients that includes peritonitis; (ix) measures that specifically monitor nursing sensitive indicators; (x) a measure that tracks which modalities a facility offers; (xi) a measure that tracks whether a facility exceeds the average percentage of patients between 18 and 54 who are employed; (xii) a measure that tracks whether facilities have shifts after 5:00 p.m.; (xiii) an emergency department use measure; (xiv) a measure on transplantations/referrals; (xv) a measure on dialysis adequacy for frequent dialyzers; (xvi) measures on phosphorus and PTH; (xvii) a composite measure which takes into account the interdependability of calcium, phosphorus, and parathyroid hormone in bone mineral metabolism; (xviii) measures assessing quality of life; and (xix) palliative care measures. Response: We thank the commenters for your comments regarding measure implementation. We will take these suggestions into consideration during future measure development and rulemaking. Comment: Some commenters specifically requested that we broaden the use of pediatric measures in the ESRD QIP. These commenters recommended that we (i) develop (a) a dialysis adequacy measure for peritoneal pediatric patients and (b) a CAHPS/experience of care measure for pediatric patients; and (ii) consider the following NQF-endorsed measures: (a) Measure 1418: Frequency of Adequacy Measurement for Pediatric Hemodialysis Patients; (b) Measure 1421: Method of Adequacy Measurement for Pediatric Hemodialysis Patients; (c) Measure 1425: Measurement of nPCR for Pediatric Hemodialysis Patients; (d) Measure 1433: Use of Iron Therapy for Pediatric Patients; and (e) 1424: Monthly hemoglobin measurement for Pediatric Patients. Response: We thank the commenters for suggesting additional measures relevant to the pediatric portion of the ESRD population for future consideration in the ESRD QIP. We recognize the importance of assessing the quality of care furnished to pediatric ESRD patients. To this end, we are adopting in this final rule a measure of pediatric hemodialysis adequacy for PY 2015. We will consider whether it is appropriate to propose to adopt E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67498 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations additional pediatric measures for the ESRD QIP. Comment: Some commenters specifically discouraged us from considering certain measures for future ESRD QIP adoption. These included (i) a quality of life measure, because no research shows that facilities can improve this aspect of patient life and patients often refuse to take surveys; and (ii) measures on electronic information exchange because it is unclear what these measures would entail or how they could be carried-out. Response: We appreciate the comments and will take them into consideration during future measure development. Comment: Many commenters supported a measure on transfusions if this measure assessed transfusions that are within the control of ESRD facilities. One commenter suggested that, before the measure is adopted, we wait to see the results of studies looking at when transfusions are and are not within a facility’s control. One commenter requested clarification regarding where CMS accesses transfusion data, whether the information shows the underlying reason for the transfusion, and the timeframe for CMS’ access and analysis of the data. Response: We appreciate the comments and will take them into consideration during future measure development. Comment: Commenters also discussed the general principles CMS should embrace in future years of the program. Commenters encouraged us to work with the kidney care community to adopt a strategic vision for the ESRD QIP, specifically the criteria and process for the adoption of measures and domains. One commenter requested that CMS and other stakeholders agree on the timeline and process for future measure development. Commenters also urged us to provide the criteria used to select measures, recommending the NQF selection criteria, and engage the Measures Application Partnership in identifying measures to include in the program and their weighting. In selecting measures, commenters stated that every measure should (i) have a verified entity responsible to maintain and update it at least once every three years; and (ii) be fully and clearly specified and tested for reliability and validity. Commenters also recommended that we phase measures into the program, requiring reporting of the measure outside of the ESRD QIP for at least 1year, and once a measure is added, we score facilities based on the lesser of the facility’s performance or the national performance rate, at least VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 for the first year. One commenter stated that all future measures should be NQFendorsed before they are adopted. Another commenter noted that NQFendorsement does not mean a measure is appropriate for the ESRD QIP. Response: We remain dedicated to a transparent, consensus-based measure development process that offers multiple opportunities for input from stakeholders. The measure development process that we currently use includes using Technical Expert Panels and public comment periods, seeking NQF endorsement, providing measures to the Measures Application Partnership for feedback, and the rulemaking process in which we respond to stakeholder comments. We encourage continued engagement by the kidney care community in this process, both in prioritizing additional measures, supporting ongoing measure development, and providing feedback for currently implemented measures. At present, we analyze all clinical measures for validity and reliability, and NQF endorsement is a key consideration we take into account when deciding whether to propose to adopt clinical measures. Where endorsed measures are not available to address key issues relevant to the ESRD population, we intend to consider unendorsed measures until such endorsed measures are available. We agree that clinical measures should be fully specified at the time they are proposed. We believe that, generally, it is helpful to both the ESRD QIP community and CMS to phase-in measures as the commenter suggests. We do not entirely understand the comment stating that we should score facilities based on the lesser of the facility’s performance or the national performance rate. We take this to mean that we should use a scoring methodology similar to PY 2012 and PY 2013 for new measures. At this time, we believe the objectives of the program are best served by scoring facilities using the achievement and improvement scoring methodology for the reasons discussed below. Comment: Some commenters support additional measures but requested that they be implemented no sooner than PY 2018 since CROWNWeb has just launched and data collection would likely be through CROWNWeb. Response: We recognize that CROWNWeb is a new data collection system and plan to take that into consideration while developing and implementing ESRD QIP measures in the future. PO 00000 Frm 00050 Fmt 4701 Sfmt 4700 Comment: In designing future years of the ESRD QIP, commenters urged us to focus on the most important measures because adding measures could dilute each measure’s weight in the calculation of the Total Performance Score. Response: We acknowledge the commenter’s concern and note that we will seek to balance appropriateness of the measures, importance of the measures, and parsimony as we consider what measures to implement through future rulemaking. Comment: Some commenters made broad suggestions about measure adoption in the future, suggesting that we use a phased approach for measure implementation whereby the measures would be reported outside of the ESRD QIP for 1 year prior to adoption of the measure in the ESRD QIP; commenters argued that this reporting period will allow us to set a proper baseline for clinical measures. Response: We thank commenters for their suggestions. In general, we seek to collect at least 1 year of data through claims or CROWNWeb before adopting a measure for the ESRD QIP. However, we make this assessment on a case-bycase basis because of the importance of timely implementation of some measures (for example, measures that directly affect patient safety). We will continue to consider these issues as the ESRD QIP evolves. Comment: One commenter encouraged us to improve the program by maintaining a reasonable number of measures in order to reduce administrative costs and publicly reporting quality measures on DFC. Response: As the ESRD QIP evolves from year-to-year, we seek to continuously evaluate the effectiveness of the measure set, burden to providers, and clarity for beneficiaries. a. Thirty-Day Hospital Readmissions One of the major areas our VBP programs seek to promote is care coordination. Care coordination measures assess caregivers not only on the care directly under their control, but also on their success in coordinating care with other providers and suppliers. Hospital readmission is often the outcome of uncoordinated care. Care coordination measures encourage primary caregivers, ESRD facilities, physicians, and hospitals to work together to improve the quality of care. A 30-day hospital readmissions measure is a primary example of care coordination. This measure is currently under development for the ESRD QIP, and we requested comment regarding our use of such a measure in future payment years. E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 The comments we received on this topic and our responses are set forth below. Comment: Commenters made many suggestions with regard to a 30-Day Readmissions measure. Some commenters did not support the adoption of this measure for the ESRD QIP, arguing that facilities cannot always control hospitalization, and suggested that facilities would be better suited to use this type of measure in a coordinated care setting. One commenter encouraged us to adopt this measure in place of an SHR measure because a 30-Day Readmission measure is more likely to increase care coordination and less likely to encourage cherry-picking. One commenter suggested that a 30-Day Readmission measure include a grace period of 10–14 days for which the facility would not be held responsible, preventing facilities from being penalized if the patient received lowquality care in the hospital, and limiting the possibility that facilities could turn away patients who have recently been hospitalized. This commenter also pointed out that the hospital 30-Day Readmissions measure does not include ESRD patients and argued that hospitals should be held responsible for readmissions during the grace period the commenter suggests. One commenter requested that the community be able to review the findings of the Hospitalization TEP that CMS held in May 2012 before this type of measure is adopted. Response: We appreciate the comments regarding our consideration of a 30-day readmission measure and will take them into consideration in future rulemaking. We note that it is our policy to make publicly available the results of measure development TEPs through https://www.cms.gov/Medicare/ Quality-Initiatives-Patient-AssessmentInstruments/MMS/ TechnicalExpertPanels.html. b. Efficiency One of the main goals of our VBP programs is not only to enhance quality of care but also improve efficiency in providing that care. At present, we are not aware of an efficiency measure that is appropriate for the ESRD population. We noted, however, that we were interested in receiving comments regarding this concept. The comments we received on this topic and our responses are set forth below. Comment: We received many comments regarding our proposal of developing and adopting an efficiency measure in future years. Several VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 commenters noted that an efficiency measure is not necessary because of the bundled payment. Many commenters asked that, if such a measure is developed, it be case-mix adjusted for nursing home residents, homeless patients, and drug and alcohol abuse to discourage cherry-picking. One commenter cautioned us to explore the unintended consequences which may result from this measure, and another commenter requested that we engage in more studies defining ‘‘efficiency’’ before we adopt a measure. Response: We thank our commenters for their input regarding the consideration of an efficiency measure for implementation in the ESRD QIP. We will take these suggestions into account as we develop measures for future years of the ESRD QIP. c. Population/Community Health We are aware that unintended consequences, specifically those involving access to care, may result from the ESRD QIP. To address these concerns, we are currently monitoring access to care and exploring the development of new measures or adjustments to existing measures that would mitigate the unintended consequences and/or incentivize facilities caring for patients who may, generally, contribute to lower facility measure rates. We requested comment on developing such a measure or adjustments to measures, specifically with regard to access to care issues. The comments we received on this topic and our responses are set forth below. Comment: Many commenters provided feedback on a possible access to care measure. Some commenters encouraged the development of such measures. Many of these commenters suggested that, instead of creating a measure to assess access to care, we develop comorbidity adjustments for quality measures that would ease facilities’ concerns about treating these patients. Commenters who serve aging patients with multiple comorbidities believe there needs to be further consideration for facilities caring for these types of patient populations. Other commenters noted that present and future measures should exclude homeless patients, nursing home patients, and patients with comorbidities of drug/alcohol abuse and mental health issues to protect access to care for these patients. Several commenters believe that care coordination is important but is not practical due to data timing issues and knowledge of staff; these commenters suggested that CMS fund additional staff PO 00000 Frm 00051 Fmt 4701 Sfmt 4700 67499 and technology prior to implementing care coordination measures. One commenter suggested that we analyze the following factors when assessing access to care: (i) Miles traveled to facility; (ii) time required to commute to facility; and (iii) method of transportation/responsible party. Response: We thank the commenters for expressing interest in addressing the issue of access to care. We are sensitive to the particular role access to care can play for ESRD patients, and the limitations encountered in collecting relevant data. Clinical measures assessing mortality and hospitalization in the ESRD population were proposed in the PY 2014 ESRD QIP, and we have incorporated risk adjustment for comorbidities in the specifications for these measures, but it is not clear to us how effectively this risk-adjustment can address problems with access. Factors such as distance traveled are not captured by claims data. We believe that exclusion of the suggested groups (homeless, nursing home patients, etc.) from quality measures may protect access for these groups, but would fail to adequately address issues for quality of care in those patients who are most at risk for poor health outcomes. We are also concerned that such exclusions may excuse facilities from taking steps toward more effective coordination of care. We respectfully disagree that care coordination is not practical. Rather, we believe it is a vital element of care for a population that is by definition at particular risk for transitions into and out of care settings such as acute care hospitals. It is particularly important for those patients who reside in long-term care facilities such as nursing homes, or who must seek care for chronic conditions related to mental health issues or drug/alcohol abuse to receive care that is coordinated since these individuals often receive extensive care from various types of providers. 6. Scoring Background and General Considerations for the PY 2015 ESRD QIP Section 1881(h)(3)(A)(i) of the Act requires the Secretary to develop a methodology for assessing the total performance of each facility based on the performance standards established with respect to the measures selected for the performance period. For the PY 2014 ESRD QIP, we adopted a performance scoring methodology that assessed facilities on both their achievement and improvement on clinical measures. We stated that we believe that this scoring methodology will more accurately reflect a facility’s performance on the measures because it E:\FR\FM\09NOR2.SGM 09NOR2 67500 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 will enable us to differentiate between facilities that simply meet the performance standards, those that exceed the performance standards by varying amounts, and those that fall short of the performance standards. We also stated that we believe that the PY 2014 methodology appropriately incentivizes facilities to both achieve high Total Performance Scores and improve the quality of care they provide (76 FR 70272). We believe that the methodology set forth for PY 2014 continues to incentivize facilities to meet the goals of the ESRD QIP; therefore, with the exception of the proposed changes in the proposed rule (77 FR 40976), we proposed to adopt a scoring methodology for the PY 2015 ESRD QIP that is nearly identical to the PY 2014 ESRD QIP. The comments we received on this proposal and our responses are set forth below. Comment: Several commenters supported our proposal to use the PY 2014 scoring methodology in the PY 2015 ESRD QIP. Response: We thank commenters for their support. We will finalize our proposals to use the PY 2014 scoring methodology for use in the PY 2015 program with the modifications discussed below. We believe that these modifications improve the efficacy of the program for the reasons discussed. 7. Performance Period for the PY 2015 ESRD QIP Section 1881(h)(4)(D) of the Act requires the Secretary to establish the performance period with respect to a year. For the PY 2014 ESRD QIP, we finalized a performance period of CY 2012. We stated that we believe that, at this point, a 12-month performance period is the most appropriate for the program because this period accounts for any potential seasonal variations that might affect a facility’s score on some of the measures, and also provides adequate incentive and feedback for facilities and Medicare beneficiaries (76 FR 70271). We continue to believe that a 12-month performance period will best meet these policy objectives, and we considered what 12-month period would be closest in time to the payment year but would still allow us to time to operationalize the program, calculate scores, and allow facilities a period of time to preview and ask questions regarding these scores before they are published and impact payment. We determined that CY 2013 is the latest period of time during which we can collect a full 12 months of data and still implement the payment reductions beginning with January 1, 2015 services. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 Therefore, for the PY 2015 ESRD QIP, we proposed to establish CY 2013 as the performance period for all of the measures. We requested comments on this proposal. The comments we received on these proposals and our responses are set forth below. Comment: Commenters supported our proposal to use CY 2013 as the performance period for the PY 2015 ESRD QIP; some commenters specifically supported a performance period that allows us to set standards before the performance period begins. Some commenters, while supporting this performance period, cautioned us against using data from CROWNWeb from this period since CY 2013 will be the first full year CROWNWeb is implemented. Response: We thank commenters for their support. We note that, because we are not finalizing the Hypercalcemia measure, we are no longer using data from CROWNWeb for purposes of scoring any clinical measure for the PY 2015 ESRD QIP. For purposes of the PY 2015 ESRD QIP, we will be using CROWNWeb to collect data only for the Mineral Metabolism reporting measure. We believe that this is appropriate since facilities will only be required to report data, but will not be scored based on these data for PY 2015. We believe that CROWNWeb is sufficiently implemented to allow successful reporting for CY 2013. We will continue to assess the appropriateness of CROWNWeb data for inclusion for purposes of clinical measures in the ESRD QIP. Comment: Many commenters asked us to shorten the data lag between the performance period and the payment reduction/public reporting of the data so that the data can remain relevant. Commenters suggested that CROWNWeb could be used to reduce these data lag. Response: For PY 2015, we have determined that data derived from claims is the most appropriate source on which to score facilities on clinical measures because this source is the most complete and representative of the greatest number of facilities. Because claims take more time to compile and calculate than other data sources to ensure reliability, there is a lag between the time when the claims are submitted for processing and the time that the claims become available to calculate ESRD QIP measure rates. We also believe it is important to allow facilities a period of time to review their scores before the payment adjustments take place. We are considering how we might be able to shorten this timeline in the PO 00000 Frm 00052 Fmt 4701 Sfmt 4700 future. We believe that CROWNWeb will be valuable in this effort once it has been successfully launched for a period of time, and we are confident that the data submission and validity issues have been resolved. Comment: One commenter suggested that we consider employing rolling 12month performance periods with payment updated quarterly. Response: At this time, we are not able to implement a rolling 12-month performance period that is updated on a quarterly basis because we do not have the systems or resources in place to calculate scores, answer inquiries, and provide Performance Score Certificates more than once per year. We will, however, continue to consider this suggestion as the ESRD QIP evolves. For the reasons stated above, we finalize CY 2013 as the performance period for the PY 2015 ESRD QIP as proposed. 8. Performance Standards for the PY 2015 ESRD QIP Similar to the PY 2014 ESRD QIP, we proposed to adopt performance standards for the PY 2015 ESRD QIP measures under section 1881(h)(4)(A) of the Act. This section provides that ‘‘the Secretary shall establish performance standards with respect to measures selected * * * for a performance period with respect to a year.’’ Section 1881(h)(4)(B) of the Act further provides that the ‘‘performance standards * * * shall include levels of achievement and improvement, as determined appropriate by the Secretary.’’ We use the performance standards to establish the minimum score a facility must achieve to avoid a payment reduction. a. Clinical Measure Performance Standards With respect to the seven proposed clinical measures, we proposed to set the PY 2015 improvement performance standard and achievement performance standard (collectively, the ‘‘performance standard’’) for each measure at the national performance rate (which we would define as the 50th percentile) of all facilities’ performance on the measure during CY 2011 (the proposed comparison period—discussed in more detail below). For the PY 2014 ESRD QIP, we set the performance standards at the national performance rate during a baseline period of July 1, 2010–June 30, 2011. This period of time, however, did not allow us to publish the numerical values for the performance standards concurrently with the final rule because of the length of time needed for us to compile claims-based measure data at E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations the individual facility level and calculate the measure rates. Instead, we included an estimate of the numerical values for the performance standards in the final rule, using nine months of data, and posted the numerical values of the performance standards based on the full 12 months of data on https:// www.dialysisreports.org/pdf/esrd/ public-measures/UpdatedBaseline2014–FR.pdf by the end of December 2011. In order to ensure that we have enough time to calculate and assign numerical values to the proposed performance standards for the PY 2015 program, we proposed to set the performance standards based on the national performance rate (that is, the 50th percentile) of facility performance in CY 2011. We noted that by choosing this time period for PY 2015, however, the data on which we base the performance standards would only capture 6 months of more recent data when compared to PY 2014 and would also overlap with 6 months of the data used to calculate the PY 2014 performance standards. We stated our concern that if we finalize this period of time, we would not be adequately addressing stakeholder requests that we take steps to minimize the length of ‘‘data lag’’ between the dates used to calculate the performance standards and the payment year. We recognized that stakeholders might prefer that we base performance standards on data as close in time to PY 2015 as possible. We stated that the period of time closest to the payment year that would allow us to post the numerical values for the performance standards before the end of the first month of the performance period is parallel to that of PY 2014, from July 1, 2011 through June 30, 2012. As with PY 2014, selecting this time period for purposes of calculating numerical values for the performance standards would not allow us to publish these numerical values until late 2012 or early 2013, which is closer in time and may possibly be during the performance period. However, as in PY 2014, we would still be able to provide estimates for the numerical values of the performance standards at the time of final rule publication and post the actual numbers as soon as they are available in December 2012 or January 2013. Based on these considerations, we proposed CY 2011 as the basis for the performance standards (that is, the national performance rates). We did, however, request comment concerning whether we should instead use data closer in time to the payment year and set the performance standards using July 1, 2011 through June 30, 2012 data. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 For two of the PY 2015 measure topics, Kt/V Dialysis Adequacy and Hypercalcemia, we noted that we do not possess data for the entirety of CY 2011, the year on which we proposed to base the performance standards. We did not begin collecting uniform data on the Kt/ V hemodialysis adequacy measure until January 1, 2012 (see Change Request 7460), and, under the conditions for coverage, facilities were not required to report serum calcium values that will be used to calculate the Hypercalcemia clinical measure until their submission of May, 2012 data with the June 2012 national implementation of CROWNWeb. Despite these issues, we stated that we do have data on which we can base performance standards. We noted that although facilities are not yet required to report serum calcium levels, approximately 63 percent of facilities, which treat approximately 80 percent of the Medicare ESRD patient population, have been voluntarily reporting these data via CROWNWeb piloting since July 2008. Additionally, we compared the serum calcium values reported by facilities in 2010 as part of a clinical data reporting program called ELab,6 to values that have been voluntarily reported by facilities in 2010 through CROWNWeb, and the values are significantly similar. We stated our belief that these similarities will also extend to data reported in 2011. Therefore, we proposed to calculate performance standards for the Hypercalcemia measure using the data that we collected via CROWNWeb Pilots collected during CY 2011. Uniform Kt/V reporting for hemodialysis patients did not begin until January 1, 2012 (CR 7640). Before this time, facilities could use a number of different methodologies to calculate Kt/V values, with the result that the values could be different depending on which methodology was used. We stated in the proposed rule that we have analyzed the data collected during the CROWNWeb pilot and found that 88 percent of facilities that reported to CROWNWeb had reported Kt/V values using a NQF specified calculation method (this method is also specified in Change Request 7640) that yields consistent results and that is part of the specifications for each of the hemodialysis Kt/V measures that we proposed to adopt for the PY 2015 program. Though we are not able to tell what calculation method a facility used by reviewing a claim, we believe it is reasonable to assume that roughly the same percentage of facilities reported Kt/V on their claims prior to 2012 using 6 https://www.esrdnet11.org. PO 00000 Frm 00053 Fmt 4701 Sfmt 4700 67501 the same formula that they used to report it under the CROWNWeb pilot. For this reason, we proposed to calculate the performance standards for the three proposed Kt/V measures using CY 2011 claims data. This is the best data we have available at this time to set reliable performance standards for Kt/V. We stated that we understand that stakeholders may be concerned about the nuances of the data and we invited public comment on this proposal. We noted that if, after consideration of the comments, we decided to not adopt the adult, hemodialysis Kt/V measure for PY 2015, we would continue to use URR as a measure of hemodialysis adequacy for this population. We also noted that the NQFendorsed measure for Kt/V measure for peritoneal dialysis adequacy does not specify the body surface area formulae or the total body water formulae to utilize; and we would accept the submission of peritoneal adequacy Kt/V values that utilize the methods currently in use as industry standards. We believe it is important to include peritoneal dialysis patients in the ESRD QIP and we solicited comments on the inclusion of the peritoneal dialysis Kt/V adequacy measure. We proposed that, were we to retain the URR measure for adult hemodialysis, we would still adopt the Kt/V peritoneal dialysis measure. We proposed that these measures would still comprise a Dialysis Adequacy measure topic and would be scored in the same manner as we proposed for the Kt/V measures, below. Even with the challenges outlined above, we believed that the advantages of adopting the Kt/V hemodialysis measure for PY 2015 outweigh the disadvantages. Therefore, we proposed Kt/V as the measure for hemodialysis adequacy for PY 2015, but we specifically solicited comments regarding whether we should continue to use URR for adult hemodialysis patients for PY 2015.7 We also considered calculating performance standards for the Kt/V Dialysis Adequacy measure topic based on data from January 1, 2012–June 30, 2012, to ensure that the data was calculated consistently. We are, however, aware that a shortened data period may affect the measure rates’ reliability. Therefore, we proposed to calculate performance standards based 7 Note that, as further explained below, the issue we have discussed with respect to the reporting of Kt/V values prior to CY 2012 would not be an issue for the calculation of improvement scores because we proposed CY 2012 as the period used to calculate the improvement threshold; beginning January 1, 2012, all facilities are required to report Kt/V uniformly on their claims. E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 67502 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations on the data from CY 2011 discussed above, but we invited comment on an alternative 6 month period beginning on or after the date on which uniform reporting began, January 1, 2012. The comments we received on these proposals and our responses are set forth below. Comment: Many commenters agreed with our proposal to use CY 2011 as the comparison period for purposes of calculating the performance standards because this period will allow facilities to view these standards when the final rule is published. Others, however, expressed support for using data from July 1, 2011–June 30, 2012 to calculate the performance standards because this period is closest in time to the performance period. Some commenters did not have a preference for the comparison period, but requested that we be consistent in the time periods we choose. Many commenters suggested that, regardless of the time period, we do not use CROWNWeb data to calculate performance standards because the data in CROWNWeb from this time period is largely from large dialysis organizations (LDOs). Response: Although we appreciate that July 1, 2011–June 30, 2012 is closer in time to the performance period, we believe that it will be more beneficial to facilities if they are familiar with the performance standards against which their performance will be evaluated before the performance period begins. We will continue to evaluate whether it will be feasible in the future to adopt performance standards using data from a period closer in time to the performance period and also make those standards public before the beginning of the performance period. Additionally, as we stated above, we will not be finalizing the Hypercalcemia measure for PY 2015. All of the other clinical measures we are adopting for PY 2015 are claims-based, and we can set the performance standards for those measures without using CROWNWeb data. Comment: One commenter expressed concern that the standards are too rigid and we expect perfection. Response: We believe that the standards that we are setting are appropriate. It is the past performance of facilities nationally which determine the performance standards; thus, ESRD facilities have demonstrated their ability to achieve these standards. Additionally, to avoid a payment reduction, facilities need only meet the minimum Total Performance Score. As discussed below, a facility need not have a perfect score on all, or any, of the measures to meet this minimum. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 Furthermore, we believe it is important to incentivize the best care possible. For these reasons, we finalize our proposal to establish performance standards for the PY 2015 ESRD QIP clinical measures at the 50th percentile of national performance during CY 2011. The numerical values for the performance standards are set forth below in Table 5. b. Performance Standards measure and the Vascular Access Type measure topic) have not declined. Therefore, for PY 2015, we will use the performance standards in the above table. If we discover that performance on any of the measures is declining in future years, we also intend to investigate the precipitating causes and modify the ESRD QIP as necessary to ensure high quality care for beneficiaries. c. Performance Standards for the PY TABLE 5—FINALIZED NUMERICAL VAL- 2015 Reporting Measures UES FOR THE PERFORMANCE STANDWe established the performance ARDS FOR THE PY 2015 ESRD QIP standards for the reporting measures for PY 2014 based upon whether facilities CLINICAL MEASURES met certain reporting requirements rather than achieved or improved on Measure specific clinical values. We proposed to establish the same performance Hemoglobin > 12 g/dL .......... 1 standard for the ICH CAHPS reporting Vascular Access Type .......... ........................ measure for PY 2015 that we established % Fistula ........................... 60 for PY 2014. Under this proposed % Catheter ........................ 13 performance standard, facilities would Kt/V ........................ be required to provide an attestation Adult Hemodialysis ........... 93 that they successfully administered the Adult, Peritoneal Dialysis .. 84 ICH CAHPS survey via a third party in Pediatric Hemodialysis ...... 93 accordance with the measure specifications. We proposed that this In accordance with our statements in attestation must be completed in the CY 2012 ESRD PPS final rule (76 FR CROWNWeb by January 31, 2014. 70273), if the final numerical values for For the NHSN Dialysis Event the PY 2015 performance standards are reporting measure, we proposed to set worse than PY 2014 for a measure, we the performance standard as proposed to substitute the PY 2014 successfully reporting 12 months of data performance standard for that measure. from CY 2013. If a facility has not yet We stated our belief that the ESRD QIP enrolled and trained in the NHSN should not have lower standards than dialysis event system, we proposed that previous years. We requested comments the performance standard for that on this proposal. facility would also include completion The comments we received on these of these requirements. proposals and our responses are set For the Mineral Metabolism reporting forth below. measure, we proposed to set the Comment: One commenter did not performance standard as successfully support our proposal to keep reporting serum phosphorus and performance standards at least as high calcium values for all qualified patients as they were the previous year and for 12 months. suggests that we, instead, investigate For the Anemia Management why a performance standard would reporting measure we proposed to set drop. Another commenter agreed with the performance standard as our proposal and stated that the only successfully reporting hemoglobin or reason that performance standards hematocrit and ESA dosage (if should be lower than they were the applicable) for all qualified patients for previous year is if we discover a major 12 months. technical issue with the previous year’s We requested comment on these standards, such as that the performance proposals. We did not receive any standards were miscalculated. comments on these proposals. We will, Response: We believe it is important therefore, finalize the reporting measure to encourage improvement as the ESRD performance standards as proposed. QIP evolves to ensure that beneficiaries 9. Scoring for the PY 2015 ESRD QIP continue to receive quality care at Measures achievable levels. Therefore, we will finalize our proposal to utilize previous In order to assess whether a facility years’ performance standards if they are has met the performance standards, we higher than those of the next year. The finalized a methodology for the PY 2014 performance standards for the measures program under which we separately used in previous years of the ESRD QIP score each clinical and reporting (the Hemoglobin Greater than 12 g/dL measure. We score facilities based on an PO 00000 Performance standard % Frm 00054 Fmt 4701 Sfmt 4700 E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations achievement and improvement scoring methodology for purposes of assessing their performance on the clinical measures. Under the PY 2014 ESRD QIP scoring methodology, a facility’s performance on each of the clinical measures is determined based on the higher of (i) an achievement score or (ii) an improvement score (76 FR 70273). We proposed to use a similar methodology for purposes of scoring facility performance on each of the clinical measures for the PY 2015 ESRD QIP. As in PY 2014, in determining a facility’s achievement score for the PY 2015 program, we proposed that facilities would, based on their performance in CY 2013 (the proposed performance period), receive points along an achievement range, which we would define as a scale that runs from the achievement threshold to the benchmark. We proposed to define the achievement threshold for each of the proposed clinical measures as the 15th percentile of national facility performance during CY 2011. We stated our belief that this achievement threshold will provide an incentive for facilities to continuously improve their performance while not reducing the incentives to facilities that score at or above the national performance rate for the clinical measures (76 FR 70276). We proposed to define the benchmark as the 90th percentile of the national facility performance during CY 2011 because it represents a demonstrably high but achievable standard of excellence that the best performing facilities reached. We further proposed that, for the proposed Kt/V Dialysis Adequacy measures and the proposed Hypercalcemia measure, we would use the same data we proposed above to calculate the performance standards for purposes of calculating the achievement thresholds and the benchmarks for these measures. We requested comment on these proposals. In determining an improvement score for the clinical measures, we proposed that facilities would receive points along an improvement range, defined as a scale running between the improvement threshold and the benchmark. We proposed to define the improvement threshold as the facility’s rate on the measure during CY 2012. The facility’s improvement score would be calculated by comparing its performance on the measure during CY 2013 (the proposed performance period) to its performance on the measure during CY 2012. We proposed to base the improvement threshold on data from CY 2012 rather than CY 2011 (the period of time we had proposed to use VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 to calculate the performance standards, achievement thresholds, and benchmarks) because, as we explained above, we do not have complete facility level CY 2011 data that we can use to calculate an improvement threshold for every facility on the Kt/V Dialysis Adequacy measures. Rather than proposing to adopt a policy under which no facility could receive an improvement score on these measures, we proposed to use data from CY 2012 to calculate the improvement thresholds. Additionally, we stated our belief that by using CY 2012 to calculate the improvement thresholds, we will more closely align timing of the payment reduction with the period of time we use to calculate improvement thresholds. We requested comments on our proposal to use data from CY 2012 to calculate improvement thresholds. When considering the time period we would use to calculate improvement thresholds, we sought to mitigate data lag issues as much as possible by selecting a period in time as close as possible to the performance period. However, to entirely mitigate this data lag, we also considered a period that would take place during the performance period. Using this approach, to calculate an improvement score, we would derive an improvement threshold from either the first quarter of CY 2013 or the first 6 months of CY 2013 and compare it to the facility’s measure rate in the last quarter of CY 2013 or the last 6 months of CY 2013, respectively. We ultimately decided to not propose this approach because, when possible, we prefer to use 12 months of data to calculate measure rates to ensure more reliable rates, particularly for low-volume facilities. Additionally, using this approach, part of the performance period for purposes of calculating the facility’s performance rate and achievement score (all of CY 2013) could overlap with the data we use to calculate the improvement threshold (first quarter or 6 months of CY 2013). Although we proposed to calculate improvement thresholds based on data from CY 2012, we also requested comment regarding use of these alternative periods for purposes of calculating the improvement thresholds. The comments we received on these proposals and our responses are set forth below. Comment: One commenter stated that, to foster continued improvement, we should consider raising the achievement threshold over time to a level greater than 15 percent. Response: We believe that, at this time, it is appropriate to set the achievement threshold at the 15th PO 00000 Frm 00055 Fmt 4701 Sfmt 4700 67503 percentile so that lower-performing facilities are incentivized to provide high quality care; if the thresholds are set too high, it is possible that a facility would not be incentivized to perform well because the cost to meet the achievement threshold would be so high that it would outweigh the overall loss of revenue resulting from the ESRD QIP payment reduction. Although we do not believe we should award lowperforming facilities a large number of points, we do believe it is important to set the standards to incentivize all facilities to perform better. Comment: One commenter suggested that we rename the achievement threshold the ‘‘Statistical Performance Floor’’ because ‘‘achievement’’ seems misleading if the floor is set at the 15th percentile. This commenter also recommended that the facility performance rate be renamed the ‘‘Facility’s Current Year Performance Rate,’’ the benchmark be renamed the ‘‘Exceptional Performance Rate’’ since it is at the 90th percentile, and the performance standard be renamed the ‘‘National Average/Median Performance Rate in the Base Year.’’ Response: One of the ways we can make the ESRD QIP transparent is by seeking to achieve consistency from year-to-year, provided there is not a contravening interest. Changing the terminology of the achievement threshold, performance rate, performance standards, and benchmark could unnecessarily confuse both facilities and beneficiaries. Additionally, we seek to harmonize CMS’ value-based purchasing programs as much as possible, and we use these naming conventions across programs. Comment: Several commenters argued that we are creating inconsistencies between the Conditions for Coverage (CfCs) and the ESRD QIP; these commenters specifically argued that the CfCs state that a facility cannot be penalized for patient non-compliance, but many of the ESRD QIP measures effectively penalize facilities for patient non-compliance. The commenter suggested that we make allowances for patient noncompliance in the ESRD QIP’s design; one commenter specifically recommended that we should require only 90 percent compliance from patients that visit the facility at least seven times per month to reconcile the CfCs and the ESRD QIP. Response: We do not believe that we are creating inconsistencies between the CfCs and the ESRD QIP, nor do we believe that the ESRD QIP penalizes facilities for patient non-compliance. Although patients’ compliance with the plan of care is a factor in some of the E:\FR\FM\09NOR2.SGM 09NOR2 67504 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations measures, the quality of care is largely controlled by the facility’s treatment of patients. Additionally, to the extent that patient non-compliance may be a factor, facilities are not required to obtain perfect results for every patient. To avoid a payment reduction, as we explain below, a facility need only meet the performance standards (that is, the 50th percentile of national performance) for each clinical measure during the comparison period (for PY 2015, this will be CY 2011) and score half of the possible points for the reporting measures. Comment: Commenters agreed with our proposal to use the facility’s rate in CY 2012 to calculate improvement thresholds. Response: We thank the commenters for their support. Comment: One commenter suggested that the improvement threshold be renamed the ‘‘Facility’s Base Year Performance Rate’’ since the improvement threshold does not represent a gain or level of improvement. Response: As noted above, we believe it is important to use consistent terminology from year-to-year to ensure transparency and comprehension in both the ESRD QIP and across CMS’ VBP programs. For the reasons discussed above, we finalize our proposed definitions of the achievement thresholds, benchmarks, and improvement thresholds. We have calculated the numerical values for the achievement threshold and benchmarks based on data from CY 2011; we will calculate the numerical values for the improvement thresholds based on individual facilities’ data from CY 2012. The numerical values for the achievement thresholds and benchmarks for the PY 2015 ESRD QIP clinical measures are set forth below in Table 6. TABLE 6—FINALIZED NUMERICAL VALUES OF ACHIEVEMENT THRESHOLDS AND BENCHMARKS FOR THE PY 2015 ESRD QIP CLINICAL MEASURES Achievement threshold (percent) Measure tkelley on DSK3SPTVN1PROD with RULES2 Hemoglobin > 12 g/dL ............................................................................................................................................. Vascular Access Type: % Fistula ........................................................................................................................................................... % Catheter ........................................................................................................................................................ Kt/V: Adult Hemodialysis ........................................................................................................................................... Adult, Peritoneal Dialysis .................................................................................................................................. Pediatric Hemodialysis ..................................................................................................................................... In accordance with our statements in the CY 2012 ESRD PPS final rule (76 FR 70273), if the final PY 2015 numerical values for the achievement thresholds and benchmarks are worse than PY 2014 for a measure, we proposed to substitute the PY 2014 achievement thresholds and benchmarks for that measure. We believe that the ESRD QIP should not have lower standards than previous years. We requested comments on this proposal. The comments we received on these proposals and our responses are set forth below. Comment: One commenter did not support our proposal to keep achievement thresholds and benchmarks at least as high as they were the previous year and suggests that we, instead, investigate why these values would drop. Another commenter agreed with our proposal and stated that the only reason that performance standards should be lower than they were the previous year is if we discover a major technical issue with the previous year’s standards, such as that the performance standards were miscalculated. Response: We believe it is important to encourage improvement as the ESRD QIP evolves to ensure that beneficiaries continue to receive quality care at achievable levels. Therefore, we will finalize our proposal to utilize previous VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 years’ achievement threshold and benchmarks if they are higher than those of the next year. The achievement thresholds and benchmarks for the measures used in previous years of the ESRD QIP (the Hemoglobin Greater than 12 g/dL measure and the Vascular Access Type measure topic) have not declined. Therefore, for PY 2015, we will use the performance standards in the above table. If we discover that performance on any of the measures is declining in future years, we also intend to investigate the precipitating causes and modify the ESRD QIP as necessary to ensure high quality care for beneficiaries. a. Scoring Facility Performance on Clinical Measures Based on Achievement We proposed to award between 0 and 10 points for each of the clinical measures. As noted, we proposed that this score be based upon the higher of an achievement or improvement score on the measure. For purposes of scoring achievement for the measures, we proposed to base the score on where a facility’s performance falls relative to the achievement threshold and the benchmark for that measure. We proposed that, identical to PY 2014, if a facility’s measure rate during the performance period is: PO 00000 Frm 00056 Fmt 4701 Sfmt 4700 Benchmark (percent) 5 0 47 22 75 5 86 63 83 97 94 97 • Equal to or greater than the benchmark, the facility would receive 10 points for achievement; • Less than the achievement threshold, the facility would receive 0 points for achievement; or • Equal to or greater than the achievement threshold, but below the benchmark, the following formula would be used to derive the achievement score: [9 * ((Facility’s performance period rate—achievement threshold)/ (benchmark—achievement threshold))] + .5, with all scores rounded to the nearest integer, with half rounded up. Using this formula, a facility would receive a score of 1 to 9 points based on a linear scale disturbing all points proportionately between the achievement threshold and the benchmark so that the interval in performance between the score needed to receive a given number of achievement points and one additional achievement point is the same throughout the range of performance from the achievement threshold to the benchmark. b. Scoring Facility Performance on Clinical Measures Based on Improvement We proposed that facilities would earn between 0 and 9 points for each of E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations the clinical measures based on how much their performance on the measure during CY 2013 improved from their performance on the measure during CY 2012. A unique improvement range for each measure would be established for each facility. We proposed that if a facility’s measure rate during the performance period is: • Less than the improvement threshold, the facility would receive 0 points for improvement; or • Equal to or greater than the improvement threshold, but below the benchmark, the following formula would be used to derive the improvement score: [10 * ((Facility performance period rate—Improvement threshold)/ (Benchmark—Improvement threshold))]—.5, with all scores rounded to the nearest integer, with half rounded up. We note that if the facility’s score is equal to or greater than the benchmark, it would receive 10 points on the measure per the achievement score methodology discussed above. The comment we received on these proposals and our responses are set forth below. Comment: One commenter requested clarification on whether (i) a facility can earn points if its performance rate is below the improvement threshold but above the achievement threshold and (ii) a facility can earn points if its performance rate is below the achievement threshold but above the improvement threshold. A commenter also requested clarification regarding whether, when scoring improvement, we multiply the ((Facility performance period rate—Improvement threshold)/ (Benchmark—Improvement threshold))] by 10 before or after we subtract 0.5. Likewise, this commenter requested clarification for the achievement scoring on whether we multiply the ((Facility’s performance period rate—achievement threshold)/(benchmark—achievement threshold))] by 9 before or after we add 0.5. Response: It is possible for a facility to earn achievement points even if that facility did not improve during the performance period as long as that facility’s performance period rate exceeds the improvement threshold. Likewise, a facility can earn improvement points even if its measure rate during the performance period is below the achievement threshold provided that facility improved during the performance period. Additionally, the 0.5 is added or subtracted, for achievement and improvement respectively, as the last step in the equations. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 For the reasons stated above, we will finalize the proposed methodology for scoring measures on achievement and improvement. c. Calculating the Reporting Measure Scores As noted, reporting measures differ from clinical measures in that they are not scored based on clinical values, but rather, are scored based on whether facilities are successful in achieving the reporting requirements associated with each of the measures. The criteria that would apply to each reporting measure are discussed below. With respect to the proposed Anemia Management, Mineral Metabolism, and NHSN Dialysis Event reporting measures, for each measure, we proposed to award facilities: (i) 0 points for meeting the reporting requirements for less than 6-consecutive months during the performance period; (ii) 5 points for meeting the reporting requirements for at least 6-consecutive months during the performance period; and (iii) 10 points for meeting the reporting requirements for all 12 months of the performance period. We believe that requiring 6consecutive months of data rather than 6 non-consecutive months of data for a facility to receive points on these measures will hold facilities to the highest level of quality, therefore, facilities will be encouraged to continue to improve their reporting mechanisms throughout the performance period. We are concerned that awarding points for 6 non-consecutive months of reporting may cause facilities to be less diligent in their reporting efforts overall. We specifically requested comment regarding whether the proposed 6consecutive month reporting requirement will improve quality more than a non-consecutive month reporting requirement. We also proposed, as discussed in more detail below, that facilities would need to receive a CCN prior to July 1, 2013 in order to receive a score on a reporting measure. Finally, for purposes of the NHSN Dialysis Event reporting measure, we proposed that to be awarded 5 or 10 points, any facility that has not yet enrolled and trained in the NHSN dialysis event system must do so and must agree to the required consent (https://www.cdc.gov/nhsn/PDFs /PurposesEligibilityRequirements Confidentiality.pdf). With respect to the proposed ICH CAHPS reporting measure, we proposed to retain the PY 2014 scoring methodology for the PY 2015 ESRD QIP. An in-center hemodialysis facility will receive a score of 10 points if it attests PO 00000 Frm 00057 Fmt 4701 Sfmt 4700 67505 that it successfully administered the ICH CAHPS survey via a third party during the performance period according to the specification found at https://www.cahps.ahrq.gov/SurveysGuidance/ICH.aspx. Eligible facilities (facilities providing adult, in-center hemodialysis) that do not provide such an attestation would receive 0 points on the measure. We proposed that this attestation must be entered via CROWNWeb by January 31, 2014. We note that the ICH CAHPS survey is only available to adult patients who are treated in-center. For purposes of the ICH CAHPS reporting measure, we determine whether a facility treats adult, in-center patients by referencing the facility’s information in CMS data sources (that is, SIMS and CROWNWeb). Facilities report the types of patients that they serve in these data sources. If a facility lists adult in-center services, we proposed that the facility would be required to comply with the ICH CAHPS reporting measure. We requested comment on the proposed methodology for scoring the PY 2015 ESRD QIP reporting measures. We also requested comment regarding whether facilities should receive points for partially reporting data and whether such reporting need be for consecutive months. The comments we received on these proposals and our responses are set forth below. Comment: Several commenters requested that we award points for partial or non-consecutive reporting of data. Other commenters recommended that we modify our scoring of the NHSN Dialysis Event, Anemia Management, and Mineral Metabolism reporting measures to allow facilities to gain points for non-consecutive reporting on a point scale of 0–10. Commenters suggested that two should be subtracted from the number of months for which the dialysis facility successfully meets the reporting requirements (rounding negative scores to zero), meaning that a facility would have to report two months of data before receiving points on the measure. Commenters argued that this approach will encourage facilities to consistently report even if consecutive reporting is not possible. One commenter argued that facilities should be required to report for all months in order to receive any points on this measure; alternatively, this commenter urged us to require facilities to report consecutive months of data. Response: We thank commenters for these suggestions. The NHSN participation requirements state that facilities must report at least 6 months of data during a calendar year to the E:\FR\FM\09NOR2.SGM 09NOR2 67506 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations measures, we believe that it is beneficial to encourage less than 6 months of reporting so that we can receive data from as many facilities as possible and use this data to develop a robust clinical measure in these areas. We believe that the Anemia Management and Mineral Metabolism reporting measures should also allow facilities to receive credit for reporting non-consecutive months because we believe that this approach will encourage reporting even if a facility fails to report for a month or more. We agree with commenters that a facility should be required to report at least two months before it is awarded points. Two months of reporting translates to reporting at a rate roughly equal to our achievement threshold for clinical measures—15 percent. We have determined that this threshold is an appropriate marker for where a facility should start earning achievement points on the clinical measures, and we believe it should also apply to these reporting measures. Additionally, as we discuss below, we will apply the scoring methodology for the Anemia Management and Mineral Metabolism reporting measures to facilities that receive a CCN during the first 6 months of the performance period. Taking all of these elements into consideration, we are finalizing a scoring methodology that will allow facilities to score points on the Mineral Metabolism and Anemia Management reporting measures provided that they receive a CCN before July 1, 2013. In order to score above a zero on these measures, a facility must report at least three months of data. Therefore, we finalize that facilities receiving a CCN before July 1, 2013 will score 0–10 points on the Anemia Management and Mineral Metabolism reporting measures using the following formula: We will round the result of this formula (with half rounded up) to generate a measure score from 0–10, and we will allow facilities to earn points using the same formula for reporting nonconsecutive months. Additionally, we finalize the ICH CAHPS measure scoring as proposed. 10. Weighting the PY 2015 ESRD QIP Measures and Calculation of the PY 2015 ESRD QIP Total Performance Score Section 1881(h)(3)(A)(iii) of the Act provides that the methodology for assessing facility total performance shall include a process to weight the performance scores with respect to individual measures to reflect priorities for quality improvement such as weighting the scores to ensure that facilities have strong incentives to meet or exceed anemia management and dialysis adequacy performance standards, as determined appropriate by the Secretary. In determining how to VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 PO 00000 Frm 00058 Fmt 4701 Sfmt 4700 E:\FR\FM\09NOR2.SGM 09NOR2 ER09NO12.001</GPH> consecutive monthly reporting during the performance period. Additionally, we will award incremental points for reporting more than 6 months of data. We will award points to facilities as follows: (i) 0 points for reporting less than 6 months of data; (ii) 5 points for reporting 6 months of data; and (iii) 10 points for reporting 12 months of data. (iv) If the facility reports more than 6 but less than 12 months of data, we will award incremental points using the following formula: ER09NO12.000</GPH> that facilities should receive credit for reporting non-consecutive months for this measure; we agree with commenters that this approach will encourage reporting because, even if a facility misses a month or many months, it can still receive points on the measure. Additionally, NHSN requirements allow non-consecutive reporting, but strongly encourage regular monthly reporting. We also agree with the commenters who stated that facilities should be awarded points on an incremental scale to incentivize reporting as much as possible. Therefore, we will begin awarding points for 6 months of reporting, and will not require We will round the result of this formula (with half rounded up) to generate a measure score from 5–10 points; as noted, facilities will earn points for reporting non-consecutive months. As we discuss below, because of the time it takes to train and enroll in the NHSN Dialysis Event module, we do not believe that it is feasible for all facilities receiving a CCN in the performance period to report at least 6 months of data. We will not apply the 6 month minimum requirement on these newly opened facilities, as we believe this requirement would place significant undue burden on these facilities to report data during their initial year of operation starting up their care delivery and administration. Therefore, the NHSN Dialysis Event reporting measure will not apply to any facility receiving a CCN on or after January 1, 2013. For the Mineral Metabolism and Anemia Management reporting tkelley on DSK3SPTVN1PROD with RULES2 dialysis event module to maintain active status in the NHSN. We believe it is important to align the scoring requirements for the NHSN dialysis event reporting measure for the ESRD QIP with the NHSN requirements, which are intended to improve the quality of the data submitted to the NHSN. Furthermore, we believe the severity of bloodstream infections and other vascular access-related infections among dialysis patients warrants more extensive monitoring in order to prevent future events. We will, therefore, require a minimum of 6 months of NHSN Dialysis Event reporting before awarding facilities points. We believe Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations appropriately weight the PY 2015 ESRD QIP measures for purposes of calculating Total Performance Scores, we considered two criteria. Specifically, we considered the number of measures we had proposed to include in the PY 2015 ESRD QIP as well as the National Quality Strategy priorities. tkelley on DSK3SPTVN1PROD with RULES2 a. Weighting Individual Measures To Compute Measure Topic Scores for the Kt/V Dialysis Adequacy Measure Topic and the Vascular Access Type Measure Topic Because the Kt/V Dialysis Adequacy measure topic and the Vascular Access Type measure topic are comprised of multiple measures, it is necessary for us to discuss how we will derive an overall score for each measure topic. For these measure topics, we proposed that each measure be scored separately for each facility using the achievement and improvement methodology discussed above. After calculating the individual measure scores within a measure topic, we proposed to calculate a measure topic score using the following steps: (1) Dividing the number of patients in the denominator of each measure by the sum of the denominators for all of the applicable measures in the measure topic; (2) multiplying that figure by the facility’s score on the measure; (3) summing the results achieved for each measure; and (4) rounding this sum (with half rounded up). We proposed that, if a facility does not have enough patients to receive a score on one of the measures in the measure topic (this proposal is discussed below), that measure would not be included in the measure topic score for that facility. Only one measure within the measure topic need have enough cases to be scored in order for the measure topic to be scored and included in the calculation of the Total Performance Score. We stated that we believe it is important to proportionately weight the measures within a measure topic because we seek to give equal importance to each patient. Finally, we proposed that the measure topic score would be equal to one clinical measure in the calculation of the Total Performance Score. For additional explanation of our proposals to calculate measure topic scores, we provided the following examples: Example 1: Facility X serves hemodialysis (HD), peritoneal dialysis (PD), and pediatric patients. For HD patients, Facility X’s Kt/V measure rate is 50/60. For PD patients, Facility’s X’s Kt/V measure rate is 15/20. For pediatric patients, Facility X’s Kt/V measure rate is 10/20. There are 100 patients included in the measure topic (60+20+20). Assume VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 that the facility’s measure rates lead to the following measure scores: HD—7; PD—8; pediatric—5. To compute the Kt/V Dialysis Adequacy measure topic score for Facility X, we would calculate the following: (7*60/ 100)+(8*20/100)+(5*20/100) = 6.8, which we would round to 7. The Kt/V Dialysis Adequacy measure topic score would then be treated as one clinical measure when calculating the Total Performance Score. Example 2: Facility Y serves HD patients and PD patients. For HD patients, Facility Y’s Kt/V measure rate is 50/60; assume that this rate leads to a score of 6. For PD patients, Facility Y’s Kt/V measure rate is 4⁄7. Facility Y has no Kt/V measure rate for pediatric patients because it does not serve this population. Assume that the minimum case number for scoring a measure is 11. Because there are only seven cases in Facility Y’s denominator, Facility Y would not receive a PD Kt/V measure score. Furthermore, Facility Y did not treat any pediatric patients, so it would not receive a pediatric Kt/V measure score. Therefore, the Kt/V Dialysis Adequacy measure topic score for Facility Y would be 6. The Kt/V Dialysis Adequacy would then be treated as one clinical measure when calculating the Total Performance Score. We requested comment on the proposed method of weighting individual measure scores to derive a measure topic score. The comments we received on these proposals and our responses are set forth below. Comment: Some commenters supported our proposals for weighting measure topics. Some commenters, however, raised concerns that, given the small number of pediatric patients relative to adult patients, combining the adequacy measures might result in a score that does not accurately reflect the quality of care provided to pediatric patients treated in adult dialysis facilities. Other commenters suggested that the measure topics should be weighted consistently across facilities to allow meaningful comparisons between facilities; these commenters requested that we modify the weighting so that each measure is weighted based on clinical relevance, importance, and the number of patients in a ‘‘typical’’ facility’s population. Response: We disagree with the commenters’ statement that combining the adequacy measures might not reflect the quality of care given to certain patients. The weighting scheme ensures that emphasis on each measure in the Kt/V measure topic is proportionate to the number of patients that facility treats. If we were to weight the measure topics consistently across facilities or base the weight on clinical relevance or the typical facility, the scoring methodology would not equally weight the quality of care provided to each, individual patient. That is, one patient’s PO 00000 Frm 00059 Fmt 4701 Sfmt 4700 67507 results could count for more points than another patient’s results, perhaps incentivizing better care for only certain ESRD populations. It is the goal of the ESRD QIP to provide the best care for every patient, and we believe the proposed weighting for measure topics meets this goal. Therefore, we are finalizing the methodology of weighting measure topics as proposed. b. Weighting the Total Performance Score In the proposed rule we stated our belief that weighting the finalized clinical measures/measure topics equally will incentivize facilities to improve and achieve high levels of performance across all of the measures, resulting in overall improvement in the quality of care provided to ESRD patients. We also stated our belief that, while the reporting measures are valuable, the clinical measures value actual patient outcomes and therefore justify a higher combined weight. We did, however, propose to weight the clinical measures slightly less for the PY 2015 ESRD QIP than we did for the PY 2014 ESRD QIP. For the PY 2015 ESRD QIP, we believe it is important to begin to more rigorously incentivize reporting, specifically since for three of the four reporting measures, we now require actual data submission. We intend to use these data for purposes of developing and creating clinical measures in the future; thus, complete and correct data submission in these areas is essential to the program’s overall goal of continued and improved ESRD quality care. For these reasons, we proposed to equally weight the clinical measures/measure topics for which a facility receives a score equal to 80 percent of the Total Performance Score; we also proposed to equally weight the reporting measures for which a facility receives a score as 20 percent of the Total Performance Score. We requested comment on this proposed methodology for weighting the clinical and reporting measures. We have also considered the issue with awarding a Total Performance Score to facilities that do not report data on the proposed minimum number of cases with respect to one or more of the finalized measures/measure topics. As we stated in the CY 2012 ESRD PPS final rule, we believe it is important to include as many facilities as possible in the ESRD QIP. We did, however, revisit our policy of including any facility that receives a score on one measure, whether that measure is a clinical or reporting measure, and we proposed a different approach for PY 2015. We stated our belief that it is preferable to E:\FR\FM\09NOR2.SGM 09NOR2 67508 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations should weight the reporting measures at 50 percent of the Total Performance Score. Some commenters stated their belief that we should maintain the 90/ 10 Total Performance Score weighting because clinical outcomes are more important than simply tracking and relaying information. Response: We believe, at this time, that it is appropriate to weight all of the clinical measures topics equally and all of the reporting measures equally in order to equally incentivize quality in all of these areas of care. We do, however, agree with the commenter that noted that because of the importance of reporting measures, such the NHSN Dialysis Event measure which tracks HAIs, we should give greater weight to the reporting measures in calculating the Total Performance Score. As stated above, we are not finalizing the Hypercalcemia clinical measure due to our lack of consistent baseline data. Instead, we will collect calcium data through the Mineral Metabolism reporting measure until we have baseline data that is robust enough to support a clinical measure’s adoption. Because of our need to collect data from not only LDOs, as we did in the CROWNWeb pilot, but all types of dialysis facilities, our decision to not finalize the Hypercalcemia measure, and the importance of collecting HAI data through the NHSN Dialysis Event reporting measure, we believe it is appropriate to weight the reporting measures more than we had proposed. We continue to believe, however, that clinical outcomes should constitute the majority of the Total Performance Score. Therefore, we finalize that, for the PY 2015 ESRD QIP, each clinical measure/ measure topic will be equally weighted to comprise 75 percent of the Total Performance Score, and the reporting measures will be equally weighted to comprise 25 percent of the Total Performance Score. Figure 2 shows the scoring for another facility, Facility B. As illustrated below, the facility’s performance on the example clinical measure improved from 26 percent in CY 2012 to 54 percent during the performance period. The achievement threshold is 46 percent, the performance standard is 58 percent, and the benchmark is 74 percent. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 PO 00000 Frm 00060 Fmt 4701 Sfmt 4700 c. Examples of the PY 2015 ESRD QIP Scoring Methodology Below, we provide examples to illustrate the scoring methodology for the PY 2015 ESRD QIP. Figures 1–3 illustrate the scoring for a clinical measure. Figure 1 shows Facility A’s performance on an example clinical measure. Note that for this example clinical measure, the facility is attempting to achieve a high rate (that is, the higher the measure rate, the higher the measure score). The example benchmark (which is the 90th percentile of performance nationally in CY 2011) calculated for this measure is 74 percent, and the example achievement threshold (which is the 15th percentile of performance nationally in CY 2011) is 46 percent. Facility A’s performance rate of 86 percent during the performance period meets or exceeds the benchmark of 76 percent, so Facility A would earn 10 points (the maximum) for achievement for this measure. (Because, in this example, Facility A has earned the maximum number of points possible for this measure, its improvement score is irrelevant.) E:\FR\FM\09NOR2.SGM 09NOR2 ER09NO12.002</GPH> tkelley on DSK3SPTVN1PROD with RULES2 require a facility to have at least one clinical and one reporting measure to receive a Total Performance Score. By requiring this minimum, we ensure that a facility is not included in the program unless it meets the minimum case requirement for at least one clinical measure/measure topic. In the case of a facility that has sufficient data (11 cases, as discussed below) from the performance period, but lacks sufficient data (11 cases, as discussed below) to calculate the improvement threshold, we proposed to only calculate its achievement score, because it would not be possible to calculate its improvement score. We requested comment on our proposals to require a facility to qualify for a score on at least one reporting and one clinical measure in order to receive a Total Performance Score. Finally, we proposed that all Total Performance Scores be rounded to the nearest integer, with half being rounded up, and we requested comment on this proposal. For further examples regarding the proposed measure and Total Performance Score calculations, we refer readers to the figures below. The comments we received on these proposals and our responses are set forth below. Comment: Many commenters supported our proposed scoring methodology. Commenters specifically supported our proposal to require a facility to have a score for both a clinical and a reporting measure to receive a Total Performance Score. One commenter stated that, because of the importance of preventing HAIs, we Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations 67509 + .5, which equals 3.07 and we round to 3. Likewise, to calculate the improvement score, we employ the improvement formula discussed above. The result of this formula for this example is [10 * ((54 ¥ 26)/(74 ¥ 26))] ¥ .5, which equals 5.33 and we round to 5. Therefore, for this example clinical measure, Facility B’s achievement score is 3, and its improvement score is 5. We award Facility B the higher of the two scores. Thus, Facility B’s score on this example measure is 5. In Figure 3 below, Facility C’s performance on the example clinical measure drops from 53 percent in CY 2012 to 40 percent in CY 2013, a decline of 13 percent. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 PO 00000 Frm 00061 Fmt 4701 Sfmt 4700 E:\FR\FM\09NOR2.SGM 09NOR2 ER09NO12.004</GPH> ER09NO12.005</GPH> measure score. To calculate the achievement score, we would employ the formula discussed above. ER09NO12.003</GPH> improvement range, we must calculate both the improvement and achievement score to find the example clinical The result of this formula for this example is [9 * ((54 ¥ 46)/(74 ¥ 46))] tkelley on DSK3SPTVN1PROD with RULES2 Because the facility’s performance during the performance period is within both the achievement range and the Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations Because Facility C’s performance during the performance period falls below the achievement threshold of 46 percent, it receives 0 points for achievement. Facility C also receives 0 points for improvement because its performance during the performance period was lower than its improvement threshold (its performance during CY 2012). Therefore, in this example, Facility C would receive 0 points for the example clinical measure. The method illustrated above would be applied to each clinical measure in order to obtain a score for each measure. Scores for reporting measures are calculated based upon their individual criteria, as proposed. After calculating the scores for each measure, we calculate the Total Performance Score. As an example, applying the weighting criteria to a facility that receives a score on all finalized measures, we would calculate the facility’s Total Performance Score using the following formula: Total Performance Score = [(.25 * Hemoglobin Greater Than 12g/dL Measure) + (.25 * Kt/V Dialysis Adequacy Measure Topic) + (.25 * Vascular Access Type Measure Topic) + (..0625 * NHSN Dialysis Event Reporting Measure) + (.0625 * ICH CAHPS Survey Reporting Measure) + (.0625 * Mineral Metabolism Reporting Measure) + (.0625 * Anemia Management Reporting Measure)] * 10. The Total Performance Score would be rounded to the nearest integer (and any individual measure values ending in .5 would be rounded to the next higher integer). However, if, for example, a facility did not receive a score on the Vascular Access Type measure topic, the facility’s Total Performance Score would be calculated as follows: VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 Total Performance Score = [(.375 * Hemoglobin Greater Than 12g/dL Measure) + (.375 * Kt/V Dialysis Adequacy Measure Topic) + (.0625 * NHSN Dialysis Event Reporting Measure) + (.0625 * ICH CAHPS Survey Reporting Measure) + (.0625 * Mineral Metabolism Reporting Measure) + (.0625 * Anemia Management Reporting Measure)] * 10 Again, the Total Performance Score would be rounded to the nearest integer (and any individual measure values ending in .5 would be rounded to the next higher integer). Finally, if, for example, a facility qualified for only two of the reporting measures, the facility’s Total Performance Score would be calculated as follows: Total Performance Score = [(.25 * Hemoglobin Greater Than 12g/dL Measure) + (.25 * Kt/V Dialysis Adequacy Measure Topic) + (.25 * Vascular Access Type Measure Topic) + (.125 * Mineral Metabolism Reporting Measure) + (.125 * Anemia Management Reporting Measure)] * 10. Again, the Total Performance Score would be rounded to the nearest integer (and any individual measure values ending in .5 would be rounded to the next higher integer). 11. Minimum Data for Scoring Measures for the PY 2015 ESRD QIP We proposed to only score facilities on clinical measures for which they have a minimum number of cases during the performance period. We assessed how reliable each clinical measure is using the currently available data. Specifically, we studied the degree the measures assess the actual differences in performance among facilities as opposed to the variation PO 00000 Frm 00062 Fmt 4701 Sfmt 4700 within a facility. Thus, in order for a facility to be scored on any clinical measure, we proposed that the facility must report a minimum number of cases qualifying for that measure over the course of the 12-month performance period. This proposed minimum seeks to ensure that facilities are being evaluated based on the care they provide. a. Minimum Data for Scoring Clinical Measures for the PY 2015 ESRD QIP Dialysis facilities tend to have a small, relatively stable patient census, with each facility reporting on an average of 50–60 cases per measure. In previous rules, commenters have asked that we consider the effect of case size on measure reliability in the context of the ESRD QIP. We recognize that as a general principle, reliability improves with increasing case size; that is, the reliability of a measure or score describes numerically to what extent that measure or score assesses the actual differences in performance among facilities as opposed to the random variation within facilities. Furthermore, we wish to be responsive to public comment and to ensure that dialysis facilities with extremely small numbers of patients are not penalized by the ESRD QIP due to random variation in their patient samples. Thus, we developed and proposed a new methodology to make favorable adjustments to the clinical measure rates of facilities with very small numbers of patients. We also proposed a case minimum 8 for clinical measures to protect patient privacy, which we believe could be compromised if the 8 For clarification purposes, as in previous years, a ‘‘case’’ refers to a patient that is included in the measure. E:\FR\FM\09NOR2.SGM 09NOR2 ER09NO12.006</GPH> tkelley on DSK3SPTVN1PROD with RULES2 67510 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations 67511 reliability adjustment to account for a possible unfavorable skew in the measure rate due to small sample size. We proposed the following methodology to adjust the measure rate used to score facilities with 11–25 cases for a given measure. The adjustment factors in facility size and the standard error of the measure, which can be estimated using an analysis of variance (ANOVA). This analysis allows us to estimate how much better the measure rate could have been if that facility were treating an ‘‘average’’ population of patients and make a favorable adjustment to the facility’s score in that amount. For example, as a facility treats more patients, the reliability of the measure rate improves, and the difference between the facility’s measure rate and the measure rate we statistically would expect to see if the facility were treating an ‘‘average’’ panel of patients decreases. Thus, the magnitude of the adjustment factor increases as the number of cases decreases from 25 to 11. Because the adjustment factor takes into account a facility’s performance (standard error of the measure) and the number of cases for the measure, it is computed separately for each measure. The specific methodology we proposed follows: • ANOVA provides an estimate sw of the square root of within facility variance, given by the within subject mean square. • Then for the ith facility, the standard error of the average measure (denoted by xi is given by where ni is the number of patients in the ith facility. Now denote C as the minimum case number. We proposed the following adjustment for the original score xi by introducing a weight depending on facility size. where C is the lower bound of cases for facilities that will not receive any adjustment. • For measures where large values of xi are good (that is, for the PY 2015 ESRD QIP, the fistula measure and the Kt/V Dialysis Adequacy measure topic): o The new score is: ti = xi + wi * SE(xi). (If ti > 100%, we set ti = 100%). • In cases where lower values of xi are better (that is, for the PY 2015 ESRD QIP, the Hemoglobin Greater Than 12g/ dL and catheter measures): o The new score is: ti = xi ¥ wi * SE(xi). (If ti < 0%, we set ti = 0%). We stated our belief that this approach gives facilities an allowance to account for the uncertainty in the estimate xi by accounting for the size of the patient population in both weights and standard errors. As explained above, this allowance decreases when the case size increases (from 11 to 26 or more)—the larger the case size, the smaller the allowance. For example, when C=26, this implies that for measures with 26 cases and above, no allowance is made. We sought public comment on this methodology and the proposed adjustment threshold. While one model is presented above, we invited comment on alternative approaches that are consistent with our intent to include as many facilities as possible in the ESRD QIP and at the same time address concerns from stakeholders regarding the reliability of VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 PO 00000 Frm 00063 Fmt 4701 Sfmt 4700 E:\FR\FM\09NOR2.SGM 09NOR2 ER09NO12.019</GPH> the ratio of the between-facility variance to the sum of the between-facility variance and the within-facility variance. We found the reliability of the Total Performance Score to be acceptable for all strata (IUR>0.6). However, we recognize that facilities with very small numbers of patients are more likely to have a lower IUR. In a facility with a low IUR, the case mix might potentially shift its measure rate higher or lower than the rate the same facility would report if it were treating an ‘‘average’’ ESRD population. In the context of the ESRD QIP, a favorable skew would not have a negative effect on facility payment, but an unfavorable skew potentially could result in the facility receiving a payment reduction. We cannot identify which specific facilities will have a low IUR until after the performance period has concluded. However, in performing the stratification analysis, we found that a favorable adjustment to the two strata with the lowest number of cases would reduce the risk of penalizing facilities in those strata for random within-facility variation. The average number of cases contributing to the Total Performance Score in the second stratum is 25. Accordingly, we developed and proposed below a favorable adjustment to the measure rates for facilities with at least the minimum case threshold of 11 and fewer than the adjustment threshold of 26 cases. This methodology would give facilities ‘‘the benefit of the doubt’’ and ensure that any error in measure rates due to a small number of cases will not adversely affect payment. Specifically, we proposed that if a facility reports at least 26 cases during the 12-month performance period on a measure, it would be scored based on its raw performance rate on the measure. If the facility reports between 11 and 25 cases during the 12-month performance period, it would be scored based on its raw performance rate plus a favorable ER09NO12.007</GPH> tkelley on DSK3SPTVN1PROD with RULES2 publicly reported data for a facility is based on a small patient population. Given the ESRD QIP’s potential to encourage quality improvement, our goal is to ensure the full participation of as many facilities as possible in the program. However, we must ensure that all measure rates capture a large enough number of patients so that the privacy of each patient is protected. A case minimum allows us to achieve these policy objectives of measurement reliability and patient privacy. For the first 3 payment years of the ESRD QIP, we set the minimum number of cases to be scored on a clinical measure at 11. Eleven cases has historically been the case minimum for displaying measures on DFC. We have determined that in the context of DFC, 11 cases will meet the requirement that individual patients are not identifiable in the aggregate measure rate. Given that we believe that 11 cases is sufficient to address privacy concerns and that our policy objective is to maximize the number of facilities that participate in the ESRD QIP, we proposed to set a proposed case minimum threshold of 11 cases. Under this proposal, facilities must report at least 11 qualifying cases over the course of the 12-month performance period to be scored on a given clinical measure. We sought public comment on this proposal. We indicated in the CY 2012 ESRD PPS final rule that we would continue to assess the reliability of our measures in future payment years of the program (76 FR 70259). To further explore this issue in response to comments, we evaluated the reliability of measure rates and the Total Performance Score for facilities of various sizes using the PY 2014 program clinical measures. Specifically, we performed a simulation of the PY 2014 QIP to calculate the Inter-Unit Reliability (IUR) stratified by facility size. The IUR is a statistic commonly adopted for assessing the reliability of measures or scores, and is tkelley on DSK3SPTVN1PROD with RULES2 67512 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations measures where there are small numbers of cases. We stated our belief that this adjustment is appropriate for the ESRD QIP considering the particular measure set and scoring methodology for PY 2015. As the program grows and evolves, we noted that we will continue to assess reliability based on the measures and scoring methodology for that payment year. The comments we received on these proposals and our responses are set forth below. Comment: Many commenters supported our proposal to use an adjustment for measure rates, especially because aging patients and patients with comorbidities can negatively affect a small facility’s score. Commenters also supported our proposal to use the adjuster for measures with 11–25 cases. Other commenters did not support the proposed adjustment because it is overly complicated, could mislead patients, and could make low-volume facilities appear better than high-volume facilities when they are not, in fact; these commenters suggested that we raise the case minimum to at least 25 cases instead of employing the proposed adjustment methodology. Some commenters expressly stated that the proposed case minimum is not sufficient; other commenters argued that the proposed case minimum should be lowered because the proposal could preclude participation from many lowvolume facilities, specifically pediatric facilities. Response: Were we to set the case minimum at 26 rather than 11, we estimate that an additional 520, or an additional 10 percent of, facilities would be excluded from the program. Although lowering the case minimum would include even more facilities, we do not believe it is appropriate to do so because of not only reliability but also privacy concerns. As we stated in the proposed rule (77 FR 40984), we believe the adjustment balances the competing concerns of reliability, privacy, and inclusion. Although it can be difficult to understand the adjustment methodology, we do not believe that this concern alone should prevent us from finalizing it as proposed. The adjustment will result in no harm to any facility; although a facility may not be able to predict its Total Performance Score if some of its measures are subject to the adjustment, the facility will know that the adjuster will not negatively affect its score. It could continue to predict its minimum score and use this score as a baseline for assessing whether or not it will receive a payment reduction. Additionally, we believe that VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 the argument that the adjuster could allow smaller facilities to seem better than they are is of little concern. Although the adjuster will affect the measure score, it will not affect the measure rate. The rates that are displayed to the public will be shown without an adjustment. Thus, a beneficiary could continue to meaningfully compare facilities, regardless of the number of patients these facilities serve. Comment: Some commenters requested that, if we adopted the proposed adjustment, we publish tables with the values of sw to make the ESRD QIP as transparent and predictable as possible. Response: The sw values represent the within facility variation. It is specific to each facility and, because it will be based on 2013 data, it cannot be derived until the end of the performance period. Therefore, we are not able to publish the sw values at this time. Comment: Some commenters encouraged us to continue to conduct analyses to determine the appropriate reliability of measures and the minimum case number for future years of the program. Some commenters suggested that, if we are concerned with reliability and minimum case numbers, we employ longer performance periods spanning multiple years. Commenters also encouraged us to align the ESRD QIP minimum case number with other VBP programs. Response: We will continue to study the reliability of measures and the Total Performance Score. We have and will continue to consider using longer performance periods on a measure-bymeasure basis. Although we strive to align the VBP programs as much as possible, each program has unique measures which may necessitate different minimum case numbers. We will continue to look for harmonization as much as is appropriate. For the reasons stated above, we finalize the case minimum and adjustment for clinical measures as proposed. b. Minimum Data Requirements for Reporting Measures by New Facilities For purposes of the PY 2014 ESRD QIP, we stated that a facility that receives a CCN on or after July 1, 2012 has the option to choose whether or not it is scored on each reporting measure (76 FR 70275). We considered using the same approach for PY 2015 as we did in PY 2014 (that is, allowing new facilities to choose whether or not they will be scored on each reporting measure). Under that approach, if a new facility reports enough information to PO 00000 Frm 00064 Fmt 4701 Sfmt 4700 receive 10 points on a reporting measure, the facility is scored on that measure. If a new facility scores zero or 5 points on a reporting measure, it is not scored on that measure. As the program evolves, we believe it is important to continuously push improvement in all facilities—both old and new. Additionally, we wish to incentivize new facilities to put reporting mechanisms in place as soon as possible. For these reasons, we proposed to modify the reporting measure minimum data requirement from that of PY 2014. For PY 2015, we proposed that any facility receiving a CCN before July 1, 2013 be scored on the reporting measures. However, since a facility receiving a CCN after January 1, 2013 would not be able to report a full 12 months of data, we stated our belief that it is not appropriate to require it to do so in order to receive a full 10 points on the reporting measures. Instead, we proposed to score these facilities proportionately for the time for which they have a CCN during the performance period. To earn 10 points on the ICH CAHPS reporting measure, we proposed to require that a facility receiving a CCN between January 1, 2013 and June 30, 2013 attest that it successfully administered the survey during the time for which it had a CCN during the performance period. For purposes of the Anemia Management, NHSN Dialysis Event, and Mineral Metabolism reporting measures, we proposed that if a facility receives a CCN on or after January 1, 2013, but before July 1, 2013, it would receive 10 points for reporting for all months for which it has a CCN and 5 points for consecutively reporting half of the months for which it has a CCN during the performance period. If a facility has a CCN for an odd number of months, we proposed to round down to calculate the number of months for which it must report to receive 5 points. Finally, we proposed to begin counting the number of months for which a facility is open on the first day of the month after the facility receives a CCN. For example, assume a facility receives a CCN on March 15, 2013. In order for this facility to receive 10 points on the applicable reporting measure, we proposed that it must report data from April 1, 2013– December 31, 2013 (or 9 months of data). In order for it to receive 5 points, we proposed that it must report half of the months for which it is open, consecutively. For the example facility to receive 5 points, it would need to report 4.5 months of data. Since we proposed to round down, this facility E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations 67513 after July 1, 2013. We requested comment regarding these proposals. We also elicited comments regarding whether there would be a more appropriate way to score these new facilities on reporting measures so that they may be eligible for inclusion in the ESRD QIP. The comments we received on these proposals and our responses are set forth below. Comment: Commenters supported our proposals regarding the reporting measures’ minimum data requirements for new facilities; specifically, commenters supported our proposal to exempt facilities receiving a CCN after June 30, 2013 from the reporting measures. Some commenters suggested that a facility that receives a CCN between January 2013 and June 2013 should be required to begin reporting on the first day of the third month after the facility receives a CCN to allow the facility to deploy its IT system and enroll in CROWNWeb and NHSN. Response: Consistent with our change to allow facilities to score 0–10 incremental points on the Anemia Management and Mineral Metabolism reporting measures, we will finalize changes to our proposed scoring methodology for these measures for facilities receiving a CCN between January 1, 2013 and June 30, 2013. Facilities receiving a CCN between January 1, 2013 and June 30, 2013, will be able to score points in proportion to their overall rate of monthly reporting on the Anemia Management and Mineral Metabolism reporting measures. As we noted above, we believe it is important to require a minimum threshold for facilities to earn points on this measure. Thus, we finalize that a facility receiving a CCN after January 1, 2013 but before June 30, 2013 can score points on the Mineral Metabolism and Anemia Management reporting measures using the following formula: We will round the result of this formula (with half rounded up) to achieve a measure score from 0–10. For purposes of the Anemia Management and Mineral Metabolism reporting measures, we do not agree with commenters that facilities should be required to report the first day of the third month after they receive their CCN. A facility with a CCN may submit claims to Medicare. If a facility is submitting claims, it should be reporting hemoglobin and ESA levels. It should also be reporting in CROWNWeb. Therefore, we do not believe it is necessary to allow facilities more time on these measures, and we finalize that facilities must begin reporting for these measures on the first day of the month after they receive their CCN. As we have previously noted, we believe that a facility needs a period of time after it receives its CCN to ensure that its systems are in place to report to the NHSN system. As we explained above, we are requiring facilities to report 6 non-consecutive months of data to receive points on the NHSN Dialysis Event measure. Because of the time required to enroll and train in the NHSN system, we do not believe it is equitable to require facilities receiving a CCN during the performance period to comply with this measure. Therefore, we are finalizing that a facility that receives a CCN during the performance period will be not be scored on the NHSN Dialysis Event reporting measure. For the ICH CAHPS measure, we believe that facilities receiving a CCN before July 1, 2013 should be able to hire a third-party administrator in time to administer the ICH CAHPS survey. Although it may take some time for facilities to put this administrator in place, it can begin doing so before it receives a CCN. Therefore, we finalize our proposals that, to earn 10 points on the ICH CAHPS reporting measure, a facility receiving a CCN between January 1, 2013 and June 30, 2013 must attest that it successfully administered the survey during the time for which it had a CCN during the performance period. We also finalize that facilities receiving a CCN after June 30, 2013 will be exempt from the Mineral Metabolism, Anemia Management, and ICH CAHPS reporting measures. For the NHSN Dialysis Event reporting measure, facilities will be exempt if they receive a CCN on or after January 1, 2013. 12. Payment Reductions for the PY 2015 ESRD QIP VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 PO 00000 Frm 00065 Fmt 4701 Sfmt 4700 Section 1881(h)(3)(A)(ii) of the Act requires the Secretary to ensure that the application of the scoring methodology results in an appropriate distribution of payment reductions across facilities such that facilities achieving the lowest Total Performance Scores receive the largest payment reductions. For PY 2014, we adopted an approach under which a facility did not have to meet or exceed the performance standards with respect to each of the finalized clinical measures to avoid receiving a payment reduction under the ESRD QIP. Rather, even if a facility failed to meet or exceed the performance standards with respect to one or more of these measures, the facility could avoid a payment reduction if it achieved a minimum Total Performance Score that is equal to or greater than the minimum Total Performance Score it would receive if it had met the performance standards for each of the clinical measures or, in the case of the Vascular Access Type Measure, for the two subcomponent measures. For PY 2014, in calculating this minimum Total Performance Score, we excluded the reporting measures E:\FR\FM\09NOR2.SGM 09NOR2 ER09NO12.008</GPH> tkelley on DSK3SPTVN1PROD with RULES2 would be required to report 4 months of data to receive 5 points. We realized that facilities receiving a CCN on or after July 1, 2013, may have difficulty meeting the requirements of the reporting measures, such as enrolling and training for the NHSN Dialysis Event reporting measure or hiring a third-party to administer the ICH CAHPS survey, because of the short period of time left in the performance period. We also stated our belief that it is appropriate to reduce payment for a 1-year period based on less than 6 months of performance. Therefore, we proposed to exclude facilities receiving a CCN on or after July 1, 2013 from the requirements of the reporting measures. Because we finalized, as discussed above, that a facility will not receive a Total Performance Score unless it receives a score on at least one clinical and one reporting measure, finalizing this proposal would result in facilities not being eligible for a payment reduction if they receive a CCN on or tkelley on DSK3SPTVN1PROD with RULES2 67514 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations because we believed this approach best underscored the importance of the clinical measures. For PY 2015, we proposed to retain the same approach as in PY 2014. We discuss the methodology for deriving the performance standards for the measure topics, above. We requested comments on these proposals. Alternately, in order to better incentivize compliance with reporting measures, we also considered raising the minimum Total Performance Score to include 50 percent of the total points a facility could have received had it met all of the reporting requirements for each measure. In other words, because a facility could receive up to 40 points in PY 2015 for meeting all of the reporting measure requirements, we considered raising the minimum Total Performance Score by 20 points (onehalf of 40). This approach would ensure that facilities receiving a CCN before August 1, 2013 could still achieve the minimum Total Performance Score by meeting, on average, the performance standards for the clinical measures and achieving as many points on the reporting measures as is possible. We requested comment regarding whether the reporting measures should be scored at greater than 0 when calculating the minimum Total Performance Score. Section 1881(h)(3)(A)(ii) of the Act requires that facilities achieving the lowest Total Performance Scores receive the largest payment reductions. For PY 2014, we adopted an approach we intend to continue for PY 2015. We believe that this consistency will allow the program to be more understandable to both facilities and the general public. Accordingly, we proposed that the payment reduction scale be the same as the PY 2014 program. Therefore, for each 10 points a facility falls below the minimum Total Performance Score, it would receive an additional 0.5 percent payment reduction on its ESRD payments for PY 2015, with a maximum reduction of 2.0 percent. As we stated in the CY 2012 ESRD PPS final rule (76 FR 70281), we believe that such a sliding scale will incentivize facilities to meet the performance standards and continue to improve their performance because even if a facility fails to achieve the minimum Total Performance Score, the facility will still be incentivized to strive for, and attain, better performance rates in order to reduce the amount of its payment reduction. We requested comments on the proposed payment reduction scale. The comments we received on these proposals and our responses are set forth below. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 Comment: Commenters agreed with our proposal to use the PY 2014 payment reductions scale for the PY 2015 ESRD QIP. Some commenters, however, supported placing more emphasis on the reporting measures in calculating the minimum Total Performance Score since these are the measures over which facilities have the most control. Some commenters suggested that we base payment reductions on actual impact rather than projections of impact, setting tiers of reductions by percentage of facilities we wish to be in each tier. Another commenter urged us to create a more individualized approach to payment reductions because high quality care is markedly different from patient to patient. Response: At this time, we do not believe it is in the best interest of the program to base payment reductions on actual impact and the percentage of facilities to which we wish to provide payment reductions. Regardless of the impact, we believe that facilities that do not meet the performance standards for each of the clinical measures should face a payment reduction. Were we to base reductions on percentages, the result could be that some high performing facilities receive a payment reduction. Our current payment reduction scale allows every facility to avoid a payment reduction provided that they meet the minimum Total Performance Score. We agree that it is important to provide individualized care to patients. We believe that the program, incentivizes facilities to furnish individualized care within a certain range of established, clinical acceptable guidelines. Finally we agree with the commenters that requested we place more emphasis on the reporting measures when calculating the minimum Total Performance Score. We specifically believe that this approach is appropriate now that we have weighted the reporting measure to comprise 25 percent of the Total Performance Score. Were we to continue to score the reporting measures at zero when calculating the minimum Total Performance Score, by increasing the weight of the reporting measures, we would be decreasing the minimum Total Performance Score. This result is contrary to our belief stated in this final rule that the reporting measures should be afforded more importance. Therefore, we will finalize the alternative approach we requested comment on in the proposed rule to include the reporting measures in the minimum Total Performance Score at 50 percent of the PO 00000 Frm 00066 Fmt 4701 Sfmt 4700 total points a facility could have received had it met all of the reporting requirements. As noted above, it is possible to gain a total of 40 points from the reporting measures; thus, we will include half, or 20 of these points, in our calculation of the minimum Total Performance Score. We believe this approach is consistent with our methodology for the clinical measures since we calculate the clinical measure component of the minimum Total Performance Score as the score a facility would have received if it had reached the 50th percentile for all clinical measures. Comment: One commenter suggested that the 2 percent payment reduction be revisited since such a small percentage will not be a worthwhile incentive as new measures are added. Several commenters expressed concern that the ESRD QIP works as a penalty system and suggested that the ESRD QIP provide incentives as well as penalties, and on balance, be budget-neutral. One commenter suggested that the payment reductions be returned to the penalized facilities for use only to improve care in the areas where they failed to meet quality standards. Response: Section 1881(h) of the Act does not provide us with the authority to issue bonus payments to facilities based on their performance under the ESRD QIP, to make reductions of more than 2.0 percent, or to redistribute the payment reductions to the originally penalized facilities. For the reasons stated above, we finalize our proposals for calculating payment reductions except that we will include reporting measures in calculating the minimum Total Performance Score. The reporting measure component of the minimum Total Performance Score will equal the score a facility would have received if it is awarded half of the maximum points it could have received on the reporting measures (that is, 5 points on each measure). Based on this approach, the minimum Total Performance Score is 60 points. Facilities failing to meet this minimum will receive payment reductions in the amounts indicated in Table 7 below. TABLE 7—FINALIZED PAYMENT REDUCTION SCALE FOR PY 2015 Total performance score 100–60 ................................ 59–50 .................................. 49–40 .................................. 39–30 .................................. 29–0 .................................... E:\FR\FM\09NOR2.SGM 09NOR2 Reduction (%) 0 0.5 1.0 1.5 2.0 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations 13. Data Validation One of the critical elements of the ESRD QIP’s success is ensuring that the data submitted to calculate measure scores and Total Performance Scores is accurate. To that end, we have procured the services of a data validation contractor who will be tasked with validating a national sample of facilities’ records as they report data under the ESRD QIP. Beginning in CY 2013, we proposed to begin a pilot data validation program for the ESRD QIP. Because data validation for the ESRD QIP is new to both facilities as well as CMS, we believe that the first year of validation should result in no payment reductions to facilities. Accordingly, we proposed that, beginning in CY 2013, we would randomly sample the records of approximately 750 facilities. We anticipate that a CMS-designated contractor would request approximately 10 records from each of these facilities. We proposed that the facility must comply with this request for records within 60-days of receiving notice. The contractor would review these records to ensure accuracy and reliability of the data reported by the facility for purposes of the ESRD QIP. As noted above, we proposed that, in the first year of this program, no facility will receive a payment reduction resulting from the data validation process. In future years of the program, we noted our intent to evolve our pilot program into a full, data validation effort. We are also discussing a data validation measure whereby facilities would be scored based on the accuracy of their records. Finally, we are contemplating increasing a facility’s payment reduction by one tier (for example, from 0.5 percent to 1.0 percent) if its data are incorrect beyond a certain threshold. In future years, we stated our intention to propose more detailed procedures regarding our data validation process that may result in penalties. We requested comment on our data validation proposals for PY 2015 and the methods we are considering for PY 2016. The comments we received on these proposals and our responses are set forth below. Comment: Many commenters supported our proposal to have a data validation pilot program that would result in no payment reductions. Some commenters suggested that we continue the pilot until we can evaluate the data from the program, and some commenters suggested that we should share the results of the pilot with the dialysis community before the official program is launched. One commenter VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 requested that, before the pilot program begins, we define the errors being sought and publish these for public comment. Another commenter stated that, before data validation efforts are initiated, CMS should provide clear specifications, data definitions, and reporting requirements because it would be inappropriate to penalize facilities when clarification questions or reporting issues have not been resolved. Commenters also recommended that CMS include the initial data validation in the routine Comprehensive Error Rate Testing (CERT) request for RACs (Recovery Audit Contractors), but cautioned against paying auditors on a contingency fee. Response: We thank commenters for their support of the pilot data validation program. At this time, we are still finalizing the processes and procedures for the pilot. We will provide this information before the pilot program begins on a publicly available Web site. We will consider the commenters’ suggestions as we continue this process. Additionally, as discussed in the sections of this rule outlining the measures, we believe that the specifications, data definitions, and reporting requirements are clear and transparent. If it becomes apparent that there is some significant confusion as to any of these elements, we will clarify these them using the most appropriate means. Comment: One commenter stated that it does not believe it is appropriate for CMS to develop a data validation measure for the ESRD QIP. This commenter argued that CMS must first explain the scope of accuracy and errors (for example, does it include missing values, transcriptional errors) that CMS requires. Other commenters requested that, before payment is tied to validation, CMS should publish for comment the relationship of errors to payment reductions (with some accorded more weight than others depending on their scope and type) and allow the dialysis community to review the results of the pilot. Response: We thank commenters for these suggestions. We believe that ensuring data accuracy of reported data is an important component to ensure accurate performance scores and corresponding payments. We continue to consider whether and how we will tie payment to any data validation issues. We will publish any future proposals in rulemaking for public comment. Comment: Some commenters expressed concern with the burden data validation may place on facilities. One commenter is concerned that producing records within 60 days is too monetarily PO 00000 Frm 00067 Fmt 4701 Sfmt 4700 67515 burdensome and suggests a 120 day period. Another commenter requested that we limit the number of document requests based on provider size and resources and reimburse facilities for data requests. One commenter suggested that the requested data sample be a percentage of patients rather than a fixed number so that small facilities are not disproportionally affected. One commenter asked that the requested records be as current as possible so that they can be easily accessed by facilities that many have data storage protocols. Another commenter specifically noted its support for HAI data validation, but stated its concern that we underestimated the burden on facilities; this commenter requested that we provide more detail on the validation process, specifically the facilities’ responsibilities, and encouraged us to partner with NHSN and state and public health partners in developing a standardized process for the validation of HAI data. Response: We do not believe that our proposals place an undue burden on facilities. We proposed to request only ten records, and we will provide the facility 60 days to produce these records. We do not believe that collecting such a small amount of documentation in such a great deal of time should pose problems for facilities. As we explain later in this rule, we estimate that it will take each facility only 2.5 hours to comply with the requests for these records and will cost approximately $83.08 per facility. We do not believe that 2.5 hours in the span of 2 months (or 2.5 minutes per day) is too little time to comply with these requests nor do we believe it warrants an additional 60 days for compliance. Further, we do not agree that we should request a percentage of documents from facilities rather than a fixed number. If a facility is large, asking for even one percent of its records could prove to be a large burden. Alternatively, requesting that a small facility provide even 10 percent of its records would not provide our data contractor with enough information to assess the validity of the data. By requesting 10 records from each facility, we can ensure a similar burden (2.5 hours and approximately $83.08) for each facility and an analysis of its validity based on the same volume of information. As noted above, at this time, we are still finalizing the processes and procedures for the pilot. We will provide further information on a publicly available Web site. As we finalize these procedures, we intend to engage various stakeholders to encourage the development of a E:\FR\FM\09NOR2.SGM 09NOR2 67516 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 standardized process for the validation of data, including data from the CDC for HAIs. Comment: One commenter requested that we specify a data validation appeals process. Response: We will consider proposing a data validation appeals process in future rulemaking. Because the proposed program is a pilot and will not have any impact on payment, we do not believe an appeals process is necessary at this time. Comment: One commenter believes that the various technological resources facilities have should be taken into account when evaluating data validity. This commenter encouraged us to evaluate manual/electronic medical records (EMR) data entry in CROWNWeb. Response: We will consider commenter’s suggestion when we evaluate the data in the pilot program. We will specifically consider if there are variations in the accuracy of data because of the mode of data entry. Comment: One commenter encouraged us not to implement a payment reduction until all facilities have been asked to submit medical records for purposes of data validation at least one time. Another commenter stated that each facility should have the opportunity to identify data transmission/download errors without the risk of payment penalty. Response: We thank commenters for the suggestions and will consider them as our pilot program advances. For the reasons stated above, we finalize our pilot data validation program as proposed, and we will specify the processes and procedures of this pilot on https:// www.dialysisreports.org. 14. Scoring Facilities Whose Ownership Has Changed During our first year of implementation of the ESRD QIP, PY 2012, facilities requested guidance regarding how a change in ownership affects any applicable ESRD QIP payment reduction. We proposed that, for all future years of the ESRD QIP, the application of an ESRD QIP payment reduction would depend on whether the facility retains its CCN after the ownership transfer. If the facility’s CCN remains the same after the facility is transferred, for purposes of the ESRD QIP, we would consider the facility to be the same facility (despite the change in ownership) and we would apply any ESRD QIP payment reduction for the transferor to the transferee. Likewise, as long as the facility retains the same CCN, we would calculate the measure VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 scores using the data submitted during the applicable period regardless of whether the ownership changed during one of these periods. If, however, a facility receives a new CCN as a result of a change in ownership, we would treat the facility as a new facility for purposes of the ESRD QIP as of the date it received the new CCN. We stated our belief that these proposals are the most operationally efficient and will allow facilities the most certainty when they change ownership. We proposed to apply these rules beginning with the PY 2014 ESRD QIP, and we requested public comment on these proposals. The comments that we received and our responses to these comments are set forth below. Comment: Many commenters strongly supported our proposals for scoring transferred facilities. One commenter expressed concern that the proposals will change the marketplace in ways that are not yet known. Response: We thank commenters for their support. We realize that this proposal may impact how dialysis facilities are acquired in the future. However, we believe that creating rules around how we will treat transferred facilities for purposes of the ESRD QIP will create a marketplace that is more predictable. Therefore, we finalize these rules for transferred facilities as proposed. 15. Public Reporting Requirements Section 1881(h)(6)(A) of the Act requires the Secretary to establish procedures for making information regarding facilities’ performance under the ESRD QIP available to the public, including information on the Total Performance Score (as well as appropriate comparisons of facilities to the national average with respect to such scores) and performance scores for individual measures achieved by each facility. Section 1881(h)(6)(B) of the Act further requires that a facility have an opportunity to review the information to be made public with respect to that facility prior to such information’s publication. In addition, section 1881(h)(6)(C) of the Act requires the Secretary to provide each facility with a certificate containing its Total Performance Score to post in patient areas within the facility. Finally, section 1881(h)(6)(D) of the Act requires the Secretary to post a list of facilities and performance-score data on the CMS Web site. In the PY 2012 ESRD QIP final rule, we adopted uniform requirements based on sections 1881(h)(6)(A) through 1881(h)(6)(D) of the Act, establishing procedures for facilities to review the PO 00000 Frm 00068 Fmt 4701 Sfmt 4700 information to be made public and the procedures for informing the public through facility-posted certificates for the first 3 payment years of the ESRD QIP (76 FR 636 through 639). We proposed that these requirements generally apply to PY 2015 and subsequent payment years. However, we proposed to make some modifications, as outlined below, to these requirements and that these modifications become effective upon the effective date of this final rule. Thus, these requirements, if finalized, would apply in PY 2014 and for subsequent payment years. All other previously finalized requirements would remain the same. First, for the first year of the program, PY 2012, we did not explicitly state that we would be publishing a list of facility performance on or after December 1 of the year before the payment consequence year. We did, however, make this list available for the pubic via the CMS Web site. For the PY 2013 ESRD QIP and subsequent payment years, and in accordance with section 1881(h)(6)(D) of the Act, we proposed to publish such aggregate list on the CMS Web site at www.cms.gov and any other Web site controlled by CMS. This list will include information on the facility, specifically: (i) Name and address; (ii) Measure rates (which may include numerators and denominators) and scores; (iii) And Total Performance Scores. This list will also indicate those facilities that do not have enough data to calculate one or more measure rates and/or a Total Performance Score. We believe it is important to publish such a list because it allows beneficiaries, the public, and facilities access to this information without having to individually download a certificate for each facility, and, because of such access, we believe it will ultimately improve quality. The data will be more accessible, Medicare beneficiaries and their families will have the information more easily to make choices about their care, and facilities can more readily compare their performance to other facilities or across facilities. Therefore, beginning in January 2013, we proposed to publish a list of facility information described above for each payment year after facilities have the ability to review their scores. Second, for PY 2012, we required facilities to prominently post certificates within 5 days of us making these certificates available for download from www.dialysisreports.org in accordance with section 1881(h)(6)(C) of the Act (76 FR 637). We proposed to modify the E:\FR\FM\09NOR2.SGM 09NOR2 tkelley on DSK3SPTVN1PROD with RULES2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations previously finalized requirements for posting certificates in two ways. We no longer believe it is necessary for facilities to post these certificates within 5 days of their availability. The certificates are provided in late December, and it was our experience in the PY 2012 program that many individuals responsible for the certificates were away on holiday during this period of time. Therefore, we proposed to change this requirement so that, beginning with the PY 2014 program, facilities will be required to post their certificates on or before the first business day after January 1 of each payment year. Certificates are typically available for download on or around December 15, and we believe that this two week amount of time is long enough to allow facilities to post them. Therefore, beginning PY 2014, we proposed that facilities be required to post their Performance Score Certificates (PSCs) on or before the first business day after January 1 of each payment year in a prominent place for the duration of that payment year and otherwise comply with the requirements listed in the PY 2012 final rule (76 FR 637). Third, for the PY 2012 ESRD QIP, we required facilities to post one copy of the certificate in their facility (76 FR 637). Beginning in PY 2014, we proposed to require facilities to post two copies of this certificate, one copy in English and one copy in Spanish. Both of these certificates (which are posted as a single file) will be provided by CMS, both must be posted by the first business day after January 1 of the payment year, and both must be posted for the entirety of such year in a prominent location. We proposed to require the certificate to be posted in both English and Spanish to make the certificate more understandable to native Spanish speakers. Thus, to best serve a greater number of ESRD patients, we proposed to finalize the requirement that facilities must post both an English and a Spanish certificate prominently in their facility. The only additional burden for facilities in adding this Spanish certificate is its printing and posting. The comments we received on these proposals and our responses are set forth below. Comment: Commenters supported our proposal to allow facilities until the first business day after January 1 to post certificates. Most commenters agreed with our proposal to require facilities to post both English and Spanish versions of the PSC beginning in PY 2014, stating that the additional burden is very small; one commenter argued that Spanish VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 versions of the PSC are not necessary in all locations and recommended that individual facility administrators determine whether posting a PSC in Spanish is necessary or beneficial based upon the population that the facility serves. Another commenter suggested not only requiring a Spanish PSC but also developing Spanish-language materials explaining the PSCs. Response: We agree with commenters that the burden of posting a Spanish as well as an English PSC is very little and far outweighs the benefits it could convey upon beneficiaries. We do not agree that it is appropriate for facility administrators to determine whether posting the Spanish PSC is necessary. A facility that does not furnish services to native Spanish speaking patients in 1 year could begin to do so during the next year. As the ESRD QIP evolves, we seek to make the program as transparent as possible for all beneficiaries. Comment: Some commenters believe that the ESRD QIP should be clearer, and we should develop and make public guidance documents for patients and clinics. These commenters also suggested that we hold open door forums specifically for patients so that they do not interpret the quality of care information incorrectly. Response: As we noted above, we seek to make the program as transparent as possible, specifically to beneficiaries. We intend to continue to assess the modes and efficacy of our communications to beneficiaries. We will take these comments into account as we do so. Comment: Some commenters requested that we make available on our Web site individual measure scores (including the numerator and denominator) and the Total Performance Scores; commenters stated that these scores should be organized by facility and state to facilitate choice in care. One commenter requested that this information be published in both English and Spanish. One commenter encouraged us to create a ‘‘one-stopshop’’ for quality information on the internet. Response: Since the PY 2012 program, we have made aggregate information on measure scores and Total Performance Scores available on https://www.cms.gov/ Medicare/End-Stage-Renal-Disease/ ESRDQualityImproveInit/. This information includes numerators and denominators for each clinical measure, the scores for each measure, and Total Performance Scores for every facility. The information is organized in alphabetical order by state and facility. We will consider publishing this information in Spanish in future years. PO 00000 Frm 00069 Fmt 4701 Sfmt 4700 67517 Additionally, we seek to align the ESRD QIP with CMS’ other VBP program; we continue to assess how information across programs should be presented, and we will considering creating a ‘‘onestop-shop’’ for information related to CMS’ programs. At present, a great deal of information on these programs can be found here: https://www.cms.gov/ Medicare/Quality-Initiatives-PatientAssessment-Instruments/ QualityInitiativesGenInfo/. Comment: One commenter believes that the NHSN measure should be included in DFC because it is key to patient safety. Response: We thank comments and will consider the appropriateness for inclusion of this measure on DFC in future Web site releases. Comment: One commenter requested that we confirm that there is consistency in measures reported in DFR, DFC, PSR, and for ESRD QIP purposes. Response: We thank the commenter for its inquiry regarding the consistency of measures reported through DFR, DFC, the Performance Score Reports (PSR), and for ESRD QIP purposes. There are some differences in the measure descriptions between DFR, DFC, and QIP because each serves its own purposes; the measure rates for the ESRD QIP that are posted on DFR, DFC, and in the PSR are the same. For example, for DFR/DFC, the denominators for the Kt/V measures include out of range values, whereas the ESRD QIP Kt/V measure denominators do not. We seek to align reporting mechanisms as much as possible, but, in some cases, we believe that it is appropriate to present this information differently. Comment: One commenter recommended that we timely monitor quality data and intervene if trends indicate a decrease in the quality of care. Response: We are committed to monitoring and evaluating the impacts of the ESRD QIP. Comment: One commenter urged us to prioritize the development and implementation of a single system to which facilities would report their data in order to simplify reporting and minimize unnecessary burdens on providers, particularly staff members otherwise providing direct care to patients. Response: We continue to evaluate our reporting systems; we seek to minimize provider burden as much as possible, and we will continue to evaluate ways in which we can do so as the program moves forward. E:\FR\FM\09NOR2.SGM 09NOR2 67518 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 IV. Limitation on Payments to All Providers, Suppliers and Other Entities Entitled to Bad Debt A. Background In accordance with section 1861(v)(1) of the Act and current regulations at 42 CFR 413.89, Medicare pays some or all of the uncollectible deductible and coinsurance amounts to those entities eligible to receive reimbursement for bad debt. To determine if bad debt amounts are allowable, the requirements at § 413.89 must be met. Chapter 3 of the Provider Reimbursement Manual (PRM) (CMS Pub. 15, Part I) provides additional guidance on the standards governing bad debt reimbursement. Prior to the passage of the Middle Class Tax Extension and Job Creation Act of 2012 (Pub. L. 112–96), under section 1861(v)(1)(T) of the Act and § 413.89(h)(1) of our regulations, Medicare payments for allowable bad debt amounts for hospitals were reduced by 30 percent for cost reporting periods beginning on or after October 1, 2001. Likewise, under section 1861(v)(1)(V) of the Act and § 413.89(h)(2) of our regulations, Medicare payments for allowable bad debt amounts for patients in skilled nursing facilities (SNFs) that were not dual eligible individuals beginning with cost reporting periods beginning on or after October 1, 2005, were reduced by 30 percent. Section 413.89(h)(2) defines a dual eligible individual for bad debt purposes as an individual that is entitled to benefits under Part A of Medicare and is determined eligible by the State for Medical Assistance under Title XIX of the Act as described in 42 CFR 423.772 paragraph (2) under the definition of a ‘‘full-benefit dual eligible individual.’’ For all other providers, suppliers, and entities eligible to receive bad debt payment, including critical access hospitals (CAHs), rural health clinics (RHCs), Federally qualified health centers (FQHCs), community mental health centers (CMHCs), end stage renal diease (ESRD) facilities, swing bed hospitals, as defined at 42 CFR 413.114(b), and patients that are dual eligible individuals in SNFs, Medicare paid 100 percent of allowable bad debt amounts. Additionally, for health maintenance organizations (HMOs) reimbursed on a cost basis and competitive medical plans (CMPs) defined under section 1876 of the Act, and for health care prepayment plans (HCPPs) defined under section 1833(a)(1)(A) of the Act, Medicare pays a portion of bad debt amounts under 42 CFR 417.536(f) of our regulations. Although Medicare previously paid VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 ESRD facilities 100 percent of allowable bad debt amounts, these payments were capped at the facility’s reasonable cost in accordance with § 413.178(a). In the proposed rule, we proposed to maintain the cap on bad debt reimbursement to an ESRD facility up to the facility’s unrecovered costs. We also proposed to apply the bad debt reduction percentages mandated by section 3201 of the Middle Class Tax Extension and Job Creation Act of 2012 (Pub. L. No. 112–96), prior to applying the cap up to the ESRD facility’s unrecovered costs. B. Section 3201 of The Middle Class Tax Extension and Job Creation Act of 2012 (Pub. L. 112–96) Sections 3201(a) and (b) of the Middle Class Tax Extension and Job Creation Act of 2012 (Pub. L. 112–96) amended section 1861(v)(1)(T) and section 1861(v)(1)(V) of the Act, respectively, by further reducing the percentage of allowable bad debt attributable to the deductibles and coinsurance amounts payable to hospitals (section 1861(v)(1)(T)) and SNFs (section 1861(v)(1)(V)). Section 3201(b) of Public Law 112–96 also revised the SNF bad debt reductions to include both dual eligible beneficiaries and non-dual eligible beneficiaries under section 1861(v)(1)(V) of the Act, and to apply such reductions to swing bed hospitals for cost reporting periods beginning during fiscal year 2013 and subsequent fiscal years. Finally, section 3201(c) of The Middle Class Tax Extension and Job Creation Act of 2012 added a new subparagraph 1861(v)(1)(W) to the Act, which applied a reduction in bad debt payments to ‘‘providers’’ not addressed under subparagraphs 1861(v)(1)(T) or 1861(v)(1)(V) of the Act. For the purpose of subparagraph 1861(v)(1)(W) of the Act, section 3201(c) Public Law 112–96 defined ‘‘providers’’ as those providers not previously described in subsections 3201(a) or (b), suppliers, or any other type of entity that receives payment for bad debts under the authority of section 1861(v)(1)(A) of the Act. These providers include, but are not limited to, CAHs, RHCs, FQHCs, CMHCs, HMOs reimbursed on a cost basis, CMPs, HCPPs and ESRD facilities. C. Summary of Provisions of This Final Rule 1. Self-Implementing Provisions of Section 3201 Public Law 112–96 The provisions of subsections 3201(a), (b), and (c) of The Middle Class Tax Extension and Job Creation Act of 2012 permit no discretion on the part of the Secretary and thus, are self PO 00000 Frm 00070 Fmt 4701 Sfmt 4700 implementing, with the exception of the proposal to maintain the cap on bad deb reimbursement for ESRD facilities, as discussed below. Comment: We received comments from commenters suggesting that the bad debt reduction percentages be implemented in single digit percent reductions instead of the double digit percent reductions, as mandated by section 3201 of the Middle Class Tax Extension and Job Creation Act of 2012. Response: While we appreciate the concerns of the provider community regarding bad debt payments to providers eligible to receive bad debt, the percent reductions of bad debt payments are statutorily mandated by section 3201 of the Middle Class Tax Extension and Job Creation Act of 2012 and do not provide for discretion. Therefore, we are codifying these provisions, as summarized below, in our regulations. • Payment of allowable bad debt to hospitals for cost reporting periods beginning during fiscal year 2013 and subsequent fiscal years will be reduced by 35 percent. • Payment of allowable bad debt to SNFs and swing bed hospitals for cost reporting periods beginning during fiscal year 2013 or a subsequent fiscal year will be reduced by 35 percent for coinsurance amounts for services furnished to a beneficiary who is not a dual eligible individual. • Payment of allowable bad debt to SNFs and swing bed hospitals for coinsurance for services furnished to a beneficiary who is a dual eligible individual will be: • For cost reporting periods beginning during fiscal year 2013, reduced by 12 percent; • For cost reporting periods beginning during fiscal year 2014, reduced by 24 percent and; • For cost reporting periods beginning during fiscal year 2015, reduced by 35 percent. • Payment of allowable bad debt to all other providers, suppliers and any other entity that receives payment for bad debts under the authority of section 1861(v)(1)(A) of the Act will be: • For cost reporting periods beginning during fiscal year 2013, reduced by 12 percent; • For cost reporting periods beginning during fiscal year 2014, reduced by 24 percent; • And for cost reporting periods beginning during fiscal year 2015 and subsequent fiscal years, by 35 percent. A summary of the changes in Medicare bad debt payment percentages required by section 3201 of The Middle Class Tax Extension and Job Creation E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations 67519 Act of 2012 is reflected in Table 8 below: TABLE 8—SUMMARY OF MEDICARE BAD DEBT REIMBURSEMENT BY PROVIDER TYPES FOR COST REPORTING PERIODS THAT BEGIN DURING FY 2013, 2014, 2015 AND SUBSEQUENT YEARS Allowable bad debt amount during FY 2012 (percent) Provider type Hospitals .................................................................................. SNFs: Non-Full Dual Eligibles ................................................. Swing Bed Hospitals: Non-Full Dual Eligibles ......................... SNFs: Full Dual Eligibles ......................................................... Hospital Swing Beds: Full Dual Eligibles ................................ CAHs ........................................................................................ ESRD Facilities ........................................................................ CMHCs .................................................................................... FQHCs ..................................................................................... RHCs ....................................................................................... Cost Based HMOs ................................................................... Health Care Pre-Payment Plans ............................................. Competitive Medical Health Plans ........................................... tkelley on DSK3SPTVN1PROD with RULES2 2. ESRD Bad Debt Cap and Remove and Reserve § 413.178 In the proposed rule, we proposed to maintain the cap on bad debt reimbursement up to an ESRD facility’s unrecovered costs. Bad debt payments are made under section 1861(v)(1)(A) of the Act to prevent non-Medicare patients from subsidizing Medicare patients and vice-versa, also known as the anti-cross subsidization principle. The cap at an ESRD facility’s unrecovered costs for bad debt reimbursement was originally implemented to assure that the combination of the composite rate payment and the bad debt payment did not exceed the ESRD facility’s total allowable costs of providing services to Medicare beneficiaries, as well as to avoid violating the anti-cross subsidization principle. Thus, by applying the cap, an ESRD facility would not be paid for bad debt amounts that exceeded its unrecovered costs under the composite rate payment system implemented in 1983. Comment: We received comments from commenters suggesting the maintenance of the cap on bad debt reimbursement to ESRD facilities up to the facilities’ unrecovered costs was inconsistent with the bad debt reimbursement policies for all other types of providers eligible to receive bad debt reimbursement and was also inconsistent with Federal court rulings. Response: After careful consideration of the policy implications of removing the cap on bad debt reimbursement at an ESRD facility’s unrecovered costs, we have decided to eliminate the cap. The elimination of the cap on bad debt VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 Allowable bad debt amount during FY 2013 (percent) 70 70 100 100 100 100 100 100 100 100 100 100 100 65 65 65 88 88 88 88 88 88 88 88 88 88 reimbursement to ESRD facilities will allow ESRD facilities to claim bad debts at an amount exceeding unrecovered costs incurred under a prospective payment system. In addition, removal of the cap on bad debt reimbursement to ESRD facilities complies with the order of the D.C. Circuit Court in Kidney Center of Hollywood, et al. v. Shalala, 133 F.3d 78 (D.C. Circuit 1998), and will allow us to apply our bad debt policies consistently across all the types of providers eligible to receive bad debt payments. Therefore, we believe the removal of the bad debt reimbursement cap at an ESRD facility’s unrecovered cost, is an equitable and reasonable policy choice with respect to bad debt reimbursement to ESRD facilities. We are eliminating the cap for ESRD facilities for cost reporting periods beginning on or after January 1, 2013, the effective date of this final rule. With this change, ESRD facilities will be reimbursed for bad debt reduced as outlined in the proposed changes to § 413.89(h)(3), described above. However, because the new bad debt reductions for ESRD facilities become effective October 1, 2012, and the removal of the cap on bad debt reimbursement to ESRD facilities will not be effective until January 1, 2013, for cost reporting periods beginning between October 1, 2012 and December 31, 2012, the cap on bad debt reimbursement to ESRD facilities will be calculated with both the required bad debt reductions and the cap on bad debt reimbursement to ESRD facilities. For illustrative purposes only, the following examples present the interaction of the application of the cap on ESRD bad debt PO 00000 Frm 00071 Fmt 4701 Sfmt 4700 Allowable bad debt amount during FY 2014 (percent) Allowable bad debt amount during FY 2015 & subsequent FYs (percent) 65 65 65 76 76 76 76 76 76 76 76 76 76 65 65 65 65 65 65 65 65 65 65 65 65 65 payments until January 1, 2013 and the ESRD bad debt reduction effective October 1, 2012: Example (A), for cost reporting periods beginning before October 1, 2012, only the cap applies as follows: 1. Unrecovered costs = $100.00 2. Aggregate Gross bad debt = $110.00 3. Bad debt amount of $110.00 is capped at the unrecovered costs of $100.00, therefore, the facility receives $100.00. Example (B), for cost reporting periods beginning between October 1, 2012 and December 31, 2012, the 12 percent reduction applies up to the facilities’ unrecovered costs as follows: 1. Unrecovered costs = $100.00 2. Aggregate Gross bad debt = $110.00 3. Bad debt amount of $110.00 is reduced by 12 percent (bad debt reduction in FY 2013) which equals $96.80. Since the reduction is less than the cap, the facility receives $96.80. Example (C), for cost reporting periods beginning on or after January 1, 2013 and before October 1, 2013, only the 12 percent reduction applies: 1. Unrecovered costs = $100.00 2. Aggregate Gross bad debt = $110.00 3. The $110.00 bad debt amount is reduced by 12 percent (bad debt reduction in FY 2013). The facility receives $96.80 with no cap applied. We are moving current regulations text at § 413.178(a) to proposed § 413.89(h)(3). The revised regulation text will remove the bad debt cap for ESRD facilities, and include the bad debt reduction percentages applicable to ESRD facilities in accordance with 1861(v)(1)(W). We are removing current paragraphs (b), (c), and (d)(1) of § 413.178 since these provisions already are set out at § 413.89, Chapter 3 of the PRM Part I, E:\FR\FM\09NOR2.SGM 09NOR2 67520 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations D. Changes to Medicare Bad Debt Policy In this rule, we are conforming existing regulations text found at § 413.89(h) to the self-implementing provisions of section 3201 of Public Law 112–96. Previously, bad debt reimbursement to an ESRD facility was capped up to the facility’s reasonable costs under § 413.178(a). In this final rule, we are moving the current provision at § 413.178(a) to § 413.89(h)(3), and adding ESRD facilities to the list of facilities to which § 413.89 ‘‘Bad debts, charity, and courtesy allowances,’’ applies. We are also eliminating duplicate provisions in § 413.178 and reserving § 413.178 for future use. In addition, we are making a technical correction to § 417.536(f)(1) to clarify Medicare bad debt reimbursement policy. 1861(v)(1)(T)(v) of the Act to hospitals for cost reporting periods beginning during fiscal year 2013 and subsequent fiscal years. We are revising § 413.89(h)(2) to add paragraphs (h)(2)(i) and (h)(2)(ii). Paragraph (h)(2)(i) will set forth the percentage reduction in reimbursable bad debt payments required by section 1861(v)(1)(V)(ii) of the Act for SNFs and swing bed hospitals for cost reporting periods beginning during fiscal years 2006 through 2012 for a patient that was not a dual eligible individual. Paragraph (h)(2)(ii) will set forth the reduction in reimbursable bad debt payments for SNFs and swing bed hospitals, for cost reporting periods beginning during fiscal year 2013 and subsequent fiscal years, for a patient that was a dual eligible individual. We are revising § 413.89(h)(3) to set forth the percentage reduction in allowable bad debt payments required by section 1861(v)(1)(W) of the Act for ESRD facilities for cost reporting periods beginning during fiscal year 2013, fiscal year 2014 and subsequent fiscal years. We are also revising § 413.89(h)(3) to set forth the applicability of the cap on bad debt reimbursement to ESRD facilities for cost reporting periods beginning between October 1, 2012 and December 31, 2012. We are adding a new § 413.89(h)(4) to set forth the percentage reduction in reimbursable bad debt payments for all other entities required by section 1861(v)(1)(W) of the Act not described in § 413.89(h)(1), (h)(2), or (h)(3) that are eligible to receive reimbursement of bad debt for cost reporting periods beginning during fiscal year 2013, fiscal year 2014, and subsequent fiscal years. 1. Changes to 42 CFR 413.89(h) Under each paragraph of our existing regulations at § 413.89(h), we describe the limits on bad debt payment to be reductions to the amount of bad debt otherwise treated as allowable costs. Under § 413.89(a), bad debts are deductions from revenue and are not to be included in allowable cost. Therefore, we are clarifying that the limits on bad debt payments are reductions to amount of allowable bad debt. We are revising § 413.89(h)(1)(iv) to set forth the percentage reduction in reimbursable bad debt payments to hospitals for cost reporting periods beginning during fiscal years 2001 through 2012. We are adding a new § 413.89(h)(1)(v), which will set forth the percentage reduction in reimbursable bad debt payments required by section 2. Rationale for Removing 42 CFR 413.178 Previously, § 413.178(a) stated that CMS will reimburse each ESRD facility its allowable Medicare bad debts, as defined in § 413.89(b), up to the facility’s costs, as determined under Medicare principles, in a single lump sum payment at the end of the facility’s cost reporting period. This cap on bad debt reimbursements will be eliminated and the new reductions in bad debt reimbursements will be applied, as discussed above. We are revising § 413.89(h)(3) to implement the ESRD facilities’ bad debt reduction effective October 1, 2012 in accordance with section 1861(v)(1)(W) of the Act. We are also removing and reserving § 413.178, since the revised provisions already are set out at § 413.89, in Chapter 3 of the PRM Part I, and in the and in the Medicare cost report instructions in the PRM Part II. In addition, we are moving the bad debt exception provision applicable to ESRD facilities discussed at § 413.178(d)(2) to proposed § 413.89(i)(2). For consistency, we are also moving the current general bad debt exception set out at § 413.89(i) to new paragraph § 413.89(i)(1). We are removing and reserving § 413.178. tkelley on DSK3SPTVN1PROD with RULES2 3. Technical Corrections We are making a technical correction to 42 CFR 417.536(f)(1) to refer to 42 CFR 413.89 as the appropriate cross reference to Medicare bad debt reimbursement policy, to revise the existing language describing bad debt to conform to § 413.89(a), and to remove requirements that already are set out at § 413.89. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 PO 00000 Frm 00072 Fmt 4701 Sfmt 4700 Medicare cost report instructions in the PRM Part II. We are moving the current general bad debt exception at § 413.89(i) to new paragraph § 413.89(i)(1) in order to move the ESRD facilities’ bad debt exception provision previously discussed at § 413.178(d)(2) to new paragraph § 413.89(i)(2). 3. Technical Corrections to 42 CFR 417.536(f)(1) In this final rule, we are revising the regulations text at 417.536(f)(1) to correct the cross-reference to the Medicare bad debt reimbursement regulation, so that § 417.536(f)(1) will reference 42 CFR 413.89 instead of the outdated reference to § 413.80. In addition, we are revising the language at 42 CFR 417.536(f)(1) to conform to the description of bad debt in § 413.89(a) and we are removing § 417.536(f)(1)(i) and (ii) since these provisions already are set out at § 413.89, in Chapter 3 of the PRM Part I, and in the Medicare cost report instructions in the PRM Part II. V. Collection of Information Requirements A. Legislative Requirement for Solicitation of Comments Under the Paperwork Reduction Act of 1995, we are required to provide 30day 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. In order to fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires that we solicit comment on the following issues: • The need for the information collection and its usefulness in carrying out the proper functions of our agency. • The accuracy of our estimate of the information collection burden. • The quality, utility, and clarity of the information to be collected. • Recommendations to minimize the information collection burden on the affected public, including automated collection techniques. B. Requirements in Regulation Text We did not propose and therefore are not finalizing any changes to regulatory text for the ESRD PPS in CY 2013. C. Additional Information Collection Requirements This final rule does not impose any new information collection requirements in the regulation text, as specified above. However, this final rule does make reference to several associated information collections that E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations are not discussed in the regulation text contained in this document. The following is a discussion of these information collections. We are soliciting public comment on each of these issues. 1. ESRD QIP tkelley on DSK3SPTVN1PROD with RULES2 a. Display of Certificates for the PY 2015 ESRD QIP Section III.D.15 of this final rule discusses a disclosure requirement for the PY 2014 and PY 2015 ESRD QIP. As stated earlier in this final rule, section 1881(h)(6)(C) of the Act requires the Secretary to provide certificates to dialysis care providers and facilities with their Total Performance Scores under the ESRD QIP. This section also requires each facility that receives an ESRD QIP certificate to display it prominently at the facility. To comply with this requirement, we proposed to issue one English and one Spanish ESRD QIP certificate beginning in PY 2014 to facilities via a generally accessible electronic file format. We had previously finalized other display requirements for the program, including that each facility prominently display the applicable ESRD QIP certificate in the patient area, take the necessary measures to ensure the security of the certificate in the patient areas, and have staff available to answer questions about the certificate in an understandable manner, taking into account that some patients might have limited English proficiency. The burden associated with the aforementioned requirements is the time and effort necessary for facilities to print the applicable ESRD QIP certificates, display the certificates prominently in patient areas, ensure the safety of the certificates, and respond to patient inquiries in reference to the certificates. We do not anticipate that posting the Spanish certificate will add more time or burden to the Collection of Information requirements outlined in the CY 2011 ESRD PPS final rule (76 FR 70298 through 70299) for the PY 2014 ESRD QIP. Therefore, this analysis only applies to the burden associated with the PY 2015 and beyond requirements. We estimate that approximately 5,726 facilities will receive ESRD QIP certificates in PY 2015 and will be required to display them. We also estimate that it will take each facility 10 minutes per year to print, prominently display, and secure the ESRD QIP certificates, for a total estimated annual burden of 954 hours (10/60 hours *5,726 facilities). According to the Bureau of Labor Statistics, the mean hourly wage of a registered nurse is VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 $33.23.9 Since we anticipate nurses (or administrative staff) will post these certificates, we estimate that the aggregate cost of this requirement will be $31,701 ($33.23/hour × 954 hours). We estimate that approximately onethird of ESRD patients, or 100,000 patients, will ask a question about the ESRD QIP certificate. We further estimate that it will take each facility approximately 5 minutes to answer each patient’s question about the applicable ESRD QIP certificate, or 1.52 hours per facility each year. The total estimated annual burden associated with this requirement is 8,704 hours (1.52 hours/ facility × 5,726 facilities). The total estimated annual burden for both displaying the ESRD QIP certificates and answering patients’ questions about the certificates is 9,658 hours (8,704 hours + 954 hours). While the total estimated annual burden associated with both of these requirements as discussed is 9,658 hours, we do not believe that there will be a significant cost associated with these requirements because we are not requiring facilities to complete new forms. We estimate that the total cost for all ESRD facilities to comply with the collection of information requirements associated with the certificates each year would be less than $320,935 ($33.23/hour × 9,658 hours). b. NHSN Dialysis Event Reporting Requirement for the PY 2015 ESRD QIP As stated above in section III.D.2.a of this finalrule, we finalized a measure requiring facilities to reporting dialysis events to the NHSN for he PY 2015 ESRD QIP. Specifically, we will require facilities to submit 12 months of dialysis event data to the NHSN to receive 10 points on the measure. The burden associated with this requirement for existing facilities is the time and effort necessary for facilities to submit 12 months of data in order to receive the maximum number of points. According to our most recent data, 5,525 facilities treat adult in-center hemodialysis and/ or pediatric in-center hemodialysis patients and are, then, eligible to receive a score on this measure; therefore, we estimate that approximately 5,525 facilities will submit the required data. Based on data previously collected, we further estimate that the average number of dialysis events is 0.008 per patient per month and that each facility has approximately 75 patients. Accordingly, we estimate the number of dialysis events in a 12-month period for all facilities to be 397,800 (0.09 events/ patient/month × 75 patiens/facility × 9 This PO 00000 hourly wage is absent any fringe benefits. Frm 00073 Fmt 4701 Sfmt 4700 67521 5,525 facilities × 12 mohths) for the PY 201 ESRD QIP performance period. We estimae it will require 10 minutes to collect and submit data on these events, and the estimated burden for submiting 12 mohths of data will be 66,300 hours (397,800 dialysis events × 10/60 minute). If the dialysis events were distributed evenly across all 5,525 facilities, the reporting would result in an additional 12 hour (66, 300 hours/ 5,525 facilities), burden for each facility at a cost of $399 ($33.23/hour × 12 hours) per facility. Again, we estimate the mean hourly wage of a registered nurse is $33.23, and we anticipate nurses (for administrative staff) will be responsible for this reporting. In total, we believe that the cost for all ESRD facilities to comply with the reporting requirements associated with NHSN Dialysis Event reporting measure will be approximately $2.2 million ($399 × 5,525 facilities= $2,204,475) per year. c. ICH CAHPS Survey Attestation Requirement for the PY 2015 ESRD QIP As stated above in section III.D.1.c of this final rule, we finalized a measure that assesses facility usage of the ICH CAHPS survey as a reporting measure for the PY 2015 ESRD QIP. The burden associated with this requirement is the time and effort necessary for facilities to administer the ICH CAHPS survey through a third party and submit an attestation to CMS that they successfully administered the survey. We estimate that approximately 5,523 facilities treat adult, in-center hemodialysis patients and are, therefore, eligible to receive a score on this measure. We estimate that all 5,523 facilities will administer the ICH CAHPS survey through a third-party and submit an attestation to that effect. We estimate that it will take each facility’s third-party administrator 16 hours per year to be trained on the survey features. We further estimate that it will take each facility approximately 5 minutes to submit the attestation each year. The estimated total annual burden on facilities is 88,829 hours ((16 hours × 5,523 facilities) + ((5/60 minutes) × 5,523 facilities) which is equal to $2,952,818 (88,829 hours × $33.23), or $534 per facility ($2,952, 818/5,523). Again, we estimate the mean hourly wage of a registered nurse is $33.23, and we anticipate nurses (or administrative staff) will be responsible for this reporting. We estimate that it would take each patient 30 minutes to complete the survey (to account for variability in education levels) and that approximately 75 surveys per year E:\FR\FM\09NOR2.SGM 09NOR2 67522 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations would be taken per facility.10 Interviewers from each facility would spend a total of approximately 37.5 hours per year with patients completing these surveys (30/60 minutes * 75 minutes) or $1,247 (37.5 hours × $33.23) for an estimated annual burden of 207,113 hours (37.5 hours * 5,523 facilities) which is equal to $6.9 million (207,113 hours × 33.23/hour). We estimate that time burden for ESRD facilities to comply with the collection of information requirements associated with administering the ICH CAHPS survey each year would be approximately $1,781 ($534 + $1,247) for each facility, or $9.9 million ($1,781 × 5,523 facilities =$9,836,463) across all ESRD facilities. d. Data Validation Requirements tkelley on DSK3SPTVN1PROD with RULES2 Section III.D.13 of this final rule outlines the data validation processes we are finalizing. We will randomly sample records from 750 facilities; each sampled facility would be required to produce approximately 10 records. The burden associated with this validation requirement is the time and effort necessary to submit validation data to a CMS contractor. Because we anticipate that the sampled facilities will be reimbursed by our validation contractor for the costs associated with copying and mailing the requested records, we only estimate the burden of retrieving and submitting the necessary records. We estimate that it will take each facility approximately 2.5 hours to comply with these requirements. If 750 facilities are tasked with providing the required documentation, the estimated annual burden across all facilities will be 1,875 hours (750 facilities × 2.5 hours) at a total of $62,307 (1,875 hours × $33.23/hour) or $83.08 ($62,307/750) per facility in the sample. Again, we estimate the mean hourly wage of a registered nurse is $33.23, and we anticipate nurses (or administrative staff) will be responsible for providing this information. The comments we received on this analysis are set forth below. Comment: One commenter believes that the underlying premise for the 10 Last year, we stated that we believed that 200 surveys would be administered per facility per year (76 FR 70299). Upon further review, however, we note that the ICH CAHPS specifications require a sample of 200 surveys only for those facilities with a large patient population. Faculties with fewer than 200 patients are required to survey all patients, aiming for a 40 percent response rate. (https:// www.cahps.ahrq.gov/∼/media/Files/ SurveyDocuments/ICH/Admin_Survey/ 53_fielding_the_ich_survey.pdf). Since we estimate that each facility serves approximately 75 patients, we believe that the average facility, at most, would survey 75 patients per year. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 CAHPS burden analysis is incorrect. This commenter stated that if the average facility serves 75 patients, it would survey at most 75 patients per year. Response: We believe that this assumption is a good approximation for this analysis. We realize that facilities may have more than 75 patients or less than 75 patients. Across the ESRD population, however, we believe 75 patients per facility is accurate. According to the ICH CAHPS specifications, if a facility has less than 200 patients, it must draw a census of patients from this facility. Therefore, if the average facility has 75 patients, we believe it would survey at most 75 patients. Comment: One commenter expressed concern that responding to questions from patients about the Performance Score Certificates (PSCs) could consume too many staff hours. Response: We recognize that patients may have questions about the PSCs. The ESRD QIP is designed not only to incentivize care, but also to stimulate discussion about the quality of dialysis care. Therefore, we believe that these questions and answers are important in promoting the goals of the program and improvement in care in that they promote patient awareness and understanding of the care they are receiving. Additionally, we believe that these questions will be answered during the course of usual patient care. We will continue to monitor the burden these questions may place upon facilities. To obtain copies of the supporting statement and any related forms for the paperwork collections referenced above, access CMS’ Web site at https:// www.cms.gov/PaperworkReductionAct of1995/PRAL/list.asp#TopOfPage. If you comment on these information collection and recordkeeping requirements, please submit your comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: CMS Desk Officer, [CMS–1352–F]; Fax: (202) 395–6974; or Email: OIRA_submission@omb.eop.gov. 2. Reductions to Bad Debt Payments for All Medicare Providers The statutorily mandated reductions of bad debt payments to providers, suppliers, and other entities that are currently receiving bad debt payments will not result in any changes to or any additional collection of information requirements. The removal of the cap on bad debt reimbursement to ESRD facilities will result in fewer collection of information requirements for ESRD facilities. PO 00000 Frm 00074 Fmt 4701 Sfmt 4700 VI. Economic Analyses A. Regulatory Impact Analysis 1. Introduction We examined the impacts of this final rule as required by Executive Order 12866 (September 30, 1993, Regulatory Planning and Review) and Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011). 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). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated economically significant under section 3(f)(1) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget. We have prepared a Regulatory Impact Analysis that to the best of our ability presents the costs and benefits of the final rule. 2. Statement of Need This rule finalizes a number of routine updates for renal dialysis items and services in CY 2013, implements the third year of the ESRD PPS transition, and makes several policy changes and clarifications to the ESRD PPS. These include updates and changes to the ESRD PPS and composite rate base rates, wage index values, wage index budget-neutrality adjustment factors, outlier payment policy, and transition budget-neutrality adjustment. Failure to publish this final rule would result in ESRD facilities not receiving appropriate payments in CY 2013. This final rule also implements the QIP for PY 2015 and beyond by establishing measures, a scoring system, and payment reductions to incentivize improvements in dialysis care as directed by section 1881(h) of the Act. Failure to establish QIP program parameters in this rule would prevent continuation of the QIP beyond PY 2014. This final rule also implements the reduction percentages of bad debt reimbursement required by section 3201 of The Middle Class Tax Extension and Job Creation Act of 2012. This final rule also removes the cap on bad debt reimbursement to an ESRD facility up to the facility’s unrecovered costs. Section 3201(c) of The Middle Class Tax E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations Extension and Job Creation Act of 2012 adds a new subparagraph— 1861(v)(1)(W) to the Act and applies a reduction in bad debt payments to ‘‘providers’’ not addressed under subparagraphs 1861(v)(1)(T) or 1861(v)(1)(V) of the Act. For the purpose of subparagraph 1861(v)(1)(W) of the Act, section 3201(c) of The Middle Class Tax Extension and Job Creation Act of 2012 defined ‘‘providers’’ as a supplier or any other type of entity that receives payment for bad debts under the authority of section 1861(v)(1)(A) of the Act. These providers include, but are not limited to, CAHs, RHCs, FQHCs, CMHCs, HMOs reimbursed on a cost basis, CMPs, HCPPs and ESRD facilities. 3. Overall Impact We estimate that the final revisions to the ESRD PPS will result in an increase of approximately $250 million in payments, from Medicare, to ESRD facilities in CY 2013, which includes the amount associated with the increase in the ESRDB market basket reduced by the productivity adjustment, updates to outlier amounts, and the effect of changing the blended payments from 50 percent under the composite rate payment and 50 percent under the ESRD PPS to 25 percent under the composite rate payment and 75 percent under the ESRD PPS. tkelley on DSK3SPTVN1PROD with RULES2 We estimate that the requirements related to the ESRD QIP for PY 2015 will cost approximately $12.4 million and the predicted payment reductions will equal about $12.1 million to result in a total impact from the proposed ESRD QIP requirements of $24.6 million. In section IV of this final rule, we discuss the provisions required by section 3201 of The Middle Class Tax Extension and Job Creation Act of 2012, which apply percentage reductions in bad debt reimbursement to all providers eligible to receive bad debt reimbursement; these provisions are specifically prescribed by statute and thus, are self-implementing. Table 9 in section IV.C.1 of the CY 2013 proposed rule (77 FR 40988) depicts a comparison of the bad debt payment percentages prior to and after FY 2013. We estimate these self implementing provisions of section 3201 of The Middle Class Tax Extension and Job Creation Act of 2012 will result in savings to the Medicare program of $10.92 billion over the period from 2012 through 2022. VerDate Mar<15>2010 18:41 Nov 08, 2012 Jkt 229001 Fiscal year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 ............................. ............................. ............................. ............................. ............................. ............................. ............................. ............................. ............................. ............................. Aggregate FY Total Savings. Medicare program savings from reductions in bad debt 240 million. 600 million. 900 million. 1.06 billion. 1.14 billion. 1.21 billion. 1.30 billion. 1.39 billion. 1.49 billion. 1.59 billion. 10.92 billion. Additionally, in section IV of this final rule, we discuss the removal of the cap on bad debt reimbursement to ESRD facilities. We estimate the removal of this cap will result in a cost to the Medicare program in the amount of $170 million from 2013 through 2022. Fiscal year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 ............................. ............................. ............................. ............................. ............................. ............................. ............................. ............................. ............................. ............................. Aggregate FY Total Cost. Medicare program cost resulting from cap removal 10 20 10 10 20 20 20 20 20 20 million. million. million. million. million. million. million. million. million. million. 170 million. B. Detailed Economic Analysis 1. CY 2013 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) 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 (that is, payments made under the 100 percent ESRD PPS and those under the ESRD PPS blended payment during the transition) in CY 2012 to estimated payments in CY 2013. To estimate the impact among various classes of ESRD facilities, it is imperative that the estimates of payments in CY 2012 and CY 2013 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 the June 2012 update of CY 2011 National Claims PO 00000 Frm 00075 Fmt 4701 Sfmt 4700 67523 History file as a basis for Medicare dialysis treatments and payments under the ESRD PPS. We updated the 2011 claims to 2012 and 2013 using various updates. The updates to the ESRD PPS base rate and the base composite rate portion of the blended rate during the transition are described in section II.C of this final rule. In addition, in order to prepare an impact analysis, since some ESRD facilities opted to be paid the blended payment amount during the transition, we made various assumptions about price growth for the formerly separately billable drugs and laboratory tests with regard to the composite portion of the ESRD PPS blended payment during the transition. These rates of price growth are briefly outlined below, and are described in more detail in the CY 2011 ESRD PPS final rule (75 FR 49078 through 49080). We used the CY 2011 amounts for the CYs 2012 and 2013 amounts for Supplies and Other Services, since this category primarily includes the $0.50 administration fee for separately billable Part B drugs and this fee continues to be an appropriate amount. Because some ESRD facilities will receive blended payments during the transition and receive payment for ESRD drugs and biologicals based on their average sales price plus 6 percent (ASP+6), we estimated price growth for these drugs and biologicals based on ASP+6 percent. We updated the last available quarter of actual ASP data for the top twelve drugs (the fourth quarter of 2012) thru 2013 by using the quarterly growth in the Producer Price Index (PPI) for Drugs, consistent with the method for addressing price growth in the ESRDB market basket. This resulted in increases of 3.0 percent, 0.2 percent, 1.4 percent and 1.0 percent, respectively, for the first quarter of 2013 thru the fourth quarter of 2013. Since the top twelve drugs account for over 99 percent of total former separately billable Part B drug payments, we used a weighted average growth of the top twelve drugs for the remainder. Table 8 below shows the updates used for the drugs. We updated payments for laboratory tests paid under the laboratory fee schedule to 2012 and 2013 using the statutorily required update of the CPI– U increase with any legislative adjustments. For this final rule, the growth from 2011 to 2012 is 0.7 percent and the growth from 2011 to 2013 is ¥1.1 percent. E:\FR\FM\09NOR2.SGM 09NOR2 67524 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations TABLE 9—PRICE INCREASES FROM 2011 TO 2012 AND 2011 TO 2013 OF FORMER SEPARATELY BILLABLE PART B DRUGS Total growth 2011 to 2012 (percent) Separately billable drugs ¥0.3 ¥31.6 ¥24.8 ¥14.7 12.2 ¥68.3 64.6 ¥12.4 15.5 6.5 11.5 ¥7.8 ¥8.1 EPO ................................................................................................................................................. Paricalcitol ........................................................................................................................................ Sodium_ferric_glut ........................................................................................................................... Iron_sucrose .................................................................................................................................... Levocarnitine .................................................................................................................................... Doxercalciferol ................................................................................................................................. Calcitriol ........................................................................................................................................... Vancomycin ..................................................................................................................................... Alteplase .......................................................................................................................................... Aranesp ............................................................................................................................................ Daptomycin ...................................................................................................................................... Ferumoxytol ..................................................................................................................................... Weight for others ............................................................................................................................. Table 10 below shows the impact of the estimated CY 2013 ESRD payments Total growth 2011 to 2013 (percent) 5.0 ¥36.5 ¥33.3 ¥14.2 ¥2.3 ¥68.5 15.7 ¥15.4 24.4 12.3 19.0 ¥4.3 ¥4.6 compared to estimated payments to ESRD facilities in CY 2012. TABLE 10—IMPACT OF CHANGES IN PAYMENTS TO ESRD FACILITIES FOR THE CY 2013 ESRD FINAL RULE [Percent change in total payments to ESRD facilities (both program and beneficiaries)] A B C D E Number of facilities Number of treatments (in millions) Effect of 2013 changes in outlier policy 3 (percent) Effect of 2013 changes in wage indexes (percent) Effect of total 2013 changes 4 (percent) tkelley on DSK3SPTVN1PROD with RULES2 Facility type All Facilities .......................................................................... Type Freestanding ................................................................. Hospital based .............................................................. Ownership Type Large dialysis organization ........................................... Regional chain .............................................................. Independent .................................................................. Hospital based 1 ............................................................ Unknown .............................................................................. Geographic Location Rural ............................................................................. Urban ............................................................................ Census Region East North Central ........................................................ East South Central ....................................................... Middle Atlantic .............................................................. Mountain ....................................................................... New England ................................................................ Pacific ........................................................................... Puerto Rico and Virgin Islands ..................................... South Atlantic ................................................................ West North Central ....................................................... West South Central ...................................................... Facility Size Less than 4,000 treatments 2 ........................................ 4,000 to 9,999 treatments ............................................ 10,000 or more treatments ........................................... Unknown ....................................................................... Percentage of Pediatric Patients Less than 2% ................................................................ Between 2% and 19% .................................................. Between 20% and 49% ................................................ More than 50% ............................................................. 5,726 41.4 0.4 0.0 3.0 5,176 550 38.0 3.4 0.5 0.3 0.0 0.1 2.9 3.6 3,719 926 636 434 11 27.3 7.1 4.4 2.6 0.0 0.5 0.3 0.2 0.3 0.3 0.0 0.1 0.0 0.2 1.5 2.9 3.0 3.0 3.6 4.4 1,267 4,459 6.8 34.6 0.5 0.4 ¥0.2 0.0 2.9 3.0 941 472 641 335 171 667 41 1,259 416 783 6.3 3.1 5.1 1.9 1.4 5.6 0.3 9.5 2.2 6.0 0.5 0.6 0.4 0.3 0.5 0.2 0.2 0.6 0.4 0.5 0.1 ¥0.5 0.0 ¥0.3 0.5 0.6 ¥2.4 ¥0.2 0.1 ¥0.2 3.1 2.5 3.1 2.6 3.5 3.4 0.6 2.8 3.2 2.8 1,105 2,225 2,370 26 2.5 11.6 27.2 0.0 0.4 0.5 0.4 0.2 0.0 0.0 0.0 0.1 3.0 3.0 3.0 3.2 5,616 44 8 58 41.0 0.4 0.0 0.1 0.5 0.3 0.1 ¥0.2 0.0 ¥0.1 ¥0.1 0.0 3.0 3.0 4.1 2.2 1 Includes hospital based facilities not reported to have large dialysis organization or regional chain ownership. the 1,105 Facilities with less than 4,000 treatments, only 332 qualify for the low-volume adjustment. The low-volume adjustment is mandated by Congress, and is not applied to pediatric patients. The impact to these Low volume Facilities is a 3.3% increase in payments. 3 Includes the effects of the final payment policy on thrombolytics for those facilities that are paid under the blend. 2 Of VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 PO 00000 Frm 00076 Fmt 4701 Sfmt 4700 E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations 67525 tkelley on DSK3SPTVN1PROD with RULES2 4 Includes the effect of Market Basket minus productivity increase of 2.3% to the ESRD PPS base and the Composite Rate. Includes the effect of the change in the drug add-on percentage from 14.3% to 14.0% for those facilities that opted to be paid under the transition. Includes the effect of the blend changing from 50/50 to 25/75 for those facilities that choose to be paid under the transition. Includes the effect of the Transition Budget-Neutrality Factor of 0.1 percent for all facilities. Note: Totals do not necessarily equal the sum of rounded parts. 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.C.7 of this final rule is shown in column C. For CY 2013, the impact on all facilities as a result of the changes to the outlier payment policy would be a 0.4 percent increase in estimated payments. The estimated impact of the changes to outlier payment policy ranges from a 0.2 percent decrease to a 0.6 percent increase. Most ESRD facilities are anticipated to experience a positive effect in their estimated CY 2013 payments as a result of the final outlier policy changes. Column D shows the effect of the wage index on ESRD facilities and reflects the CY 2013 wage index values for the composite rate portion of the blended payment during the transition and the ESRD PPS payments. Facilities located in the census region of Puerto Rico and the Virgin Islands would receive a 2.4 percent decrease in estimated payments in CY 2013. Since most of the facilities in this category are located in Puerto Rico, the decrease is primarily due to the reduction in the wage index floor, (which only affects facilities in Puerto Rico in CY 2013). The other categories of types of facilities in the impact table show changes in estimated payments ranging from a 0.5 percent decrease to a 1.5 percent increase due to the update of the wage index. Column E reflects the overall impact (that is, the effect of the final outlier policy changes, the effect of the final wage index, the effect of the ESRDB market basket increase minus productivity adjustment, the effect of the change in the blended payment percentage from 50 percent of payments based on the composite rate system and 50 percent based on the ESRD PPS in 2012, to 25/75, respectively, for 2013, for those facilities that opted to be paid under the transition, and the effect of the 0.1 percent transition budgetneutrality adjustment increase). We expect that overall, ESRD facilities will experience a 3.0 percent increase in VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 estimated payments in 2013. ESRD facilities in Puerto Rico and the Virgin Islands are expected to receive a 0.6 percent increase in their estimated payments in CY 2013. This smaller increase is primarily due to the negative impact of the wage index. The other categories of types of facilities in the impact table show positive impacts ranging from an increase of 2.2 percent to 4.4 percent in their 2013 estimated payments. b. Effects on Other Providers Under the ESRD PPS, ESRD facilities are paid directly for the renal dialysis bundle and other provider types such as laboratories, DME suppliers, and pharmacies, may no longer bill Medicare directly for renal dialysis services. Rather, effective January 1, 2011, such other providers can only furnish renal dialysis services under arrangements with ESRD facilities and must seek payment from ESRD facilities rather than Medicare. Under the ESRD PPS, Medicare pays ESRD facilities one payment for renal dialysis services, which may have been separately paid to suppliers by Medicare prior to the implementation of the ESRD PPS. Therefore, in CY 2013, the third year of the ESRD PPS, we estimate that the final ESRD PPS will 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 2013 will be approximately $8.4 billion. This estimate is based on various price update factors discussed in section VI.B in this final rule and takes into account a projected increase in fee-for-service Medicare dialysis beneficiary enrollment of 4.0 percent in CY 2013. d. Effects on Medicare Beneficiaries Under the ESRD PPS, beneficiaries are responsible for paying 20 percent of the ESRD PPS payment amount or blended payment amount for patients treated in facilities going through the ESRD PPS transition. As a result of the projected 3.0 percent overall increase in the ESRD PPS payment amounts in CY 2013, we estimate that there will be an increase in beneficiary co-insurance payments of PO 00000 Frm 00077 Fmt 4701 Sfmt 4700 3.0 percent in CY 2013, which translates to approximately $60 million. e. Alternatives Considered We considered eliminating the AY modifier use by ESRD facilities in CY 2013, which could address program integrity concerns but could also require Medicare beneficiaries to incur additional injections, medical visits and co-insurance liabilities and accordingly, we did not pursue this alternative. Rather, we decided to monitor the use of the AY modifier and consider the elimination of the AY modifier in future rulemaking if we determine that it is being used inappropriately. 2. ESRD QIP a. Effects of the PY 2015 ESRD QIP The ESRD QIP provisions are intended to prevent possible reductions in the quality of ESRD dialysis facility services provided to beneficiaries as a result of payment changes under the ESRD PPS by implementing an ESRD QIP that reduces ESRD payments by up to 2 percent for dialysis facilities that fail to meet or exceed a Total Performance Score with respect to performance standards established by the Secretary with respect to certain specified measures. The methodology that we are finalizing to determine a facility’s Total Performance Score is described in section III.D.9 and III.D.10 of this final rule. Any reductions in ESRD payments would begin on January 1, 2015 for services furnished on or after January 1, 2015. As a result, based on the ESRD QIP outlined in this final rule, we estimate that, of the total number of dialysis facilities (including those not receiving an ESRD QIP Total Performance Score), approximately 20 percent or 1,093 of the facilities would likely receive a payment reduction for PY 2015. Facilities that do not receive a TPS are not eligible for a payment reduction. The ESRD QIP impact assessment assumes an initial count of 5,726 dialysis facilities paid through the ESRD PPS. Table 11 shows the overall estimated distribution of payment reductions resulting from the PY 2015 ESRD QIP. E:\FR\FM\09NOR2.SGM 09NOR2 67526 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations TABLE 11—ESTIMATED DISTRIBUTION OF PY 2015 ESRD QIP PAYMENT REDUCTIONS TABLE 11—ESTIMATED DISTRIBUTION To estimate whether or not a facility OF PY 2015 ESRD QIP PAYMENT would receive a payment reduction under the proposed approach, we REDUCTIONS—Continued Payment reduction (percent) Payment reduction (percent) 0.0 0.5 1.0 1.5 ................. ................. ................. ................. Number of facilities Percent of facilities 4308 599 309 97 79.8 11.1 5.7 1.8 scored each facility on achievement and improvement for each of the proposed Percent of clinical measures using the most recent facilities data available for each measure shown 1.6 in Table 12. Number of facilities 2.0 ................. 88 * Note: this table excludes 325 facilities that did not receive a score because they did not have enough data to receive a Total Performance Score. TABLE 12—DATA USED TO ESTIMATE PY 2015 ESRD QIP PAYMENT REDUCTIONS Period of time used to calculate achievement thresholds, performance standards, benchmarks, and improvement thresholds Measure Hemoglobin Greater Than 12 g/dL ................................................................................ Vascular Access Type % Fistula ................................................................................................................. % Catheter .............................................................................................................. Kt/V Adult HD ................................................................................................................. Adult PD ................................................................................................................. Pediatric HD ........................................................................................................... We used claims data for these calculations. Clinical measures with less than 11 cases for a facility were not included in that facility’s Total Performance Score. Clinical measures with 11–25 cases for a facility received an adjustment as outlined in section III.C.11.a of this final rule. Each facility’s Total Performance Score was compared to the estimated minimum Total Performance Score and the payment reduction table found in section III.D.12 of this final rule. Facilities were required to have a score on at least one clinical measure to receive a Total Performance Score. For these simulations, reporting measures were not included due to lack of data availability. Therefore, the simulated facility Total Performance Scores were calculated using only the clinical measure scores. Performance period Jan 2010–Dec 2010 ........... Jan 2011–Dec 2011. Oct 2010–Apr 2011 ............ Oct 2010–Apr 2011 ............ May 2011–Dec 2011. May 2011–Dec 2011. Jul 2010–Mar 2011 ............ Jul 2010–Mar 2011 ............ Jul 2010–Mar 2011 ............ Apr 2011–Dec 2011. Apr 2011–Dec 2011. Apr 2011–Dec 2011. To estimate the total payment reductions in PY 2015 for each facility resulting from this final rule, we multiplied the total Medicare payments to the facility during the 1-year period between January 2011 and December 2011 by the facility’s estimated payment reduction percentage expected under the ESRD QIP, yielding a total payment reduction amount for each facility: (Total ESRD payment in January 2011 and December 2011 times the estimated payment reduction percentage). For PY 2015 the total payment reduction for all of the 1,093 facilities expected to receive a reduction is approximately $12 million ($12,087,940). Further, we estimate that the total costs associated with the collection of information requirements for PY 2015 described in section V.C. of this final rule would be approximately $12.4 million for all ESRD facilities. As a result, we estimate that ESRD facilities will experience an aggregate impact of $24.5 million ($12,087,940 + 12,424,180 = $24,512,120) as a result of the PY 2015 ESRD QIP. Table 13 below shows the estimated impact of the finalized ESRD QIP payment reductions to all ESRD facilities for PY 2015. The table details the distribution of ESRD facilities by facility size (both among facilities considered to be small entities and by number of treatments per facility), geography (both urban/rural and by region), and by facility type (hospital based/freestanding facilities). Given that the time periods used for these calculations will differ from those we will use for the PY 2015 ESRD QIP, the actual impact of the PY 2015 ESRD QIP may vary significantly from the values provided here. TABLE 13—IMPACT OF ESRD QIP PAYMENT REDUCTIONS TO ESRD FACILITIES FOR CY 2015 Number of Medicare treatments 2009 (in millions) tkelley on DSK3SPTVN1PROD with RULES2 Number of facilities All Facilities .......................................................................... Facility Type: Freestanding ................................................................. Hospital-based .............................................................. Ownership Type: Large Dialysis ............................................................... Regional Chain ............................................................. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 PO 00000 Frm 00078 Number of facilities with QIP score Number of facilities expected to receive a payment reduction Payment reduction (percent change in total ESRD payments) 5,726 41.4 5,401 1,093 ¥0.17 5,176 550 38.0 3.4 4,989 412 931 162 ¥0.15 ¥0.41 3,719 926 27.3 7.1 3,612 882 662 151 ¥0.14 ¥0.14 Fmt 4701 Sfmt 4700 E:\FR\FM\09NOR2.SGM 09NOR2 67527 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations TABLE 13—IMPACT OF ESRD QIP PAYMENT REDUCTIONS TO ESRD FACILITIES FOR CY 2015—Continued Number of Medicare treatments 2009 (in millions) Number of facilities Independent .................................................................. Hospital-based (non-chain) ........................................... Unknown ....................................................................... Facility Size: Large Entities ................................................................ Small Entities 1 .............................................................. Unknown ....................................................................... Urban/Rural Status: 1) Rural ......................................................................... 2) Urban ........................................................................ Census Region: Northeast ...................................................................... Midwest ......................................................................... South ............................................................................. West .............................................................................. U.S. Territories 2 ........................................................... Census Division: East North Central ........................................................ East South Central ....................................................... Middle Atlantic .............................................................. Mountain ....................................................................... New England ................................................................ Pacific ........................................................................... South Atlantic ................................................................ West North Central ....................................................... West South Central ...................................................... U.S. Territories 2 ........................................................... Facility Size (# of total treatments): Less than 4,000 treatments .......................................... 4,000–9,999 treatments ................................................ Over 10,000 treatments ................................................ Unknown ....................................................................... 1 Small Number of facilities with QIP score Number of facilities expected to receive a payment reduction Payment reduction (percent change in total ESRD payments) 636 434 11 4.4 2.6 0.0 584 318 5 150 128 2 ¥0.22 ¥0.43 ¥0.30 4,645 1,070 11 34.4 7.0 0.0 4,494 902 5 813 278 2 ¥0.14 ¥0.30 ¥0.30 1,267 4,459 6.8 34.6 1,188 4,213 263 830 ¥0.18 ¥0.16 810 1,352 2,510 1,001 53 6.5 8.5 18.7 7.5 0.3 752 1,238 2,420 952 39 166 310 445 154 18 ¥0.20 ¥0.21 ¥0.15 ¥0.13 ¥0.37 941 472 641 335 171 667 1,259 416 783 41 6.3 3.1 5.1 1.9 1.4 5.6 9.5 2.2 6.0 0.3 856 451 593 321 159 631 1,217 382 752 39 227 77 143 64 23 90 236 83 132 18 ¥0.23 ¥0.15 ¥0.22 ¥0.15 ¥0.13 ¥0.11 ¥0.16 ¥0.17 ¥0.13 ¥0.37 1,105 2,225 2,370 26 2.5 11.6 27.2 0.0 864 2,190 2,345 2 214 420 459 0 ¥0.27 ¥0.15 ¥0.14 ¥0.00 Entities include hospital-based and satellite facilities and non-chain facilities based on DFC self-reported status. Puerto Rico and Virgin Islands. tkelley on DSK3SPTVN1PROD with RULES2 2 Includes The comments we received on this analysis are set forth below. Comment: Several commenters requested that we provide, for both PY 2014 and PY 2015, the data, assumptions, and methodology used to calculate the rate of improvement, performance standards, achievement thresholds, and benchmarks for all measures to allow stakeholders to have the opportunity to assess the impact on facilities so that the community may provide meaningful comment. Commenters also argued that we have underestimated the PY 2014 average payment reduction (i.e., by 36 percent), and requested that we provide the model, data, and assumption we used for these estimates. Response: As we noted above, the PY 2014 final rule was finalized on November 1, 2011 (76 FR 70228). We direct commenters to this rule for our analysis of the PY 2014 ESRD QIP. The methodology and assumptions that we used to calculate the estimated rate of improvement, performance standards, VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 achievement thresholds, and standards are set forth in this section. b. Alternatives Considered for the PY 2015 ESRD QIP In developing the PY 2015 ESRD QIP, we selected measures that we believe are important indicators of patient outcomes and quality of care as discussed in sections III.C, and III.D of this final rule. Poor management of anemia and inadequate dialysis, for example, can lead to otherwiseavoidable hospitalizations, decreased quality of life, and death. Infections are also a leading cause of hospitalization and death among hemodialysis patients, but there are proven infection control methods that have been shown effective in reducing morbidity and mortality. We also considered proposing to adopt the Standardized Hospitalization Ratio Admissions (SHR) measure and the Standardized Mortality Ratio (SMR) measures as part of the PY 2015 ESRD QIP. While we decided not to propose to adopt the SHR and SMR measures for the PY 2015 ESRD QIP, we will publicly report these measure rates/ratios via PO 00000 Frm 00079 Fmt 4701 Sfmt 4700 DFC to encourage facilities to improve their care. We believe the measures selected for the ESRD QIP will allow us to continue focusing on improving the quality of care that Medicare beneficiaries receive from ESRD dialysis facilities. In developing the scoring methodology for the PY 2015 ESRD QIP, we considered a number of alternatives including various improvement ranges, achievement thresholds, and benchmarks. We also considered whether some of the new measures should be scored based only on achievement. We also discussed scoring some of the clinical measures using a binary methodology (that is, facilities receive either zero or 10 points for missing or achieving a standard, respectively). We ultimately decided to mirror the PY 2014 ESRD QIP scoring methodology as closely as possible. We aim to design a scoring methodology that is straightforward and transparent to facilities, patients, and other stakeholders, and we believe that one of E:\FR\FM\09NOR2.SGM 09NOR2 67528 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations the ways to obtain this transparency is to be as consistent as possible from yearto-year of the program. We believe that this consistency will allow us to better assess the impacts of the ESRD QIP upon facilities and beneficiaries. Finally, we believe that all scoring methodologies for Medicare VBP programs should be aligned as appropriate given their specific statutory requirements, and the scoring methodology for the ESRD QIP is similar to the Hospital Inpatient VBP Program. When deciding upon how to best score the Vascular Access Type and Kt/ V Dialysis Adequacy measure topics, we considered combining all of the measures within the measure topic into one composite measure (that is, having one, combined numerator and one, combined denominator for all of the measures within the topic) rather than individually scoring each measure and weighting it appropriately in the measure topic. We believe that it is important to mirror the NQF specifications for each measure as much as possible; we also heeded the suggestion of the Measures Application Partnership to further test composite measures before implementing them. Therefore, we decided to score measure topics where each measure within the measure topic is scored individually and then weighted appropriately. We considered requiring facilities to report data for 100 percent of their patients for the Mineral Metabolism and Anemia Management reporting measures in order to ensure complete, accurate data collection. We ultimately decided that, because there are some situations where a facility cannot control whether a patient’s blood is drawn (for example, hospitalization), we should adopt a reporting threshold of less than 100 percent. We also considered multiple baseline periods for purposes of scoring facilities on achievement and improvement. We considered periods of the same time and duration, periods occurring at different times, and periods with various durations. We ultimately decided that a baseline period of 12-months for both the achievement and improvement scores is best because it is consistent with the PY 2014 program. Additionally, a 12-month baseline period prevents issues related to seasonality. We finalized achievement and improvement baseline periods occurring over different periods of time because we believe that this approach mitigates data lag as much as possible and also allows us to score all of the measures on both achievement and improvement. Finally, we finalized an achievement baseline period spanning a calendar year (CY 2011) because this approach allows us to publish the numerical values for the performance standards before the beginning of the performance period. In deciding upon the minimum number of cases required for a facility to be scored on a measure, we reviewed and discussed many options. We considered keeping the program the same as PY 2014 by excluding measures with less than 11 cases and applying no adjustment. We also discussed including an adjustment for measures with 11–25 cases. Finally, we discussed an adjustment applicable to measures with 26–50 cases. We believe that we should set the case minimum at 11 and adopt an adjustment for measures with 11–25 cases. Finally, in deciding upon the calculation of the minimum Total Performance Score, we considered scoring the reporting measures at zero, consistent with PY 2014. We decided, however, to finalize a minimum Total Performance Score that includes half of the maximum score a facility could receive on these measures. We believe that this methodology appropriately places emphasis on complete reporting from all facilities. We did not receive any comments related to this analysis of the alternatives that we considered for the PY 2015 ESRD QIP. 3. Reductions to Bad Debt Payments for All Medicare Providers Section 3201 of The Middle Class Tax Extension and Job Creation Act of 2012 that requires reductions in bad debt reimbursement to all providers, supplies and other entities eligible to receive bad debt reimbursement will have a significant impact on the operations of all affected entities. However, these provisions are specifically prescribed by statute and thus, are self-implementing. It is estimated that these provisions will result in savings in CY 2013 of $330 million. Removal of the cap on bad debt reimbursement to ESRD facilities up to a facility’s unrecovered cost will have an impact on ESRD facilities by increasing their bad debt reimbursement amounts. It is estimated that the removal of this cap will result in $10 million in increased payments to ESRD facilities for CY 2013. Therefore, it is estimated that the combined overall savings in the CY 2013 would be $320 million. C. Accounting Statement As required by OMB Circular A–4 (available at https:// www.whitehouse.gov/omb/ circulars_a004_a-4), in Table 14 below, we have prepared an accounting statement showing the classification of the transfers and costs associated with the various provisions of this final rule. TABLE 14—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED TRANSFERS AND COSTS/SAVINGS ESRD PPS for CY 2013 Category Transfers Annualized Monetized Transfers .............................................................. From Whom to Whom .............................................................................. Increased Beneficiary Co-insurance Payments ....................................... From Whom to Whom .............................................................................. $250 million. Federal government to ESRD providers. $60 million. Beneficiaries to ESRD providers. tkelley on DSK3SPTVN1PROD with RULES2 ESRD QIP for PY 2015 Annualized Monetized Transfers .............................................................. From Whom to Whom .............................................................................. ¥$12.1 million.* Federal government to ESRD providers. Category Costs Annualized Monetized ESRD Provider Costs .......................................... VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 PO 00000 Frm 00080 Fmt 4701 12.4 million.** Sfmt 4700 E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations 67529 TABLE 14—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED TRANSFERS AND COSTS/SAVINGS—Continued Savings from Congressionally Mandated Reductions of Bad Debt Payments in CY 2013 Category Transfers Annualized Monetized Bad Debt Payments ............................................. From Whom to Whom .............................................................................. $¥320 million. Federal government to Medicare providers. tkelley on DSK3SPTVN1PROD with RULES2 * It is the reduced payment to the ESRD facilities, which fall below the quality standards as stated in section III.D.12 of this proposed rule. ** It is the cost associated with the collection of information requirements for all ESRD facilities. VII. Regulatory Flexibility Act Analysis The Regulatory Flexibility Act (September 19, 1980, Pub. L. 96–354) (RFA) 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 include small businesses, nonprofit organizations, and small governmental jurisdictions. Approximately 19 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 $34.5 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 Web site at https://www.sba.gov/sites/default/files/ files/Size_Standards_Table.pdf (Kidney Dialysis Centers are listed as 621492 with a size standard of $34.5 million). The claims data used to estimate payments to ESRD facilities in this RFA analysis and RIA do not identify which dialysis facilities are part of a large dialysis organization (LDO), regional chain, or other type of ownership because each individual dialysis facility has its own provider number and bills Medicare using this number. Therefore, in previous RFA analyses and RIAs presented in proposed and final rules that updated the basic case-mix adjusted composite payment system, we considered each ESRD facility to be a small entity for purposes of the RFA analysis. However, we conducted a special analysis for this final rule that enabled us to identify the ESRD facilities that are part of an LDO or regional chain and therefore, were able to identify individual ESRD facilities that will be considered small entities. 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. VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 For purposes of the RFA, we estimate that approximately 19 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 9. Using the definitions in this ownership category, we consider the 636 facilities that are independent and the 434 facilities that are shown as hospitalbased to be small entities. The ESRD facilities that are owned and operated by LDOs and regional chains would have total revenues of more than $34.5 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 in this rule, a hospital-based ESRD facility (as defined by ownership type) is estimated to receive a 3.6 percent increase in payments for CY 2013. An independent facility (as defined by ownership type) is estimated to receive a 3.0 percent increase in payments for 2013. Based on the ESRD QIP payment reduction impacts to ESRD facilities for PY 2015, we estimate that of the 1,093 ESRD facilities expected to receive a payment reduction, 278 ESRD small entity facilities will experience a payment reduction (ranging from 0.5 percent up to 2.0 of total payments). We anticipate the payment reductions to average approximately $11,059 per facility among the 1,093 facilities receiving a payment reduction, with an average of $12,866 per small entity facilities receiving a payment reduction. The projected impacts for these small entities are estimates based on current data. The actual impacts may differ. Using our projections of facility performance, we then estimated the impact of anticipated payment reductions on ESRD small entities, by comparing the total payment reductions for the 278 small entities expected to receive a payment reduction, with the aggregate ESRD payments to all small entities. We estimate that there are a total of 1,070 small entity facilities. For PO 00000 Frm 00081 Fmt 4701 Sfmt 4700 this entire group of 1,070 ESRD small entity facilities, a decrease of 0.30% percent in aggregate ESRD payments is observed. The comment we received on this analysis is set forth below. Comment: One commenter expressed concern that we have not provided additional funding for the ESRD QIP COI requirements to alleviate the aggregate associated cost; commenter is specifically concerned of the impact on small facilities. Response: We recognize that a facility may have additional costs resulting from the ESRD QIP. We believe that these costs, however, are necessary in improving care and do not outweigh the utility of the program. We will continue to monitor these costs, paying specific attention to their effect upon small facilities. Therefore, the Secretary has determined that this final rule will not have a significant economic impact on a substantial number of small entities. 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. Any such regulatory impact 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 will have a significant impact on operations of a substantial number of small rural hospitals because most dialysis facilities are freestanding. While there are 180 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 180 rural hospital-based dialysis facilities will experience an estimated 3.5 percent increase in payments. As a result, this final rule is estimated to not have a significant impact on small rural hospitals. Therefore, the Secretary has determined that this final rule will not have a significant economic impact on a substantial number of small entities. E:\FR\FM\09NOR2.SGM 09NOR2 67530 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations Section 3201 of The Middle Class Tax Extension and Job Creation Act of 2012 that requires reductions in bad debt reimbursement to all providers, supplies and other entities eligible to receive bad debt reimbursement will have a significant impact on the operations of a substantial number of small entities and small rural hospitals. However, these provisions are specifically prescribed by the Congress and thus, are self-implementing. Additionally, we do not believe that the removal of the cap on bad debt reimbursements to ESRD facilities up to their unrecovered costs will have a significant impact on the operations of a substantial number of small entities and small rural hospitals. Thus, we are not providing a Regulatory Flexibility Act Analysis to codify the statutorily mandated reductions in bad debt payments, nor for the removal of the cap on bad debt reimbursement as it pertains to ESRD facilities. VIII. Unfunded Mandates Reform Act Analysis Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104–4) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year $100 million in 1995 dollars, updated annually for inflation. In 2012, that threshold is approximately $139 million. This final rule does not include any mandates that will impose spending costs on State, local, or Tribal governments in the aggregate, or by the private sector, of $139 million. tkelley on DSK3SPTVN1PROD with RULES2 IX. Federalism Analysis Executive Order 13132 on Federalism (August 4, 1999) establishes certain requirements that an agency must meet when it promulgates a 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. X. Files Available to the Public via the Internet This section lists the Addenda referred to in the preamble of this final rule. Beginning in CY 2012, 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. We will VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 continue to post the Addenda through the Internet. Readers who experience any problems accessing the Addenda that are posted on the CMS Web site at https:// www.cms.gov/ESRDPayment/PAY/ list.asp, should contact Michelle Cruse at (410) 786–7540. List of Subjects 42 CFR Part 413 Health facilities, Kidney diseases, Medicare, Reporting and recordkeeping requirements. 42 CFR Part 417 Administrative practice and procedure, Grant programs—health, Health care, Health insurance, Health maintenance organizations (HMO), Loan programs—health, 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; OPTIONAL PROSPECTIVELY DETERMINED PAYMENT RATES FOR SKILLED NURSING FACILITIES 1. The authority citation for part 413 is revised to read as follows: ■ Authority: Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (i), and (n), 1861(v), 1871, 1881, 1883 and 1886 of the Social Security Act (42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a), (i), and (n), 1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww); and sec. 124 of Pub. L. 106–113 (113 Stat. 1501A– 332) and sec. 3201 of Pub. L. 112–96 (126 Stat. 156). Subpart F—Specific Categories of Costs 2. Section 413.89 is amended by revising paragraphs (h)(1) introductory text, (h)(1)(iv), (h)(2), (h)(3), and (i), and by adding paragraphs (h)(1)(v) and (h)(4) to read as follows: ■ § 413.89 Bad debts, charity, and courtesy allowances. * * * * * (h) * * * (1) Hospitals. In determining reasonable costs for hospitals, the amount of allowable bad debt (as defined in paragraph (e) of this section) is reduced: * * * * * (iv) For cost reporting periods beginning during fiscal years 2001 through 2012, by 30 percent. PO 00000 Frm 00082 Fmt 4701 Sfmt 4700 (v) For cost reporting periods beginning during a subsequent fiscal year, by 35 percent. (2) Skilled nursing facilities and swing bed hospitals. For the purposes of this paragraph (h)(2), a dual eligible individual is defined as an individual that is entitled to benefits under Part A of Medicare and is determined eligible by the State for medical assistance under Title XIX of the Act as described under paragraph (2) of the definition of a ‘‘full-benefit dual eligible individual’’ at § 423.772 of this chapter. In determining reasonable costs for a skilled nursing facility and for posthospital SNF care furnished in a swing bed hospital, as defined in § 413.114(b), the amount of allowable bad debt (as defined in paragraph (e) of this section) is reduced: (i) For non-dual eligible individuals— (A) For cost reporting periods beginning during fiscal years 2006 through 2012, by 30 percent, for a patient in a skilled nursing facility. (B) For cost reporting periods beginning during a subsequent fiscal year, by 35 percent, for a patient in a skilled nursing facility or receiving posthospital SNF care in a swing bed hospital. (ii) For dual eligible individuals—(A) For cost reporting periods beginning during fiscal year 2013, by 12 percent, for a patient in a skilled nursing facility or a patient receiving post-hospital SNF care in a swing bed hospital. (B) For cost reporting periods beginning during fiscal year 2014, by 24 percent, for a patient in a skilled nursing facility or a patient receiving post-hospital SNF care in a swing bed hospital. (C) For cost reporting periods beginning during a subsequent fiscal year, by 35 percent, for a patient in a skilled nursing facility or a patient receiving post-hospital SNF care in a swing bed hospital. (3) End-stage renal dialysis facilities. In determining reasonable costs for an end-stage renal dialysis facility, the amount of allowable bad debt (as defined in paragraph (e) of this section) is: (i) For cost reporting periods beginning before October 1, 2012, reimbursed up to the facility’s costs. (ii) For cost reporting periods beginning on or after October 1, 2012 and before January 1, 2013, reduced by 12 percent with the resulting amount reimbursed up to the facility’s costs. (iii) For cost reporting periods beginning on or after January 1, 2013 and before October 1, 2013, reduced by 12 percent. E:\FR\FM\09NOR2.SGM 09NOR2 Federal Register / Vol. 77, No. 218 / Friday, November 9, 2012 / Rules and Regulations tkelley on DSK3SPTVN1PROD with RULES2 (iv) For cost reporting periods beginning during fiscal year 2014, reduced by 24 percent. (v) For cost reporting periods beginning during a subsequent fiscal year, reduced by 35 percent. (4) All other providers. In determining reasonable costs for all other providers, suppliers and other entities not described elsewhere in paragraph (h) of this section that are eligible to receive reimbursement for bad debts under this section, the amount of allowable bad debts (as defined in paragraph (e) of this section) is reduced: (i) For cost reporting periods beginning during fiscal year 2013, by 12 percent. (ii) For cost reporting periods beginning during fiscal year 2014, by 24 percent. (iii) For cost reporting periods beginning during a subsequent fiscal year, by 35 percent. (i) Exceptions applicable to bad debt reimbursement. (1) Bad debts arising from covered services paid under a reasonable charge-based methodology or a fee schedule are not reimbursable under the program. (2) For end-stage renal dialysis services furnished on or after January 1, 2011 and paid for under the end-stage VerDate Mar<15>2010 17:38 Nov 08, 2012 Jkt 229001 renal dialysis prospective payment system described in § 413.215, bad debts arising from covered items or services that, prior to January 1, 2011 were paid under a reasonable charge-based methodology or a fee schedule, including but not limited to drugs, laboratory tests, and supplies are not reimbursable under the program. § 413.178 [Removed and Reserved] 3. Section 413.178 is removed and reserved. ■ PART 417—HEALTH MAINTENANCE ORGANIZATIONS, COMPETITIVE MEDICAL PLANS, AND HEALTH CARE PREPAYMENT PLANS 4. The authority citation for part 417 continues to read as follows: ■ Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh), secs. 1301, 1306, and 1310 of the Public Health Service Act (42 U.S.C. 300e, 300e–5, and 300e–9), and 31 U.S.C. 9701. Subpart O—Medicare Payment: Cost Basis § 417.536 Cost payment principles. * * * * * (f) * * * (1) Bad debts attributable to Medicare deductible and coinsurance amounts are allowable only if the requirements of § 413.89 of this chapter are met, subject to the limitations described under § 413.89(h) and the exceptions for services described under § 413.89(i). * * * * * (Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, Medicare—Supplementary Medical Insurance Program) Dated: October 26, 2012. Marilyn Tavenner, Acting Administrator, Centers for Medicare & Medicaid Services. Kathleen Sebelius, Secretary, Department of Health and Human Services. [FR Doc. 2012–26903 Filed 11–2–12; 4:15 pm] BILLING CODE 4120–01–P 5. Section 417.536 is amended by revising paragraph (f)(1) to read as follows: ■ PO 00000 Frm 00083 Fmt 4701 Sfmt 9990 67531 E:\FR\FM\09NOR2.SGM 09NOR2

Agencies

[Federal Register Volume 77, Number 218 (Friday, November 9, 2012)]
[Rules and Regulations]
[Pages 67449-67531]
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Medicare Program; End-Stage Renal Disease Prospective Payment System,
Quality Incentive Program, and Bad Debt Reductions for All Medicare
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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 413 and 417

[CMS-1352-F]
RIN 0938-AR13

Medicare Program; End-Stage Renal Disease Prospective Payment
System, Quality Incentive Program, and Bad Debt Reductions for All
Medicare Providers

AGENCY: Centers for Medicare & Medicaid Services (CMS), 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) 2013. This rule also sets forth requirements for the ESRD quality
incentive program (QIP), including for payment year (PY) 2015 and
beyond. In addition, this rule implements changes to bad debt
reimbursement for all Medicare providers, suppliers, and other entities
eligible to receive Medicare payment for bad debt and removes the cap
on bad debt reimbursement to ESRD facilities. (See the Table of
Contents for a listing of the specific issues addressed in this final
rule.)

DATES: Effective Date: These regulations are effective on January 1,
2013.
Applicability Date: The regulations setting forth the reductions in
Medicare bad debt pursuant to section 3201 of the Middle Class Tax
Extension and Job Creation Act of 2012 (Pub. L. 112-96) are applicable
for cost reporting periods beginning October 1, 2012.

FOR FURTHER INFORMATION CONTACT: Michelle Cruse, (410) 786-4533, for
issues related to ESRD.
Heidi Oumarou, (410) 786-7942, for issues related to the ESRD
market basket.
Anita Segar, (410) 786-4614, for issues related to the QIP.
Kellie Shannon, (410) 786-0416 for information regarding Medicare
bad debt.

SUPPLEMENTARY INFORMATION:

Table of Contents

To assist readers in referencing sections contained in this
preamble, we are providing a Table of Contents. Some of the issues
discussed in this preamble affect the payment policies, but do not
require changes to the regulations in the Code of Federal Regulations
(CFR).

I. Executive Summary
A. Purpose
1. End-Stage Renal Disease (ESRD) Prospective Payment System
(PPS)
2. ESRD QIP
3. Reductions to Bad Debt Payments for All Medicare Providers
and Elimination of the Cap on Bad Debt Reimbursement to ESRD
Facilities
B. Summary of Major Provisions
1. ESRD PPS
2. ESRD QIP
3. Reductions to Bad Debt Payments for All Medicare Providers
and Elimination of the Cap on Bad Debt Reimbursement to ESRD
Facilities
C. Summary of Cost and Benefits
1. Impacts of the Final ESRD PPS
2. ESRD QIP
3. Impacts of Bad Debt Provisions
II. Calendar Year (CY) 2013 End-Stage Renal Disease (ESRD)
Prospective Payment System (PPS)
A. Background on the End-Stage Renal Disease (ESRD) Prospective
Payment System (PPS)
B. Summary of the Proposed Provisions and Responses to Comments
on the CY 2013 ESRD PPS
C. Routine Updates and Proposed Policy Changes to the CY 2013
ESRD PPS
1. Composite Rate Portion of the ESRD PPS Blended Payment
a. Update to the Drug Add-on to the Composite Rate Portion of
the ESRD Blended Payment Rate
i. Estimating Growth in Expenditures for Drugs and Biologicals
in CY 2013
ii. Estimating Per Patient Growth
iii. Applying the Growth Update to the Drug Add-On Adjustment
iv. Update to the Drug Add-On Adjustment for CY 2013
2. ESRD PPS Base Rate
3. ESRD Bundled Market Basket
a. Overview and Background
b. Market Basket Update Increase Factor and Labor-Related Share
for ESRD Facilities for CY 2013
c. Productivity Adjustment
d. Calculation of the ESRDB Market Basket Update Adjusted for
Multifactor Productivity for CY 2013
4. Transition Budget-Neutrality Adjustment for CY 2013
5. Updates to the Wage Index Values and Wage Index Floor for the
Composite Rate Portion of the Blended Payment and the ESRD PPS
Payment
a. Reduction to the ESRD Wage Index Floor
b. Policies for Areas With No Wage Data
c. Wage Index Budget-Neutrality Adjustment
d. ESRD PPS Wage Index Tables
6. Drug Policy Changes
a. Daptomycin
b. Alteplase and Other Thrombolytics
c. Part B Drug Pricing
7. Revisions to the Outlier Policy
a. Impact of Changes to the Outlier Policy
b. Outlier Policy Percentage
D. Clarifications Regarding the ESRD PPS
1. Reporting Composite Rate Items and Services
2. ESRD Facility Responsibilities for ESRD-Related Drugs and
Biologicals
3. Use of AY Modifier
E. Miscellaneous Comments
III. End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP)
for Payment Year (PY) 2015
A. Background
B. Summary of the Proposed Provisions and Responses to Comments
on the ESRD QIP for PY 2015
C. Considerations in Updating and Expanding Quality Measures
Under the ESRD QIP for PY 2015 and Subsequent PYs
1. Value-Based Purchasing (VBP) Overview
2. Brief Overview of Proposals
3. Measures Application Partnership Review
4. PY 2014 Mineral Metabolism Measure
D. Proposed Measures for the PY 2015 ESRD QIP and Subsequent PYs
of the ESRD QIP
1. PY 2014 Measures Continuing for PY 2015 and Subsequent PYs
a. Hemoglobin Greater Than 12 g/dL
b. Vascular Access Type (VAT) Measure Topic
c. In-Center Hemodialysis Consumer Assessment of Healthcare
Providers and Systems (ICH CAHPS)
2. Expansion of Two PY 2014 Measures for PY 2015 and Subsequent
PYs
a. Expanded National Healthcare Safety Network (NHSN) Dialysis
Event Reporting Measure
b. Expanded Mineral Metabolism Reporting Measure
3. New Measures for PY 2015 and Subsequent PYs of the ESRD QIP
a. Kt/V Dialysis Adequacy Measure Topic
i. Adult Hemodialysis Adequacy
ii. Peritoneal Dialysis Adequacy
iii. Pediatric, In-center Hemodialysis Adequacy
b. Hypercalcemia
c. Anemia Management Reporting Measure
4. Measures Under Consideration for Future PYs of the ESRD QIP
a. Standardized Hospitalization Ratio (SHR)
b. Standardized Mortality Ratio (SMR)
c. Public Reporting of SHR and SMR Measures
5. Other Potential Future Measures Under Development
a. Thirty-Day Hospital Readmissions
b. Efficiency
c. Population/Community Health
6. Scoring Background and General Considerations for the PY 2015
ESRD QIP
7. Performance Period for the PY 2015 ESRD QIP
8. Performance Standards for the PY 2015 ESRD QIP
a. Clinical Measure Performance Standards
b. Performance Standards
c. Performance Standards for the PY 2015 Reporting Measures
9. Scoring for the PY 2015 ESRD QIP Measures
a. Scoring Facility Performance on Clinical Measures Based on
Achievement
b. Scoring Facility Performance on Clinical Measures Based on
Improvement
c. Calculating the Reporting Measure Scores

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10. Weighting the PY 2015 ESRD QIP Measures and Calculation of
the PY 2015 ESRD QIP Total Performance Score
a. Weighting Individual Measures To Compute Measure Topic Scores
for the Kt/V Dialysis Adequacy Measure Topic and the Vascular Access
Type Measure Topic
b. Weighting the Total Performance Score
c. Examples of the PY 2015 ESRD QIP Scoring Methodology
11. Minimum Data for Scoring Measures for the PY 2015 ESRD QIP
a. Minimum Data for Scoring Clinical Measures for the PY 2015
ESRD QIP
b. Minimum Data Requirements for Reporting Measures by New
Facilities
12. Payment Reductions for the PY 2015 ESRD QIP
13. Data Validation
14. Scoring Facilities Whose Ownership has Changed
15. Public Reporting Requirements
IV. Limitation on Payments to All Providers, Suppliers and Other
Entities Entitled to Bad Debt
A. Background
B. Section 3201 of The Middle Class Tax Extension and Job
Creation Act of 2012 (Pub. L. No. 112-96)
C. Summary of Provisions of This Final Rule
1. Section 3201 of The Middle Class Tax Extension and Job
Creation Act of 2012 (Pub. L. No. 112-96)
2. ESRD Bad Debt Cap and Remove and Reserve Sec. 413.178
3. Technical Corrections
D. Changes to Medicare Bad Debt Policy
1. Changes to 42 CFR 413.89(h)
2. Rationale for Removing 42 CFR 413.178
3. Technical Corrections to 42 CFR 417.536(f)(1)
V. Collection of Information Requirements
A. Legislative Requirement for Solicitation of Comments
B. Requirements in the Regulation Text
C. Additional Information Collection Requirements
1. ESRD QIP
a. Display of Certificates for the PY 2015 ESRD QIP
b. NHSN Dialysis Event Reporting Requirement for the PY 2015
ESRD QIP
c. ICH CAHPS Survey Attestation Requirement for the PY 2015 ESRD
QIP
d. Data Validation Requirements
2. Reductions to Bad Debt Payments for All Medicare Providers
VI. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
2. Statement of Need
3. Overall Impact
B. Detailed Economic Analysis
1. CY 2013 End-Stage Renal Disease (ESRD) Prospective Payment
System (PPS)
a. Effects on ESRD Facilities
b. Effects on Other Providers
c. Effects on the Medicare Program
d. Effects on Medicare Beneficiaries
e. Alternatives Considered
2. ESRD QIP
a. Effects of the PY 2015 ESRD QIP
b. Alternatives Considered for the PY 2015 ESRD QIP
3. Reductions to Bad Debt Payments for All Medicare Providers
C. Accounting Statement
VII. Regulatory Flexibility Act Analysis
VIII. Unfunded Mandates Reform Act Analysis
IX. Federalism Analysis
X. Files Available to the Public via the Internet
Regulations Text

Acronyms

Because of the many terms to which we refer by acronym in this
final rule, we are listing the acronyms used and their corresponding
meanings in alphabetical order below:

AMCC Automated Multi-Channel Chemistry
ASP Average Sales Price
AV Arteriovenous
BLS Bureau of Labor Statistics
BMI Body Mass Index
BSA Body Surface Area
CAH Critical Access Hospital
CBSA Core-Based Statistical Area
CCN CMS Certification Number
CDC Centers for Disease Control and Prevention
CLABSI Central Line Access Bloodstream Infections
CFR Code of Federal Regulations
CIP Core Indicators Project
CMHC Community Mental Health Center
CMP Competitive Medical Plans
CMS Centers for Medicare & Medicaid Services
CPM Clinical Performance Measure
CPT Current Procedural Terminology
CROWNWeb Consolidated Renal Operations in a Web-Enabled Network
CY Calendar Year
DFC Dialysis Facility Compare
DFR Dialysis Facility Report
DME Durable Medical Equipment
ESA Erythropoiesis stimulating agent
ESRD End-Stage Renal Disease
ESRDB End-Stage Renal Disease Bundled
FDA Food and Drug Administration
FI/MAC Fiscal Intermediary/Medicare Administrative Contractor
FQHC Federally Qualified Health Center
FY Fiscal Year
GDP Gross Domestic Product
HAI Healthcare-associated Infections
HCPCS Healthcare Common Procedure Coding System
HCPP Health Care Prepayment Plan
HD Hemodialysis
HHD Home Hemodialysis
HMO Health Maintenance Organization
ICD-9-CM International Classification of Diseases, 9th Edition,
Clinical Modifications
ICH CAHPS In-Center Hemodialysis Consumer Assessment of Healthcare
Providers and Systems
IGI IHS Global Insight
IPPS Inpatient Prospective Payment System
KDIGO Kidney Disease: Improving Global Outcomes
KDOQI Kidney Disease Outcome Quality Initiative
Kt/V A measure of dialysis adequacy where K is dialyzer clearance, t
is dialysis time, and V is total body water volume
LDO Large Dialysis Organization
MAP Medicare Allowable Payment
MCP Monthly Capitation Payment
MIPPA Medicare Improvements for Patients and Providers Act of 2008
(Pub. L. 110-275)
MMA Medicare Prescription Drug, Improvement and Modernization Act of
2003
MMEA Medicare and Medicaid Extenders Act of 2010 Pub. L. 111-309
MFP Multifactor Productivity
NHSN National Healthcare Safety Network
NQF National Quality Forum
PD Peritoneal Dialysis
PFS Physician Fee Schedule
PPS Prospective Payment System
PSR Performance Score Report
PY Payment Year
QIP Quality Incentive Program
REMIS Renal Management Information System
RFA Regulatory Flexibility Act
RHC Rural Health Clinic
RRF Residual Renal Function
RUL Reasonable Useful Lifetime
SBA Small Business Administration
SHR Standardized Hospitalization Ratio
SIMS Standard Information Management System
SMR Standardized Mortality Ratio
SNF Skilled Nursing Facility
SSA Social Security Administration
TEP Technical Expert Panel
The Act Social Security Act
The Affordable Care Act The Patient Protection and Affordable Care
Act
URR Urea Reduction Ratio
VAT Vascular Access Type
VBP Value Based Purchasing

I. Executive Summary

A. Purpose

1. End-Stage Renal Disease (ESRD) Prospective Payment System (PPS)
This final rule updates and makes revisions to the End-Stage Renal
Disease (ESRD) prospective payment system (PPS) for calendar year (CY)
2013. In accordance with 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), the
Centers for Medicare & Medicaid Services (CMS) implemented a case-mix
adjusted bundled PPS for Medicare outpatient ESRD dialysis services
beginning January 1, 2011. The ESRD PPS replaced the basic case-mix
adjusted composite payment system and the methodologies for the
reimbursement of separately billable outpatient ESRD services.
Also, section 1881(b)(14)(F) of the Act, as added by section 153(b)
of MIPPA and amended by section 3401(h) of the Affordable Care Act
(Pub. L. 111-148), established that beginning CY 2012, and each
subsequent year, the Secretary shall reduce the market basket increase
factor by a productivity

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adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. In
addition, the application of the productivity adjustment may result in
the increase factor being less than 0.0 percent for a year.
2. End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP)
This final rule also sets forth requirements for the ESRD quality
incentive program (QIP), including for payment year (PY) 2015. The
program is authorized under section 153(c) of MIPPA, which added
section 1881(h) to the Social Security Act (the Act). The ESRD QIP is
the most recent step in fostering improved patient outcomes by
establishing incentives for dialysis facilities to meet performance
standards established by CMS.
3. Reductions to Bad Debt Payments for all Medicare Providers and
Elimination of the Cap on Bad Debt Reimbursement to ESRD Facilities
This final rule also implements the changes to the limitations on
payments for bad debt reimbursement set forth in section 3201 of The
Middle Class Tax Extension and Job Creation Act of 2012 (Pub. L. 112-
96) by revising 42 CFR 413.89, Bad debts, charity, and courtesy
allowances. Additionally, this rule will remove the cap on bad debt
reimbursement to ESRD facilities.

B. Summary of the Major Provisions

1. ESRD PPS
Update to the composite and ESRD PPS base rate for CY
2013: For CY 2013, the ESRD PPS base rate is $240.36. This amount
reflects the application of the ESRD bundled (ESRDB) market basket
reduced by the productivity adjustment, or 2.3 percent, and the wage
index budget-neutrality adjustment factor of 1.000613 to the CY 2012
ESRD PPS base rate of $234.81. The base rate is applicable to both the
ESRD PPS portion of the blended payment under the transition and
payments under the full PPS. During the transition, we are required to
update the composite rate for ESRD facilities receiving a blended
payment. For CY 2013, the composite base rate is $145.20. This amount
reflects the CY 2012 composite rate of $141.94, increased by the ESRDB
market basket reduced by the productivity adjustment.
Update to the composite rate drug add-on for CY 2013:
There are no changes to the methodology used to compute the drug add-on
for CY 2013; we are only updating the data used to calculate the drug
add-on for CY 2013. Using 6 years of average sales price (ASP) drug
expenditure data and other data, we estimate a 2.9 percent decrease in
aggregate drug expenditures and a 4.0 percent increase in enrollment.
Using these estimates, we project a 6.6 percent decrease in per patient
growth of drug expenditures for CY 2013. Thus, we are projecting that
the combined growth in per patient utilization and pricing for CY 2013
will result in a decrease to the drug add-on equal to 0.9 percentage
points. We will apply a zero update to the drug add-on adjustment and
maintain the $20.33 per treatment drug add-on amount for CY 2013.
Because the market basket minus productivity that is applied to the
composite rate increases the composite rate, the add-on adjustment of
14.3 percent is reduced to 14.0 percent to maintain the drug add-on at
$20.33.
Market basket and productivity adjustment: Under section
1881(b)(14)(F) of the Act, beginning in CY 2012, ESRD PPS payment
amounts and the composite rate portion of the transition blended
payment amounts shall be annually increased by an ESRD market basket
percentage increase factor reduced by a multi-factor productivity (MFP)
adjustment. The CY 2013 ESRDB market basket increase factor is 2.9
percent. The current forecast of the CY 2013 MFP adjustment is 0.6
percent. The resulting final CY 2013 MFP-adjusted ESRDB market basket
update is equal to 2.3 percent.
The transition budget-neutrality adjustment factor: For CY
2013, we are applying the transition budget-neutrality adjustment
methodology established in CY 2011. This results in a 0.1 percent
adjustment. Therefore, for CY 2013, a 0.1 percent increase will be
applied to both the blended payments made under the transition and
payments made under the full ESRD PPS for renal dialysis services
furnished January 1, 2013 through December 31, 2013.
Updates to the wage index and wage index floor: We adjust
wage indices on an annual basis using the most current hospital wage
data to account for differing wage levels in areas in which ESRD
facilities are located. In CY 2013, we are not making any changes to
the application of the wage index budget-neutrality adjustment factor
and will continue to apply the budget-neutrality adjustment to the pre-
floor, pre-reclassified wage index values for the composite rate
portion of the blended payment and to the base rate for the ESRD PPS.
Over the past several years, we have been gradually decreasing the wage
index floor by 0.05 in an effort to gradually phase out the floor, and
in CY 2013 we will continue to do so. Therefore, in CY 2013, we are
reducing the wage index floor from 0.550 to 0.500. We also applied the
wage index budget-neutrality adjustment factor to the wage index floor
of 0.500, which results in an adjusted wage index floor of 0.501 (0.500
x 1.001141) for CY 2013.
Update to the outlier policy: We are updating the outlier
services fixed dollar loss amounts and Medicare Allowable Payments
(MAPs) for CY 2013 using 2011 data. Based on the use of more current
data, the fixed dollar loss amount for pediatric patients will decrease
from $71.64 to $47.32 and the MAP amount will decrease from $45.44 to
$41.39 as compared to CY 2012 values. For adult patients, the fixed-
dollar loss amount drops from $141.21 to $110.22 and the MAP amount
drops from $78.00 to $59.42. Because of the decline in utilization
associated with the implementation of the expanded bundle, the 1
percent target for outlier payments was not achieved in CY 2011. Use of
2011 data to recalibrate the thresholds, reflecting lower utilization
of epoetin and other outlier services, is expected to result in
aggregate outlier payments close to the 1 percent target in CY 2013. We
believe this update to the outlier MAPs and fixed dollar loss amounts
for CY 2013 will increase payments for ESRD beneficiaries requiring
higher resource utilization in accordance with a 1 percent outlier
policy.
Policy reiteration (composite rate drugs and AY modifier):
Under the composite and basic case-mix adjusted composite rate payment
systems, certain drugs were included in the composite rate and were not
eligible for separate payment. Our analyses of claims show that ESRD
facilities are continuing to report composite rate drugs on ESRD
claims. In this rule, we are reiterating that any item or service
included in the composite rate should not be identified on ESRD claims.
An AY modifier can be appended to claims for drugs and laboratory tests
that are not ESRD-related to allow for separate payment. Our analyses
of claims show that there are ESRD facilities and laboratories that are
appending the AY modifier to drugs and laboratory tests that we believe
are ESRD-related, resulting in separate payment. In this rule, we
reiterate the purpose of the AY modifier and emphasize that we are
continuing our monitoring efforts. We also indicate that we may
consider eliminating the AY modifier in future rulemaking if we believe
that the AY modifier is not being used for the purpose intended.

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2. ESRD QIP
This final rule also implements new requirements for the ESRD QIP.
It will continue some of the previous ESRD QIP measures, add new
measures, and expand the scope of some of the existing measures to
cover the measure topics as follows:
To evaluate anemia management:
[cir] Hemoglobin Greater Than 12 g/dL, a clinical measure.
[cir] Anemia Management, a reporting measure.*
To evaluate dialysis adequacy:
[cir] A clinical Kt/V measure for adult hemodialysis patients.*
[cir] A clinical Kt/V measure for adult peritoneal dialysis
patients. *
[cir] A clinical Kt/V measure for pediatric in-center hemodialysis
patients. *
To determine whether patients are treated using the most
beneficial type of vascular access:
[cir] Vascular Access Type, a clinical measure topic comprised of
an arteriovenous fistula and a catheter measure.
To address effective bone mineral metabolism management:
[cir] Mineral Metabolism, a reporting measure.
To address safety:
[cir] National Healthcare Safety Network (NHSN) Dialysis Event
reporting measure.
To assess patient and caregiver experience:
[cir] In-Center Hemodialysis Consumer Assessment of Healthcare
Providers and Systems (ICH CAHPS) survey reporting measure.
* Denotes that this measure is new to the ESRD QIP.
This final rule also establishes CY 2013 as the performance period
for the PY 2015 ESRD QIP. It also establishes performance standards for
each measure and adopts scoring and payment reduction methodologies
that are similar to those finalized for the PY 2014 ESRD QIP.
3. Reductions to Bad Debt Payments for all Medicare Providers and
Elimination of the Cap on Bad Debt Reimbursement to ESRD Facilities
This rule also implements the statutory changes to the limitations
on payments for bad debt reimbursement by revising 42 CFR 413.89, Bad
debts, charity, and courtesy allowances. We are also moving 42 CFR
413.178(a) to 42 CFR 413.89(h)(3), and moving 42 CFR 413.178(d)(2) to
42 CFR 413.89(i)(2) and removing and reserving the remainder of 42 CFR
413.178. Additionally, we are making a technical correction to the
cross reference in 42 CFR 417.536(f)(1) to Medicare bad debt
reimbursement policy. Finally, this final rule will eliminate the cap
on bad debt reimbursement to an ESRD facility at its unrecovered costs.

C. Summary of Costs and Benefits

In section VI.B of this final rule, we set forth a detailed
analysis of the impacts that the changes will have on affected entities
and beneficiaries. The impacts include the following:
1. Impacts of the Final ESRD PPS
The impact chart in section VI.B of this final rule displays the
estimated change in payments to ESRD facilities in CY 2013 as compared
to estimated payments in CY 2012. The overall impact of the CY 2013
changes is projected to be a 3.0 percent increase in payments.
Hospital-based ESRD facilities have an estimated 3.6 percent increase
in payments compared with freestanding facilities with an estimated 2.9
percent increase. Urban facilities are expected to receive an estimated
payment increase of 3.0 percent compared to an estimated 2.9 percent
increase for rural facilities. We expect a 2.4 percent decrease in
estimated payments as a result of wage index adjustments for Puerto
Rico and the Virgin Islands. However, this decrease is offset primarily
by the impact of the market basket increase, resulting in an estimated
0.6 percent increase in payment. The estimated 3.0 percent overall
payment increase will result in a $250 million cost to Medicare and a
$60 million cost to beneficiaries. In 2013, a 2.3 percent market basket
increase will result in a $190 million cost to Medicare and a $50
million cost to beneficiaries. The outlier fixed dollar loss and MAP
adjustments in CY 2013 will result in a $30 million cost to Medicare
and a $10 million cost to beneficiaries. The difference in cost to
Medicare is due to the effects of changing the blend of payments from
50/50 to 25/75 and the 0.1 percent transition budget-neutrality
adjustment.
2. Impacts for ESRD QIP
The overall economic impact of the ESRD QIP is an estimated $24.6
million for PY 2015. We expect the total payment reductions to be
approximately $12.1 million, and the costs associated with the
collection of information requirements for certain measures to be
approximately $12.4 million.
The estimated payment reduction will continue to incentivize
facilities to provide higher quality care to beneficiaries. The
reporting measures that result in costs associated with the collection
of information are critical to better understanding the quality of care
beneficiaries receive, particularly a patient's experience of care, and
will be used to incentivize improvements in the quality of care
provided.
3. Impacts of Bad Debt Provisions
We are codifying the provisions of section 3201 of The Middle Class
Tax Extension and Job Creation Act of 2012 that requires reductions in
bad debt reimbursement to all providers eligible to receive bad debt
reimbursement; these provisions are specifically prescribed by statute
and thus, are generally self-implementing. There will be a $10.92
billion savings to the program over 10 years resulting from these self-
implementing reductions in bad debt reimbursement. We are also removing
the cap on reimbursement for bad debt to ESRD facilities for cost
reporting periods beginning on or after January 1, 2013, which will
result in a cost to the Medicare program of $170 million over 10 years.

II. Calendar Year (CY) 2013 End-Stage Renal Disease (ESRD) Prospective
Payment System (PPS)

A. Background on the End-Stage Renal Disease (ESRD) Prospective Payment
System (PPS)

On August 12, 2010, we published in the Federal Register a final
(75 FR 49030) titled, ``End-Stage Renal Disease Prospective Payment
System'', hereinafter referred to as the CY 2011 ESRD PPS final rule.
In the CY 2011 ESRD PPS final rule, we implemented a case-mix adjusted
bundled PPS for Medicare outpatient ESRD dialysis services beginning
January 1, 2011, in accordance with section 1881(b)(14) of the Act, as
added by section 153(b) of MIPPA.
On April 6, 2011, we published in the Federal Register an interim
final rule with comment period (76 FR 18930) titled, ``Changes in the
End-Stage Renal Disease Prospective Payment System Transition Budget-
Neutrality Adjustment'', which revised the ESRD transition budget-
neutrality adjustment for CY 2011. In the interim final rule, we
revised the 3.1 percent transition budget-neutrality adjustment
reduction to a zero percent transition budget-neutrality adjustment for
renal dialysis services furnished on April 1, 2011 through December 31,
2011 (76 FR 18933). On November 10, 2011, we published in the Federal
Register, a final rule (76 FR 70228 through 70316) titled, ``Medicare
Program; End-Stage Renal Disease Prospective Payment System and Quality
Incentive Program;

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Ambulance Fee Schedule; Durable Medical Equipment; and Competitive
Acquisition of Certain Durable Medical Equipment, Prosthetics,
Orthotics and Supplies (hereinafter referred to as the CY 2012 ESRD PPS
final rule). In that final rule, for the ESRD PPS, we made a number of
routine updates for CY 2012, implemented the second year of the
transition to the ESRD PPS, made several policy changes,
clarifications, and technical changes. In the CY 2013 ESRD PPS proposed
rule (77 FR 40956), we summarize the updates, changes, and
clarifications that were finalized in the CY 2012 ESRD PPS final rule
(76 FR 70228).

B. Summary of the Proposed Provisions and Responses to Comments on the
CY 2013 ESRD PPS

The proposed rule, titled ``Medicare Program; End-Stage Renal
Disease Prospective Payment System, Quality Incentive Program, and Bad
Debt Reductions for All Medicare Providers'' (77 FR 40952), hereinafter
referred to as the CY 2013 ESRD PPS proposed rule appeared in the
Federal Register on July 11, 2012, with a comment period that ended on
August 31, 2012. In that proposed rule, for the ESRD PPS, we proposed
to (1) make a number of routine updates for CY 2013, (2) implement the
third year of the transition, and (3) make several policy changes and
clarifications. We received approximately 40 public comments on the
ESRD PPS proposals, including comments from ESRD facilities; national
renal, nephrologist and patient organizations; patients; manufacturers;
health care systems; and nurses. 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 2013 ESRD PPS.

C. Routine Updates and Proposed Policy Changes to the CY 2013 ESRD PPS

1. Composite Rate Portion of the ESRD PPS Blended Payment
Section 1881(b)(14)(E)(i) of the Act requires a 4-year transition
under the ESRD PPS. This final rule implements the third year of the
transition for those ESRD facilities that did not elect to receive 100
percent of the payment amount under the ESRD PPS. For CY 2013, under 42
CFR 413.239(a)(3), facilities that are transitioning will receive a
blended rate equal to the sum of 75 percent of the full ESRD PPS amount
and 25 percent of the basic case-mix adjusted composite payment amount.
Accordingly, we continue to update the composite rate portion of the
blended payment during the transition, (that is, CY 2011 through 2013),
which includes updates to the drug add-on adjustment required by
section 1881(b)(12)(F) of the Act, discussed in section II.C.1.a of
this final rule, as well as the wage index values (which includes a
budget-neutrality factor) used to adjust the labor component of the
composite rate discussed in section II.C.5 of this final rule. For CY
2013, we proposed to update the second part of the transition budget-
neutrality adjustment to reflect updated data. The transition budget-
neutrality adjustment is applied to both the blended payments under the
transition and payments under the ESRD PPS. The discussion regarding
the transition budget-neutrality adjustment can be found in section
II.C.4 of this final rule.
As discussed in the CY 2013 ESRD PPS proposed rule (76 FR 40957),
section II.C.3 of this final rule, and in section 1881(b)(14)(F)(ii) of
the Act, as added by section 153(b) of MIPPA and amended by section
3401(h) of the Affordable Care Act, for the years in which the
transition applies, the composite base rate shall be annually increased
by the ESRDB market basket and, for CY 2012 and each subsequent year,
the ESRDB market basket shall be reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act. In the CY 2013
ESRD PPS proposed rule (77 FR 40957), we proposed for CY 2013 a
composite rate of $145.49, which reflected the CY 2012 composite rate
of $141.94 increased by an ESRDB market basket of 3.2 reduced by the
productivity adjustment of 0.7 percent, resulting in an update of 2.5
percent, based on the first quarter 2012 IGI forecast of the ESRDB
market basket.
We received four public comments supporting our proposal to
increase the composite base rate by 2.5 percent for ESRD services
furnished in CY 2013 and paid under the blended payment methodology
during the transition period.
In section II.C.3.b of this final rule, we finalize the CY 2013
ESRDB market basket update of 2.9 percent, and the MFP adjustment of
0.6 percent, which results in a forecasted rate of increase to the base
rate of 2.3 percent. This final update is based on the third quarter
2012 IGI forecast of the ESRDB market basket. Consequently for CY 2013,
we are finalizing the composite base rate under the ESRD PPS payment of
$145.20 for ESRD services furnished during CY 2013 and paid under the
blended payment methodology. This amount reflects the CY 2012 composite
rate of $141.94 increased by the CY 2013 ESRD market basket increase
factor of 2.9 percent reduced by the productivity adjustment of 0.6
percent. The resulting CY 2013 MFP-adjusted ESRD market basket update
is 2.3 percent ($141.94 x 1.023 = $ 145.20).
a. Update to the Drug Add-On to the Composite Rate Portion of the ESRD
Blended Payment Rate
Section 1881(b)(14)(E)(i) of the Act requires a 4-year transition
under the ESRD PPS. Under 42 CFR 413.239, ESRD facilities were
permitted to make a one-time election by November 1, 2010, to be
excluded from the transition and receive full payment under the ESRD
PPS. Under Sec. 413.239(a)(3), in CY 2013, ESRD facilities that
elected to receive payment under the transition will be paid a blended
amount consisting of 25 percent of the basic case-mix adjusted
composite payment system payment and 75 percent of the ESRD PPS
payment. Thus, we must continue to update the composite rate portion of
the blended payment amount during the ESRD PPS transition (CY 2011
through 2013), which includes an update to the drug add-on.
As required under section 1881(b)(12) of the Act, the basic case-
mix adjusted composite payment system includes the services in the
composite rate and an add-on to the composite rate portion of the
blended payment to account for the difference between pre-Medicare
Modernization Act payments for separately billed drugs and the revised
drug pricing specified in the statute. For the drug add-on for CY 2013
(77 FR 40957 through 40959), we did not propose any changes to the drug
add-on methodology, but merely updated the data used in computing the
drug add-on as described below.
i. Estimating Growth in Expenditures for Drugs and Biologicals in CY
2013
Section 1881(b)(12)(F) of the Act specifies that the drug add-on
increase must reflect ``the estimated growth in expenditures for drugs
and biologicals (including erythropoietin) that are separately billable
* * *''. By referring to ``expenditures'', we believe the statute
contemplates that the update would account for both increases in drug
prices, as well as increases in utilization of those drugs.
As we indicated in the CY 2013 ESRD PPS proposed rule (77 FR
40957), we continue to estimate growth in drug expenditures based on
the trends in available data. To account for increases in drug prices
and utilization for CY 2013 we used the 6 years of available drug
expenditure data based on ASP pricing. We then removed growth in

[[Page 67455]]

enrollment for the same time period from the expenditure growth so that
the residual reflects the per patient expenditure growth (which
includes price and utilization combined).
To estimate drug expenditure growth using trend analysis, for CY
2013, we looked at the average annual growth in total drug expenditures
between 2006 and 2011. First, we estimated the total drug expenditures
for all ESRD facilities in CY 2011. We used the final CY 2006 through
CY 2010 ESRD claims data and the latest available CY 2011 ESRD facility
claims, updated through December 31, 2011 (that is, claims with dates
of service from January 1 through December 31, 2011, that were
received, processed, paid, and passed to the National Claims History
File as of December 31, 2011). We indicated in the CY 2013 ESRD PPS
proposed rule (77 FR 40958) that for the CY 2013 PPS final rule, we
would use additional updated CY 2011 claims with dates of service for
the same timeframe. This updated CY 2011 data file would include claims
received, processed, paid, and passed to the National Claims History
File as of June 30, 2012. We further stated that while the CY 2011
claims file used in the proposed rule was the most current available,
we recognize that it does not reflect a complete year, as claims with
dates of service towards the end of the year have not all been
processed. To more accurately estimate the update to the drug add-on,
completed aggregate drug expenditures are required.
In the CY 2013 ESRD PPS proposed rule (77 FR 40958), we inflated
the CY 2011 drug expenditures to estimate the June 30, 2012 update of
the 2011 claims file. We used the relationship between the December
2010 and the June 2011 versions of 2010 claims to estimate the more
complete 2011 claims that were available in June 2012 and applied that
ratio to the 2011 claims data from the December 2011 claims file. The
net adjustment to the CY 2011 claims data was an increase of 9.7
percent to the 2011 expenditure data. This adjustment allows us to more
accurately compare the 2010 and 2011 drug expenditure data to estimate
per patient growth.
We further stated in the CY 2013 ESRD PPS proposed rule (77 FR
40958), that using the completed full-year 2011 drug expenditure
figure, we calculated the average annual change in drug expenditures
from 2006 through 2011. This average annual change showed a decrease of
3.0 percent in drug expenditures from 2006 through 2011. We used this
3.0 percent decrease to project drug expenditures for both 2012 and
2013.
For this CY 2013 final rule, using the full year 2011 drug
expenditure figure based on the June 2012 update of the CY 2011
National Claims History File, we calculated the average annual change
in drug expenditure from 2006 through 2011. This average annual change
showed a decrease of 2.9 percent in drug expenditures from 2006 through
2011. We used this 2.9 decrease to project drug expenditures for both
2012 and 2013. We note that the decrease in the drug expenditures
percentage is a result of our use of updated data.
ii. Estimating Per Patient Growth
In the CY 2013 ESRD PPS proposed rule (77 FR 40958), we explained
that once we had the projected growth in drug expenditures from 2012 to
2013, we calculated per patient growth between CYs 2012 and 2013 by
removing the estimated growth in enrollment data between CYs 2012 and
2013. We had estimated a 4.6 percent growth in fee-for-service Medicare
dialysis beneficiary enrollment between CYs 2012 and 2013. To obtain
the per-patient estimated growth in expenditures, we divided the total
drug expenditure change of a 3 percent decrease between 2012 and 2013
(0.97) by enrollment growth of 4.6 percent (1.046) for the same
timeframe. The result was a per-patient growth factor equal to 0.927
(0.97/1.046 = 0.927). Thus, we are projecting a 7.3 percent decrease (-
7.3% = -.073 = 0.927 -1) in per patient growth in drug expenditures
between CYs 2012 and 2013.
For this final rule, we estimate a 4.0 percent estimated growth in
enrollment between CYs 2012 and 2013. To obtain the per-patient
estimated growth in expenditures, we divided the total drug expenditure
change of a 2.9 percent decrease between CYs 2012 and 2013 (0.971) by
enrollment growth of 4.0 percent (1.04) for the same timeframe. The
result is a per-patient growth factor equal to 0.934 (.971/1.04=.934).
Thus, in this final rule, for CY 2013 we are projecting a 6.6 percent
decrease (-6.6% percent =-.063=.934-1) in per patient growth in drug
expenditures between CYs 2012 and 2013.
iii. Applying the Proposed Growth Update to the Drug Add-On Adjustment
We explained in the CY 2013 ESRD PPS proposed rule (77 FR 40958),
that in the CY 2012 ESRD PPS proposed and final rules, we provided an
incorrect citation to the CY 2006 PFS final rule with comment in the
discussion of the application of the projected growth update
percentages. The correct citation to this discussion in the CY 2006 PFS
final rule with comment is 70 FR 70166 and 70167. In the CY 2006 rule,
we applied the projected growth percentage to the total amount of drug
add-on dollars established for CY 2005 to establish a dollar amount for
the CY 2006 growth. In addition, we projected the growth in dialysis
treatments for CY 2006 based on the projected growth in ESRD
enrollment. We divided the projected total dollar amount of the CY 2006
growth by the projected total dialysis treatments to develop the per
treatment growth update amount. This growth update amount, combined
with the CY 2005 per treatment drug add-on amount, resulted in a 14.7
percent adjustment to the composite rate for CY 2006.
We further explained in the CY 2013 ESRD PPS proposed rule (77 FR
40958), that subsequent to the publication of the CY 2006 PFS final
rule with comment, the Deficit Reduction Act (DRA) of 2005 (Pub. L.
109-171) was enacted on February 8, 2006. Section 5106 of the DRA
amended section 1881(b)(12) of the Act to require the Secretary to
increase the amount of the composite rate component of the basic case-
mix adjusted system for dialysis services furnished on or after January
1, 2006 by 1.6 percent above the amount of the composite rate for such
services furnished on December 31, 2005. We issued Change Request 4291,
Transmittal 849, entitled, ``Update to the ESRD Composite Payment
Rates'' on February 10, 2006 to instruct contractors to implement this
change. We stated in Change Request 4291 that because the drug add-on
adjustment is determined as a percentage of the composite rate, it was
necessary to adjust the drug add-on percentage to account for the 1.6
percent increase in the composite payment rate. Therefore, the total
drug add-on adjustment to the composite payment rate for 2006 was 14.5
percent instead of 14.7 percent.
Finally, we explained in the CY 2013 ESRD PPS proposed rule (77 FR
40958) that in the CY 2007 PFS final rule with comment period (71 FR
69683 and 69684), we revised our update methodology by applying the
growth update to the per treatment drug add-on amount. That is, for CY
2007, we applied the growth update factor of 4.03 percent to the $18.88
per treatment drug add-on amount resulting in an updated per treatment
drug add-on amount of $19.64 per treatment (71 FR 69684). For CY 2008,
the per treatment drug add-on amount was updated to $20.33. In the CYs
2009, 2010, and 2011 PFS final rule with comment period (73 FR 69755
through 69757, 74 FR 61923, and 75 FR 73485, respectively) and the CY
2012

[[Page 67456]]

ESRD PPS final rule (76 FR 70239), we applied a zero update to the per
treatment drug add-on amount resulting in a per treatment drug add-on
amount of $20.33. For CY 2013, we did not make any update to the per
treatment drug add-on amount of $20.33 established in CY 2008.
As discussed in detail below, in this final rule, for CY 2013, we
are finalizing a zero update to the per treatment drug add-on amount of
$20.33 established in CY 2008.
iv. Update to the Drug Add-On Adjustment for CY 2013
As discussed above, in the CY 2013 ESRD PPS proposed rule (77 FR
40958), we estimated a 3.0 percent decrease in drug expenditures
between CYs 2012 and 2013. Combining this decrease with a 4.6 percent
increase in enrollment, as described above, we projected a 7.3 percent
decrease in per patient growth of drug expenditures between CYs 2012
and CY 2013. Therefore, in the CY 2013 ESRD PPS proposed rule, we
projected that the combined growth in per patient utilization and
pricing for CY 2013 would result in a decrease to the drug add-on equal
to 1.0 percentage points (out of the revised 14.0 percent add-on for
2013). This figure was derived by applying the 7.3 percent decrease to
the CY 2012 drug add-on of $20.33. This resulted in a revised drug add-
on of $18.85, which is 13.0 percent of the proposed CY 2013 base
composite rate of $145.49. We indicated that if we were to apply no
decrease to the drug add-on of $20.33, this would result in a 14.0
percent drug add-on. However, similar to last year and as indicated
above, we proposed a zero update to the drug add-on adjustment. We
believe this approach is consistent with the language under section
1881(b)(12)(F) of the Act, which states in part that ``the Secretary
shall annually increase'' the drug add-on amount based on the growth in
expenditures for separately billed ESRD drugs. Therefore, we proposed
to apply a zero update and maintain the $20.33 per treatment drug add-
on amount for CY 2013. We sought comment on our proposed zero update to
the drug add-on.
We further stated in the CY 2013 ESRD PPS proposed rule (77 FR
40959), that the current $20.33 per treatment drug add-on reflected a
14.3 percent drug add-on adjustment to the composite rate in effect for
CY 2012. As discussed in section II.3.a of the CY 2013 ESRD PPS
proposed rule, section 1881(b)(14)(F) of the Act requires that an ESRDB
market basket minus productivity adjustment be used to update the
composite rate portion of the ESRD PPS payment resulting in a decrease
to the CY 2013 drug add-on adjustment from 14.3 to 14.0 percent, to
maintain the drug add-on at $20.33. This decrease occurs because the
drug add-on adjustment is a percentage of the composite rate. Since the
proposed CY 2013 composite rate is higher than the CY 2012 composite
rate and since the drug add-on remains at $20.33, the percentage
decreases. Therefore, we proposed a drug add-on adjustment to the
composite rate for CY 2013 of 14.0 percent.
We did not receive any comments on our proposals to use a zero
update to the drug add-on or on the proposed drug-add on adjustment to
the composite rate for CY 2013 of 14.0 percent.
In this final rule, for CY 2013, we estimate a 2.9 percent decrease
in drug expenditures between CYs 2012 and 2013. Combining this increase
with a 4.0 percent increase in enrollment, we project a 6.6 percent
decrease in per patient growth of drug expenditures between CYs 2012
and 2013. Therefore, we project that the combined growth in per patient
utilization and pricing for CY 2013 results in a decrease to the drug
add-on equal to 0.9 percentage points. This figure is derived by
applying the 6.6 percent decrease to the CY 2012 drug add-on of $20.33.
This results in a revised drug add-on of $18.98, which is 13.1 percent
of the final CY 2013 base composite rate of $145.20. Applying no
decrease to the drug add-on of $20.33 results in a 14.0 percent drug
add-on. Similar to last year and as discussed above, for CY 2013, we
are finalizing a zero update to the drug add-on and maintaining the
$20.33 per treatment drug add-on amount.
The current $20.33 per treatment drug add-on reflected a 14.3
percent drug add-on adjustment to the composite rate in effect for CY
2012. Using the latest ESRDB market basket minus productivity
adjustments to update the composite rate portion of the ESRD PPS
payment (forecast of 2.3 percent in CY 2013 effective January 1, 2013,
as discussed in section II.C.3 of this final rule), results in a
decrease to the CY 2013 drug add-on adjustment from 14.3 to 14.0
percent in order to maintain the drug add-on amount of $20.33. This
decrease occurs because the drug add-on adjustment is a percentage of
the composite rate. Because the final CY 2013 composite rate is higher
than CY 2012 composite rate, and since the drug add-on remains at
$20.33, the percentage decreases. Therefore, we are finalizing for CY
2013 the drug add-on adjustment of 14.0 to the composite rate.
2. ESRD PPS Base Rate
In the CY 2013 ESRD PPS proposed rule (77 FR 40959) and CY 2012
ESRD PPS final rule (76 FR 70231), we discussed the development of the
ESRD PPS per treatment base rate that is codified in the Medicare
regulations at 42 CFR 413.220 and 413.230. We explained that the CY
2011 ESRD PPS final rule (75 FR 49071 through 49082) 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), updated to CY 2011, and represented the average per
treatment Medicare Allowable Payment (MAP) for composite rate and
separately billable services. We further explained that in accordance
with 42 CFR 413.230, the ESRD PPS base rate is adjusted for the
patient-specific case-mix adjustments, applicable facility adjustments,
geographic differences in area wage levels using an area wage index, as
well as any outlier payment or training payments (if applicable). For
CY 2012, the ESRD PPS base rate was $234.81 (76 FR 70231).
We also indicated in the CY 2013 ESRD PPS proposed rule (77 FR
40959) that 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, provides that, beginning in 2012, the ESRD PPS payment amounts are
required to be annually adjusted by the rate of increase in the ESRD
market basket, reduced by the productivity adjustment. Accordingly, in
the CY 2013 ESRD PPS proposed rule, we applied the 2.5 percent increase
to the CY 2012 ESRD PPS base rate of $234.81, which resulted in a
proposed CY 2013 ESRD PPS base rate of $240.68 ($234.81 x 1.025 =
$240.68). The ESRD PPS base rate is applicable to both the ESRD PPS
portion of the blended payment under the transition and payments under
the full ESRD PPS.
In addition, for CY 2013, we proposed a wage index budget-
neutrality adjustment factor of 1.000826 to be applied to the CY 2013
ESRD PPS base rate (that is, $240.68), which yielded a proposed CY 2013
ESRD PPS wage index budget-neutrality adjusted base rate of $240.88
($240.68 x 1.000826 = $240.88).

[[Page 67457]]

Comment: All commenters supported our CY 2013 ESRD PPS wage index
budget-neutrality adjusted base rate. Two commenters thanked CMS for
providing an update to the base rate, and one commenter specifically
appreciated the base rate increase at a time when the Medicare ESRD
program is undergoing significant changes and noted that it is
important to retain savings where applicable.
Response: We thank the commenters for their support. In this final
rule, using updated data for CY 2013, we applied the 2.3 percent
increase (ESRDB market basket update less productivity) to the CY 2012
ESRD PPS base rate of $234.81, which results in an ESRD PPS base rate
for CY 2013 of $240.21 ($234.81 x 1.023 = $240.21). In addition, we
applied the wage index budget-neutrality adjustment factor of 1.000613
to the updated base rate of $240.21, yielding an ESRD PPS wage index
budget-neutrality adjusted base rate for CY 2013 of $240.36 ($240.21 x
1.000613 = $240.36).
3. ESRD Bundled Market Basket
a. Overview and Background
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 bundled payment
amounts are required to be annually increased by an ESRD market basket
increase factor that is reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act. The application
of the productivity adjustment described 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 further 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.
Under section 1881(b)(14)(F)(ii) of the Act, as added by section 153(b)
of MIPPA and amended by section 3401(h) of the Affordable Care Act, the
ESRDB market basket increase factor will also be used to update the
composite rate portion of ESRD payments during the ESRD PPS transition
period from CYs 2011 through 2013; though beginning in CY 2012, such
market basket increase factor will be reduced by the productivity
adjustment. Therefore, a full market basket was applied to the
composite rate portion of the blended payment in CY 2011 during the
first year of the transition.
b. Market Basket Update Increase Factor and Labor-related Share for
ESRD Facilities for CY 2013
As required under section 1881(b)(14)(F) of the Act, CMS developed
an all-inclusive ESRDB input price index (75 FR 49151 through 49162).
Although ``market basket'' technically describes the mix of goods and
services used to produce ESRD care, 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 that
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 same methodology described in the CY 2011
ESRD PPS final rule (75 FR 49151 through 49162) to compute the CY 2013
ESRDB market basket increase factor and labor-related share based on
the best available data (76 FR 40503). Consistent with historical
practice, we estimated the ESRDB market basket update based on IHS
Global Insight (IGI), Inc.'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 the IGI forecast for the third quarter
of 2012 of the CY 2008-based ESRDB market basket (with historical data
through the second quarter of 2012), and consistent with our historical
practice of estimating market basket increases based on the best
available data, the CY 2013 ESRDB market basket increase factor is 2.9
percent.
For the CY 2013 ESRD payment update, we will continue to use a
labor-related share of 41.737 percent for the ESRD PPS payment and the
ESRD PPS portion of the blended payment, which was finalized in the CY
2011 ESRD final rule (75 FR 49161). We will also continue to use a
labor-related share of 53.711 percent for the ESRD composite rate
portion of the blended payment for all years of the transition. This
labor-related share was developed from the labor-related components of
the 1997 ESRD composite rate market basket that was finalized in the CY
2006 Physician Fee Schedule (PFS) final rule (70 FR 70168), and is
consistent with the mix of labor-related services paid under the
composite rate, as well as the method finalized in the CY 2011 ESRD PPS
final rule (75 FR 49116).
c. Productivity Adjustment
The ESRDB market basket must be annually adjusted by changes in
economy-wide productivity. Specifically, under section
1881(b)(14)(F)(i) of the Act, as amended by section 3401(h) of the
Affordable Care 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 statute defines the productivity adjustment to be equal to
the 10-year moving average of changes in annual economy-wide private
nonfarm business multifactor productivity (MFP) (as projected by the
Secretary for the 10-year period ending with the applicable fiscal
year, year, cost reporting period, or other annual period) (the ``MFP
adjustment''). The Bureau of Labor Statistics (BLS) is the agency that
publishes the official measure of private nonfarm business MFP. Please
see https://www.bls.gov/mfp to obtain the BLS historical published MFP
data.
CMS notes that the methodology for calculating and applying the MFP
adjustment to the ESRD payment update is similar to the methodology
used in other payment systems, as required by section 3401 of the
Affordable Care Act.
The projection of MFP is currently produced by IGI. The details
regarding the methodology for forecasting MFP and how it is applied to
the market basket was finalized in the CY 2012 ESRD PPS final rule (76
FR 70232 through 70234). Using this method and the IGI forecast for the
third quarter of 2012 of the 10-year moving average of MFP, the CY 2013
MFP factor is 0.6 percent.
d. Calculation of the ESRDB Market Basket Update, Adjusted for
Multifactor Productivity for CY 2013
Under section 1881(b)(14)(F) of the Act, beginning in CY 2012, ESRD
PPS payment amounts and the composite rate portion of the transition
blended payment amounts shall be annually increased by an ESRD market
basket percentage increase factor reduced by a productivity adjustment.
We proposed to follow the same methodology for calculating the ESRDB
market basket updates adjusted for MFP that was finalized in the CY
2012 ESRD PPS final rule (76 FR 70234).
Thus, in accordance with section 1881(b)(14)(F)(i) of the Act, the
market basket increase factor for CY 2013 for the ESRDB market basket
is based on the 3rd quarter 2012 forecast of the CY 2008-based ESRDB
market basket

[[Page 67458]]

update, which is estimated to be 2.9 percent. This market basket
percentage is then reduced by the MFP adjustment (the 10-year moving
average of MFP for the period ending CY 2013) of 0.6 percent, which is
based on IGI's 3rd quarter 2012 forecast. The resulting MFP-adjusted
ESRDB market basket update for CY 2013 is equal to 2.3 percent, or 2.9
percent less 0.6 percentage point.
We received two comments in support of the market basket update. We
are finalizing the update to the ESRDB market basket of 2.3 percent for
CY 2013.
4. Transition Budget-Neutrality Adjustment for CY 2013
Section 1881(b)(14)(E)(i) of the Act requires the Secretary to
provide a 4-year phase-in of the payments under the ESRD PPS for renal
dialysis services furnished on or after January 1, 2011, with payments
under the ESRD PPS fully implemented for renal dialysis services
furnished on or after January 1, 2014. Although the statute uses the
term ``phase-in,'' we use the term ``transition'' in our discussions in
order to be consistent with other Medicare payment systems.
Section 1881(b)(14)(E)(ii) of the Act permitted ESRD facilities to
make a one-time election to be excluded from the transition. An ESRD
facility that elected to be excluded from the transition receives
payment for renal dialysis services furnished on or after January 1,
2011, based on 100 percent of the payment rate under the ESRD PPS
rather than a blended payment based in part on the payment under the
basic case-mix adjusted composite payment system and in part on the
payment under the ESRD PPS. Section 1881(b)(14)(E)(iii) of the Act also
requires that we make an adjustment to payments during the transition
so that the estimated total amount of payments under the ESRD PPS,
including payments under the transition, equals the estimated total
amount of payments that would otherwise occur under the ESRD PPS
without such a transition. We refer to this provision as the transition
budget-neutrality adjustment.
In the CY 2012 ESRD PPS final rule (76 FR 70235), we discussed the
two parts that comprise the transition budget-neutrality adjustment
factor. For the first part, we created a one-time payment adjustment to
the composite rate portion of the blended payment during the transition
to account for the per treatment costs of ESRD drugs with an injectable
equivalent that were paid under Part D. We finalized the one-time
addition of the CY 2011 Part D per treatment amount of $0.49 to the
composite rate (76 FR 70231). For the second part, we explained that we
computed a factor that would make the estimated total amount of
payments under the ESRD PPS, including payments under the transition,
equal to the estimated total amount of payments that would otherwise
occur without such a transition.
Given that the transition budget-neutrality adjustment required
under section 1881(b)(14)(E)(iii) of the Act applies in each year of
the transition, we must update the transition budget-neutrality
adjustment for CY 2013, the third year of the transition. As discussed
in detail below, and in accordance with section 1881(b)(14)(E)(iii) of
the Act, an adjustment is made to payments so that estimated total
payments under the transition equal estimated total payment amounts
without such a transition.
In the CY 2013 ESRD PPS proposed rule, we did not propose to change
the methodology used to calculate either part of the transition budget-
neutrality adjustment factor. We did, however, propose to use updated
data to calculate the second part of the transition budget-neutrality
adjustment factor. The first part, which is the Part D payment amount
added to the composite rate, is updated annually by the ESRDB market
basket reduced by the productivity adjustment. The second part is
updated as described below.
For CY 2013, we started with 2011 utilization data from claims, as
2011 is the latest complete year of claims data available. In the CY
2013 ESRD PPS proposed rule, we used the December 2011 claims file. In
this final rule, we used the June 2012 claims file. We updated the CY
2011 utilization data to CYs 2012 and 2013 payments by using the price
growth factors for CYs 2012 and 2013, as discussed in the impact
analysis in section VI.C of this final rule. We then took the estimated
payments under the full CY 2013 ESRD PPS and the blended payments under
the transition based on actual facility election data and compared
these estimated payments to the total estimated payments in CY 2013 as
if all facilities had elected to receive payment under the ESRD PPS. We
then calculated the transition budget-neutrality factor to be 1 minus
the ratio of estimated payments under the ESRD PPS as if there were no
transition to the total estimated payments under the transition, which
results in a zero percent reduction factor for CY 2013. In the CY 2013
ESRD PPS proposed rule, we proposed a zero percent reduction to all
payments made to ESRD facilities (that is, the zero percent adjustment
would be applied to both the blended payments made under the transition
and payments made under the 100 percent ESRD PPS) for renal dialysis
items and services furnished January 1, 2013 through December 31, 2013
(77 FR 40957). We solicited comments on the proposed second part of the
CY 2013 transition budget-neutrality adjustment.
We received three comments as set forth below.
Comment: All of the commenters supported using updated data and
maintaining a zero percent budget-neutrality transition adjustment for
CY 2013.
Response: We thank the commenters for their support of our proposed
use of updated data and a transition budget-neutrality factor of zero
percent for renal dialysis services furnished during January 1, 2013
through December 31, 2013. As we indicated above, for the proposed
rule, we used the December 2011 claims file to compute the transition
budget-neutrality adjustment factor. For this final rule, we used the
June 2012 claims file. As a result of using the June 2012 claims file,
we calculated the transition budget-neutrality factor to be a reduction
of 1 minus the ratio of estimated payments under the ESRD PPS as if
there were no transition to the total estimated payments under the
transition, which results in a 0.1 percent increase factor for CY 2013.
We believe the claims data we used to perform our analysis resulted in
the change in the transition budget-neutrality adjustment factor from
the zero factor used in previous years to the 0.1 percent increase
factor for CY 2013. We note that in past years, the transition budget-
neutrality factor has not always been an absolute zero, but was rounded
to zero percent. The June 2012 claims file represents 2011 data, the
first year of the PPS. In 2011, the utilization for separately billable
drugs, laboratory tests and other items dropped significantly. For ESRD
facilities that are paid under the transition, the decrease in
utilization contributed to the payment for the composite rate portion
of the blended payment being lower than the payment for the ESRD PPS
portion of the blended payment. Therefore, total payments for all
facilities under the transition were lower than what payments would
have been under the ESRD PPS, if there were no transition. This
widening difference resulted in the transition budget-neutrality
adjustment rounding to 0.1 for CY 2013. We are finalizing for CY 2013 a
transition budget-neutrality adjustment of 0.1 percent.

[[Page 67459]]

5. Updates to the Wage Index Values and Wage Index Floor for the
Composite Rate Portion of the Blended Payment and the ESRD PPS Payment
Section 1881(b)(14)(D)(iv)(II) of the Act provides that the ESRD
PPS may include such other payment adjustments as the Secretary
determines appropriate, such as a payment adjustment by a geographic
wage index, such as the index referred to in section 1881(b)(12)(D) of
the Act. In the CY 2011 ESRD PPS final rule (75 FR 49117), we finalized
the use of the OMB's core-based statistical area (CBSA) based
geographic area designations to define urban/rural areas and
corresponding wage index values. In the CY 2012 ESRD PPS final rule (76
FR 70241), we finalized the wage index policy that is used under the
ESRD PPS. Under the ESRD PPS, we have adopted the same method and
source of wage index values used previously to compute the wage index
values for the basic case-mix adjusted composite payment system.
Specifically, we finalized our policies to continue to utilize the
methodology established under the composite payment system for updating
the wage index values using the OMB's CBSA-based geographic area
designations to define urban and rural areas and corresponding wage
index values; the gradual reduction of the wage index floor during the
transition; and the policies for areas with no hospital data. For CY
2013, we did not propose any changes to the methodology finalized in
the CY 2012 final rule and will update the wage index values using the
FY 2013 Inpatient Prospective Payment System (IPPS) pre-floor, pre-
reclassified hospital wage data.
In the CY 2012 ESRD PPS final rule (76 FR 70242), we explained that
we would continue to use the labor-related share of 53.711 finalized in
the 2005 PFS final rule (70 FR 70168) for the composite rate portion of
the blended payment during the transition and continue to use a labor-
related share of 41.737 for the ESRD PPS payment for CY 2012. We also
discussed that the wage data used to construct the wage index under the
ESRD PPS is updated annually, based on the most current data available
and based on the Office of Management and Budget's (OMB's) urban and
rural definitions and corresponding wage index values. Additional
discussion on the labor-related share can be found in section II.c.3 of
this final rule. For CY 2013, we did not propose to change the labor-
related shares, as finalized in the CY 2012 rule, as discussed in
section II.C.3 of this final rule.
In the CY 2012 ESRD PPS final rule (76 FR 70240), we discussed that
during the transition we would continue to update the composite rate
portion of the ESRD PPS blended payment, including adjusting payments
for geographic differences in area wage levels, as noted above. We also
discussed the application of the wage index budget-neutrality
adjustment factor to the area wage index values for the composite rate
portion of the ESRD PPS blended payment. In the proposed rule, for CY
2013 we did not propose any changes to the methodology for the wage
index used to adjust the composite rate portion of the ESRD PPS blended
payment.
a. Reduction to the ESRD Wage Index Floor
In the CY 2012 ESRD PPS final rule (76 FR 70239 through 70241), we
finalized that we will continue to reduce the wage index floor by 0.05
for each of the remaining years of the transition. That is, we
finalized the 0.05 reduction to the wage index floor for CYs 2012 and
2013, resulting in a wage index floor of 0.550 and 0.500, respectively.
The wage index floor value is used in lieu of wage index values below
the floor. The wage index floor is applied to both the composite rate
portion of the blend and to the ESRD PPS. In the CY 2013 ESRD PPS
proposed rule, we did not propose any changes to the wage index floor
methodology or reduction. Consequently, for CY 2013 we indicated in the
proposed rule that we would continue to reduce the wage index floor by
0.05, which will reduce the wage index value for the wage index floor
from 0.550 to 0.500. For CY 2013, the wage index floor of 0.500 only
applies to areas located in Puerto Rico because those are the only
areas that have wage index values below the wage index floor value of
0.500. In the CY 2012 ESRD PPS final rule (76 FR 70241), we explained
that continuing to artificially adjust the wage index values after the
transition by substituting a wage index floor is not an appropriate
method to address low wages in certain geographic locations. Therefore,
we would no longer apply a wage index floor beginning January 1, 2014.
b. Policies for Areas With No Wage Data
In the CY 2012 ESRD PPS final rule (76 FR 70241), we explained that
we adopted the CBSA designations for the basic case-mix adjusted
composite rate payment system and for the ESRD PPS. We also discussed
and finalized the methodologies we use to calculate wage index values
for ESRD facilities that are located in urban and rural areas where
there are no hospital data. That is, for urban areas with no hospital
data we compute the average wage index value of all urban areas within
the State and 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. For rural Puerto Rico, we use the wage index floor as
the wage index value, since all rural Puerto Rico areas are below the
floor.
We further explained that for rural Massachusetts, we determined
that the borders of Dukes and Nantucket Counties are contiguous with
Barnstable and Bristol counties. Under the methodology, the values for
these counties are averaged to establish the wage index value for rural
Massachusetts.
After the CY 2012 ESRD PPS final rule was published, we determined
that for CY 2012 there was a rural hospital with wage data on which to
base an area wage index for rural Massachusetts. We note that the wage
index value for rural Massachusetts was correctly identified on the
wage index table for CY 2012 based on the wage data for that rural
hospital. Consequently, in the CY 2013 ESRD PPS proposed rule we
corrected the statement in the CY 2012 final rule that ``For rural
Massachusetts, we determined that the borders of Dukes and Nantucket
Counties are contiguous with Barnstable and Bristol counties. Under the
methodology, the values for these counties are averaged to establish
the wage index value for rural Massachusetts'' (76 FR 70241).
Therefore, for CY 2012 and subsequent years, the area wage index value
for rural Massachusetts is based on wage data of the rural hospital.
For CY 2013, we will continue to use the statewide urban average
based on the average of all urban areas within the state for urban
areas without hospital data. We note that Yuba City, California now has
hospital data to calculate a wage index. Therefore, the methodology for
computing a wage index for urban areas without hospital data no longer
applies to that area. The only urban area without wage index data is
Hinesville-Fort Stewart, GA.
c. Wage Index Budget-Neutrality Adjustment
In the CY 2012 ESRD PPS final rule (76 FR 70241 and 70242), we
explained that we have broad discretion under section
1881(b)(14)(D)(iv)(II) of the Act to develop a geographic wage index.
We explained that in addition to being

[[Page 67460]]

given broad discretion, the section cites the wage index under the
basic case-mix adjusted composite payment system as an example. We have
previously interpreted the statutory requirement in section
1881(b)(12)(D) of the Act for the geographic adjustment for the basic
case-mix adjusted composite payment system as requiring that the
geographic adjustment be made in a budget-neutral manner.
In the CY 2012 ESRD PPS final rule (76 FR 70241 and 70242), we
finalized the policy to apply the wage index in a budget-neutral manner
under the ESRD PPS using a wage index budget-neutrality adjustment
factor. We further explained that in the first year of the ESRD PPS, CY
2011, we did not apply a wage index budget-neutrality adjustment factor
under the ESRD PPS because budget-neutrality was achieved through the
overall 98 percent budget-neutrality requirement in section
1881(b)(14)(A)(ii) of the Act. In the CY 2012 ESRD PPS final rule (76
FR 70242), we finalized that for CYs 2012 and 2013 we will apply the
wage index budget-neutrality adjustment to the wage index values for
the composite rate portion of the blended payment and that for CY 2012
and subsequent years we will apply the wage index budget-neutrality
adjustment to the ESRD PPS base rate for purposes of the ESRD PPS
portion of the blended payment during the transition and the ESRD PPS
payment. We did not propose any changes to the wage index budget-
neutrality adjustment methodology for CY 2013.
In the CY 2012 ESRD PPS final rule (76 FR 70242), we also finalized
the methodology for computing the wage index budget-neutrality
adjustment factor for CY 2012 and subsequent years. For CY 2013, we did
not propose any changes to the methodology. Consequently, for the CY
2013 wage index budget-neutrality adjustment factors, we use the fiscal
year (FY) 2013 pre-floor, pre-reclassified, non-occupational mix-
adjusted hospital data to compute the wage index values, 2011
outpatient claims (paid and processed as of December 31, 2011), and
geographic location information for each facility, which can be found
through Dialysis Facility Compare (DFC). The DFC can be found at the
Dialysis Facility Compare Web page on the Medicare.gov Web site at
www.Medicare.gov/Dialysis. The FY 2013 hospital wage index data for
each urban and rural locale by CBSA may also be accessed on the CMS Web
site at https://www.cms.hhs.gov/AcuteInpatientPPS/WIFN/list.asp. The
wage index data are located in the section entitled, ``FY 2013 Proposed
Rule Occupational Mix Adjusted and Unadjusted Average Hourly Wage and
Pre-Reclassified Wage Index by CBSA''.
To compute the CY 2013 wage index budget-neutrality adjustment
factor for this final rule, we used treatment counts from the 2011
claims and facility-specific CY 2012 payment rates; we computed the
estimated total dollar amount that each ESRD facility would have
received in CY 2012. The total of these payments became the target
amount of expenditures for all ESRD facilities for CY 2013. Next, we
computed the estimated dollar amount that would have been paid for the
same ESRD facilities using the final ESRD wage index for CY 2013. The
total of these payments becomes the new CY 2013 amount of wage-adjusted
expenditures for all ESRD facilities.
After comparing these two dollar amounts (target amount divided by
the new CY 2013 amount), we calculated two wage index budget-neutrality
adjustment factors that, when multiplied by the applicable CY 2013
estimated payments, would result in aggregate payments to ESRD
facilities that would remain budget-neutral when compared to the target
amount of expenditures. The first factor was applied to the ESRD PPS
base rate. The second factor was applied to the wage index values for
the composite rate portion of the blended payment. Therefore, in this
final rule, we are finalizing for CY 2013, the wage index budget-
neutrality adjustment factor for the composite portion of the ESRD PPS
blended payment of 1.001141, which is applied directly to the ESRD wage
index values. For the ESRD PPS (that is, for the full ESRD PPS payments
and the ESRD PPS portion of the blended payments during the
transition), we are finalizing the wage index budget-neutrality
adjustment factor of 1.000613 that will be applied to the ESRD PPS base
rate. Because we apply the wage index budget-neutrality adjustment
factor to the wage index values to ensure budget-neutrality under the
composite rate portion of the blended payment, we also apply the wage
index budget-neutrality adjustment factor to the wage index floor. We
note that this would apply to areas in Puerto Rico, subject to the
floor. Therefore, for the composite rate portion of the blended
payment, we are finalizing for CY 2013, to apply the wage index budget-
neutrality adjustment factor to the wage index floor of 0.500 which
results in an adjusted wage index floor of 0.501 (1.001141 x 0.500)
because under the composite rate, the wage index budget-neutrality
adjustment is applied to the wage index value. Under the ESRD PPS, the
wage index budget-neutrality adjustment factor is applied to the base
rate.
d. ESRD PPS Wage Index Tables
The CY 2013 ESRD PPS proposed wage index tables, referred to as
Addendum A (ESRD facilities located in urban areas), and Addendum B
(ESRD facilities located in rural areas) are posted on the CMS Web site
at https://www.cms.gov/vESRDPayment/PAY/list.asp. The wage index tables
list two separate columns of wage index values. One column represents
the wage index values for the composite rate portion of the blended
payment to which the wage index budget-neutrality adjustment factor has
been applied. The other column lists the wage index values for the ESRD
PPS, which does not reflect the application of the wage index budget-
neutrality adjustment factor, because we finalized for CY 2012 and
subsequent years that we will apply the wage index budget-neutrality
adjustment factor to the ESRD PPS base rate.
We received one comment. The comment and our response are set forth
below.
Comment: We received a comment from an LDO that expressed concern
about the negative impact of the wage index floor on dialysis providers
in Puerto Rico. The commenter expressed concern that wages for dialysis
facilities in Puerto Rico are not accurately captured by the current
hospital wage index methodology. The commenter urged CMS to determine
an alternate basis for calculating the wage index floor in Puerto Rico,
stating that it does not believe that the wage index as reported for
Puerto Rico is representative of the wage levels of dialysis providers
in Puerto Rico relative to a sample of other states. Specifically, the
commenter provided its own analysis of its random sampling of cost
report salaries comparing ESRD facilities in Puerto Rico with ESRD
facilities in Florida, Georgia, Ohio, South Carolina and Virginia. The
commenter recommended that reimbursement for Puerto Rico be based on
``some measure other than the hospital wage index, such as basing the
wage index on cost report salaries relative to other state salaries.''
The commenter further explained that Puerto Rico requires that only
registered nurses (RN) provide dialysis therapy, and therefore, in the
dialysis setting, the occupational mix would be weighted more toward
RNs than the mix for hospital.
Response: We understand that the commenter is concerned about wage

[[Page 67461]]

index values in Puerto Rico, however, it is our policy to use wage
indices for all ESRD facilities that are based on the IPPS pre-floor,
pre-reclassified hospital wage data. We discuss this in detail above.
We believe that this is an appropriate mechanism for obtaining wage
index values to be used to geographically adjust the ESRD PPS base rate
for all ESRD facilities. It has been the same method that we have used
previously for the basic case-mix adjusted composite rate payment
system. We refer the commenter to the discussion on the methodology
used to determine wage index values in the CY 2013 IPPS final rule (77
FR 53365 through 55367). We will, however, consider the commenter's
recommended approach if we determine in the future that a change to the
methodology for determining geographic wage index values is warranted.
In the CY 2012 ESRD PPS proposed rule (76 FR 40509 and 40510), we
proposed to continue to reduce the wage index floor by 0.50 for each of
the remaining years of the transition (that is, CYs 2012 and 2013). We
also stated that ``we continue to believe that artificially adjusting
wage index values by substituting a wage index floor is not an
appropriate method to address low wages in certain geographic
locations'' and that, accordingly, we will no longer apply a wage index
floor beginning January 1, 2014 (76 FR 70241). We will include in the
CY 2014 ESRD PPS proposed rule, the methodology we propose to use to
address wages in rural Puerto Rico when we no longer apply the wage
index floor.
Therefore, we are finalizing the wage index floor value of 0.500
for CY 2013.
6. Drug Policy Changes
a. Daptomycin
In the CY 2011 ESRD PPS final rule (75 FR 49050 through 49052), we
stated that antibiotics used for the treatment of vascular access
infections and peritonitis are renal dialysis services under the ESRD
PPS. Payments for anti-infective drugs in injectable forms (covered
under Part B) and oral or other forms of administration (formerly
covered under Part D) used for the treatment of ESRD, were included in
computing the final ESRD PPS base rate and, therefore, would not be
separately paid under the ESRD PPS. We further stated that any anti-
infective drug or biological used for the treatment of ESRD-related
conditions would be considered a renal dialysis service and not
eligible for separate payment. We noted that this policy also applies
to any drug or biological that may be developed in the future.
In the CY 2012 ESRD PPS final rule (76 FR 70243), we explained that
subsequent to the publication of the CY 2011 ESRD PPS final rule, we
received numerous comments indicating that vancomycin is indicated in
the treatment of both ESRD and non-ESRD conditions, such as skin
infections. In the CY 2012 ESRD PPS final rule (76 FR 70243), we
allowed ESRD facilities to receive separate payment for vancomycin when
furnished to treat non-ESRD related conditions. When ESRD facilities
furnish vancomycin to treat non-ESRD related conditions, they place the
AY modifier on the claim. We stipulated that in accordance with ICD-9-
CM guidelines as described in the CY 2011 ESRD PPS final rule (75 FR
49107), an ESRD facility must report on the claim the diagnosis code
for which vancomycin is indicated. We also reiterated that treatment of
any skin infection that is related to renal dialysis access management
would be considered a renal dialysis service paid under the ESRD PPS,
and that no separate payment would be made (76 FR 70243). Finally, in
response to comments, we stated that we would consider allowing
separate payment for daptomycin (76 FR 70243).
In the CY 2013 ESRD PPS proposed rule (77 FR 40963), we explained
that after consultation with our medical experts, we proposed to allow
ESRD facilities to receive separate payment for daptomycin when
furnished to treat non-ESRD related conditions for CY 2013 and
subsequent years. When ESRD facilities furnish daptomycin to treat non-
ESRD-related conditions, they would place the AY modifier on the claim.
We also explained that if ESRD facilities submitted claims for
daptomycin with the AY modifier, then the ESRD facility would also be
required to report the diagnosis code for which the daptomycin is
indicated in accordance with ICD-9-CM diagnostic coding guidelines. We
sought public comments on our proposal to permit separate payment for
daptomycin when furnished to treat non-ESRD-related conditions. As we
discussed in the proposed rule, we will continue to monitor the use of
anti-infectives furnished by ESRD facilities including those that are
identified as non-ESRD related (77 FR 40963). The comments we received
and our responses are set forth below.
Comment: We received eight comments in support of our proposal to
allow for separate payment for daptomycin when furnished for non-ESRD
related conditions. One commenter encouraged CMS to consider the
appropriateness of other anti-infective drugs and biologicals which
could be used in the future for both ESRD and non-ESRD conditions, with
the primary goal to help reduce drug resistance in this compromised and
susceptible patient population.
Response: We thank the commenters for their support. We believe
that the commenter is suggesting that CMS should frequently consider
whether other drugs should be included in the ESRD PPS. We will
consider allowing separate payment for other anti-infective drugs and
biologicals as we may determine appropriate.
We are finalizing the proposal to eliminate the restriction on
daptomycin to allow ESRD facilities to receive separate payment by
placing the AY modifier on the claim for daptomycin when furnished to
treat non-ESRD related conditions. In accordance with ICD-9-CM
diagnostic coding guidelines as described in the CY 2011 ESRD PPS final
rule (75 FR 49107), the ESRD facility must indicate on the claim the
diagnosis code for which the daptomycin is indicated.
During our monitoring of claims we have noted that there are ESRD
facilities that are indicating a type of organism rather than a
diagnosis that would indicate that the anti-infective was furnished for
non-ESRD-related conditions. We reiterate that the diagnosis code for
which vancomycin or daptomycin is used must be indicated on the claim.
We also reiterate that treatment of any skin infection that is related
to renal dialysis access management will be considered a renal dialysis
service and will continue to be paid under the ESRD PPS, and no
separate payment will be made. We will continue to monitor the use of
anti-infectives furnished by ESRD facilities including those that are
identified as non-ESRD related to ensure proper billing of these drugs.
b. Alteplase and Other Thrombolytics
In the CY 2012 ESRD PPS final rule (76 FR 70246 through 70247), we
explained that after the CY 2011 ESRD PPS final rule was published, our
clinical review of the 2007 ESRD claims used to develop the ESRD PPS
revealed that dialysis facilities routinely used alteplase and other
thrombolytic drugs for access management purposes. We explained that
under the Medicare Benefit Policy Manual, Pub. 100-02, chapter 11,
section 30.4.1, drugs used as a substitute for any of the listed items
or used to accomplish the same effect were covered under the composite
rate. We further explained that because

[[Page 67462]]

heparin is a composite rate drug and could be used for access
management, any drug or biological used for the same purpose may not be
separately paid. Medicare regulations at 42 CFR 413.237(a)(2) through
(a)(6), and (b) specify the methodology used to calculate outlier
payments. 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 discussion on the outlier policy is in section
II.C.7 of this final rule. Section 413.237(a)(1) provides the
definition of ESRD outlier services. Specifically, Sec.
413.237(a)(1)(i) includes ``ESRD related drugs and biologicals that
were or would have been, prior to January 1, 2011, separately billable
under Medicare Part B.''
Because outlier payments are restricted under Sec. 413.237(a) to
those items or services that were or would have been separately
billable prior to January 1, 2011, in the CY 2012 ESRD PPS final rule
(76 FR 70249), we excluded thrombolytic drugs from the outlier policy
and we recomputed the outlier MAP amounts to reflect this change.
However, we noted in the CY 2012 ESRD PPS final rule (76 FR 70249),
that for CY 2012 we had not proposed to exclude separate payment of
thrombolytic drugs under the composite rate portion of the blended
payment and therefore, separate payment would be made for thrombolytics
for the composite rate portion of the blended payment in CY 2012.
For CY 2013, we proposed that thrombolytic drugs would not be
considered eligible for separate payment under the composite rate
portion of the blended payment for those ESRD facilities that are
receiving a blended payment under the transition (77 FR 40963). We
believe that this is consistent with the changes we made to our outlier
policy regarding excluding thrombolytic drugs from outlier eligibility
as discussed above. We note that these conclusions are specific to
ESRD. We solicited comments on our proposal to exclude thrombolytic
drugs from separate payment under the composite rate portion of the
blended payment during the transition.
The comments and our responses are set forth below.
Comment: We received five comments pertaining to our proposal to no
longer provide separate payment for thrombolytic drugs under the
composite rate portion of the blended payment in CY 2013. In general,
commenters agreed with CMS that both heparin and alteplase or other
thrombolytic drugs are used for access management, but a few commenters
disagreed with our assertion that heparin and alteplase are used for
the same purpose. Some commenters specifically noted that CMS's
proposal not to allow separate payment for alteplase and thrombolytic
drugs under the composite rate portion of the blended payment during
the transition period for CY 2013 is flawed because the drugs are used
to achieve different clinical results and utilize different mechanisms
of action. In particular, the commenters noted that heparin is used to
prevent clotting whereas alteplase is used to avoid a poorly
functioning catheter. Some commenters provided examples of the efficacy
of alteplase and thrombolytics, as compared to heparin. Some
commenters, including a renal organization and a pharmaceutical
manufacturer, disagreed that heparin can be used as a substitute for
alteplase, citing the different mechanisms of action for the two drugs.
One commented that because heparin and thrombolytics achieve different
clinical results, they should not be treated as substitutes for payment
purposes.
Response: We believe alteplase and heparin are used for the same
renal dialysis-related purpose, namely, vascular access management. In
the CY 2012 ESRD PPS final rule (76 FR 70246 through 70249), we
addressed similar comments regarding the use of alteplase and heparin
in the context of our proposal to eliminate thrombolytics from the
outlier policy. We noted that in the development of the ESRD PPS, we
recognized that alteplase and heparin were pharmacologically different
(that one is a thrombolytic that lyses clots and the other is an
anticoagulant that prevents clots, respectively) (76 FR 70248). We
further stated, however, that we believed that both drugs enable the
catheter or graft to function either through clot prevention or clot
degradation, thereby providing effective dialysis vascular access. We
further believe that, for purposes of payment for renal dialysis
services, it is sufficient that these products can be used for the
purpose of providing dialysis vascular access. Consistent with the ESRD
Benefit Policy Manual, Pub. 100-02, chapter 11, section 30.4.1, drugs
used as substitutes for any of the listed items, or used to accomplish
the same effect, are covered under the composite rate and are not
separately payable. Because heparin is a composite rate drug and
thrombolytics are used to achieve the same renal dialysis-related
clinical outcome, we believe it is appropriate to exclude thrombolytic
drugs from separate payment under the composite rate portion of the
blended payment during the transition.
Comment: One ESRD facility commented that the high cost of
alteplase compared to heparin would prevent substitution of alteplase
for heparin. The commenter argued that CMS's policy in the ESRD Benefit
Policy Manual, Pub. 100-02, chapter 11, section 30.4.1 of covering
under the composite rate drugs used as substitutes for composite rate
drugs, or used to accomplish the same effect, is without regard to
innovation, cost, effectiveness, and efficiencies, and may result in
increased cost to the Medicare program. The commenter also noted that
the cost of thrombolytics is included in the ESRD PPS for those not in
the transition and that elimination of separate payment for those in
the transition would negatively impact reimbursement. A pharmaceutical
company stated that the proposed changes may negatively affect catheter
care because disallowing outlier payments and separate payment for
thrombolytics creates a financial incentive for facilities to avoid
restoring patency with alteplase.
Response: In the CY 2012 ESRD PPS final rule (76 FR 70247), we
explained that the ESRD PPS provides an opportunity for ESRD facilities
to make decisions based on the medical needs of patients and not on the
basis of financial gain. We further explained that we are not implying
that thrombolytics or any access management drug should not be used
when clinically indicated. We noted that Medicare payment policy is not
intended to dictate, determine, or influence clinical practice or favor
one course of treatment over another. Rather, by accounting in the ESRD
PPS base rate for the cost of drugs and biologicals that had been
separately payable under the composite rate system, we believe that we
provide adequate payment to maintain patency of the access site
regardless of whether patency is maintained using heparin or a
thrombolytic. For additional information regarding this issue, we refer
the commenters to the comment responses in the CY 2012 ESRD PPS final
rule (76 FR 70247 through 70249).
We disagree with the commenter that ESRD facilities receiving
blended payments during the transition are unfairly disadvantaged
because they will not receive separate payment for thrombolytics for
the portion of the

[[Page 67463]]

blended payment based on the composite rate. Even when the composite
rate system was in place before the ESRD PPS was implemented, it was
our policy not to pay separately for drugs that could be used to
accomplish the same effect as composite rate drugs. Accordingly, it is
consistent with that policy not to provide separate payment for
thrombolytics for the composite rate portion of blended payments during
the remainder of the transition.
For all of the reasons stated above, we continue to believe that
alteplase and other thrombolytics should not be eligible for separate
payment under the composite rate portion of the blended payment. After
consideration of public comments, we are finalizing our CY 2013
proposal to exclude alteplase and other thrombolytics from separate
payment, which we believe is consistent with the CY 2012 ESRD PPS
changes made to the outlier policy to exclude thrombolytic drugs from
outlier payments.
c. Part B Drug Pricing
In the CY 2011 ESRD PPS proposed rule (74 FR 49991), with respect
to estimating the imputed MAP amounts of ESRD outlier services that are
separately billable under Part B, we proposed to use Average Sales
Price (ASP) data for Part B ESRD-related drugs (which is updated
quarterly). We did not make any changes to this proposed methodology in
the CY 2011 final rule. In the CY 2012 ESRD PPS final rule (76 FR
70243), we explained that ESRD facilities receiving blended payments
under the transition would receive payments based on ASP for separately
billable ESRD drugs and biologicals for the composite rate portion of
the blend. In the CY 2012 ESRD PPS final rule (76 FR 70244), we stated
that under the outlier policy, we will use the ASP methodology.
In the CY 2013 ESRD PPS proposed rule (77 FR 40963), we proposed
for CY 2013 and subsequent years to continue to use the ASP
methodology, including any modifications finalized in the PFS final
rules, to compute our outlier MAP amounts, the drug add-on, and any
other policy that requires the use of payment amounts for drugs and
biologicals that would be separately paid absent the ESRD PPS and for
the composite rate portion of the blended payment during the
transition. We explained that we would use this methodology for payment
analyses that CMS may perform. We did not receive public comments on
our proposal to apply the ASP methodology or any modifications to the
ASP for these purposes, as updated in the PFS rule or in updating the
ASP pricing. Therefore, we are finalizing that for CY 2013 and
subsequent years we will continue to use the ASP methodology, including
any modifications finalized in the Physician Fee Schedule (PFS) final
rules, to compute outlier MAP amounts, the drug add-on, and any other
policy that requires the use of payment amounts for drugs and
biologicals that would be separately paid absent the ESRD PPS and for
the composite rate portion of the blended payment during the
transition.
7. Revisions 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 erythropoiesis stimulating agents (ESAs)
necessary for anemia management. Our regulations at 42 CFR
413.237(a)(1) provide that ESRD outlier services include: (i) ESRD-
related drugs and biologicals that were or would have been, prior to
January 1, 2011, separately billable under Medicare Part B; (ii) ESRD-
related laboratory tests that were or would have been, prior to January
1, 2011, separately billable under Medicare Part B; (iii) medical/
surgical supplies, including syringes used to administer ESRD-related
drugs, that were or would have been, prior to January 1, 2011,
separately billable under Medicare Part B; and (iv) renal dialysis
service drugs that were or would have been, prior to January 1, 2011,
covered under Medicare Part D, excluding ESRD-related oral-only drugs.
In the CY 2011 ESRD PPS final rule, 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 on the
monthly claim (75 FR 49142).
In the CY 2013 ESRD PPS proposed rule (77 FR 40964), we explained
that drugs, laboratory tests, and medical/surgical supplies that we
would recognize as outlier services are specified in Attachment 3 of
Change Request 7064, Transmittal 2033 issued August 20, 2010 and
rescinded and replaced by Transmittal 2094, dated November 17, 2010. We
also explained that with respect to the outlier policy, Transmittal
2094 identified additional drugs and laboratory tests that may be
eligible for ESRD outlier payment. Transmittal 2094 was rescinded and
replaced by Transmittal 2134, dated January 14, 2011 which was issued
to correct the subject on the Transmittal page and made no other
changes.
In the CY 2012 ESRD PPS final rule (76 FR 70246), we finalized our
proposal to stop issuing a specific list of eligible outlier service
drugs which were or would have been separately billable under Medicare
Part B prior to January 1, 2011. We stated in that rule that we planned
to use separate guidance to continue to identify renal dialysis service
drugs which were or would have been covered under Part D for outlier
eligibility purposes in order to provide unit prices for calculating
imputed outlier services. In the CY 2013 ESRD PPS proposed rule (77 FR
40964), we explained that we planned to identify, through our
monitoring efforts, those items and services that are incorrectly being
identified as eligible outlier services. Any updates to the list of
renal dialysis items and services that qualify as outlier services will
be made through administrative issuances, if necessary.
We indicated in the CY 2013 ESRD PPS proposed rule (77 FR 40964),
that Medicare regulations at 42 CFR 413.237(a)(2) through (a)(6), and
(b) specify the methodology used to calculate outlier payments. We
explained that 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. We further
explained that 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. We also stated
that the threshold is equal to the ESRD facility's predicted ESRD
outlier services MAP amount per treatment (which is case-mix adjusted)
plus the fixed dollar loss amount. Finally, we explained that in
accordance with 42 CFR 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
and that ESRD facilities are eligible to receive outlier payments for
treating both adult and pediatric dialysis patients.
In the CY 2011 ESRD PPS final rule, using 2007 data, we established
the outlier percentage at 1.0 percent of total payments (75 FR 49142
through 49143). We also established the fixed dollar loss amounts that
are added to the predicted outlier services MAP amounts. The outlier
services MAP amounts and fixed dollar loss amounts are different for
adult and pediatric patients due to

[[Page 67464]]

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 and
49139), the predicted outlier services MAP amounts for a patient would
be 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 to compute the payment adjustments. The
average outlier services MAP amount per treatment for CY 2011 was based
on payment amounts reported on 2007 claims and adjusted to reflect
projected prices for 2011. For CY 2012, the outlier services MAP
amounts and fixed dollar loss amounts were based on 2010 data (76 FR
70250). That is, for CYs 2011 and 2012, the MAP and fixed dollar loss
amounts were computed based on pre-ESRD PPS claims data and
utilization.
Comment: Several commenters agreed that no changes need to be made
to the methodology and commended CMS for its transparency regarding the
data and methodology used to update the MAP and fixed dollar loss
thresholds. Some commenters expressed appreciation of CMS's clear
explanation of eligible outlier services.
Response: We thank the commenters for their support. We will
continue to issue guidance regarding the renal dialysis items and
services that could qualify for outlier payment.
a. Impact of Changes to the Outlier Policy
In the CY 2013 ESRD PPS proposed rule (77 FR 40964), we explained
that we did not propose any changes to the methodology used to compute
the MAP or fixed dollar loss amounts. Rather, we explained that we were
updating the outlier services MAP amounts and fixed dollar loss amounts
to reflect the utilization of outlier services reported on the 2011
claims using the December 2011 claims file. In this final rule, for CY
2013, we used the June 2012 update of the CY 2011 National Claims
History File to update the outlier services MAP amounts and fixed
dollar loss amounts. That is, for CY 2013, the MAP and fixed dollar
loss amounts are based on utilization data from the 2011 ESRD PPS
claims. For this final rule, the impact of this update is shown in
Table 1, which compares the outlier services MAP amounts and fixed
dollar loss amounts used for the outlier policy in CY 2012 with the
updated estimates. The estimates for the CY 2013 outlier policy, which
are included in Column III of Table 1, were inflation-adjusted to
reflect projected 2013 prices for outlier services.

Table 1--Outlier policy: Impact of Using Updated Data To Define the Outlier Policy
----------------------------------------------------------------------------------------------------------------
Column I Outlier policy Column II Updated Column III Final
for CY2012 (based on outlier estimates based outlier policy for
2010 data price inflated on 2011 data price CY2013 (based on 2011
to 2012) * inflated to 2012 * data price inflated to
---------------------------------------------------- 2013) *
-------------------------
Age < 18 Age > = 18 Age < 18 Age > = 18 Age < 18 Age > = 18
----------------------------------------------------------------------------------------------------------------
Average outlier services MAP $46.26 $81.73 $37.84 $59.49 $38.65 $61.38
amount per treatment \1\.........
Adjustments
Standardization for outlier 1.0024 0.9738 1.0927 0.9878 1.0927 0.9878
services \2\.................
MIPPA reduction............... 0.98 0.98 0.98 0.98 0.98 0.98
Adjusted average outlier $45.44 $78.00 $40.52 $57.59 $41.39 $59.42
services MAP amount \3\......
Fixed dollar loss amount that is $71.64 $141.21 $44.16 $103.47 $47.32 $110.22
added to the predicted MAP to
determine the outlier threshold
\4\..............................
Patient months qualifying for 5.7% 5.4% 7.8% 5.2% 7.6% 5.1%
outlier payment..................
----------------------------------------------------------------------------------------------------------------
* The outlier services MAP amounts and fixed dollar loss amounts were inflation adjusted to reflect updated
prices for outlier services (that is, 2012 prices in Columns I and II and projected 2013 prices in Column
III).
\1\ Excludes patients for whom not all data were available to calculate projected payments under an expanded
bundle. The outlier services MAP amounts are based on 2011 data. The medically unbelievable edits of 400,000
units for epoetin and 1,200 mcg for Aranesp that are in place under the ESA claims monitoring policy were
applied.
\2\ Applied to the average outlier MAP per treatment. Standardization for outlier services is based on existing
Case Mix Adjusters for adult and pediatric patient groups.
\3\ This is the amount to which the separately billable (SB) payment multipliers are applied to calculate the
predicted outlier services MAP for each patient.
\4\ The fixed dollar loss amounts were calculated using 2011 data to yield total outlier payments that represent
1% of total projected payments for the ESRD PPS.

As seen in Table 1, the estimated fixed dollar loss amounts that
determine the 2013 outlier threshold amounts (Column III) are lower
than those used for the 2012 outlier policy (Column I). The main reason
for these reductions is the lower utilization of epoetin and other
outlier services in CY 2011, the first year of the PPS. This can be
seen by comparing the outlier service MAP amounts in Column I (which
are based on 2010 data) with the outlier service MAP amounts in Column
II (which are based on 2011 data).
The fixed dollar loss amounts which are added to the predicted MAP
amounts per treatment to determine the outlier thresholds are being
updated from the CY 2012 amount. Based on the use of the most recently
available data, the fixed-dollar loss amount for pediatric patients
will decrease from $71.64 to $47.32 and the MAP amount will decrease
from $45.44 to $41.39 as compared to CY 2012 values. For adult
patients, the fixed-dollar loss amount drops from $141.21 to $110.22
and the MAP amount drops from $78.00 to $59.42.
We estimate that the percentage of patient months qualifying for
outlier payments under the current policy will be 5.1 percent and 7.6
percent for adult and pediatric patients, respectively, based on our
use of 2011 data. The pediatric outlier MAP and fixed dollar loss
amounts continue to be lower for pediatric patients than adults due to
the continued lower use of outlier services (primarily reflecting lower
use of epoetin and other injectable drugs).
Comment: All of the commenters supported CMS's decision to lower
the threshold for both the fixed dollar loss

[[Page 67465]]

and MAP amounts for pediatric and adult patients. The commenters stated
that they believed that outlier payment mechanisms are fundamental to
the long-term success of prospective payment systems to ensure patients
get the care they need, even when there are financial disincentives.
The commenters further expressed that it is important for CMS to ensure
that the information it uses to determine the outlier thresholds each
year is as current as possible and agreed with CMS in using the 2011
ESRD claims and utilization for CY 2013.
Response: We thank the commenters for their support.
Comment: Several commenters expressed concern that some ESRD
facilities may not have the necessary resources available to identify
outlier services on the claim, and therefore are not receiving the
outlier payments to which they are entitled. One commenter suggested
that CMS make available data indicating that the outlier policy is
beneficial to small ESRD facilities. The commenter further explained
that this policy could be detrimental to small facilities because,
although the facilities' base rate is reduced by 1 percent to account
for outlier services, the facilities may be unable recoup this amount
because of resource limitations.
Response: Outlier services are the items and services that were
separately paid prior to the implementation of the ESRD PPS and are
also separately paid under the composite rate portion of the blended
payment for those ESRD facilities under the transition. We do not
believe that it should be difficult for small facilities to identify
outlier services on claims because these facilities should have had
experience identifying these items on claims before the PPS was
implemented. Specifically, the items eligible for outlier payments
under the ESRD PPS are the same items that had been separately paid
under the basic case-mix adjusted composite rate system and are
separately paid under the composite rate portion of the blended payment
for ESRD facilities receiving payment under the transition.
Consequently, we believe that identifying items eligible for outlier
payment is not an additional burden nor do we believe that it is
difficult for small ESRD facilities.
In terms of demonstrating that the outlier policy is beneficial to
small ESRD facilities, we note that the outlier policy is intended to
account for the cost of beneficiaries with high resource utilization;
it is not intended to account for facility size. Instead, our low-
volume adjustment accounts for facility size by adjusting for the cost
of treating a low volume of ESRD patients. Although we will continue to
monitor the impact of our outlier policy, as noted above, we believe
that all facilities, regardless of size, should be able to identify
outlier services on claims and be compensated for the cost of treating
beneficiaries with high resource utilization.
b. Outlier Policy Percentage
In the CY 2013 ESRD PPS proposed rule (77 FR 40965), we explained
that 42 CFR 413.220(b)(4) stipulates that the per treatment base rate
is reduced by 1 percent to account for the proportion of the estimated
total payments under the ESRD PPS that are outlier payments. We further
explained that because of the decrease in utilization associated with
the implementation of the ESRD PPS, the 1 percent target for outlier
payments was not achieved in CY 2011. For this final rule, using the
June 2012 update of the CY 2011 National Claims History File, we found
that outlier payments represented approximately 0.3 percent of total
payments. That is, the historical data previously used to set the
outlier thresholds for CY 2011 projected greater use of outlier
services than was observed under the expanded ESRD PPS, leading to
lower outlier payments than expected. Use of 2011 data to recalibrate
the thresholds, reflecting lower utilization of epoetin and other
outlier services, will result in aggregate outlier payments close to
the 1 percent target in CY 2013. We believe this update to the outlier
MAP and fixed dollar loss amounts for CY 2013 will increase payments
for ESRD beneficiaries requiring higher resource utilization in
accordance with a 1 percent outlier policy.
We note that recalibration of the fixed dollar loss amounts in this
final rule for CY 2013 outlier payments results in no change in
payments to ESRD facilities for beneficiaries with renal dialysis items
and services that are not eligible for outlier payments, but raises
payments to providers for beneficiaries with renal dialysis items and
services that are eligible for outlier payments. Therefore, beneficiary
co-insurance obligations would increase for renal dialysis services
eligible for outlier services and would remain unchanged for those not
eligible.
Comment: One commenter recommended that CMS estimate and publish
the amount of the shortfall in outlier payments paid during CY 2011.
The commenters recommended that CMS develop a mechanism to return these
funds to the ESRD facilities so that these funds may be used to offset
the costs associated with numerous ``unfunded mandates'' imposed on
these facilities. One commenter suggested that CMS set less than 1
percent aside for outliers and allocate the leftover funds to the ESRD
PPS base rate.
Response: We disagree that the shortfall in outlier payments should
be used to make additional payments to ESRD facilities to account for
not achieving the 1 percent threshold. The 1 percent outlier policy is
a prospective payment mechanism in which thresholds are established and
adjusted on a yearly basis based on historical data. In the FY 1997
Inpatient Prospective Payment System (IPPS) final rule (61 FR 46229 and
46230), we explained that we believe our outlier policies are
consistent with the statute and the goals of the prospective payment
system. Many of the factors used to set prospective payment amounts for
a given year are based on estimates. These factors include not only the
outlier thresholds, but also the market basket rate of increase, the
update factors and the required budget-neutrality provisions. We do not
believe that Congress intended that the standardized amounts should be
adjusted (upward or downward) to reflect differences between projected
and actual outlier payments for a given year. Moreover, retroactive
adjustments would be extremely difficult or impracticable (if not
impossible) to administer. We further explained that the thresholds for
a given year reflect certain levels of costs, so that if costs are held
down, fewer cases qualify for outlier payments and outlier payments are
lower than expected. We believe that the same explanation applies to
the ESRD PPS.

D. Clarifications Regarding the ESRD PPS

1. Reporting Composite Rate Items and Services
In the CY 2011 ESRD PPS final rule (75 FR 49036), we explained that
section 1881(b)(14)(B)(i) of the Act requires that the ESRD PPS payment
bundle include composite rate items and services. The basic case-mix
adjusted composite payment system represented a limited PPS for a
bundle of routine outpatient maintenance renal dialysis services. We
defined composite rate services at Sec. 413.171 as ``items and
services used in the provision of outpatient maintenance dialysis for
the treatment of ESRD and included in the composite payment system
established under section 1881(b)(7) [of the Act] and the basic case-
mix adjusted composite payment system established under section
1881(b)(12) of the Act.'' In 42 CFR 413.171 we also defined renal

[[Page 67466]]

dialysis services as including, ``items and services included in the
composite rate for renal dialysis services as of December 31, 2010.''
We further explained that currently services that are billed on the
ESRD claim do not provide any detail of the composite rate items and
services that are furnished to the patient. We indicated that, as we
discussed in the Medicare Claims Processing Manual, Pub. 100-04,
chapter 8, sections 50.1 and 50.2, laboratory tests and drugs covered
under the facility's composite rate may not be billed separately (75 FR
49173). We stated in the CY 2013 ESRD PPS proposed rule that the
composite rate represented the routine items and services provided to
Medicare beneficiaries for outpatient maintenance dialysis and
therefore was full payment for those items and services. Therefore, it
would not have been appropriate for ESRD facilities to bill for items
and services in the composite rate because this would result in
duplicate payments by Medicare (77 FR 40965).
We also explained in the CY 2011 ESRD PPS final rule (75 FR 49048),
that in our analysis of the ESRD claims we identified drugs and
biologicals that were included in the composite payment rate but for
which ESRD facilities received separate payment in addition to the
composite rate payment. Because these composite rate drugs and
biologicals were listed separately on the ESRD claims, separate payment
was inadvertently made. We further explained that we excluded those
inadvertent payments from the final ESRD PPS base rate calculation. We
also noted that the Medicare Benefit Policy Manual, Pub. 100-02,
chapter 11, section 30.4.1 lists the drugs and fluids that were
included under the composite payment system and explicitly states, ``*
* * drugs used in the dialysis procedure are covered under the
facility's composite rate and may not be billed separately. Drugs that
are used as a substitute for any of these items, or are used to
accomplish the same effect, are also covered under the composite
rate.'' The manual further provides that ``administration of these
items (both the staff time and supplies) is covered under the composite
rate and may not be billed separately'' (75 FR 49048).
In the CY 2012 ESRD PPS final rule (76 FR 70243), with regard to
antibiotics, we provided for separate payment for vancomycin when
furnished to treat non-ESRD related conditions. We also eliminated the
payment distinction for antibiotics furnished in an ESRD facility or in
the home used to treat access infections or peritonitis. We finalized
that antibiotics furnished in the home to treat access site infections
and peritonitis would be eligible for outlier payment (76 FR 70246). In
the CY 2013 ESRD PPS proposed rule (77 FR 40963), we proposed to allow
for separate payment for daptomycin if furnished for non-ESRD-related
conditions and finalized in section II.C.6.2 of this final rule.
As described at 42 CFR 413.239, there are ESRD facilities receiving
reimbursement under the transition, that is, receiving a blended
payment of the basic case-mix adjusted composite rate payment system
and the ESRD PPS. If an ESRD facility receives payment under the
transition and reports a drug, biological, or laboratory test that was
included in the composite rate on the ESRD claim, it could
inadvertently receive separate payment for that item or service within
the portion of the blended payment that is based on the basic case-mix
adjusted composite payment system.
As mentioned above and defined at 42 CFR 413.237, ESRD-related
drugs, biologicals, and laboratory tests that were or would have been
separately payable under the basic case-mix adjusted composite payment
system qualify as eligible outlier services. In the CY 2012 ESRD PPS
final rule (76 FR 70246), we finalized that as of CY 2012, we would no
longer issue a specific list of eligible outlier service drugs which
were or would have been separately billable under Medicare Part B prior
to January 1, 2011. If an ESRD facility reports a drug or biological
that was included in the basic case-mix adjusted composite payment
system on the ESRD claim, it would inappropriately be applied toward an
outlier calculation because all drugs and biologicals with a rate
available on the ASP pricing file when the modifier AY is not present
may be eligible for outlier consideration.
We explained in the CY 2013 ESRD PPS proposed rule, that as a
result of our monitoring efforts, we continue to find composite rate
drugs reported on ESRD claims and reiterated that composite rate items
and services are not to be reported on the ESRD facility claims. We
noted that we are instituting measures to ensure that composite rate
drugs are prevented from being applied to the outlier payment. These
measures will be discussed through administrative issuances, as
appropriate. We also noted that we would continue to monitor the
reporting of composite rate items and services on ESRD claims and plan
to take actions to recoup inappropriate and duplicative payments.
Finally, we noted that if the inclusion of composite rate items and
services such as laboratory tests, drugs and supplies on claims will be
required to be reported, we will discuss this requirement in future
rulemaking (77 FR 40966).
We received one comment on this issue. The comment and our response
are set forth below.
Comment: One commenter concluded that any action to recoup
inappropriate and duplicative payments for reporting composite rate
items and services should be pursued on a going forward basis rather
than retrospectively.
Response: CMS has a fiduciary responsibility to ensure that
accurate payments are made. If we were to identify inappropriate
payments that had been made because composite rate items and services
were reported on claims for the purpose of receiving separate payment
we would pursue recoupment of those payments in accordance with
applicable laws and regulations.
2. ESRD Facility Responsibilities for ESRD-Related Drugs and
Biologicals
In the CY 2013 ESRD PPS proposed rule (77 FR 40966), we indicated
that we had become aware that some ESRD facilities are requiring ESRD
beneficiaries to purchase renal dialysis drugs from the ESRD facility
and are instructing beneficiaries not to use their Part D plan for
their purchases. We explained that section 1866(a)(1)(A) of the Act, as
codified in regulations at 42 CFR 489.21, prohibits providers from
billing beneficiaries for services for which the beneficiary would have
been entitled to have payment made under Medicare if the provider
appropriately filed claims for those services. Furthermore, section
1881(b)(2)(A) of the Act states that payments shall be made to an ESRD
facility only if it agrees to accept such payments as payment in full
for covered services except for the beneficiary co-insurance and
deductible amounts.
Furthermore, in the CY 2011 ESRD PPS final rule (75 FR 49045), we
explained that the ESRD PPS bundled base rate reflects Medicare payment
for the average ESRD patient. We stated that we had incorporated
payments under the basic case-mix adjusted composite rate payment
system as well as payments for separately billable items and services
into the ESRD PPS base rate. As a result, we believe the ESRD PPS
payments are sufficient and reflect the average cost of providing care
to the average patient with ESRD and therefore, we expect that, on
average, high cost patients would be offset by low cost patients. In
the CY 2011 ESRD PPS final rule (75 FR 49045), we also explained that
we had provided for

[[Page 67467]]

higher acuity patients with patient case-mix adjusters and outlier
payments for high-cost patients. We further cited 42 CFR 494.90 of the
ESRD Conditions for Coverage which requires the development of an
individualized patient plan of care to address patient needs and
concluded that we believe ESRD facilities should make medical decisions
based on patient needs and not solely on a financial basis.
In the CY 2011 ESRD PPS final rule (75 FR 49050), we stipulated
that any drug or biological (that is, injectable, oral or other forms
of administration) furnished for the purpose of access management,
anemia management, vascular access or peritonitis, cellular management
or bone and mineral metabolism would be considered renal dialysis
services under the ESRD PPS. Any drug or biological used as a
substitute for a drug or biological that was included in the ESRD PPS
bundled base rate would also be a renal dialysis service and would not
be eligible for separate payment. Antiemetics, anti-infectives,
antipruritics, anxiolytic, excess fluid management, fluid and
electrolyte management and pain management drugs and biologicals could
be used for dialysis purposes and therefore, are considered ESRD-
related when used for those purposes. We indicated that we presumed
these drugs and biologicals to be renal dialysis services in whatever
form they are furnished, unless indicated on the claim that they are
used for non-ESRD-related conditions. Drugs and biologicals paid under
Part D that are furnished by an ESRD facility for ESRD-related purposes
are considered renal dialysis services (75 FR 49050 and 49051).
In the CY 2013 ESRD PPS proposed rule, we reiterated that ESRD
facilities are responsible for furnishing renal dialysis items and
services that are required to meet patient needs. This would include
oral or other forms of administration of injectable drugs and
biologicals that are furnished for ESRD-related conditions. We also
expect that ESRD facilities will not restrict access to necessary drugs
for financial purposes by requiring patients to purchase medically
necessary drugs and biologicals. We expect that ESRD facilities will
furnish drugs and biologicals that had been considered medically
necessary prior to the implementation of the ESRD PPS and not exclude
them because the ESRD facility is now financially responsible for these
drugs and biologicals. Because of the reasons cited above, ESRD
facilities may not require, induce or coerce beneficiaries to purchase
any renal dialysis item or service.
We received no comments on the clarification of our policy
regarding ESRD facility responsibilities for ESRD-related drugs and
biologicals.
3. Use of AY Modifier
As we indicated in the CY 2013 ESRD PPS proposed rule (77 FR
40967), in the CY 2011 ESRD PPS final rule, we developed a mechanism to
be used by ESRD facilities to identify and be paid separately for non-
ESRD-related items and services, such as drugs, biologicals, and
equipment and supplies (75 FR 49052 and 75 FR 49168). We provided this
mechanism in order to support a Medicare beneficiary's need for non-
ESRD-related items and services (that is, predominantly drugs and
laboratory tests) during a dialysis treatment and to mitigate the need
for the beneficiary to receive additional injections or health care
visits. We further stated that in the event that supplies or equipment
are not ESRD-related, ESRD facilities would be required to place a
modifier on the claim for those supplies and equipment, signifying that
they were used for services that were not ESRD-related and eligible for
separate payment outside of the ESRD PPS (75 FR 49168). Change Request
7064, Transmittal 2033, titled ``End Stage Renal Disease (ESRD)
Prospective Payment System (PPS) and Consolidated Billing for Limited
Part B Services'', issued on August 20, 2010, re-issued November 17,
2010 under Transmittal 2094, and re-issued January 14, 2011 under
Transmittal 2134, provided instructions on the use of the modifier. In
that Change Request, we indicated that the claim lines for laboratory
tests and drugs provided to a beneficiary for reasons other than the
treatment of ESRD must be submitted with the AY modifier to signal
separate payment outside of the ESRD PPS. In the CY 2012 ESRD PPS final
rule, we provided for the use of the AY modifier with vancomycin if
used for non-ESRD-related conditions and with the requirement that the
ESRD facilities include the diagnosis code of the condition on the
claim (76 FR 70243). In the CY 2013 ESRD PPS proposed rule (77 FR
40967), we proposed to allow the use of the AY modifier for separate
payment when daptomycin is furnished by an ESRD facility to an ESRD
Medicare beneficiary for non-ESRD related conditions. We are finalizing
this policy above. ESRD facilities are required to indicate an
appropriate diagnosis code on the claim that reflects the condition
requiring the use of daptomycin.
We explained in the CY 2013 ESRD PPS proposed rule (77 FR 40967)
that our monitoring activities have identified that ESRD facilities and
clinical laboratories are appending the AY modifier for items that we
believe are ESRD-related. We noted in the proposed rule (77 FR 40967)
that some ESRD facilities and clinical laboratories appear to be
appending the AY modifier on many items and services reported on
claims. We reiterated in the proposed rule that the purpose of the AY
modifier is to allow beneficiaries the convenience to receive non-ESRD-
related items (for example, drugs and laboratory tests) during their
dialysis treatment and to allow the ESRD facility to receive a separate
payment for furnishing those items. The AY modifier is also intended to
allow separate payment to laboratories in the event an ESRD-related
laboratory test is required for non-ESRD-related conditions. The AY
modifier is not intended to be used to receive a separate payment for
items that are ESRD-related and therefore included in the ESRD PPS base
rate. We further stated that we would continue to monitor the use of
the AY modifier and intend to take steps to recoup inappropriate
payments. In the event that we believe the AY modifier is not being
used for the purpose intended, we may be forced to discontinue the AY
modifier and cease to provide separate payment for any non-ESRD-related
drug or laboratory test furnished.
We received several comments on our clarification of this policy
and our responses are set forth below.
Comment: We received six comments regarding the AY modifier.
Commenters supported maintaining the AY modifier for non-ESRD
conditions. Several commenters provided reasons for supporting the AY
modifier. For example, some commenters concurred that the AY modifier
is intended to allow Medicare beneficiaries the convenience of
receiving non-ESRD related items and services during the course of
dialysis treatment; and to allow the ESRD facility or laboratory to
receive a separate payment when furnishing non-ESRD items or services.
It also enables optimal coordinated care to Medicare beneficiaries by
minimizing their need for additional doctor visits and duplicative or
unnecessary lab tests. Five commenters largely encouraged CMS to
continue the use of the modifier for reporting non-ESRD related items
or services for payment and to furnish supporting data on AY modifier
misuse. A few commenters suggested that CMS should consider drafting
guidance on the appropriate use of the AY modifier.
A few commenters expressed concern over the possible elimination of
the AY modifier and identified possible resulting hardships for
Medicare ESRD

[[Page 67468]]

beneficiaries. One commenter noted that the elimination of the AY
modifier would force facilities to send dialysis patients to labs or
infusion centers to receive IV medications that would risk the vascular
access and add transportation and time burdens for the beneficiary.
Response: We thank commenters for their support of the use of the
AY modifier. We agree that the elimination of the AY modifier could
result in additional hardships for ESRD beneficiaries.
Comment: One commenter suggested that, rather than eliminating the
AY modifier, CMS should rely upon the contractors to educate providers,
audit payments for AY items, and request documentation when
appropriate. Another commenter encouraged CMS to provide data on the
exact abuses or the scope of modifier misuse noting that patients
should not suffer because of modifier abuse, but rather CMS should work
with facilities and providers to ensure policy compliance.
Response: With regard to the suggestion that the responsibility for
AY modifier monitoring education should rest on the CMS contractors
(that is, the Medicare Administrative Contractors (MACs)), we note that
we do provide education and instructions to the A/B MACs through
administrative issuances and MedLearn articles that they can then use
to educate providers. For example, CMS Change Request 7064 and
subsequent Medicare Learning Network Matters (MLN) article
MM7064, published on January 14, 2011, notifies contractors that ESRD-
related laboratory services, drugs and supplies will be subject to Part
B consolidated billing edits and no longer separately payable when
furnished to ESRD beneficiaries. However, these consolidated billing
edits do not apply when the items and services are not ESRD-related.
When items and services are furnished to an ESRD beneficiary for
conditions other than ESRD, the AY modifier must be present on the
claim to bypass billing edits and allow for a separate payment outside
of the ESRD PPS. CMS MLN MM7064 may be viewed at https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM7064.pdf. Finally, we are in the process
of updating the ESRD Benefit Policy Manual, Pub 100-02, chapter 11, to
reflect the policy requirements under the ESRD PPS, including the use
of the AY modifier.
With regard to the comment concerning monitoring the use of the AY
modifier and the suggested functions to be performed by the MACs, as we
discussed in the CY 2013 ESRD PPS proposed rule (77 FR 40967), we are
continuing to monitor the use of the AY modifier and intend to take
steps to recoup inappropriate payments. Although we are updating our
manual, we believe that we have provided adequate instructions as to
the appropriate use of the AY modifier. We expect that the contractors
will convey information regarding the proper use of the AY modifier to
the ESRD facilities, and will also audit payments and request
documentation as necessary. However, CMS has the responsibility to
ensure that payments are made appropriately. Therefore, we will
continue to monitor the use of the AY modifier. If we believe that the
AY modifier is not being used as intended, or it is being used in order
to receive separate payment for renal dialysis items and services that
are in the bundled payment, we will be forced to reconsider its use.

E. Miscellaneous Comments

We received thirty-five comments from Medicare beneficiaries,
family members, ESRD facilities, nurses, physicians, professional
organizations, renal organizations, and manufacturers related to issues
that were not specifically addressed in the CY 2013 ESRD PPS proposed
rule.
Comment: We received comments from patients, their families, renal
associations and manufacturers requesting changes in how CMS pays for
home dialysis and home dialysis training. Many of these commenters
described the benefits of home dialysis. Most commenters asked CMS to
increase the number of weekly allowable dialysis sessions and eliminate
the medical justification requirement for additional sessions. One
commenter questioned why payment for in-facility dialysis was the same
as for home dialysis, noting the differences between staff and supply
use between in-facility and home dialysis. Some commenters contended
that patient requests for home dialysis are being denied. Commenters
also stated that beneficiaries with ESRD are not provided with the same
home training opportunities as beneficiaries whose care is covered by
other payment sources. Many of the commenters stated that payment for
home dialysis training is insufficient and does not reflect the true
cost of training. Some commenters indicated various ranges of time
required for home training in terms of time per day and number of
training sessions. One home dialysis organization stated that ESRD
facilities only receive payment for 18, rather than 25, training
sessions for new patients.
Response: CMS developed a reimbursement mechanism with the 2011
implementation of the ESRD PPS that we believe supports home-based
dialysis. That is, the ESRD PPS payment, which includes drugs,
laboratory tests, staff time, supplies, patient-level adjustments,
facility-level adjustments and outlier payments, is the same regardless
of the location where the dialysis services are furnished or the
dialysis modality, which we believe supports beneficiaries' ability to
elect to receive dialysis at home, where appropriate. It is not,
however, CMS's intent to encourage, discourage or require any
particular dialysis modality. Rather, we believe that decisions
regarding whether to receive dialysis and which dialysis modality to
use should be made by beneficiaries in consultation with their
physicians. This includes the decision whether to receive home
hemodialysis or home peritoneal dialysis, rather than in-facility
dialysis. We believe that the decision to perform home dialysis
includes determining the beneficiary's abilities, the beneficiary's
desire to perform home dialysis and the beneficiary's physical and
emotional status.
With regard to the comment asking why the payment is the same for
in-facility as home dialysis, we believe that our policy to pay the
same amount, including the patient-level and facility-level
adjustments, as well as the outlier policy for home and in-facility
dialysis, provides adequate payment to account for the short-term
increase in staff time necessary to train beneficiaries for home
dialysis. Training costs are included in the ESRD PPS base rate,
however, we also provide an add-on adjustment for each training session
that represents one hour of nursing time to conduct one-on-one training
treatments for each training treatment furnished by a Medicare
certified home dialysis training facility. The add-on payment for one
hour of training per training session does not imply that it takes only
one hour per training session to properly educate a beneficiary to
perform home dialysis. We believe that our payment is adequate for
training and home dialysis.
We have been and will continue to monitor and analyze trends in
home dialysis and home dialysis training. We have seen a continuing
increase in overall home dialysis since mid-2009, including in 2011. In
particular, we have observed an increase in home hemodialysis and a
decline in home peritoneal dialysis with an overall higher rate of home
peritoneal dialysis. In addition, our monitoring shows that

[[Page 67469]]

ESRD facilities receive payments for more treatments for home
hemodialysis than for in-facility hemodialysis. We also have seen an
increase in home training in 2011, particularly in retraining.
Consequently, we do not believe that the ESRD PPS and our training
adjustment discourage beneficiaries from receiving home dialysis.
Commenters also requested that we increase the maximum number of
dialysis sessions and eliminate the medical justification requirement
for dialysis treatments after a beneficiary has received three sessions
in one week. We note that, although three is the maximum number of
sessions that we will cover without a showing of medical necessity, we
will cover additional sessions where those sessions are medically
necessary. We are aware that there are observational studies that
support additional weekly dialysis treatments and that there is some
industry support for additional treatments. We have and will continue
to monitor and analyze the number of dialysis treatments that Medicare
beneficiaries receive to determine whether a change in this
longstanding policy is warranted.
In addition, in the CY 2011 ESRD PPS final rule (75 FR 49064) we
stated in response to a MedPAC comment that we would consider whether
it would be appropriate to utilize a larger unit of payment, rather
than a per treatment payment, after the transition period. We further
stated that ``we may evaluate whether the ERSD PPS has resulted in
improved outcomes, the degree to which home dialysis has increased, and
whether interested stakeholders would favor an alternative to the per
treatment approach.'' We will continue to monitor the impact of the
ESRD PPS and will take these comments into consideration if we
determine that any changes to the per treatment payment approach are
warranted.
With regard to the comment that ESRD facilities receive payment for
18 rather than 25 training treatments for new patients, we believe that
the commenter is confusing the adjustment for beneficiaries who are
receiving home dialysis training but are not in their first four months
of dialysis, with beneficiaries who have been newly diagnosed with ESRD
and are receiving their first four months of dialysis. The home
dialysis training adjustment applies to those beneficiaries who are not
in their first four months of dialysis treatments. This adjustment does
not apply for those beneficiaries newly diagnosed with ESRD. Instead,
facilities receive the onset of dialysis adjustment for these
beneficiaries. As we explained in the CY 2011 ESRD PPS final rule (75
FR 49094), we believe that the costs associated with the onset of
dialysis adjustment and the training add-on adjustment overlap (that
is, costs for services could be accounted for in both adjustments).
Accordingly, we finalized a policy that ESRD facilities will not
receive the home dialysis training adjustment when they are receiving
the onset of dialysis adjustment. This does not mean that an ESRD
facility may not furnish home training services during the onset
period. Rather, the onset of dialysis payment adjustment of 51 percent
per treatment accounts for the administrative and labor costs
associated with new patients, including the costs to train patients.
We are unable to address the comment contending that ESRD
beneficiaries are not offered the same home dialysis training
opportunities as those offered to ESRD beneficiaries covered by private
payers because we are not familiar with these payment sources.
Comment: One patient support group recommended that CMS use revenue
code 0820 when reporting home dialysis instead of revenue code 0821,
which is currently used to describe both in-facility and home dialysis
services. The commenter contends that this will correctly identify
patients on home dialysis in Medicare claims data.
Response: Our current Medicare policy for reporting home dialysis
services with revenue code 0821 appended with ESRD condition code 74
(Dialysis in the Home) allows us to distinguish beneficiaries receiving
dialysis at home from those receiving treatment in an ESRD facility.
Comment: We received twelve comments regarding the Agency's plan to
include oral-only drugs in the ESRD PPS bundled payment for CY 2014.
Commenters expressed concern about the administrative burden,
compliance with state laws, and associated costs in furnishing oral-
only drugs within the scope of the ESRD service. A few commenters
requested that CMS ask for community input so that the inclusion of the
oral-only drugs will be an uneventful transition for patients. ESRD
industry associations cautioned that the inclusion of oral-only drugs
into the ESRD PPS CY 2014 bundled payment may limit patient access to
the most clinically appropriate drugs and threaten optimal health
outcomes for ESRD Medicare beneficiaries. Some commenters recommended
that CMS include patient protections to ensure patient care is not
compromised and that oral-only drugs continue to be furnished at the
recommended doses. Many commenters requested that the Agency share
advance information about the methodology and data sources that the
Agency will use to calculate the reimbursement rates for drugs and
therapies and encouraged CMS to use the most recent year of available
data to establish a payment rate for oral-only drugs. Other commenters
requested that CMS adopt a methodology that measures the actual
utilization on a per treatment basis and includes costs associated with
drug administration when reimbursing oral-only drugs as part of the
ESRD PPS.
Response: We thank the commenters for their comments. In the CY
2011 ESRD PPS final rule (75 FR 49038 through 49044), we responded to
comparable comments regarding the inclusion of oral-only drugs in CY
2014. We received many suggestions from stakeholders on how oral-only
drugs should be included in the ESRD PPS bundled payment. We have
reviewed and will continue to review all of the comments, which we will
consider as we formulate our proposals on this issue. We intend to
address the inclusion of oral-only drugs in the ESRD PPS in the CY 2014
ESRD PPS proposed rule.
Comment: We received three comments from industry associations
requesting that CMS release the rate-setting file to allow the industry
to test the Agency's assumptions and complete its own analysis of the
payment policies set forth in the CY 2013 ESRD PPS proposed rule. One
commenter encouraged CMS to make data available to the public
generally, not just dialysis facilities in particular, to allow for a
more complete assessment of the ESRD PPS program.
Response: We received comparable requests and comments in response
to the CY 2012 ESRD PPS proposed rule and responded to those comments
in the CY 2012 ESRD PPS final rule (76 FR 70254 to 70255). We believe
that we have provided and will provide data sufficient to analyze the
payment policies included in the proposed rule, by posting the impact
file for CY 2012 on the ESRD PPS Payment Web site. We will also post a
provider-level impact file and the wage index file for CY 2013 shortly
after publication of this final rule. We also explained that we have
not made the rate setting file available ``because the release of
patient identifiable data is not necessary to accomplish the purpose of
analyzing our proposals. Applicable Federal privacy laws and
regulations, including the Privacy Act and HIPPA Privacy Rule only
permit us to disclose personal

[[Page 67470]]

identifiable information when it is necessary to administer the
program, or for health care operations and payment.''
Comment: We received 8 comments requesting modification to the
standardization factor methodology and calculation for CY 2013. Many of
these commenters encouraged CMS to use the most current data available
in order to establish the standardization factor, rather than
historical estimates. Some commenters indicated that because we had
adjusted the outlier fixed dollar loss and MAP amounts to account for
outlier payments below the 1 percent threshold in CY 2011, we should
provide a comparable adjustment to the standardization factor and the
ESRD PPS base rate to account for payments for patient- and facility-
level adjusters that were not utilized. Some commenters continue to
contend that the ESRD PPS base rate established in CY 2011 is incorrect
and that CMS should return the payment amounts removed from the base
rate to account for the adjusters, thereby increasing the base rate.
Other commenters stated that the ESRD PPS base rate should be adjusted
to account for payments allocated for the patient- and facility-level
adjusters that had not ultimately been paid to the ESRD facilities. A
few commenters requested that CMS modify the payment for case-mix and
co-morbidity adjustments.
Response: In the CY 2011 ESRD PPS final rule, we described the data
sources that were used in constructing the ESRD PPS payment bundle, the
development of the ESRD PPS base rate, and the payment adjusters (75 FR
49064 through 49127). In the CY 2013 ESRD PPS proposed rule, we
proposed to update the base rate by the rate of increase in the ESRD
market basket, reduced by the productivity adjustment (77 FR 40959).
The base rate was developed using 2007 claims, in accordance with
section 1881(b)(14)(A)(ii) of the Act, which requires CMS to use the
lowest per patient utilization year. We also explained the methodology
used to determine the case-mix adjustment amount, including co-
morbidities (75 FR 49087 through 49116). In the CY 2013 ESRD PPS
proposed rule, we stated that we were not proposing any changes to the
methodology used to compute the MAP or fixed dollar loss amounts, but
were updating the outlier services MAP amounts and fixed dollar loss
amounts to reflect the utilization of outlier services reported on the
2011 claims, using the December 2011 claims file (77 FR 40964). The
methodology for calculating and updating the base rate was finalized
last year through notice and comment rulemaking, as were the
methodologies for updating the outlier threshold. In the CY 2013 ESRD
PPS proposed rule, we did not propose to change how the base rate is
calculated or updated. We also did not propose in the CY 2013 ESRD PPS
proposed rule to modify the payment adjusters. We do not believe that
because we lowered the MAP and fixed dollar loss amounts to adjust for
outlier payment expenditures that were below the 1 percent target, we
must adjust the standardization factor for the ESRD PPS base rate. We
will, however, continue to monitor our payments and consider if any
changes need to be made in the future.
Comment: One commenter requested clarification when billing
Medicare for Lipid Profile laboratory services furnished to ESRD
beneficiaries. Another commenter encouraged CMS to furnish guidance for
blood draws and laboratory collections under the ESRD PPS.
Response: ESRD-related laboratory tests may not be billed with the
AY modifier and no separate payment shall be made when an ESRD facility
or laboratory furnishes ESRD-related laboratory tests to an ESRD
beneficiary. We discuss laboratory tests furnished under the PPS in our
CY 2011 and CY 2012 ESRD PPS final rules (75 FR 49053 through 49056 and
76 FR 70249 through 70250, respectively). Furthermore, the Lipid
Profile laboratory test is appropriately included in the ESRD PPS
payment bundle when Lipid abnormalities result from, or are related to
the beneficiary's ESRD. For example, some forms of dialysis,
particularly peritoneal dialysis, are associated with increased
cholesterol and triglyceride levels, and a Lipid Profile laboratory
test to assess these levels would be included in the bundled payment.
If, however, the Lipid Profile laboratory test is furnished for reasons
other than for the treatment of ESRD, the laboratory services may be
billed with the AY modifier and are eligible for separate payment. With
regard to the comment requesting guidance for blood draws and
laboratory collections, we refer the commenter to Change Request 7617,
Transmittal 150, entitled, ``Implementation of Changes in End Stage
Renal Disease Payment for Calendar Year 2012'' issued on November 16,
2011.
Comment: One commenter requested that CMS consider the
implementation of pediatric co-morbidities to the pediatric case mix
adjustments, while another commenter requested consideration of a case-
mix adjustment for race. One association called for CMS to establish a
new technology adjuster in a non-budget-neutral manner, stating that
new technologies have the potential to lead to better diagnosis,
treatment, and patient outcomes.
Response: We thank the commenters for their suggestions, but note
that we did not propose to implement these adjusters in the CY 2013
ESRD PPS proposed rule. We refer the commenters to the CY 2011 ESRD PPS
final rule (75 FR 49128 through 49134; 75 FR 49108 and 49115; 75 FR
49174), in which we explained the methodology used to develop the ESRD
PPS for the pediatric population, discussed the reasons for not
including a patient-level case mix adjuster for race, and responded to
comments suggesting that we provide separate payment for new and
innovative drugs and technologies.
Comment: Some commenters requested that the cost reports be amended
to reflect the actual cost of care. Some of the recommendations
included that the cost report should provide flexibility to allow for
innovation, eliminate the limitation on medical director fees,
recognize the cost of supporting the ESRD networks, and allow immediate
recognition on cost reports of ``new or innovative items/services,''
Response: We thank the commenters for their suggestions. We plan to
analyze the cost reports to determine if there are any changes required
and will consider the suggestions provided.
We received a number of other comments on a variety of topics that
we believe are outside the scope of the proposed rule. The commenters
requested that ESRD beneficiaries be able to maintain disability
benefits while employed; expressed concern about the ``corporate
practice of medicine'' by dialysis facilities; noted that securing the
necessary documentation for acute co-morbidities is problematic and
urged CMS to furnish co-morbidity claims data from the CMS database;
advocated for inclusion of their product in the ESRD PPS payment; and
disputed over payment changes to its product under Part D. We
appreciate the comments; however, because these comments were not in
response to any proposals or discussions in the proposed rule, they are
beyond the scope of this final rule. We refer the commenters to the CY
2011 ESRD PPS final rule, where we believe that we addressed many of
these issues (75 FR 49030).

[[Page 67471]]

III. End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP) for
Payment Year (PY) 2015

A. Background

For over 30 years, monitoring the quality of care provided to end-
stage renal disease (ESRD) patients by dialysis providers or facilities
(hereinafter referred to collectively as ``facility'' or
``facilities'') has been an important component of the Medicare ESRD
payment system. The ESRD quality incentive program (QIP) is the most
recent step in fostering improved patient outcomes by establishing
incentives for dialysis facilities to meet or exceed performance
standards established by CMS. The ESRD QIP is authorized by section
153(c) of MIPPA, which added section 1881(h) to the Act. CMS
established the ESRD QIP for PY 2012, the initial year of the program
in which ESRD payment reductions based on quality performance are being
made to dialysis facilities, in two rules published in the Federal
Register on August 12, 2010 and January 5, 2011 (75 FR 49030 and 76 FR
628, respectively). On November 10, 2011, CMS published a final rule in
the Federal Register outlining the PY 2013 and PY 2014 ESRD QIP (76 FR
70228).
Section 1881(h) of the Act requires the Secretary to establish an
ESRD QIP, which we have implemented by (i) selecting measures; (ii)
establishing the performance standards that apply to the individual
measures; (iii) specifying a performance period with respect to a year;
(iv) developing a methodology for assessing the total performance of
each facility based on the performance standards with respect to the
measures for a performance period; and (v) applying an appropriate
payment reduction to facilities that do not meet or exceed the
established Total Performance Score. In this final rule, we describe
each of these elements, as applicable, and our final policies for their
application to PY 2015 and future payment years of the ESRD QIP.

B. Summary of the Proposed Provisions and Responses to Comments on the
ESRD QIP for PY 2015

A proposed rule, entitled ``Medicare Program; End-Stage Renal
Disease Prospective Payment System, Payment System, Quality Incentive
Program, and Bad Debt Reductions for All Medicare Providers'' (77 FR
40952), hereinafter referred to as the CY 2013 ESRD PPS proposed rule,
appeared in the Federal Register on July 11, 2012, with a comment
period that ended on August 31, 2012. In that proposed rule, we made
proposals for the ESRD QIP, including introducing and expanding
measures, refining the scoring methodology, modifying the program's
public reporting requirements, establishing how the ESRD QIP payment
reduction applies to facilities whose ownership has changed, and
initiating a data validation pilot program. We received approximately
55 public comments on these proposals from many interested parties
including dialysis facilities, organizations representing dialysis
facilities, nephrologists, nurses, dietitians, home health advocacy
groups, pharmaceutical manufacturers, patients, advocacy groups, and
the Medicare Payment Advisory Commission (MedPAC). In this section of
the final rule, we provide a summary of each proposed requirement, a
summary of the public comments received on these requirements, our
responses to these comments, and the final policies that we will adopt
for the program.

C. Considerations in Updating and Expanding Quality Measures Under the
ESRD QIP for PY 2015 and Subsequent PYs

1. Value-Based Purchasing (VBP) Overview
Throughout the past decade, Medicare has been transitioning from a
program that pays for healthcare based solely on the number of services
furnished to a beneficiary to a program that ties payments to providers
and suppliers to the quality of care of the services they deliver. By
paying for the quality of care, rather than merely the quantity of
care, we believe we are strengthening the healthcare system while also
advancing the National Quality Strategy and the three part aim which
promote (i) better care for the individual thereby (ii) advancing the
health of the entire population while also (iii) reducing costs. CMS
specifies the domains and specific measures of quality for our VBP
programs and we are working to link the aims of the National Quality
Strategy with our payment policies on a national scale.
There are currently six domains of measurement for our VBP
programs, based on the six priorities of the National Quality Strategy:
(i) Care coordination; (ii) population/community health; (iii)
efficiency and cost reduction; (iv) safety; (v) patient- and caregiver-
centered experience and outcomes; and (vi) clinical care. Together
these domains not only encourage better care at the facility level, but
also encourage different care settings to interface to comprehensively
improve healthcare overall. Although currently none of the VBP programs
measure quality across all of the six domains, we are working to ensure
that each program considers measures supporting the six national
priorities where feasible. Furthermore, we are working in partnership
with facilities, beneficiaries, the National Quality Forum (NQF), the
Measures Application Partnership, sister agencies in the Department of
Health and Human Services (HHS), and other stakeholders to develop new
measures where gaps exist, refine measures requiring adjustment, and
remove measures when appropriate. We are also working with stakeholders
to ensure that the ESRD QIP serves the needs of our beneficiaries and
also advances the goals of the National Quality Strategy.
We believe that the development of an ESRD QIP that is successful
in promoting the delivery of high quality healthcare services in
dialysis facilities is paramount. We seek to adopt measures for the
ESRD QIP that promote high-quality, safer, and more efficient care. In
addition to the priorities of the National Quality Strategy, our
measure development and selection activities for the ESRD QIP take into
account other national priorities, such as those established by the
National Priorities Partnership (https://www.qualityforum.org/npp/), HHS
Strategic Plan (https://www.hhs.gov/secretary/about/priorities/priorities.html), the National Strategy for Quality Improvement in
Healthcare (https://www.healthcare.gov/center/reports/quality03212011a.html), and the HHS National Action Plan to Prevent
Healthcare Associated Infections (HAIs) (https://www.hhs.gov/ash/initiatives/hai/esrd.html). To the extent practicable, we have sought
to adopt measures that have been endorsed by a national consensus
organization, recommended by multi-stakeholder organizations, and
developed with the input of facilities, purchasers/payers,
beneficiaries, and other stakeholders.
2. Brief Overview of Proposals
For PY 2014, we adopted measures for the ESRD QIP that fall under
three of the six VBP measure priority domains based on the National
Quality Strategy:
Safety: National Healthcare Safety Network (NHSN) Dialysis
Event reporting;
Patient- and caregiver-centered experience: In-Center
Hemodialysis Consumer Assessment of Healthcare Providers and Systems
(ICH CAHPS) survey reporting; and
Clinical quality of care: (i) Hemoglobin Greater Than 12
g/dL; (ii) Hemodialysis Adequacy (Urea Reduction Ratio (URR)); (iii)
Vascular

[[Page 67472]]

Access Type; (iv) and Mineral Metabolism reporting (76 FR 70228).
For PY 2014, we also proposed to change the requirements for the
Mineral Metabolism reporting measure.
For PY 2015, we proposed to add new measures in the clinical
quality of care domain and to expand the scope of the NHSN Dialysis
Event reporting measure (safety domain) and the Mineral Metabolism
reporting measure (clinical quality of care domain). We believe that
the PY 2015 ESRD QIP should not only promote the health of ESRD
patients, but also uphold the goals of the National Quality Strategy
(NQS). To that end, we proposed to include 11 measures in the PY 2015
ESRD QIP. We also proposed to include these measures and measure topics
in subsequent payment years. The proposed measures would evaluate
facilities on the following topics that fall under the NQS clinical
quality of care measure domain:

For purposes of evaluating anemia management:
[cir] Hemoglobin Greater Than 12 g/dL, a clinical measure.
[cir] Anemia Management, a reporting measure.*
To evaluate dialysis adequacy:
[cir] A clinical Kt/V measure for adult hemodialysis patients.*
[cir] A clinical Kt/V measure for adult peritoneal dialysis
patients.*
[cir] A clinical Kt/V measure for pediatric hemodialysis patients.*
To determine whether patients are treated using the most
beneficial type of vascular access:
[cir] An arteriovenous fistula measure.
[cir] A catheter measure.
To address effective bone mineral metabolism management:
[cir] Hypercalcemia, a clinical measure.*
[cir] Mineral Metabolism, a reporting measure (expansion proposed).
Additionally, we proposed to expand a previously adopted reporting
measure addressing safety:
NHSN Dialysis Event reporting measure.
We also proposed to continue using a previously adopted reporting
measure assessing patient- and caregiver-centered experience:
ICH CAHPS survey reporting measure.

*Indicates that the measure is new to the ESRD QIP.

Although we did not propose to adopt measures that address care
coordination, population/community health, or efficiency and cost of
care, we solicited comments in the proposed rule on potential measures
that would fall into each of these areas. We discussed the following
measures that are under consideration for possible adoption in
subsequent payment years: a 30-Day Hospital Readmission measure to
address care coordination; an access to care measure to address
population/community health; and an efficiency measure. We also
discussed the Standardized Hospitalization Ratio Admissions (SHR)
measure and the Standardized Mortality Ratio (SMR) measure that we are
considering for program adoption in future years. We welcomed, and
continue to welcome, further comments on these and other potential
measures for future payment years.
3. Measures Application Partnership Review
In addition to the considerations discussed above, in selecting
measures for the PY 2015 ESRD QIP, we considered input from the multi-
stakeholder group, the Measures Application Partnership (https://www.qualityforum.org.map/). Section 1890A(a)(1) of the Act, as added by
section 3014(b) of the Affordable Care Act, requires the entity with a
contract under section 1890(a) of the Act, currently NQF, to convene
multi-stakeholder groups to provide input to the Secretary on the
selection of quality and efficiency measures for use in certain
programs. Section 1890A(a)(2) of the Act requires the Secretary, not
later than December 1 of each year, to make available to the public a
list of quality and efficiency measures that are under consideration
for use in certain programs. Section 1890A(a)(3) of the Act requires
the entity with a contract under section 1890(a) of the Act to transmit
the input of the multi-stakeholder groups to the Secretary not later
than February 1 of each year, beginning in 2012. Section 1890A(a)(4) of
the Act requires the Secretary to take into consideration the input of
the multi-stakeholder groups in selecting quality and efficiency
measures. The Measures Application Partnership is the public-private
partnership comprised of multi-stakeholder groups convened by NQF for
the primary purpose of providing input on measures as required by
sections 1890A(a)(1) and (3) of the Act. The Measures Application
Partnership's input on the quality and efficiency measures under
consideration for adoption in CY 2012 was transmitted to the Secretary
on February 1, 2012 and is available at (https://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=69885). As required by
section 1890A(a)(4) of the Act, we considered these recommendations in
selecting quality and efficiency measures for the ESRD QIP.
Four proposed measures for the PY 2015 ESRD QIP (that is, three for
dialysis adequacy and one for hypercalcemia) were made publicly
available in accordance with section 1890A(a)(2) of the Act and were
reviewed by the Measures Application Partnership. The Measures
Application Partnership gave support to two of the proposed measures,
NQF 1454: Proportion of patients with hypercalcemia and NQF
1423: Minimum spKt/V for Pediatric Hemodialysis Patients. The
Measures Application Partnership supported the direction of a proposed
composite measure comprised of two NQF-endorsed measures, NQF
0249: Hemodialysis Adequacy Clinical Performance Measure III:
Hemodialysis Adequacy--HD Adequacy--Minimum Delivered Hemodialysis Dose
and NQF 0318: Peritoneal Dialysis Adequacy Clinical
Performance Measure III--Delivered Dose of Peritoneal Dialysis Above
Minimum. The Measures Application Partnership recommended that the
composite measure comprised of the two NQF dialysis adequacy measures
be tested to ensure feasibility. We took these comments into
consideration when we proposed measures for the PY 2015 ESRD QIP.
4. PY 2014 Mineral Metabolism Measure
In the CY 2012 ESRD PPS final rule, we adopted the Mineral
Metabolism reporting measure for the PY 2014 ESRD QIP which requires
each facility to attest that it monitored serum calcium and serum
phosphorus at least once a month for each Medicare ESRD patient (76 FR
70271). We have since realized, however, that it may be difficult for
some facilities to make this attestation if, for example, a patient is
seen at the beginning of the month, his or her blood is not drawn, and
then he or she is hospitalized or transient for the remainder of the
month. While it is our intention to encourage facilities to put systems
and processes into place to ensure at least monthly serum calcium and
phosphorus monitoring, we believe it is reasonable to give
consideration to situations where the monthly blood draw does not
happen within the dialysis facility given these scenarios. Therefore,
for PY 2014, we proposed to change the Mineral Metabolism reporting
requirement.
We considered proposing to require facilities to report the
required information for less than 100 percent of their patients. There
are circumstances, however, that are beyond a facility's control
wherein it may not be able to

[[Page 67473]]

draw a sample for this patient. Therefore, for purposes of scoring the
measure, we proposed to modify the PY 2014 measure to require that, in
order for a facility to receive 10 points on the PY 2014 Mineral
Metabolism measure, it must attest that it monitored on a monthly basis
the serum calcium and serum phosphorus levels for every Medicare ESRD
patient provided that: (i) The patient is alive for the entirety of the
applicable month; (ii) if the patient is treated in-center, that
patient was treated at that facility at least twice during the claim
month; and (iii) if the patient receives dialysis at home, a facility
must report this information regardless of the number of treatments,
provided that a claim is submitted for that patient. We also proposed
that if a patient is hospitalized or transient during a claim month,
the facility could monitor the serum calcium and serum phosphorus
readings for that patient for the month if a patient has labs drawn by
another provider/facility, those labs are evaluated by an accredited
laboratory (a laboratory that is accredited by, for example, Joint
Commission, College of American Pathologists, AAB (American Association
of Bioanalysts), or State or Federal agency), and the dialysis facility
reviews the serum calcium and serum phosphorus readings. We stated our
belief that these proposals will provide more flexibility for
facilities and will also prevent facilities from drawing blood, even
when not necessary, each time a patient visits for fear that he or she
will fail to come to the facility again during that month. We requested
comment on this proposal.
We also requested comment on our consideration to lower the
attestation to monthly monitoring of 98 percent of Medicare ESRD
patients. We chose 98 percent in order to encourage improvement, and to
ensure that we do not undermine the current level of high-reporting
(based on the CROWNWeb pilot data). We recognize that 100 percent might
not be appropriate due to some individual cases that may not fit
specified criteria.
Additionally, for purposes of clarification, we noted that the PY
2014 attestations for both the Mineral Metabolism and ICH CAHPS
measures will become available in CROWNWeb in December 2012. As noted
in the CY 2012 ESRD PPS final rule, these attestations must be made
before January 31, 2013 (76 FR 70269, 70271).
We received the following comments on these proposals:
Comment: Many commenters were appreciative of our willingness to
revisit our requirements for the PY 2014 Mineral Metabolism
attestation. Some commenters suggested that we modify the exclusion to
include the following patients: (i) Beneficiaries who are regularly
treated at the facility and who fit into one of these categories: (a)
Beneficiaries who die within the applicable month; (b) beneficiaries
that receive fewer than 7 treatments in a month; and (c) beneficiaries
receiving home dialysis therapy who miss their in-center appointments
when there is a documented, good faith effort to have them participate
in such a visit during the applicable month; (ii) transient dialysis
patients; (iii) pediatric patients (unless the measure is specific to
this population); and (iv) kidney transplant recipients with a
functioning graft. Commenters stated that these exclusions are
consistent with our own measures, CROWNWeb, and the URR reporting
specifications; additionally, these exclusions seek to hold facilities
accountable only for those beneficiaries to whom they regularly give
care and for whose care they can affect. One commenter believed that
home dialysis patients should only be included if they attend their
monthly visit. One commenter requested that we use NQF inclusion
criteria for purposes of defining the exclusions of the Mineral
Metabolism reporting measure.
Response: Upon further review, we agree with commenters who believe
that the exclusions should be modified. We recognize that treating a
patient twice may not provide enough time to effectuate quality patient
care. We agree with the commenters who suggested that an in-center
hemodialysis patient should be excluded if treated by a facility fewer
than seven times during the month, regardless of whether the patient is
officially admitted to that facility. With seven treatments, we believe
that a facility should have had adequate opportunities to draw blood
necessary to measure serum calcium and phosphorus levels. We also
believe that the threshold of seven will discourage unnecessary testing
of in-center hemodialysis patients by facilities because they will know
that, since in-center patients are typically treated three times per
week, a patient must have been treated by the facility for at least two
weeks to be included; thus, the facility need not feel pressure to draw
blood for every in-center patient during the first few visits of the
month. Based on these considerations, we will not finalize our proposal
to exclude only in-center patients who have been treated fewer than two
times by the facility during the claim month. Instead, we will exclude
any patient who is treated by the facility fewer than seven times
during the reporting month.
We do not believe that it is necessary to specifically exclude
transient patients from this measure because, as noted, any patient
that is treated by the facility at least seven times during the
applicable reporting month is present at the facility for enough time
that the facility should be held accountable for that patient.
Likewise, for the same reasons mentioned above, we do not believe we
need to separately exclude patients who are deceased at the end of the
reporting month. Provided that the patient is treated by the facility
at least seven times during that month, the facility should be able to
draw blood necessary to monitor serum calcium and serum phosphorus
levels even if the patient is deceased at the end of the month.
We continue to believe that facilities should be required to attest
that they monitored the serum calcium and phosphorus levels of home
dialysis patients irrespective of whether those patients attend a
monthly appointment. We believe that it is incumbent upon a facility to
make home dialysis patients aware that they must attend monthly
appointments to be properly treated. In addition, since the mechanisms
that cause cardiovascular and bone disease do not differ between home
and in-center hemodialysis patients, we believe that the inclusion of
home dialysis patients in the Mineral Metabolism reporting measure is
appropriate. Therefore we will finalize our proposal that we will
include any home hemodialysis patient for which a facility submits a
claim with respect to the reporting month in this measure.
We also believe it is important to include transplant patients
until they are officially discharged from a facility; regular
monitoring can help ensure that a transplant remains effective and that
the facility is continuing to provide the best care possible.
We believe it is important to monitor serum calcium and serum
phosphorus levels in adult and pediatric patients alike because
improper bone mineral metabolism management can lead to serious,
negative outcomes, including death, in both populations. Although we
are aware that specific target values for calcium and phosphorus have
not been set for the pediatric population, we still believe that this
measure will lead to better observation of mineral metabolism in these
patients if one or both of these values are unusually high or low.
Additionally, we believe that the inclusion of pediatric patients in
this measure is consistent with current guidelines on the frequency of
mineral

[[Page 67474]]

metabolism testing as reported in KDIGO guidelines chapter 3
``Diagnosis of CKD-MBD: biochemical abnormalities.'' Thus, we believe
that this measure is appropriate for both adult and pediatric patients.
Finally, we do not believe that we must use NQF inclusion criteria
for this measure. Although we seek to align our measures and our
selection criteria with NQF as much as possible, as we stated in the CY
2011 ESRD PPS Final Rule, we believe it is appropriate, at this time to
employ a measure that has not been NQF-endorsed (76 FR 70271 through
72).
For the reasons stated above, we are finalizing that to earn 10
points on the Mineral Metabolism reporting measure, facilities must
attest in CROWNWeb that they have monitored the serum calcium and serum
phosphorus levels on a monthly basis for (i) in-center Medicare
patients who have been treated at least seven times by the facility;
and (ii) home hemodialysis Medicare patients for whom the facility
submits a claim.
Comment: Several commenters encouraged us to not adopt a percentage
reporting threshold because it does not distinguish between
beneficiaries legitimately excluded and those that were merely missed.
Other commenters requested that we use both exclusions and a threshold,
recognizing that there are some circumstances preventing blood draws
that facilities cannot control; one commenter suggested a threshold of
90 percent or an allowance of two patients to ensure that small
facilities are not disproportionally affected. Another commenter
recommended that we use a threshold of 95 percent. Another commenter
stated that requiring 98 percent reporting may make it difficult for
patients to travel because dialysis facilities may encourage them
otherwise to ensure compliance with the measure.
Response: We agree with the commenters who argued that, even with
exclusions, there are circumstances in which facilities cannot attest
to monitoring the serum calcium and serum phosphorus levels for every
patient at least once per month. For example, a facility may wait until
later to draw blood from a patient because it believes that patient
will be treated by the facility for the entirety of the month, but
learns that the patient has been hospitalized unexpectedly for all or
part of the applicable month. Therefore, we believe that we should not
require an attestation of 100 percent monitoring. Based on data from
the CROWNWeb pilot, we believe that facilities report serum calcium and
serum phosphorus levels for approximately 96 percent of their patients.
Therefore, we will finalize that facilities must attest to monitoring
calcium and phosphorus on a monthly basis for at least 96 percent, in
total, of (i) in-center Medicare patients who have been treated at
least seven times by the facility; and (ii) home hemodialysis Medicare
patients for whom the facility submits a claim.\1\
---------------------------------------------------------------------------

\1\ We note that the reporting requirements are somewhat
different for CROWNWeb. All patients must be reported for CROWNWeb
purposes, even if those patients would not be included in the
measure for purposes of the ESRD QIP.
---------------------------------------------------------------------------

We are concerned that small facilities may be disproportionately
impacted by this 96 percent reporting threshold because, for example, a
facility with 10 patients could miss monitoring for only one patient
and fail to meet the threshold. We have previously stated that, to
disincentivize cherry picking, we seek to ensure that one patient does
not skew a facility's score. We do, however, seek to ensure the highest
quality of care regardless of the facility size. Taking these two
competing interests into consideration, we believe that it is
appropriate to allow facilities that treat less than 11 Medicare
patients during the performance period to attest that they have met the
requirements for this measure if they monitored the serum calcium and
serum phosphorus levels on a monthly basis for at least all but one of
its (i) in-center Medicare patients who have been treated at least
seven times by the facility; and (ii) home hemodialysis Medicare
patients for whom the facility submits a claim. We believe 11 is the
appropriate cut-off because, as we explain below, a case minimum of 11
allows us to include as many facilities as possible while also taking
into account privacy and reliability. We believe that one is the
appropriate number because, as noted above, although we seek to ensure
the highest quality of care regardless of facility size, we also seek
to mitigate cherry-picking by ensuring that one patient does not skew a
facility's score.
Comment: Many commenters noted that it is impractical for
facilities to obtain labs from other providers because other providers
are not required to measure these data, do not share data with dialysis
facilities, and, even if facilities could obtain these data, they could
not be sure that the labs were consistent or reported under the same
standards.
Response: We recognize that it may be difficult for facilities to
coordinate with hospitals and other care providers in order to obtain
lab values. Accordingly, we are not mandating facilities to do so. In
the proposed rule (77 FR 40969), we stated that facilities may obtain
lab values from other providers. This proposal was specifically
designed to afford facilities more flexibility in acquiring serum
calcium and phosphorus values. Facilities are highly encouraged to
coordinate with other providers, but this measure does not mandate them
to do so. We believe that the commenters' concerns about inconsistent
lab data are mitigated by the requirement that the lab must be
accredited. Facilities can use these values for the purpose of
monitoring the serum calcium and phosphorus levels of their patients;
additionally, collecting these data may encourage providers to engage
one another about the patient's conditions and care.
Comment: Several commenters asked for clarification on the
following points: (1) Are only Medicare patients included in the
denominator, (2) are Medicare Railroad and Medicare Advantage (MA)
patients included in the denominator, (3) could CMS give an example of
an accurate application of the exclusions and/or threshold, (4) if CMS
institutes a threshold, would it be rounded, (5) if a patient is
excluded from the measure for attestation purposes, must his or her
values still be reported in CROWNWeb, and (6) how does CMS plan on
counting the number of treatments for home patients.
Response: We will address these questions in turn.
First, a facility treating at least 11 Medicare patients during the
performance period is required to monitor serum calcium and serum
phosphorus on a monthly basis for all (i) in-center Medicare patients
who have been treated at least seven times by the facility; and (ii)
home hemodialysis Medicare patients for whom the facility submits a
claim. These patients include Medicare Advantage and Medicare Railroad
beneficiaries.
As an example of the application of the exclusions and threshold,
assume the following: (i) A facility treats 30 Medicare patients in
month X; (ii) patient A is an in-center hemodialysis patient who was
treated by the facility seven times during the first two weeks of month
X, but the facility failed to obtain a blood draw during this period,
and the patient is in the hospital for the next two weeks of month X
but the facility monitors the patient's serum phosphorus and calcium by
obtaining these values from the hospital; (iii) patient B and C are
both in-center hemodialysis patients who were treated by the facility
at least seven times during month X, but the facility fails to monitor
the serum calcium and serum phosphorus of these patients during

[[Page 67475]]

month X; (iv) patient D was visiting the facility and was treated by
the facility only 4 times during month X; and (v) the facility monitors
the serum calcium and serum phosphorus on a monthly basis for every
other (i) in-center Medicare patient who had been treated at least
seven times by the facility during month X; and (ii) home hemodialysis
Medicare patient for whom the facility submitted a claim during month
X. The facility is considered to have monitored the serum calcium and
serum phosphorus during month X for every patient except B and C
because patient D was only treated four times during the month and the
facility obtained the values for patient A from another provider. The
facility's monitoring rate for month X is 27/29, or 93.1 percent
(rounded to 93 percent). A facility with 30 patients must attest that
it monitored on a monthly basis the serum calcium and serum phosphorus
for all (i) in-center Medicare patients who have been treated at least
seven times by the facility; and (ii) home hemodialysis Medicare
patients for whom the facility submits a claim. Therefore, this
facility could not attest that it successfully monitored the serum
calcium and serum phosphorus in total for at least 96 percent of its
(i) in-center Medicare patients who had been treated at least 7 times
by the facility; and (ii) home hemodialysis Medicare patients for whom
the facility submitted a claim.\2\ For purposes of this measure,
facilities may round up to a whole percentage point when calculating
whether they met the 96 percent threshold.
---------------------------------------------------------------------------

\2\ Note that, for ease, we provided an example for only one
month. However, to make the attestation, a facility must monitor for
the duration of the performance period the serum calcium and serum
phosphorus levels on a monthly basis for all (i) in-center Medicare
patients who have been treated at least seven times by the facility;
and (ii) home hemodialysis Medicare patients for whom the facility
submits a claim.
---------------------------------------------------------------------------

Finally, for the reasons discussed above, facilities will be
required to monitor the serum calcium and serum phosphorus at least
once per month for every home hemodialysis patient for whom it submits
a claim regardless of the number of treatments during that month.
Comment: Many commenters requested that we revisit various aspects
of the PY 2014 ESRD QIP.
Response: The PY 2014 ESRD QIP was finalized on November 1, 2011
(76 FR 70228). Although we requested comment regarding the PY 2014
Mineral Metabolism reporting measure in the proposed rule, we did not
propose to reconsider any other elements of the PY 2014 program.
Therefore, we consider these comments to be outside the scope of the
proposed rule. We refer readers to the 2012 ESRD PPS final rule for
more information on the finalized PY 2014 ESRD QIP (76 FR 70228).
For the reasons stated above, we finalize that a facility treating
at least 11 Medicare patients during the performance period can attest
to meeting the requirements of the PY 2014 Mineral Metabolism reporting
measure if it monitors on a monthly basis the serum calcium and serum
phosphorus for at least 96 percent in total of all (i) in-center
Medicare patients who have been treated at least seven times by the
facility; and (ii) home hemodialysis Medicare patients for whom the
facility submits a claim. We also finalize that a facility treating
fewer than 11 Medicare patients during the performance period can
attest to meeting the requirements of the PY 2014 Mineral Metabolism
reporting measure if it monitors on a monthly basis the serum calcium
and serum phosphorus levels for at least all but one of its (i) in-
center Medicare patients who have been treated at least seven times by
the facility; and (ii) home hemodialysis Medicare patients for whom the
facility submits a claim.

D. Proposed Measures for the PY 2015 ESRD QIP and Subsequent PYs of the
ESRD QIP

Similar to our other quality reporting and pay for performance
programs, we proposed that once a quality measure is selected and
finalized for the ESRD QIP through rulemaking, the measure would
continue to remain part of the program for all future years, unless we
remove or replace it through rulemaking or notification (if the measure
raises potential safety concerns). We believe that this will streamline
the rulemaking process, provide continuity of quality measurement, and
allow ESRD facilities to plan both quality reporting and quality
improvement activities. In general, we anticipate considering quality
measures for removal or replacement if: (1) Measure performance among
the majority of ESRD facilities is so high and unvarying that
meaningful distinctions in improvements or performance can no longer be
made; (2) performance or improvement on a measure does not result in
better or the intended patient outcomes; (3) a measure no longer aligns
with current clinical guidelines or practice; (4) a more broadly
applicable (across settings, populations, or conditions) measure for
the topic becomes available; (5) a measure that is more proximal in
time to desired patient outcomes for the particular topic becomes
available; (6) a measure that is more strongly associated with desired
patient outcomes for the particular topic becomes available; or (7)
collection or public reporting of a measure leads to negative
unintended consequences. If there is reason to believe that a measure
raises potential safety concerns, we proposed that we would take
immediate action to remove the measure from the ESRD QIP and not wait
for the annual rulemaking cycle. We proposed that such measures would
be promptly removed from the measure set, and we would confirm the
removal in the next ESRD QIP rulemaking cycle. ESRD facilities and the
public would be immediately notified of our decision to remove a
measure that raises potential safety concerns through the usual ESRD
program communication channels, including memos, email notification,
and web postings.
Many of the quality measures used in different Medicare and
Medicaid reporting programs are endorsed by NQF. As part of its regular
maintenance process for endorsed performance measures, the NQF requires
measure stewards to submit annual measure maintenance updates and
undergo maintenance of endorsement review every 3 years. Under the
measure maintenance process, the measure steward (owner/developer) is
responsible for updating and maintaining the currency and relevance of
the measure and confirming specification changes to NQF on an annual
basis. NQF solicits information from measure stewards for annual
reviews in order to review measures for continued endorsement in a
specific 3-year cycle. Non-NQF-endorsed measures may also go through
similar maintenance by their measure stewards; such maintenance
includes reviewing and updating measures.
Through the measure maintenance process, measures are sometimes
updated to incorporate changes that we believe do not substantially
change the nature of the measures. Examples could be changes to
exclusions to the patient population, changes to definitions, or
extension of the measure endorsement to apply to other settings. We
believe these types of maintenance changes are distinct from more
substantive changes to measures that result in what are considered new
or different measures, and that they do not trigger the same agency
obligations under the Administrative Procedure Act.
We proposed that if a measure that we have adopted for the ESRD QIP
is updated in a manner that we consider to not substantially change the
nature of the measure, we would use a

[[Page 67476]]

subregulatory process to incorporate those updates to the measure
specifications that apply to the program. Specifically, we would revise
our previously adopted measure specifications to clearly identify the
updates made by the NQF or other measure steward and either post the
updates directly on the CMS Web site or provide links to where the
updates can be found. We would also provide sufficient lead time for
facilities to implement the changes where changes to the data
collection systems would be necessary.
We proposed to continue to use the rulemaking process to adopt
changes to a measure that we consider to substantially change the
nature of the measure. We stated our belief that this proposal
adequately balances our need to incorporate updates to ESRD QIP
measures in the most expeditious manner possible, while preserving the
public's ability to comment on updates that so fundamentally change an
endorsed measure that it is no longer the same measure that we
originally adopted. We invited public comment on this proposal and on
our proposal that once a quality measure is adopted, it is retained for
use in the subsequent ESRD QIP payment years unless we remove or
replace it as discussed above.
The comments we received on these proposals and our responses are
set forth below.
Comment: Commenters requested clarification regarding the removal
or replacement criteria for measures, specifically the criteria listed
in (2) and (5) and the process for removal or replacement. Commenters
suggested that CMS provide illustrative scenarios and consider
convening an emergency technical expert panel (TEP) to identify and
analyze removal or replacement issues. Commenters also encouraged us to
add two criteria for removal or replacement: (i) Negative unintended
consequences to the Medicare ESRD system as a whole; and (ii) if data
for a measure cannot be collected reliably and accurately or if
collecting the data places an undue burden on facilities. One commenter
asked that CMS confirm that we will use rulemaking to retire or remove
measures from the ESRD QIP. Finally, the commenters stated that some of
the measures proposed meet the replacement and removal criteria and
suggested that CMS implement only new measures that meet the proposed
criteria.
Response: We thank those commenters who provided suggestions
regarding the criteria and process for measure replacement or removal
from the ESRD QIP. We concur with those commenters who argue in favor
of implementing measures that meet the proposed criteria. We do not
believe that an emergency technical expert panel (TEP) is an
appropriate part of the removal process, as we typically convene TEPs
in order to obtain expert stakeholder input as part of the measure
development process. These TEPs are convened as needed during the
measure maintenance cycle and can provide any necessary comment
regarding the clinical appropriateness of implemented measures.
Emergency TEPs would also be difficult and expensive to employ quickly,
such as in response to public comments in support of measure removal.
We will consider the inclusion of additional removal criteria such as
those suggested by commenters through future rulemaking, but will
finalize the proposed criteria to remain consistent with similar
criteria implemented for other quality reporting and pay-for-
performance programs, such as the Hospital Inpatient Quality Reporting
Program and Hospital Outpatient Quality Reporting Program. The second
criterion we proposed, the availability of alternative measures with a
stronger relationship to patient outcomes, is intended to allow us to
implement new measures in the ESRD QIP that have a stronger association
with relevant health outcomes. Such measures may better assess the
quality of care provided by dialysis facilities and in such cases, we
believe it would be appropriate to reflect this in the ESRD QIP. Our
use of the fifth criterion is consistent with this principal, and would
be applied in those circumstances where we believe existing measures
are not as temporally proximal to health outcomes of interest as are
newly available measures. We believe that in such cases, it would be
appropriate to remove these measures, rather than simply increase the
volume of quality measures for which dialysis facilities are
responsible under the ESRD QIP.
Except for measures that raise potential safety concerns, any
decisions to remove or replace measures under the ESRD QIP will be made
through the rulemaking process. Each year, we will assess whether any
measures should be removed or replaced under the ESRD QIP, and we will
make appropriate proposals during the rulemaking cycle. Stakeholders
will then have the opportunity to provide feedback regarding the
proposed removal or replacement of these measures, and the rationale
behind our proposals. Any measure removal will then be finalized as
part of the ESRD PPS final rule.
We take the suggestion that we implement only new measures that
meet the proposed criteria to mean that we should implement only
measures that do not meet the proposed removal criteria. We recognize
the potential value in taking these criteria into consideration for
measure implementation, and believe we do so to the extent practicable.
However, we believe that we must take into consideration additional
criteria, such as statutory requirements governing the ESRD QIP and
emergent public health and safety issues, when determining what
measures to propose and finalize for the program. In some cases, it is
possible that these issues will take precedence over the criteria
proposed for measure removal.
Comment: Several commenters urged us to adopt measure
specifications and data definitions that are clear, modifying this
information through rulemaking alone. Commenters argued that it is only
appropriate to use sub-regulatory processes to aid facilities in
interpreting the specifications and definitions, and suggested that we
develop a regular and transparent process for collecting and responding
to these questions, ideally on a quarterly basis with a schedule set
forth in rules.
Response: We thank those commenters who provided feedback to our
proposal to update NQF-endorsed measures using a subregulatory process.
We concur that measure specifications and data definitions should be
clear. However, we believe that using a subregulatory process to make
certain types of updates to measures is appropriate. The NQF regularly
maintains its endorsed measures through annual and triennial reviews,
which may result in the NQF making updates to the measures. We believe
that it is important to have in place a subregulatory process to
incorporate non-substantive updates made by the NQF to the measure
specifications we have adopted for the ESRD QIP so that these measures
remain up-to-date and clinically relevant. We also recognize that some
changes the NQF might make to its endorsed measures are substantive in
nature and might not be appropriate for adoption using a subregulatory
process. Therefore, we are finalizing a policy under which we will use
a subregulatory process to make non-substantive updates to NQF-endorsed
measures used for the ESRD QIP. With respect to what constitutes
substantive versus non-substantive changes, we expect to make this
determination on a case-by-case basis. Examples of non-substantive
changes might include updated diagnosis or procedure codes, medication
updates for categories of medications, broadening of age ranges,

[[Page 67477]]

and exclusions for a measure (such as the addition of a hospice
exclusion to the 30-day mortality measures used in the Hospital IQR
Program). We believe that non-substantive changes may include updates
to NQF-endorsed measures based upon changes to guidelines upon which
the measures are based.
We will continue to use rulemaking to adopt substantive updates
made by the NQF to the endorsed measures we have adopted for the ESRD
QIP. Examples of changes that we might consider to be substantive would
be those in which the changes are so significant that the measure is no
longer the same measure, or when a standard of performance assessed by
a measure becomes more stringent (for example, changes in the
acceptable timing of medication, procedure/process, or test
administration). Another example of a substantive change would be where
the NQF has extended its endorsement of a previously endorsed measure
to a new setting, such as extending a measure from the inpatient
setting to hospice. These policies regarding what is considered
substantive versus non-substantive would apply to all ESRD QIP
measures. We also note that the NQF process incorporates an opportunity
for public comment and engagement in the measure maintenance process.
We aim to be as transparent as possible in implementing the ESRD
QIP. Occasionally, questions arise related to measures that have been
adopted. We plan to publish these questions and answers on a publicly
available Web site. We will consider standardizing a timeline for
submission of and answers to these questions as the program evolves.
For the reasons discussed above, we are finalizing our proposal
regarding continued use of measures in the ESRD QIP unless we remove or
replace them. We are also adopting a policy under which we will use a
subregulatory process to make non-substantive updates to measures, and
will use the rulemaking process to make substantive updates to
measures.
1. PY 2014 Measures Continuing for PY 2015 and Subsequent PYs
We previously finalized six measures including one measure with two
measure sub-components (see Table 2 below) for the PY 2014 ESRD QIP (76
FR 70228). We proposed to continue to use five of these measures for
the PY 2015 ESRD QIP; however, we also proposed to augment two (NHSN
Dialysis Event reporting and Mineral Metabolism reporting) of these
five measures used in PY 2014 to continue to promote improvement in the
PY 2015 ESRD QIP. We proposed to remove the PY 2014 URR Dialysis
Adequacy measure. In addition, we proposed to add three new measures of
dialysis adequacy, an anemia management reporting measure, and a
hypercalcemia clinical measure (Table 3).

Table 2--Measures Adopted for the PY 2014 ESRD QIP
------------------------------------------------------------------------

------------------------------------------------------------------------
NQF No. Measure title
------------------------------------------------------------------------
N/A.......................... Percent of Patients with Hemoglobin
Greater Than 12 g/dL*
------------------------------------------------------------------------
N/A.......................... URR Hemodialysis Adequacy
------------------------------------------------------------------------
N/A for composite measure.... Vascular Access Hemodialysis Vascular
Type. Access-Maximizing
Placement of Arterial
Venous Fistula (AVF)*
(NQF0257).
Hemodialysis Vascular
Access-Minimizing use
of Catheters as Chronic
Dialysis Access*
(NQF0256).
------------------------------------------------------------------------
N/A\1\....................... NHSN Dialysis Event Reporting*\+\
Enroll and report 3 months of dialysis
event data.
------------------------------------------------------------------------
N/A\2\....................... In-Center Hemodialysis
Consumer Assessment of
Healthcare Providers
and Systems (ICH CAHPS)
Survey Reporting*
Facilities are required
to attest that they
administered the ICH
CAHPS survey via a
third party during the
performance period.
------------------------------------------------------------------------
N/A\3\....................... Mineral Metabolism
Reporting
Facilities are required
to attest that they
have monitored each of
their Medicare
patient's phosphorus
and calcium levels
monthly throughout the
performance period.*\+\
------------------------------------------------------------------------
\1\ We note that an NQF-endorsed bloodstream infection measure
(NQF1460) exists, and data for this measure is collected as
part of dialysis event reporting in NHSN. It is our intention to use
this measure in future years of the ESRD QIP. We believe that a
reporting measure is a necessary step in reaching our goal to use
NQF1460.
\2\ We note that a related measure utilizing the results of this survey
has been NQF-endorsed (0258), and it is our intention to use
this measure in future years of the ESRD QIP. We believe that a
reporting measure is a necessary step in reaching our goal to use
NQF0258.
\3\ We note that the NQF has previously endorsed phosphorus and calcium
monitoring measures (0261 and 0255) upon which this
measure is based. NQF has since withdrawn its endorsement of the
calcium measure.
* Indicates a measure we are proposing for PY 2015 and future years of
the ESRD QIP.
\+\ Indicates a measure we are proposing to augment for PY 2015 and
future years of the ESRD QIP.

Table 3--New Measures Proposed for the ESRD QIP PY 2015 and Future Years
of the Program
------------------------------------------------------------------------
NQF No. Measure title
------------------------------------------------------------------------
N/A.................... Anemia Management Reporting.
0249................... Hemodialysis Adequacy Clinical Performance
Measure III: Hemodialysis Adequacy--HD
Adequacy--Minimum Delivered Hemodialysis Dose.
0318................... Peritoneal Dialysis Adequacy Clinical
Performance Measure III--Delivered Dose of
Peritoneal Dialysis Above Minimum.
1423................... Minimum spKt/V for Pediatric Hemodialysis
Patients.
1454................... Proportion of Patients with Hypercalcemia.
------------------------------------------------------------------------

[[Page 67478]]

We proposed to continue using two measures and one measure topic
adopted in PY 2014 for the PY 2015 ESRD QIP and subsequent payment
years of the program. For the reasons stated in the CY 2012 ESRD PPS
final rule (76 FR 70262, 70264 through 65, 70269), we proposed to
continue using: (i) The Hemoglobin Greater than 12 g/dL measure; (ii)
the Vascular Access Type measure topic comprised of two measures, (a)
the Hemodialysis Vascular Access-Maximizing Placement of AVF (NQF
0257) measure, and (b) the Hemodialysis Vascular Access-
Minimizing use of Catheters as Chronic Dialysis Access (NQF
0256) measure; and (iii) the ICH CAHPS survey reporting
measure. The technical specifications for these measures can be found
at https://www.dialysisreports.org/pdf/esrd/public-measures/AnemiaManagement-HGB-2015-NPRM.pdf; https://www.dialysisreports.org/pdf/esrd/public-measures/VascularAccess-Catheter-2015-NPRM.pdf; https://www.dialysisreports.org/pdf/esrd/public-measures/VascularAccess-Fistula-2015-NPRM.pdf; and https://www.dialysisreports.org/pdf/esrd/public-measures/ICHCAHPS-2015-NPRM.pdf. We requested comment on the
proposed continuation of these measures.
The comments we received on these proposals and our responses are
set forth below. We will separately discuss each of the measures and
the comments received on these measures.
a. Hemoglobin Greater Than 12 g/dL
Comment: Many commenters strongly supported the continuation of
this measure, specifically because proper anemia management can prevent
patients from developing serious, life threatening conditions. Other
commenters, however, asked that we consider removing the measure or
reducing its weight since high hemoglobin and ESA overuse no longer
pose a realistic concern because of the economic incentives of the ESRD
PPS payment bundle and the new clinical evidence and FDA-approved label
for ESAs (https://www.fda.gov/Drugs/DrugSafety/ucm259639.htm). One
commenter noted that the TREAT study and its own research indicate that
large ESA doses, rather than high hemoglobin levels, result in adverse
effects. Finally, one commenter believes that the Hemoglobin Greater
Than 12 g/dL measure leads to confusion because physicians begin
increasing ESA dosage only after hemoglobin levels have fallen far
below 12 g/dL, resulting in an increase in patients with low hemoglobin
levels. The same commenter noted that it is difficult to incentivize
clinics to provide proper ESA dosage with the ESRD PPS payment bundle
and the Hemoglobin Greater than 12 g/dL measure combined. Finally, one
commenter urged us to individualize anemia management measures.
Response: We appreciate feedback relating to the use of the
Hemoglobin Greater Than 12 g/dL measure in the ESRD QIP. We recognize
that changes in the incentive structure for ESA therapy may have
consequences for ESA utilization. We feel, however, that because of the
negative clinical outcomes that can result from high hemoglobin levels
in the ESRD population, this measure is still important in ensuring
that facilities provide quality care.
We also appreciate the need to consider dosage and clinical
practice when ascertaining the potential adverse effects of ESA
therapy. We have begun to develop additional anemia management measures
that account for ESA dose. These measures are focused on utilization of
ESAs and transfusion avoidance to further incentivize proper care. We
intend to propose to adopt one or more of these measures for the ESRD
QIP in future rulemaking.
Finally, we agree that it is important to individualize care for
each beneficiary. We believe that the Hemoglobin Greater than 12 g/dL
measure both allows facilities discretion to properly manage hemoglobin
levels in each patient and prevents adverse patient outcomes associated
with hemoglobin levels that are too high. However, we recognize that
greater individualization may be possible and are currently working to
develop additional anemia management measures that will enhance this
aspect of the ESRD QIP.
Comment: Several commenters supported the measure, generally, but
asked us to make refinements. One commenter suggested that we measure
hemoglobin on a three or 6-month rolling basis rather than monthly
because monthly measurement does not provide a comprehensive assessment
of the care patients are receiving; studies show that although
hemoglobin levels can fluctuate greatly within short periods of time,
the mean hemoglobin level can remain in the measure target range.
Another commenter stated that, as the measure is currently conceived,
facilities cannot act on its results. Because it takes time for
hemoglobin levels to change, one commenter recommended excluding
patients who have been on ESA therapy for one month or less and
patients whose ESA therapy was promptly discontinued once the facility
became aware that their hemoglobin levels were over 12 g/dL. Finally,
one commenter noted that hemoglobin levels at high altitude facilities
are more likely to be greater than 12 g/dL.
Response: We thank the commenters who made suggestions regarding
the refinement of the Hemoglobin Greater Than 12 g/dL measure.
Addressing the concern commenters raised with the high degree of
variability in hemoglobin from month to month, the measure rate is
calculated using the average hemoglobin of a patient over 4-12 months.
For example, if a patient is treated for 4 months, then we use the
average of the 4-month period to calculate the measure rate. If a
patient is treated for 5 months, we use the average from that 5-month
period and so on. Relevant to concerns raised about the exclusion of
patients who have just begun ESA therapy, the measure currently
excludes new patients (less than 90 days since ESRD onset), and
excludes claims for which there is no evidence of ESA use. We believe
these exclusions address the commenters' concerns. Regarding the
comment that hemoglobin levels at high altitude facilities are more
likely to reach the measure threshold, we do not currently employ risk
adjustment for the measure for this or other environmental factors that
could conceivably have similar impacts. However, we plan to conduct
monitoring and surveillance of our quality measures for issues such as
geographical variation.
Comment: One commenter argued that using patients' yearly averages
for measures fails to test the actionability of the measures because it
is difficult to identify areas of improvement until the end of the
year. Instead, the commenter suggests ``per-facility averaging,''--
averaging of end-of-month hemoglobin results for each facility's
patients, each month, then averaging up to 12 of those facility monthly
averages, which this commenter argued allows facilities to know their
year-to-date numerators and denominators, fostering ongoing quality
incentive and process improvement.
Response: We appreciate the commenter's suggestion regarding per-
facility averaging and all feedback to improve the usefulness of our
quality measures to facilities. However, we believe that averaging
hemoglobin over multiple patients in a facility would be inconsistent
with medical guidance, which deals with patient specific situations. We
believe that facilities should strive to provide the best care to each
patient treated by the facility.
Comment: One commenter requested confirmation that patients who are
not

[[Page 67479]]

on ESA therapy are not included in the Hemoglobin Greater than 12 g/dL
measure.
Response: The measure rate is calculated using claims that include
a hemoglobin level and ESA dosing information.
Comment: Several commenters requested that we include a measure in
the ESRD QIP that establishes a floor for hemoglobin, specifically
noting that, because of the bundle, there may be a perceived financial
incentive to underutilize ESAs. They argued that studies have shown
that as hemoglobin drops below 10, mortality and hospitalization
increase, and that hemoglobin levels affect a patient's quality of life
(both empirically and anecdotally). Some commenters stated that we
should reinstate the Hemoglobin Greater than 10 g/dL measure that we
used in the PY 2012 ESRD QIP, arguing that the measure is reliable and
is consistent with the FDA-approved labeling which recognizes the
importance of transfusion avoidance and recommends that initiation of
ESA therapy be considered when the hemoglobin level falls below 10 g/
dL. One commenter argued that patients should be allowed to make
decisions about their quality of life and safety, even if that means
keeping the hemoglobin level higher than recommended. Other commenters
noted that patients with hemoglobin less than 10 g/dL are increasing,
as are the rate of transfusions, and increased transfusions can
decrease the chances of a successful transplant; in turn, failed
transfusions can increase the cost of care since patients with
transplants cost less than those on dialysis. One commenter stated that
we should specifically consider reinstituting a hemoglobin floor if the
United States Renal Data Service information shows that transfusion
rates have risen significantly. Other commenters suggested that even if
we do not adopt a measure for low hemoglobin, we report hemoglobin
levels, transfusion rates, and ESA dosage on DFC and include the
Hemoglobin Less than 10 g/dL measure on DFC. Finally, other commenters
urged us to continue to monitor and support metrics such as
transfusions, quality of life, reactivity to antibodies preventing
transfusions, and underutilization of ESAs.
Response: We thank the commenters for bringing to us their concerns
about the ESRD PPS payment bundle potentially increasing the risk for
underutilization of ESA therapy. As noted in the CY 2012 ESRD PPS final
rule (76 FR 70257), we could not at the time identify a specific
hemoglobin lower bound level that has been proven safe for all patients
treated with ESAs, and the state of evidence supporting such a lower
bound remains weak. For these reasons, we believe that the rationale
for removing the Hemoglobin Less Than 10 g/dL measure from the ESRD QIP
measure set remains valid. However, we recognize that the potential for
ESA underutilization is an important issue. As noted in the CY 2012
ESRD PPS final rule (76 FR 70257), we will continue to monitor the
Medicare ESRD population for evidence of underutilization of ESAs, a
rise in blood transfusions, and the replacement of ESA therapy with
transfusions. Although we are no longer including the Hemoglobin Less
than 10 g/dL measure in the ESRD QIP (and will no longer be publicly
reporting it on DFC beginning January 2013), the results will be
available via a downloadable file for facilities to provide for
continued monitoring of the measure. Finally, we continue to work with
stakeholders through a consensus-based measure development process to
produce measures capable of addressing ESA underutilization and blood
transfusions, while remaining consistent with the existing relevant
guidelines and evidence base.
We also appreciate comments encouraging us to move toward
implementing quality of life and other patient-centered measures that
address anemia management. These measurement domains are important to
us and we plan to develop appropriate measures to be implemented in the
ESRD QIP during future rulemaking.
For the reasons stated above, we will continue to use the
Hemoglobin Greater than 12 g/dL measure for PY 2015 and future years of
the ESRD QIP. The technical specifications for this finalized measure
can be found at https://www.dialysisreports.org/pdf/esrd/public-measures/AnemiaManagement-HGB-2015-FR.pdf
b. Vascular Access Type (VAT) Measure Topic
Comment: Many commenters strongly supported our continued inclusion
of the VAT measure topic in the PY 2015 ESRD QIP. Many commenters,
however, also expressed concern that the composite measure over-
emphasizes fistulae, underemphasizes grafts, and, therefore, promotes
inappropriate care in some cases. Commenters noted that fistulae are
not suitable for some patients, fistulae take time to mature, and
grafts are sometimes the most clinically appropriate. Several
commenters asked us to decrease the emphasis on fistulae by developing
a graft measure and, in the meantime, weight the catheter measure at
\2/3\ of the VAT measure topic and the fistula measure at \1/3\ of the
VAT measure topic. Other commenters urged us to take a ``fistula first,
catheter last'' approach that would award some points for patients with
grafts. Commenters were also concerned that the fistula standards are
too stringent and could cause unintended consequences such as ``cherry-
picking'' patients who are not eligible for a fistula. Commenters
suggested that we exclude or allow doctors to exclude certain patients
from the measure's denominator providing for more individualized care,
noting that studies show that facilities are unlikely to ``game'' such
an exception.
Response: As discussed in the CY 2011 ESRD PPS Final Rule, we
continue to believe that the VAT measure topic and its respective
weights incentivize the best care for ESRD beneficiaries (76 FR 70265,
70275). Catheters are undesirable due to their high rate of
complications, such as infections, and we discourage their use through
the catheter measure. We believe that the preferred type of vascular
access is an AV fistula due to lower rates of complications, which we
promote through the fistula measure. Although grafts do decrease the
risk of infections and complications when compared to catheters, grafts
do not decrease these risks as much as fistulae. We, therefore, do not
believe that grafts are either beneficial enough to be specifically
rewarded or harmful enough to be specifically penalized. Furthermore,
we do not believe it is in the best interest of patients to weight the
fistula measure more than the catheter measure because our primary goal
is to promote fistula use; we believe that both measures are equally
important in promoting the best clinical practices with respect to VAT.
We recognize that the catheter measure could incentivize ``cherry-
picking'' of patients, leading to access to care issues for patients
with catheters. We are actively monitoring access to care and other
potential issues associated with ``cherry-picking,'' and it is our
intent to engage the community as we monitor these issues.
Comment: One commenter encouraged us to promote fistulae in
pediatric patients as well as adults.
Response: We thank the commenter who encouraged the promotion of
fistulae use in pediatric patients. The NQF-endorsed fistula measure
excluded pediatric patients. Children on chronic dialysis have a
fundamentally different psychosocial profile than adults. Fistula use,
with its attendant frequent painful needle sticks are less commonly
used in

[[Page 67480]]

children than adults. In addition, there are technical issues that make
fistula creation more difficult in children. We will continue to
investigate whether there are measures in existence or that could be
developed for the purpose of appropriately addressing vascular access
among pediatric patients and may propose to adopt one or more of these
measures in future rulemaking.
For the reasons listed above, we will continue to use the VAT
measure topic for PY 2015 and future years of the ESRD QIP. The
technical specifications for the finalized measures in this measure
topic can be found at https://www.dialysisreports.org/pdf/esrd/public-measures/VascularAccess-Catheter-2015-FR.pdf and https://www.dialysisreports.org/pdf/esrd/public-measures/VascularAccess-Fistula-2015-FR.pdf.
c. In-center Hemodialysis Consumer Assessment of Healthcare Providers
and Systems (ICH CAHPS)
Comment: Many commenters supported the measure in its entirety.
Many commenters supported monitoring patients' experiences, but believe
the ICH CAHPS survey, with 57 questions, is too burdensome and lengthy
for beneficiaries to complete. These commenters requested that we
minimize this burden and suggested that the ICH CAHPS survey be parsed
into three parts, with each patient receiving one of these parts and a
group of core questions. Commenters also suggested that CMS allow
facilities to give patients the survey and allow patients to return
surveys via a ``drop-box'' at the facility or by mail to the third-
party administrator; commenters believe this approach will improve the
response rate as patients are less likely to ignore the survey and one
commenter noted that, without such an approach, the experiences of
homeless patients will not be recorded.
Response: As we noted in the 2012 ESRD PPS Final Rule, we continue
to believe that assessing the experiences of patients is vital to
quality care (76 FR 70269 through 70). Patient surveys can, and should,
draw a facility's attention to issues that can only be raised by those
receiving care. Although commenters may consider the survey to be
burdensome to patients, the CAHPS tool went through extensive testing
during development including focus groups and one-on-one patient
sessions which assessed this burden and created specifications
accordingly. Furthermore, we believe that concerns about patient burden
can be at least partially mitigated without decreasing the number of
questions on the survey or how the survey is administered. For example,
as the specifications indicate,\3\ patients may take a break during the
administration of the survey or take the survey in multiple sittings if
they feel that the number of questions is too great to answer at one
time. Finally, we do not believe that facilities should be permitted to
give patients the survey at the facility and allow patients to submit
these surveys via a ``drop box'' or any other method. We believe that
patients are much more likely to truthfully respond to the surveys if
they are perceived to be in no way connected to the facility; providing
the surveys at the facility and allowing patients to return them by any
means may lead to the patient to believe that his or her answers can be
traced to him or her, and this thought may bias the surveys. Thus, we
believe that this survey as it is currently specified is the best
method available at this time to measure patient experience.
---------------------------------------------------------------------------

\3\ See https://www.cahps.ahrq.gov/content/products/ICH/PROD_ICH_Intro.asp?p=1022&s=222.
---------------------------------------------------------------------------

We thank commenters for bringing to our attention the hardships
homeless patients may face in accessing the survey. Although we believe
that the survey most accurately represents patients' experiences of
care at this time, we will continue to evaluate how we can accurately
capture all patient populations, including the homeless.
Comment: One commenter suggested that CMS define a threshold for
patients at which a facility would not need to administer the survey.
Response: We recognize that there are many small dialysis
facilities for which hiring a third-party administrator to fulfill the
ICH CAHPS survey requirements is impractical or prohibitively costly.
Therefore, beginning PY 2015, we will exempt any facilities that have
treated (whether that patient was visiting the facility or otherwise)
10 patients during the performance period or fewer that are qualified
to take the survey. Patients are qualified to take the survey if they
are adult, in-center hemodialysis patients. We believe that 11 patients
(regardless of the number of times these patients were treated) is an
appropriate threshold for applying the measure because it is consistent
with the policy that we are finalizing for all measures in which we
recognize that facilities with 10 or fewer patients in the denominator
of a measure should be exempt from that measure. Although we are not
requiring facilities to submit actual ICH CAHPS data at this time, we
are considering collecting it in the future. We also intend to use the
information collected from reporting measures for purposes of scoring
clinical measures based on the same data in subsequent payment years
and want to adopt a minimum reporting threshold that we can apply to
all measures. For these reasons, we are finalizing that facilities must
attest to administering the ICH CAHPS survey if they treat during the
performance period at least 11 adult, in-center hemodialysis patients.
We also finalize that we will consider a facility to have met the 11
patient threshold unless it affirmatively attests in CROWNWeb that it
treated 10 or fewer in-center, adult hemodialysis patients during the
performance period. If a facility does not affirmatively attest to
having treated 10 or fewer in-center, adult hemodialysis patients
during the performance period, we will score it on this measure.
Additionally, we are applying this policy to the NHSN Dialysis Event
reporting measure, discussed below, because we intend to use the data
from that measure to adopt a clinical measure in subsequent payment
years. Unlike the ICH CAHPS measure, the NHSN measure applies to both
adult and pediatric in-center hemodialysis patients. Therefore, we
finalize that a facility must treat at least 11 in-center hemodialysis
patients (whether adult or pediatric) during the performance period to
be scored on the NHSN Dialysis Event reporting measure. To be
considered a facility which has treated 10 or fewer in-center
hemodialysis patients (whether adult or pediatric) during the
performance period, the facility must make an attestation in CROWNWeb
to this effect. If a facility does not make this attestation, we will
score it on this measure.
Comment: One commenter expressed concern that patients often do not
answer the surveys honestly for fear of retaliation and the validity of
the survey should be questioned.
Response: We recognize that patients may feel pressure to answer
questions in the survey favorably. We believe, however, this concern is
mitigated because under the measure specifications, a third-party must
administer the survey. These third-party administrators are not
associated with facilities and do not report patient-specific data to
the facilities. Therefore, the facility would have no knowledge of
patient's answers.
Comment: Several commenters expressed concern about CROWNWeb's
ability to provide an adequate reporting system for this measure.
Response: CROWNWeb was launched nationally in June of 2012, and we
recognize that some facilities may still be familiarizing themselves
with the

[[Page 67481]]

new system. As discussed, facilities are not required to report ICH
CAHPS data to CROWNWeb or any other system; they are only required to
make an attestation that they administered the surveys according to the
specifications. The attestations for the ICH CAHPS measure for PY 2015
are not due until the end of January 2014. We have no reason to believe
that the attestation function will not be ready by the end of January
2013, the PY 2014 deadline. We believe that by this time, facilities'
transition period should have ended, and facilities will be able to
successfully submit their attestations. Therefore, because the
attestations should be ready in CROWNWeb by January 2013 for the PY
2014 ESRD QIP, they should also be available in CROWNWeb for the PY
2015 program.
Comment: Many commenters noted that the ICH CAHPS measure's third-
party administration requirement imposes significant costs on
facilities and that facilities should be allowed to include these costs
in their cost reports.
Response: Facilities may report allowable operating expenses in
their Medicare cost reports. We believe that it is consistent with this
payment policy for facilities to include the ICH CAHPS costs on their
cost reports because they are allowable operating expenses.
Comment: Several commenters urged us to adopt the ICH CAHPS measure
as an outcome measure rather than a reporting measure. One commenter
believes that, if we cannot implement the measure as an outcome measure
for PY 2015, we should do the following in order to facilitate our
adoption of an ICH CAHPS outcome measure as soon as possible: (i)
Develop a standardized protocol and quality assurance guidelines for
survey administration that are more detailed than the AHRQ
requirements; (ii) contract with an experienced organization that can
provide oversight for the ICH CAHPS program; and (iii) approve survey
vendors. Another commenter argued that the survey should be limited to
questions about the facility rather than the physician.
Response: Currently, we are not able to include the ICH CAHPS
survey as an outcome measure because we do not possess data from which
we can set performance standards. We believe that it is important to
adopt an outcome-based measure as soon as possible, and we are
diligently working to ensure that it is a part of the program as soon
as possible. To that end, we will be working to set up a survey vendor
approval program; we believe that the specifications are appropriately
detailed, but we will continue to assess whether they should be refined
before we propose to adopt this survey as an outcome-based measure.
Regarding the survey questions, the majority of the survey is limited
to questions about the facility. Only seven of the 58 core questions
are about the patients' nephrologists. There are 22 questions about the
staff at the facility (not including the doctor), three about the
center, and nine about treatment; the remaining questions capture
demographic information. The continuous care received by dialysis
patients makes them keenly aware of their primary doctors' involvement.
To the extent that the questions are about the physician, we believe
that they are appropriate because they are targeted at the nephrologist
who is most involved in the patient's dialysis care.
Comment: Commenters requested that we develop new measures of
patient's experiences. One commenter argued that a measure should be
developed that evaluates a patient's experience during each dialysis
session because each experience can vary, and further argued that this
type of evaluation would allow facilities to better assess why patients
do not stay for entire treatments or miss treatments. Many commenters
requested that we develop a CAHPS measure for home hemodialysis and
peritoneal dialysis patients. Commenters also suggested that we make
the responses to the surveys public.
Response: We remain dedicated to developing and adopting measures
of patient experiences of care in the ESRD QIP, specifically those
patients who are treated at home. At this time we cannot operationally
make the responses to the ICH CAHPS survey public because, as noted
above, we do not possess the data; however, we will consider making
these surveys public in future years if facilities are required to
submit their ICH CAHPS data to CMS.
For the reasons discussed above, we are finalizing the ICH CAHPS
reporting measure for use in the PY 2015 ESRD QIP and future years of
the program. We are also finalizing that the measure applies to
facilities that treat a minimum of 11 in-center, adult hemodialysis
patients during the performance period. We will consider a facility to
have met the 11 in-center, adult hemodialysis patient threshold unless
it affirmatively attests in CROWNWeb to having treated 10 or fewer
adult, in-center hemodialysis patients during the performance period.
If a facility does not make the attestation, we will score it
accordingly. The technical specifications for this finalized measure
can be found at https://www.dialysisreports.org/pdf/esrd/public-measures/ICHCAHPS-2015-FR.pdf.
2. Expansion of Two PY 2014 Measures for PY 2015 and Subsequent PYs
As stated earlier, we believe it is important to continue using
measures from one payment year to the next payment year of the program
to encourage continued improvements in patient care. Therefore, we
proposed to expand the requirements under two reporting measures that
we adopted for the PY 2014 ESRD QIP. These proposed expanded
requirements would apply to the measures for PY 2015 and subsequent
payment years of the ESRD QIP.
a. Expanded National Healthcare Safety Network (NHSN) Dialysis Event
Reporting Measure
Hospital Acquired Infections (HAIs) are a leading cause of
preventable mortality and morbidity across different settings in the
healthcare sector, including dialysis facilities. In a national effort
to reduce HAIs outcome, HHS agencies, including CMS and the Centers for
Disease Control and Prevention (CDC) are working together to encourage
facilities to report to the NHSN as a way to track and facilitate
action intended to reduce HAIs. The NHSN is currently a secure,
internet-based surveillance system that integrates patient and
healthcare personnel safety surveillance systems managed by the
Division of Healthcare Quality Promotion at the CDC. NHSN has been
operational since 2006 and tracks data from acute care hospitals, long-
term care hospitals, psychiatric hospitals, rehabilitation hospitals,
outpatient dialysis centers, ambulatory surgery centers, and long term
care facilities. We believe that reporting dialysis events to the NHSN
by all facilities supports national goals for patient safety,
particularly goals for the reduction of HAIs.
For the reasons stated above, we proposed to retain the NHSN
Dialysis Event reporting measure that we adopted for the PY 2014 ESRD
QIP (76 FR 70268 through 70269), but with an expanded reporting period.
For PY 2014, ESRD facilities were required to: (i) Enroll in the NHSN
and complete any training required by the CDC related to reporting
dialysis events via the NHSN system; and (ii) submit three or more
consecutive months of dialysis event data to the NHSN. For the PY 2015
ESRD QIP and future payment years, we proposed to retain the NHSN
measure and expand the reporting period to a full 12 months of dialysis
event data. Although we expect most

[[Page 67482]]

facilities to have enrolled and trained in the NHSN dialysis event
system by the end of CY 2012, we proposed that facilities that have not
done so by January 1, 2013 or facilities that receive a CMS
certification number (CCN) during 2013 must enroll and complete this
training before reporting the data in order to fulfill the requirements
of this reporting measure. The information reported to NHSN would be
provided by the CDC to CMS for use in the ESRD QIP.
As discussed in more detail below, we proposed that the performance
period for the PY 2015 ESRD QIP would be CY 2013. We proposed that
facilities must report dialysis event data monthly to the NHSN for this
measure. We also proposed that facilities be granted a ``grace period''
of one month to report these data. For further information regarding
the NHSN's dialysis event reporting protocols, please see https://www.cdc.gov/nhsn/psc_da_de.html. This link provides general
information and links to more detailed, specialized information.
We note that this proposed measure only applies to facilities
treating patients in-center. For purposes of the NHSN Dialysis Event
reporting measure, we determine whether a facility treats patients in-
center by referencing the facility's information in CMS data sources
(that is, SIMS and CROWNWeb). Facilities report the types of patients
that they serve in these data sources. If a facility lists in-center
services, we proposed that the facility would be required to comply
with the NHSN dialysis event reporting measure.
Section 1881(h)(2)(B)(i) of the Act requires that, unless the
exception set forth in section 1881(h)(2)(B)(ii) of the Act applies,
the measures specified for the ESRD QIP under section
1881(h)(2)(A)(iii) of the Act must have been endorsed by the entity
with a contract under section 1890(a) of the Act (which is currently
NQF). Under the exception set forth in 1881(h)(2)(B)(ii) of the Act, in
the case of a specified area or medical topic determined appropriate by
the Secretary for which a feasible and practical measure has not been
endorsed by the entity with a contract under section 1890(a) of the
Act, the Secretary may specify a measure that is not so endorsed so
long as due consideration is given to measures that have been endorsed
or adopted by a consensus organization identified by the Secretary.
An NQF-endorsed bloodstream infection measure (NQF1460)
exists and is collected by the CDC as part of dialysis event reporting
in NHSN. This measure assesses the number of hemodialysis patients with
positive blood cultures. This measure differs from the dialysis event
reporting measure that we adopted for the PY 2014 ESRD QIP and proposed
to expand beginning with the PY 2015 program because it evaluates the
number of hemodialysis outpatients with positive blood cultures over a
specified time period. By contrast, the NHSN Dialysis Event reporting
measure that we proposed assesses facilities based on whether they
enroll and report dialysis event data to the NHSN, not based on what
the data reported are. We intend to propose to adopt NQF 1460
once facilities have reported enough data to enable us to compute
performance standards, achievement thresholds, improvement thresholds,
and benchmarks for the measure.
For the reasons stated in the CY 2012 ESRD PPS final rule (76 FR
70268 through 69), we proposed to retain the measure and expand the
reporting period for PY 2015 and future payment years of the program.
We requested comment on this proposal, and noted that the technical
specifications for this measure are located at https://www.dialysisreports.org/pdf/esrd/public-measures/NHSNDialysisReporting-2015-NPRM.pdf.
The comments we received on these proposals and our responses are
set forth below.
Comment: Many commenters supported the expansion of the NHSN
Dialysis Event reporting measure, stating that monitoring the number of
patients with access-related infections for an entire year will help
the community better understand ways to reduce infection rates. Some
commenters expressed concern with certain aspects of the measure.
Several commenters expressed their concern about the burden of this
measure, specifically highlighting the burden of manual data-entry and
the staff hours demanded for this entry and oversight; one commenter
noted that NQF criteria related to feasibility favor electronic
collection and data collected during the course of care. Commenters
argued further that manual data entry affects reliability, further
affecting the baseline calculations for future measures. Many
commenters suggested a batch download system. Some commenters noted
that the CDC intends to make a Clinical Document Architecture (CDA)
system available for batch entries, but expressed concern that the CDC
CDA system will be available for individual facilities only (rather
than for an entire corporation); others stated that they did not
believe the CDA system will be ready for data entry by the end of CY
2012. Commenters also stated that the NHSN system is yet another Web
site to which ESRD facilities must report, reducing time staff can
spend caring for patients. Finally, some commenters support the
expansion of the measure, but only if the required monthly reporting is
at the facility rather than the patient level.
Response: We do not believe that this measure is unnecessarily
burdensome. Monitoring vascular access infections following uniform
definitions and utilizing the comparative rate data to evaluate and
improve performance is part of providing good patient care. Although
enrollment and training can be time-consuming, approximately 90 percent
of all hemodialysis centers have already enrolled in NHSN. Furthermore,
we believe that any burden a facility may face is outweighed by the
importance of this measure since infections can often lead to serious
complications, including death. Further to help decrease the burden,
the CDC began allowing facilities to report to NHSN through imported
CDA files on September 14, 2012. Using this function, any individual
with Administrative Rights for a facility will be able to import that
facility's specific CDA files that meet NHSN's formatting requirements.
This includes large dialysis organizations that have given
Administrative Rights to a single person for purposes of the entire (or
some portion of) the organization. However, at this time each
facility's files must be submitted separately. Because we are aware
that large dialysis organizations (as well as many other dialysis
companies) have given Administrative Rights to a single representative
of the organization, we recognize that they will eventually be able to
submit CDA data for a number of individual facilities, from a single
central location, all through a single batch submission process. This
batch data submission process is expected to be available in August
2013. Finally, the monthly reporting required by the NHSN is at the
facility level. Facility-level review of the data in NHSN is expected,
whether the data are reported by facility staff or by a corporate
representative. We believe that facilities have a direct role in
preventing infections by collecting the NHSN Dialysis Event data,
actively assessing their data, and regularly feeding back this
information to clinical staff to improve practices.
Comment: One commenter argued that the NHSN Dialysis Event
reporting measure will not improve care because the system is not
efficient and is not correlated to CROWNWeb. Many commenters urged us
to synchronize NHSN and CROWNWeb data

[[Page 67483]]

requirements. Commenters also requested that CMS continue to use the
same reporting schedule for PY 2015 as it will for PY 2014, allowing
facilities to report quarterly with all data being required by March
31, 2014. Commenters noted that quarterly reporting is important
because this timeframe will allow facilities ample time to submit data
correctly, stating that some infections take more than a month to
identify and capture. One commenter recommended that we modify the
requirements of this provision to allow a facility to report a full 12
months of data by January 31, 2014. Other commenters urged us to ensure
that the NHSN Dialysis Event reporting measure allows the NHSN system
to remain a surveillance system.
Response: We disagree with the comment that the NHSN Dialysis Event
reporting measure will not improve care. Requiring facilities to report
through the NHSN will allow us to monitor and better understand the
causes of infections. Additionally, as we stated in the proposed rule
(77 FR 40971 through 72), we intend to use the information gathered by
this reporting measure to adopt a clinical measure in future years;
this measure will encourage facilities to decrease the circumstances
which lead to infections. Although we intend to use data from the NHSN
to adopt a clinical measure, we will work with the CDC to ensure that
the ESRD QIP does not unnecessarily limit the surveillance purposes of
the NHSN system.
Commenters are correct in that the NHSN Dialysis Event reporting
measure data is not correlated to CROWNWeb. We recognize that CROWNWeb
and the NHSN are two distinct systems which require reporting. At this
time, we do not require infection reporting in CROWNWeb. We believe
that it is more beneficial for both facilities and CMS to require
infection reporting through the NHSN. The NHSN is a well-established
secure, internet-based surveillance system that integrates patient and
healthcare personnel safety surveillance systems managed by the
Division of Healthcare Quality Promotion at the CDC; it is used by many
other types of providers to report infections. We believe that NHSN's
history and wide-spread surveillance make it the best mode of reporting
dialysis events at this time.
We do not agree with commenters' suggestions to extend the
reporting timeline for the PY 2015 NHSN Dialysis Event reporting
measure. The NHSN system recommends monthly reporting, and we believe
it is important to adhere to the NHSN requirements as much as possible.
However, to maximize data completeness and accuracy, facilities will be
allowed to add to and modify the reported data until the performance
period reporting deadline. Data for the entire performance period must
be reported by April 15, 2014. We chose April 15, 2014 because this
date allows facilities a full quarter after the performance period to
review their data for completeness and accuracy. After consulting with
the CDC, we believe that such a timeframe will maximize the reliability
of the data and allow facilities to report any infections that
developed during the performance period but that are identified after
the performance period has ended.
Comment: One commenter is concerned with the proposed expansion of
this measure if NHSN data is not validated or audited for completeness.
This commenter expressed specific concern that there could be
surveillance bias in interpreting submitted data.
Response: We recognize that bias exists because some facilities may
be more likely to identify and report dialysis events than others.
Varying degrees of completeness of the data could lead to inaccurate
comparisons between facilities. The CDC and CMS are beginning to
formulate a strategy to validate data for purposes of the ESRD QIP; we
are committed to rigorous validation to identify inaccuracies and
ensure reliability of the data.
Comment: One commenter suggested that CDC standardize and clarify
data definitions to ensure ``apples-to-apples'' comparisons and allow
corporate oversight of data entered into the system for verification
and reliability purposes. Another commenter stated that it does not
support the adoption of a future NHSN Dialysis Event clinical measure
because facility policies and procedures and physician practices vary
widely with respect to the circumstances under which blood cultures are
obtained and results are reported; this commenter requested that
reporting be standardized before the measure is adopted.
Response: The CDC develops protocols, definitions, and criteria for
the purposes of standardizing reporting, and expects that all NHSN
users strictly adhere to the protocol guidance for data that are
reported into NHSN. The dialysis event surveillance reporting protocol
is available on CDC's NHSN Web site and includes data definitions
(https://www.cdc.gov/nhsn/PDFs/pscManual/8pscDialysisEventcurrent.pdf).
Users may contact the NHSN help desk (NHSN@cdc.gov) for clarifications
to these data definitions. We will continue to work with the CDC to
monitor these concerns while we consider adopting a measure based on
NHSN data for future years of the program.
Comment: One commenter requested clarification regarding whether
facilities are required to report infections occurring in the dialysis
unit only, exempting the facilities for infections that result from
care in other environments.
Response: The measure specifications, which are available at
(https://www.cdc.gov/nhsn/PDFs/pscManual/8pscDialysisEventcurrent.pdf),
provide that positive blood cultures occurring within one calendar day
after a hospital admission must also be reported. For further
clarification on reportable event definitions and considerations
surrounding attribution, please contact the NHSN help desk
(NHSN@cdc.gov).
Comment: One commenter asked us to confirm that, as long as the
census data is reported every month, the facility may attest to having
met the requirements for the NHSN measure.
Response: For the reasons discussed above, we finalize that a
facility may attest for purposes of being exempt from reporting for the
NHSN dialysis event measure if it treats fewer than 11 in-center
hemodialysis patients during the performance period. If a facility
treats 11 or more in-center hemodialysis patients, we will score the
facility based on whether it reported data to the NHSN.
Comment: One commenter urged us to develop a measure which targets
the cause of the infections. Another commenter suggested that CMS
consider adding NHSN dialysis specific indicators, perhaps in stages,
such as local access site infection, access-related bloodstream
infection, and vascular access infection to the NHSN surveillance data.
Response: We thank commenters for these suggestions. We acknowledge
that preventing and monitoring infections is crucial to patient care.
We will continue to work with the dialysis community to include robust
infection measures in the ESRD QIP.
Comment: Many commenters support our proposed transition of the
NHSN Dialysis Event reporting measure to a clinical measure using the
NQF-endorsed measure 1460. Some commenters urged us to adopt
the clinical measure in PY 2015. Other commenters, however, suggested
that we allow sufficient time to ensure that NHSN data can be reported
without additional burden to providers. One commenter suggested that,
once the measure is adopted as a clinical measure, we interpret the
rate of positive blood cultures against the

[[Page 67484]]

facility's rate of empiric antibiotic treatment, since some facilities
treat empirically rather than through taking blood cultures.
Response: We thank commenters for supporting our proposal to adopt
the NQF-endorsed infection measure for future years of the program. We
are unable to adopt the NQF-endorsed clinical measure for PY 2015
because we have not yet gathered data on which we can base performance
standards. For purposes of the ESRD QIP, facilities began reporting to
the NHSN during 2012; to receive full points on the measure for PY
2014, facilities need only to report three months of data. We do not
believe it is appropriate to base performance standards on three months
of data for purposes of an infection measure because infections can
vary by season. We believe that using a 12-month period for setting
these standards will prove more accurate. Because we are requiring 12
months of data for the PY 2015 ESRD QIP, we believe we can use this
information to adopt standards for a clinical measure in future years.
Additionally, we agree with the commenters who believe that it may be
necessary for facilities to become more familiar with the NHSN system
before we adopt a clinical measure.
We thank the commenter who suggested that we interpret the rate of
positive blood cultures against the facility's rate of empiric
antibiotic treatments to account for facilities that might treat
patients empirically for infection without drawing cultures. The NHSN
collects information on IV antimicrobial starts, in part, for this
reason. Providers are expected to adhere to standards of clinical
practice, which include obtaining blood cultures prior to antibiotic
administration for suspected bloodstream infections.
Comment: One commenter stated its support for the adoption of an
MRSA standardized infection rate clinical measure.
Response: We thank the commenter for providing this suggestion and
will take it into consideration in future measure development and
rulemaking.
For the reasons stated above, we finalize the NHSN Dialysis Event
reporting measure as proposed except for the following; a facility must
treat at least 11 in-center hemodialysis patients (both adult and
pediatric) during the performance period to be scored on the NHSN
Dialysis Event reporting measure, as noted above. To be considered a
facility which has treated 10 or fewer in-center hemodialysis patients
during the performance period, the facility must make an attestation in
CROWNWeb to this effect. If a facility does not make this attestation,
we will score it accordingly. Additionally, we recommend that
facilities report monthly to the NHSN. Data for the entire performance
period must be reported by April 15, 2014. The technical specifications
for this finalized measure can be found at https://www.dialysisreports.org/pdf/esrd/public-measures/NHSNDialysisReporting-2015-FR.pdf.
b. Expanded Mineral Metabolism Reporting Measure
Undertreatment of bone mineral metabolism disease can cause severe
consequences for ESRD patients. For PY 2014, it was not yet feasible
for us to adopt a clinical measure evaluating facilities based on their
patients' bone mineral metabolism rates because facilities did not
report serum phosphorus and serum calcium values during the baseline
and performance periods that we finalized with respect to that year.
Instead, for PY 2014, we finalized a measure assessing whether
facilities routinely monitored the serum calcium and serum phosphorus
levels in their patients. For PY 2015, we proposed to expand this
measure by requiring facilities to report a serum calcium and serum
phosphorus level for each qualifying patient each month according to
the requirements in CROWNWeb. Facilities would be required to enter
these values into CROWNWeb on a monthly basis. Facilities would be
granted a ``grace period'' of one month to enter the data. For example,
we would require a facility to report serum calcium and serum
phosphorus data for January 2013 on or before February 28, 2013. The
final month of data from the performance period would be reported on or
before January 31, 2014.
We do not intend for this measure to encourage unnecessary testing
or unduly burden a facility. Consequently, for purposes of scoring the
measure, we considered proposing to require facilities to report the
required information for less than 100 percent of their patients.
Specifically, we considered lowering the threshold to reporting 98
percent of patients for a month in order to receive credit for that
month. We chose 98 percent in order to encourage improvement, and to
ensure that we do not undermine the current level of high-reporting
(based on the CROWNWeb pilot data). We recognize that 100 percent might
not be appropriate due to some individual cases that may not fit
specified criteria. We ultimately proposed that a facility should be
required to take and report these values for every patient at least
once per month so that each beneficiary receives the highest standard
of care. We noted, however, that there are circumstances beyond a
facility's control wherein it may not be able to draw a sample for this
patient. Therefore, we did not propose that the facility itself must
draw the serum phosphorus and serum calcium levels. If, for example, a
patient is hospitalized or transient during a claim month, we proposed
that the facility may report the serum calcium and serum phosphorus
readings for the patient for a month if a patient has labs drawn by
another provider/facility and those labs are evaluated by an accredited
laboratory (a laboratory that is accredited by, for example, the Joint
Commission, the College of American Pathologists, the AAB (American
Association of Bioanalysts), or State or Federal agency), and the
dialysis facility obtains the serum calcium and serum phosphorus
readings. Additionally, we proposed to only consider a patient
qualified for this measure (i) if the patient is alive at the end of
the month; (ii) if the patient is treated in-center, that patient was
treated at that facility at least twice during the claim month; and
(iii) if the patient receives dialysis at home, a claim is submitted
for that patient. We stated our belief that that these proposals will
provide more flexibility for facilities and will also discourage
facilities from drawing blood, even when not necessary, for fear that
the patient will fail to come to the facility again during that month.
We requested comment on these proposals. We also requested comment on
whether facilities should only have to report data for 98 percent of
their patients.
Section 1881(h)(2)(B)(i) of the Act requires that, unless the
exception set forth in section 1881(h)(2)(B)(ii) applies, the measures
specified for the ESRD QIP under section 1881(h)(2)(A)(iii) of the Act
must have been endorsed by the entity with a contract under section
1890(a) of the Act (which is currently NQF). Under the exception set
forth in 1881(h)(2)(B)(ii) of the Act, in the case of a specified area
or medical topic determined appropriate by the Secretary for which a
feasible and practical measure has not been endorsed by the entity with
a contract under section 1890(a) of the Act, the Secretary may specify
a measure that is not so endorsed so long as due consideration is given
to measures that have been endorsed or adopted by a consensus
organization identified by the Secretary.
An NQF-endorsed measure assessing hypercalcemia exists (NQF
1454) and we proposed to adopt this measure for the PY 2015
ESRD QIP and subsequent

[[Page 67485]]

payment years, as further discussed below. The NQF-endorsed
hypercalcemia measure, however, does not score facilities based only on
whether or not that facility reported serum calcium values. The Mineral
Metabolism reporting measure, unlike the Hypercalcemia measure, would
assess only whether facilities report serum calcium and serum
phosphorus values. It would not score facilities based on the actual
values that they report. We stated our belief that it is important to
continue to encourage reporting independent of a measure that scores
based on the actual values reported because we need such values to
monitor aspects of bone mineral metabolism, for example phosphorus
management, independent of hypercalcemia; we noted that this
information will allow us to develop comprehensive bone mineral
metabolism measures for use in future years of the ESRD QIP.
In the CY 2012 ESRD PPS final rule, we discussed the basis for the
Mineral Metabolism reporting measure (76 FR 70270 through 71). We
stated that ``the NQF has previously endorsed phosphorus and calcium
monitoring measures (NQF 0261 and NQF 0255) and, in
2008, we adopted serum calcium and serum phosphorus monitoring as
Clinical Performance Measures (https://www.dialysisreports.org/ESRDMeasures.aspx).'' The NQF measures referenced above call for
monitoring these serum calcium and serum phosphorus values, but they do
not require actual reporting of these values, as is the intent of the
Mineral Metabolism reporting measure.
For these reasons, we proposed to expand the Mineral Metabolism
reporting measure for PY 2015 and subsequent payment years under
1881(h)(2)(B)(ii) of the Act. The technical specifications for this
measure can be found at https://www.dialysisreports.org/pdf/esrd/public-measures/MineralMetabolism-Reporting-2015-NPRM.pdf. We further noted
that requiring the reporting of serum calcium and serum phosphorus
levels for the PY 2015 ESRD QIP will allow us to develop mineral
metabolism measures based on clinical data in the future. We requested
comment on these proposals to expand the Mineral Metabolism reporting
measure.
The comments we received on these proposals and our responses are
set forth below.
Comment: Many commenters generally supported this measure, but
requested that we make modifications to our proposed exclusions. These
commenters suggested that we exclude, for all of the reporting
measures, the following patients: (i) Beneficiaries who are regularly
treated at the facility and who fit into one of these categories: (a)
Beneficiaries who die within the applicable month; (b) beneficiaries
that receive fewer than 7 treatments in a month; and (c) beneficiaries
receiving home dialysis therapy who miss their in-center appointments
when there is a documented, good faith effort to have them participate
in such a visit during the applicable month; (ii) transient dialysis
patients; (iii) pediatric patients (unless the measure is specific to
this population); and (iv) kidney transplant recipients with a
functioning graft. Commenters stated that these exclusions are
consistent with our own measures reported on DFC. Additionally,
commenters stated that these exclusions seek to hold facilities
accountable only for those beneficiaries to whom they regularly give
care and for whose care they can affect. Another commenter, however,
stated that we should not implement other commenters' suggestions that
we exclude beneficiaries receiving home dialysis therapy who miss their
in-center appointments when there is a documented, good faith effort to
have them participate in such a visit during the applicable month; this
commenter stated that it is the responsibility of the facilities to
educate patients on the importance of making and keeping appointments.
Additionally the commenter argued that ``good faith'' is too vague;
commenter requested that, if we did adopt this exclusion, we clearly
define a ``good faith effort.''
Response: Upon further review, we agree with commenters who believe
that the exclusions should be modified. We recognize that treating a
patient twice may not provide enough time to effectuate quality patient
care. We agree with the commenters who suggested that an in-center
hemodialysis patient should be excluded if treated by a facility fewer
than seven times during the month, regardless of whether the patient is
officially admitted to that facility. With seven treatments, we believe
that a facility should have had adequate opportunities to draw blood
necessary to report serum calcium and phosphorus levels. We also
believe that the threshold of seven will discourage unnecessary testing
of in-center hemodialysis patients by facilities because they will know
that, since in-center patients are typically treated three times per
week, a patient must have been treated by the facility for at least two
weeks to be included; thus, the facility need not feel pressure to draw
blood for every patient for the first few visits of the month. Based on
these considerations, we will not finalize our proposal to exclude only
in-center patients who have been treated fewer than two times by the
facility during the claim month. Instead, we will exclude any in-center
patient who is treated by the facility fewer than seven times during
the reporting month.
We do not believe that it is necessary to specifically exclude
transient patients from this measure because, as noted, any patient
that is treated by the facility at least seven times during the
applicable reporting month is present at the facility for enough time
that the facility should be held accountable for that patient.
Likewise, for the same reasons mentioned above, we do not believe we
need to separately exclude patients who are deceased at the end of the
reporting month. Provided that the patient is treated by the facility
at least seven times during that month, the facility should be able to
draw blood necessary to report serum calcium and serum phosphorus
levels even if that patient is deceased at the end of the month.
We continue to believe that facilities should be required to report
the serum calcium and phosphorus levels of home dialysis patients
irrespective of whether those patients attend a monthly appointment. We
believe that it is incumbent upon a facility to make home dialysis
patients aware that they must attend monthly appointments to be
properly treated. In addition, since the mechanisms that cause
cardiovascular and bone disease do not differ between home and in-
center hemodialysis patients, we believe that the inclusion of home
dialysis patients in the Mineral Metabolism reporting measure is
appropriate. Therefore we will finalize our proposal that we will
include any home hemodialysis patient for which a facility submits a
claim with respect to the reporting month in this measure.
We also believe it is important to include transplant patients
until they are officially discharged from a facility; regular
monitoring can help ensure that a transplant remains effective and that
the facility is continuing to provide the best care possible.
We believe it is important to monitor serum calcium and serum
phosphorus levels in adult and pediatric patients alike because
improper bone mineral metabolism management can lead to serious,
negative outcomes, including death, in both populations. Although we
are aware that specific target values for calcium and phosphorus have
not been set for the pediatric population, we still believe that this
measure will lead to

[[Page 67486]]

better observation of mineral metabolism in these patients if one or
both of these values are unusually high or low. Additionally, we
believe that the inclusion of pediatric patients in this measure is
consistent with current guidelines on the frequency of mineral
metabolism testing as reported in KDIGO guidelines chapter 3
``Diagnosis of CKD-MBD: biochemical abnormalities.'' Thus, we believe
that this measure is appropriate for both adult and pediatric patients.
For the reasons stated above, we finalize that facilities must
report in CROWNWeb the serum calcium and serum phosphorus levels on a
monthly basis for (i) in-center Medicare patients who have been treated
at least seven times by the facility; and (ii) home hemodialysis
Medicare patients for whom the facility submits a claim.
Comment: Several commenters encouraged us to not adopt a percentage
reporting threshold because it would not distinguish between
beneficiaries legitimately excluded and those that were merely missed.
Other commenters requested that we use both exclusions and a threshold;
one commenter suggested a threshold of 90 percent or an allowance of
two patients to ensure that small facilities are not disproportionally
affected. Another commenter stated that requiring 98 percent reporting
may make it difficult for patients to travel because dialysis
facilities may encourage them otherwise to ensure compliance with the
measure. One commenter requested that we provide guidance regarding the
standardization of blood-draws so that data can be reliable before we
implement a reporting threshold.
Response: We agree with the commenters who argued that, even with
exclusions, there are circumstances in which facilities cannot report
the serum calcium and serum phosphorus levels for every patient at
least once per month. For example, a facility may wait to draw blood
from a patient because it believes that the patient will be treated for
the entirety of the month, but learns that the patient has been
hospitalized unexpectedly for all or part of the applicable month.
Therefore, we believe that we should not require an attestation of 100
percent monitoring. Based on data from the CROWNWeb pilot, we believe
that facilities are generally able to report serum calcium and serum
phosphorus for approximately 96 percent of their patients. As
commenters have argued, the information in CROWNWeb, however, was
voluntarily reported which may mean that the data is biased toward
facilities that value reporting; additionally, the data from the
CROWNWeb pilot was mainly supplied by LDOs that may be more likely to
have more resources and corporate policies that require reporting
compliance. Furthermore, such a high percentage requirement may
disadvantage small facilities. For example, if a facility has 10
patients, failure to report for one patient will drop that facility's
reporting rate to below 90 percent.
Taking all of these issues into consideration, we finalize a
normative reporting threshold for this measure; facilities will be
required to report at the rate of the 50th percentile of all facilities
in 2013 for each month of the performance period in order to gain 10
points on the measure. However, if the 50th percentile of all
facilities in 2013 is greater than 97 percent, facilities will only be
required to report monthly for 97 percent, in total, of their (i) in-
center Medicare patients who have been treated at least seven times by
the facility; and (ii) home hemodialysis Medicare patients for whom the
facility submits a claim. This floor ensures that facilities are not
penalized as long as they improve by one percent above the reporting
rates in the CROWNWeb pilot; that is, facilities know that, provided
they reach 97 percent for each month of the performance period, they
will meet the requirements of the measure. We believe that it is
important to adopt a reporting rate of 97 percent in PY 2015 to ensure
continued improvement. We believe that this methodology fairly balances
the concerns that the reporting in CROWNWeb is skewed with our desire
to encourage continued improvement in the community.
We are concerned that small facilities may be disproportionately
impacted by the reporting threshold because, for example, a facility
with 10 patients could fail to report for only one patient and,
therefore, fail to meet the threshold. As we have stated, we intend to
use the information collected from reporting measures for purposes of
scoring clinical measures based on the same data in subsequent payment
years. Therefore, we will not require a facility to report this measure
if it treats fewer than 11 (i) in-center Medicare patients who have
been treated at least seven times by the facility; and (ii) home
hemodialysis Medicare patients for whom the facility submits a claim.
If a facility does not treat at least 11 of these patients during the
performance period, it will be required to attest to this fact via
CROWNWeb. If a facility does not make the attestation, we will score it
accordingly.
Comment: Some commenters did not support including this measure in
PY 2015. One commenter argued that it is inappropriate to adopt this
measure because it is not-NQF endorsed, nor. One commenter stated that
it is inappropriate to adopt this measure under the exception set forth
in the statute for measures which are not NQF-endorsed; this commenter
stated that the NQF process ensures that measures have gone through a
rigorous evaluation process, including reliability and validity. Some
commenters argued that this measure should be deferred because we have
not articulated the intent of the data collection or explained the
measure for which we intend to ultimately use these data. Several
commenters do not support this measure because facilities already
collect these data so the measure is unlikely to improve care, and they
requested that we adopt a measure based on outcomes. One commenter does
not support adoption of this measure because, it contends, Kidney
Disease: Improving Global Outcomes (KDIGO) has not indicated that serum
calcium and serum phosphorus must be reported on a monthly basis.
Further, the commenter argues that although it is customary to measure
serum calcium and phosphorus monthly, there is no evidence that it
indicates quality care.
Response: KDIGO recommends monthly measurements (see Table 13 on
internet document titled ``Kidney Disease Improving Global Outcomes
Clinical Practice Guideline for the Diagnosis, Evaluation, Prevention,
and Treatment of Chronic Kidney Disease-Mineral and Bone Disorder (CKD-
MBD)'' at https://www.kdigo.org/guidelines/mbd/guide3.html#chap31)).
KDIGO also emphasizes the importance of following trends versus single
measurements, thus supporting relatively frequent measurements (for
example, monthly). There is evidence that calcium and phosphorus levels
may be associated with clinical outcomes. Monthly measurements will
serve to identify elevated levels of serum calcium and phosphorus and
trigger therapeutic interventions, thus contributing to high quality
care. Because of these important considerations, and for the reasons
stated above, we believe that it is important to adopt this measure
even though it is not NQF-endorsed. We disagree that it is
inappropriate to adopt a measure not endorsed by NQF under the
exception set forth in the statute. We believe the exception language
was intended for such a circumstance where an endorsed measure is not
available for implementation to address key issues described in the
statute, such as mineral

[[Page 67487]]

metabolism. We will continue to work toward the development and
implementation of appropriate, NQF-endorsed measures to support the
ESRD QIP.
Comment: Many commenters noted that it is impractical for
facilities to obtain lab values from other providers because other
providers are not required to measure these data, do not share data
with dialysis facilities, and, even if facilities could obtain these
data, they could not be sure that the lab values were consistent or
reported under the same standards. Finally, these commenters stated
that CROWNWeb does not permit facilities to submit data obtained from
other providers if the lab result is outside the admission or discharge
date.
Response: We recognize that it may be difficult for facilities to
coordinate with hospitals and other care providers in order to obtain
lab values. Therefore, we are not mandating facilities to do so. In the
CY 2013 ESRD PPS proposed rule (77 FR 40969), we stated that facilities
may obtain lab values from other providers. This proposal was
specifically designed to afford facilities more flexibility in
acquiring and reporting serum calcium and serum phosphorus values. As
discussed previously in this preamble, facilities are highly encouraged
to coordinate with other providers, but the ESRD QIP does not mandate
them to do so. We believe that the commenters' concerns about
inconsistent lab data are mitigated by the requirement that the lab
must be accredited. Finally, the commenter is right in that CROWNWeb
does not allow facilities to submit data obtained from other providers
if the lab result is outside the admission or discharge date. As long
as the patient is treated at least seven times by the facility during
the applicable reporting month, however, the facility will be required
to report the patient's serum phosphorus and calcium levels regardless
of whether the patient also has blood drawn elsewhere (for example, as
a result of a hospitalization) during the month.
Comment: Many commenters encouraged us to monitor, in addition to
phosphorus and calcium, serum levels of parathyroid hormone (PTH),
arguing that proper bone mineral management must take all three factors
into account. Commenters also encouraged us to adopt measures in all of
these areas.
Response: We thank those commenters who advocated the monitoring of
PTH. We recognize the important role played by parathyroid hormone in
mineral metabolism in the ESRD population, and will pursue avenues by
which we may monitor serum levels of parathyroid hormone in the future.
As explained above, we are modifying our proposed exclusions and
finalizing that any facility must report serum calcium and serum
phosphorus levels for all (i) in-center Medicare patients who have been
treated at least seven times by the facility; and (ii) home
hemodialysis Medicare patients for whom the facility submits a claim
least once per month via CROWNWeb at the lesser of the 50th percentile
of facilities in 2013 or 97 percent per month to receive 10 points on
the measure. We also finalize that we will only apply this measure to
facilities with at least 11 (i) in-center Medicare patients who have
been treated at least seven times by the facility; and (ii) home
hemodialysis Medicare patients for whom the facility submits a claim.
Facilities who treat less than 11 of these patients during the
performance period must attest to this fact in CROWNWeb. If they do not
make this attestation, we will score them accordingly. The technical
specifications for this finalized measure can be found at https://www.dialysisreports.org/pdf/esrd/public-measures/MineralMetabolism-Reporting-2015-FR.pdf.
3. New Measures for PY 2015 and Subsequent PYs of the ESRD QIP
As the program evolves, we believe it is important to continue to
evaluate and expand the measures selected for the ESRD QIP. Therefore,
for the PY 2015 ESRD QIP and subsequent payment years, we proposed to
adopt five new measures. The proposed new measures include: Three
measures of dialysis adequacy (together comprising one dialysis
adequacy measure topic); one measure of hypercalcemia; and one
reporting measure related to hemoglobin and ESA dosages for all
patients.
a. Kt/V Dialysis Adequacy Measure Topic
Section 1881(h)(2)(A)(i) states that the ESRD QIP must evaluate
facilities based on measures of ``dialysis adequacy.'' For PYs 2012
through 2014, the ESRD QIP included a hemodialysis adequacy measure
evaluating the number of patients with a URR of at least 65 percent.
For the PY 2015 ESRD QIP, and future payment years, we proposed to
remove the URR Hemodialysis Adequacy measure. In its place, we proposed
to adopt three measures of dialysis adequacy (together comprising one
dialysis adequacy measure topic) based on Kt/V (K = clearance, t =
dialysis time, and V = volume of distribution) for the PY 2015 ESRD QIP
and future payment years of the program. Kt/V is a widely accepted
measure of dialysis adequacy in the ESRD community because it takes
into account the amount of urea removed with excess fluid. Further,
while the URR Hemodialysis Adequacy measure only applies to in-center
hemodialysis patients, we stated that the proposed Kt/V measures will
allow us to evaluate dialysis adequacy in adult hemodialysis (HD)
patients (in-center and home hemodialysis (HHD)) receiving three
treatments weekly, adult peritoneal dialysis (PD) patients, and
pediatric HD patients receiving three to four treatments weekly. We
proposed to adopt the following NQF-endorsed Kt/V measures of dialysis
adequacy, each one applicable to a different patient population:
(i) NQF 0249: Hemodialysis Adequacy Clinical Performance
Measure III: Hemodialysis Adequacy--HD Adequacy--Minimum Delivered
Hemodialysis Dose;
(ii) NQF 0318: Peritoneal Dialysis Adequacy Clinical
Performance Measure III--Delivered Dose of Peritoneal Dialysis Above
Minimum; and
(iii) NQF 1423: Minimum spKt/V for Pediatric Hemodialysis
Patients. The proposed measures assess whether Medicare dialysis
patients (PD, HD, and pediatric hemodialysis) meet the modality
specific Kt/V threshold. Performance on the measures is expressed as a
proportion of patient-months meeting the measure threshold. The
technical specifications for these measures can be found at https://www.dialysisreports.org/pdf/esrd/public-measures/PediatricHemodialysisAdequacy-ktv-2015-NPRM.pdf; https://www.dialysisreports.org/pdf/esrd/public-measures/PeritonealDialysisAdequacy-ktv-2015-NPRM.pdf; and https://www.dialysisreports.org/pdf/esrd/public-measures/HemodialysisAdequacy-ktv-2015-NPRM.pdf.
We requested comment on these proposals. The comments we received
on these proposals and our responses are set forth below.
i. Adult Hemodialysis Adequacy
Comment: The majority of commenters strongly supported the adoption
of this measure and the removal of URR as a measure of dialysis
adequacy, stating that the measure is more accurate and used more
widely by the dialysis community. Other commenters, however, stated
that URR is a more appropriate measure of dialysis adequacy because Kt/
V is dependent upon many factors, including mid-week sampling, accurate
urine collection, and dialysis

[[Page 67488]]

prescriptions, whereas URR needs only pre- and post-blood draws. One
commenter did not support a Kt/V measure because it only promotes
``adequacy'' rather than optimal health, urea is not associated with
toxicity, it does not take into account ultrafiltration, and it is only
a point in time measurement. Some commenters supported the adoption of
Kt/V as a measure of dialysis adequacy for hemodialysis patients, but
requested that we delay implementation until PY 2016 so that we can
ensure the data we are using to calculate achievement thresholds,
benchmarks, and performance standards were calculated using consistent
methodology. One commenter suggested that we include Kt/V in PY 2015,
but calculate rates for performance standards, benchmarks, and
thresholds based on data from January 1, 2012-June 30, 2012 since these
dates would include only data that were calculated using the NQF-
endorsed formulae. Finally, one commenter stated that we should request
raw data from facilities and calculate Kt/V to ensure consistency.
Response: We thank those commenters who supported the
implementation of these measures. We note that the published literature
suggests there is insufficient evidence to support the superiority of
alternative measures of small solute clearance over spKt/V. The KDOQI
Clinical Practice Guideline for Methods for Measuring and Expressing
Hemodialysis Dose (CPG 2) also state that ``the delivered Kt/V
determined by single-pool urea kinetic modeling continues to be
preferred as the most precise and accurate measure of dialysis'' (page
12, KDOQI 2006 Update). Furthermore, the minimum delivered hemodialysis
dose for both adult and pediatric patients, spKt/V>=1.2, was endorsed
by NQF in 2007. Regarding concerns about the use of consistent
methodology in the calculation of performance standards, beginning in
January 2012, the measure specifications for adult and pediatric
hemodialysis Kt/V state that single-pool Kt/V be measured using
Daugirdas II or Urea Kinetic Modeling. We anticipate that these
specifications will provide valid and consistent spKt/V values.
We thank the commenter for the suggestion of utilizing data from
January 1, 2012-June 30, 2012 to set achievement thresholds,
benchmarks, and performance standards. We believe, however, that
whenever possible, these values should be based on a full year of data
since these data, although not necessarily calculated using the same
NQF-endorsed methodology, represent any changes that may occur as a
result of seasonality. Additionally, utilizing this timeframe will
enable us to post the numerical values of the performance standards as
soon as they are available in December 2012 or January 2013.
We thank the commenter for the suggestion of collecting raw data
rather than calculated spKt/V values. At this time, we are not
operationally able to request these elements on claims. We will
consider this suggestion in future years of the program.
Comment: Several commenters supported the measure but requested
that we refine it to specify that the calculated spKt/V include
estimates of residual renal function (RRF) to avoid incentivizing
improper, longer dialysis sessions for these patients; one commenter
recommended that, consistent with KDOQI guidance, RRF be included in
spKt/V only if the urine collection used to measure it was within the
previous 90 days. Commenters also requested that we exclude patients
dialyzing four or more times per week or overnight and include patients
with Kt/V less than 2.5 since many patients achieve these values.
Response: Consistent with the 2006 KDOQI Clinical Guidelines for
hemodialysis adequacy, we do not find published, medical evidence to
support the inclusion of RRF in defining the minimum target spKt/V.
Additionally, effective January 2012, the Medicare claims processing
instructions specifically state that the reported spKt/V should not
include RRF. We currently exclude patients dialyzing four or more times
per week from the adult HD measure because this exclusion was NQF-
endorsed.
According to the measure specifications, overnight dialysis
patients are included in the HD spKt/V measure unless they are
dialyzing less than two or greater than four times per week, or if they
are in the first 90 days of ESRD treatment. We do not currently have
the ability to identify patients who are receiving thrice weekly in-
center nocturnal hemodialysis and do not have a measure specific to
this population. We are currently working with stakeholders to develop
adequacy measures to address frequent, home, and nocturnal hemodialysis
patients for future years of the ESRD QIP.
Finally, patients with spKt/V less than 0.5 or greater than 2.5 are
excluded from the Kt/V adult hemodialysis dialysis adequacy measure.
Patients with HD spKt/V values greater than 2.5 are excluded from the
measure calculation as these values are considered implausible for most
hemodialysis patients.
Comment: Commenter stated that spKt/V does not reflect patients on
short daily, frequent, and nocturnal dialysis and should be updated
accordingly. Another commenter requested that we develop a spKt/V
measure for home dialyzers.
Response: We are currently working with stakeholders to develop
adequacy measures to address other members of the ESRD population (i.e.
frequent, home, and nocturnal hemodialysis patients) for future years
of the ESRD QIP.
Comment: One commenter requested that we specify that the lab draw
for this measure should be done mid-week to better reflect patients'
actual conditions.
Response: Under the measure specifications for the Kt/V adult
hemodialysis adequacy measure, facilities are required to report the
last spKt/V measurement of the month. The NQF-endorsed measures for
minimum dialysis adequacy for both pediatric and adult patients do not
adjust for the day of the week; a minimum target value of spKt/V
greater than or equal to 1.2 should be achieved regardless of when this
is measured. We appreciate your suggestion and will take it under
consideration during our ongoing measure maintenance.
Comment: One commenter stated that ``dialysis adequacy'' is a
misnomer because it does not provide a full picture of dialysis
adequacy. Instead, the commenter suggests it be called a measure of
``urea removal,'' encouraging stakeholders to develop measures that are
more comprehensive of dialysis adequacy. Another commenter asked us to
recognize that ``adequacy'' is not synonymous with optimal levels.
Response: ``Dialysis adequacy'' is used in the ESRD QIP to
represent the quantification of urea removal by dialysis, one widely
accepted measurement of adequacy of this treatment. We recognize there
are other aspects of dialysis adequacy, and we are currently working
with stakeholders to develop additional measures for future years of
the ESRD QIP. Additionally, we emphasize that these minimum spKt/V
target levels may not be optimal levels for all patients. Therefore we
encourage clinicians to consider targeting higher spKt/V targets on an
individual patient basis as clinically indicated.
ii. Peritoneal Dialysis Adequacy
Comment: Many commenters supported the adoption of this measure and
asked us to finalize the measure along with the formula and methodology
for its calculation. One commenter explicitly asked us to finalize a
methodology for obtaining

[[Page 67489]]

dialysate, blood, and urine sampling. Other commenters, however, did
not support the measure, stating that we have not yet specified a
consistent reporting methodology. These commenters suggested that we
finalize this measure as a reporting measure only for PY 2015, define a
methodology for calculating the values in the final rule, and use data
from CY 2013 for purposes of adopting this measure as a clinical
measure in future years. One commenter stated that we should request
raw data from facilities and calculate Kt/V to ensure consistency.
Finally, some commenters stated that they did not support the measure.
Response: We thank the commenters who supported the adoption of
this measure. There is more than one method that may be used by
facilities to calculate PD Kt/V. Methods for reporting PD Kt/V on
Medicare claims were specified prior to the start of data collection in
July 2010 and are based on measure specifications endorsed by the
National Quality Forum in 2007. Measurement of peritoneal dialysis Kt/V
is based on timed (24 hour) dialysate collection to measure urea
clearance (k). Time (t) is specified in the definition (week or per
week). The only component of Kt/V measurement in peritoneal dialysis
that is formula-based is the estimation of total body water (V). V is
estimated from either of two formulae (Watson or Hume) predictive
equations that are based on patient anthropometric and demographic
information. We will consider the standardization of estimating total
body water as part of our annual ongoing measure maintenance process,
but we note that we believe it is appropriate to adopt this measure
without this standardization because the Watson and Hume formulae yield
substantially similar results. Moreover, NQF approved the measure with
the specification to use the Watson or Hume formula to estimate ``V.''
We choose to collect reported Kt/V, rather than the data elements for
Kt/V, due to the limitations of collecting data on Medicare claims and
to minimize burden on facilities.
Comment: One commenter supported the use of Kt/V as a measure of
dialysis adequacy for peritoneal dialysis patients, but suggested that
we refine it in the final rule. This commenter stated that we need to:
(i) Clarify in the technical measure specifications that a patient is
only included in the measure population if he/she has been on
peritoneal dialysis for 90 days or more so that a patient transferring
from hemodialysis to peritoneal dialysis will not be immediately
counted in the measure; and (ii) exclude patients in the first month
they are eligible to be included in the denominator if no Kt/V
measurement is taken until the fourth month since the measure specifies
Kt/V need only be measured once every 4 months. One commenter noted
that a monthly measurement period for the measure is problematic
because Kt/V is assessed throughout the month in home training clinics;
this commenter suggested that there be a 30-day window from the time of
the adequacy measure to adjust the prescription and repeat the adequacy
measure.
Response: We thank commenters for their feedback regarding the
exclusion criteria for Kt/V for adult peritoneal ESRD patients. To the
first point, patients are excluded from this measure if they are in the
first 90 days of treatment for ESRD. If a patient changes from
hemodialysis to peritoneal dialysis during a month, the patient would
be included in both the HD and PD Kt/V measure calculations. The 2006
KDOQI Clinical Practice Guidelines for peritoneal dialysis adequacy
(Guideline 2.1.2) state ``the total solute clearance (residual kidney
and peritoneal, in terms of Kt/V) should be measured within the first
month after initiating dialysis therapy and at least once every 4
months thereafter.'' While this measure is consistent with the
guideline, we acknowledge that a patient may be included in the PD Kt/V
measure calculation in the same month their modality changed to PD.
However, after switching from hemodialysis to peritoneal dialysis,
peritoneal dialysis clearance typically is not measured right away or
even in the same month as the PD catheter insertion, as the peritoneal
membrane is in a state of flux and its membrane transport
characteristics are unstable for a few weeks. In several clinical
scenarios it may not be appropriate to measure PD Kt/V within the first
several weeks after initiation of peritoneal dialysis. Therefore, we
believe that the PD unit personnel will not have measured PD adequacy
in the 30 days following the transition from HD to PD. With regard to
the comment on excluding patients from the denominator for the first
month if no measurement is taken until the fourth month, we use the
data reported in conjunction with Medicare dialysis facility claims
value code D5: Result of last Kt/V reading and occurrence code 51: Date
of last Kt/V reading. The claims reporting instructions indicate that
for PD patients this should be within the last 4 months of the claim
date of service. All monthly claims with valid PD Kt/V values will be
used in the calculation. In response to the monthly measurement period
comment, for PD patients, facilities are only required to report Kt/V
once every 4 months.
Comment: One commenter urged us to develop a pediatric peritoneal
dialysis adequacy measure in collaboration with stakeholders.
Response: We are currently working with stakeholders to develop a
pediatric peritoneal dialysis adequacy measure as part of a consensus-
based measure development process, and we will consider implementing
such a measure through future rulemaking.
iii. Pediatric In-Center Hemodialysis Adequacy
Comment: Several commenters supported the adoption of a Kt/V
hemodialysis adequacy measure for pediatric patients even if we do not
adopt the adult Kt/V measures. Other commenters, however, argued that
we should not finalize the pediatric in-center hemodialysis adequacy
measure because (i) the measure does not exclude RRF patients; and (ii)
the measure applies to 4 times per week hemodialysis. These commenters
believe that adoption of the proposed measure would, in effect, raise
the pediatric dialysis dose above the adult dialysis dose in a
substantial number of children who either have a significant RRF or are
treated with dialysis four days a week; they caution that we should
avoid incentivizing improper, longer dialysis sessions for these
patients. Some commenters urged us to harmonize the adult and pediatric
spKt/V hemodialysis adequacy measures, specifically regarding the
required number of dialysis sessions for inclusion in the measure and
the inclusion of RRF. Another commenter stated that we should consider
changing the measure so that it is based on weekly dose. Other
commenters stated, generally, that spKt/V is not appropriate for
pediatric patients and encouraged us to work with stakeholders to
develop a suitable pediatric dialysis measure.
Response: We thank the commenters who supported the implementation
of the spKt/V hemodialysis adequacy measure for pediatric patients and
those who provided feedback for its implementation. The measure
methodology was developed through a consensus-based process
incorporating the input of a Technical Expert Panel and was endorsed by
NQF in 2011. The pediatric hemodialysis adequacy measure differs from
the corresponding adult adequacy measure in that the measure applies to
patients receiving four dialysis treatments a week.

[[Page 67490]]

Analysis of 2007 claims data suggest that in 5.6 percent of patient-
weeks, dialysis sessions occurred four times per week for pediatric
patients. Given that this is a significant proportion, the TEP
concluded that these patients should be included in this measure. As
seen in Table 4 below, there were three or four dialysis sessions in
approximately 88 percent of patient-weeks. Based on these results, the
TEP concluded that by defining the denominator as hemodialysis patients
receiving dialysis three or four times weekly, the measure will be
applicable to most pediatric hemodialysis patients.

Table 4--Dialysis Sessions per Patient Week Among All HD Pediatric
Patients < 20 Years Old
------------------------------------------------------------------------
Number of
Sessions per week patient-weeks Percent
------------------------------------------------------------------------
1....................................... 211 2.6
2....................................... 614 7.5
3....................................... 6712 82.2
4....................................... 533 6.5
5....................................... 60 0.7
6....................................... 36 0.4
7....................................... 3 0.04
------------------------------------------------------------------------

N=312 patients with first Medicare dialysis claim on or before
January 1, 2007.
With regard to the incorporation of RRF in the calculation of
adequacy, the TEP did not agree that RRF should be added to the measure
description for several reasons: (i) Published studies evaluating
dialysis adequacy in the pediatric population do not include residual
renal function; (ii) RRF changes continuously with age in the pediatric
population; and (iii) RRF is difficult to measure among pediatric
patients. Neither the NQF-endorsed measure specifications nor the KDOQI
guidelines support measuring spKt/V in pediatric patients based on a
weekly dose. Furthermore there is no evidence to support a minimum
target value for a weekly Kt/V dose. We will continue to consider other
measurements of dialysis adequacy for the pediatric population; at this
time, we believe that this measure is the most suitable.
For the reasons stated above, we are adopting the Kt/V measure
topic as proposed. The technical specifications for each of the
finalized measures in this measure topic can be found at https://www.dialysisreports.org/pdf/esrd/public-measures/HemodialysisAdequacy-ktv-2015-FR.pdf (adult hemodialysis), https://www.dialysisreports.org/pdf/esrd/public-measures/PeritonealDialysisAdequacy-ktv-2015-FR.pdf
(adult peritoneal dialysis), and https://www.dialysisreports.org/pdf/esrd/public-measures/PediatricHemodialysisAdequacy-ktv-2015-FR.pdf
(pediatric in-center hemodialysis).
b. Hypercalcemia
Section 1881(h)(2)(A)(iii) of the Act states that the measures
specified for the ESRD QIP shall include other measures as the
Secretary specifies, including, to the extent feasible, measures of
bone mineral metabolism. Abnormalities of bone mineral metabolism are
exceedingly common and contribute significantly to morbidity and
mortality in patients with advanced Chronic Kidney Disease (CKD).
Numerous studies have associated disorders of mineral metabolism with
morbidity, including fractures, cardiovascular disease, and mortality.
Therefore, we believe it is necessary to adopt a clinical measure that
encourages proper bone mineral metabolism management.
One indicator of bone mineral metabolism management is ensuring
normal calcium levels in the blood. Therefore, we proposed to use the
NQF-endorsed measure, NQF 1454: Proportion of patients with
hypercalcemia, to evaluate ESRD facilities for the PY 2015 and future
payment years of the ESRD QIP. This measure assesses the number of
patients with uncorrected serum calcium greater than 10.2 mg/dL for a
3-month rolling average. ``Uncorrected'' means not corrected for serum
albumin concentration. Performance on this measure is expressed as a
proportion of patient-months for which the 3-month rolling average
exceeds the measure threshold. Because the NQF-endorsed measure calls
for a 3-month rolling average, we also proposed that the first measure
rate for this measure would be calculated using the first 3 months of
data collected during the proposed performance period (that is, there
would be no measure rate for the first 2 months of the performance
period; we would calculate the first measure rate for the performance
period using the first 3 months of data and would then calculate a rate
each successive month, dropping the oldest month and adding the newest
month). Because we proposed to adopt this measure not only for PY 2015,
but also subsequent payment years, we also proposed that, beginning
with the PY 2016 program, we would measure hypercalcemia beginning in
January of the applicable performance period. This would allow us to
have a 3-month rolling average for all months in the performance
period. We proposed that the 3-month rolling average rate for January
would be calculated using the rates from November and December of the
previous year as well as January of that year. Likewise, we proposed
that the rate for February would be calculated using the rates from
December, January and February to calculate the 3-month rolling
average, and so on. Technical specifications for this measure can be
found at https://www.dialysisreports.org/pdf/esrd/public-measures/MineralMetabolism-Hypercalcemia-2015-NPRM.pdf.
The comments we received on these proposals and our responses are
set forth below.
Comment: Several commenters supported this measure, noting that it
is consistent with KDIGO guidelines and is especially necessary given
that we will include oral-only drugs in the bundle beginning in PY
2014; some commenters specifically argued that that there is sufficient
validity and reliability of the data collected in CROWNWeb to establish
an appropriate clinical measure for PY 2015, and noted that this
measure is in keeping with Congress' intent to include a measure of
bone mineral metabolism in the ESRD QIP. Other commenters, however,
stated their belief that, despite its NQF-endorsement, the measure is
not aligned with clinical standards, is contrary to KDIGO guidelines,
and does not advance the aims of the National Quality Strategy.
Additionally, several commenters, both those supporting and opposing
the measure, argued that it is inappropriate to use CROWNWeb data to
define performance standards, achievement thresholds, and benchmarks
because the data underrepresents small- and mid-sized dialysis
organizations, does not account for the differences in reporting which
may exist when data are voluntarily reported (and data were voluntarily
reported in the CROWNWeb pilot), was submitted with the understanding
that it was test data and would not be used by CMS programs, and
because it suffers from serious data collection problems, a lack of
definitions, and a lack of reporting requirements in CROWNWeb. Many
commenters suggested that we adopt this measure as a reporting measure
only for PY 2015. Several other commenters believe that the proposed
hypercalcemia measure is only appropriate if we include similar
clinical measures for serum phosphorus, parathyroid hormone (PTH), and
other mineral metrics because a hypercalcemia measure alone represents
a piecemeal approach to bone and mineral metabolism that will not be
sufficient to ensure quality care for ESRD patients and may even
incentivize

[[Page 67491]]

inappropriate care. Finally, commenters recommended that CMS monitor
secondary parathyroid hormone and not include oral-only drugs in the
bundle until such measures and monitoring are in place.
Response: Commenters rightly state that the performance standards,
achievement thresholds, and benchmarks for the proposed Hypercalcemia
measure were not calculated using data from all facilities. Because it
is possible that these calculations could contain a systemic bias, and
we have no effective means of addressing that bias in the ESRD QIP as
this time, we will not finalize a clinical measure for hypercalcemia,
as discussed above, until valid data from all facilities are accessible
for the purpose of establishing performance standards, achievement
thresholds, and benchmarks. We are not finalizing a clinical
Hypercalcemia measure at this time. We do, however, continue to believe
that hypercalcemia is an important indicator of bone mineral
metabolism, and we intend to use this measure in subsequent payment
years.
Comment: One commenter stated that, generally, we should not use
data from CROWNWeb for the ESRD QIP until the validity of CROWNWeb data
is confirmed. Commenters also urged us to find solutions for the
CROWNWeb issues which the community has been experiencing in order to
ensure that, as measures increasingly rely on CROWNWeb data, there is
no question as to the data's validity.
Response: We thank the commenters who expressed concern regarding
the use of CROWNWeb data for the ESRD QIP. Given the potential risk to
validity of ESRD QIP clinical measures calculated using CROWNWeb data,
we will not finalize the proposed clinical measure for hypercalcemia
that depends on those data, as noted above.
Comment: One commenter urged us to exclude patients who have
hypercalcemia for reasons other than ESRD treatment (for example,
medication and malignancy) from the Hypercalcemia measure. The
commenter requests confirmation that the Hypercalcemia measure includes
all patients rather than just Medicare patients, and is concerned with
CMS' move to include the total facility population in the measure
collection process. One commenter seeks clarification regarding whether
a lower or higher rate is desirable for the Hypercalcemia measure.
Response: We thank the commenters for raising these issues with the
Hypercalcemia measure, and we will incorporate them in discussions
during future rulemaking, when the Hypercalcemia measure is considered
as a measure for the ESRD QIP in future payment years.
For the reasons discussed above, we will not finalize the
Hypercalcemia measure for use in the PY 2015 ESRD QIP or subsequent
years until indicated otherwise in rulemaking.
c. Anemia Management Reporting Measure
Section 1881(h)(2)(A)(i) requires ``measures on anemia management
that reflect the labeling approved by the Food and Drug Administration
(FDA) for such management.'' Although the current FDA-approved label
for ESAs only specifically addresses hemoglobin levels greater than 11
g/dL, previous FDA-approved labels suggested patients on ESAs maintain
a hemoglobin level of 10-12 g/dL. As we noted in the CY 2012 ESRD PPS
final rule, upon further research, the FDA determined that there is no
evidence suggesting a lower target level at which hemoglobin does not
cause increased risks of death, serious adverse cardiovascular
reactions, and stroke and, therefore, changed its approved label on
June 24, 2011 (76 FR 70257).
As a result of the changes in the FDA approved-label and the
implementation of the ESRD QIP, we are monitoring trends and indicators
of anemia management for the Medicare ESRD population. We have found
that the average monthly blood transfusion rate increased from 2.7
percent in 2010 to 3.2 percent in 2011. We are working through our ESRD
QIP monitoring and evaluation program to further assess the effect of
the ESRD PPS. We believe that it is important that we continue
monitoring hemoglobin levels in patients to ensure that anemia is
properly treated, and we, therefore, proposed to adopt a measure for PY
2015, and future payment years, which requires facilities to report ESA
dosage (if applicable) and hemoglobin and/or hematocrit levels for
patients on at least one monthly claim. In addition to this measure,
proposed below, we plan to continue to monitor the rate of transfusions
and may consider the adoption of relevant quality measures through
future rulemaking if necessary.
Since January 1, 2012, facilities have been required to report
hemoglobin or hematocrit \4\ levels for each patient on every claim (CR
7640). Beginning April 1, 2012, if a hemoglobin or hematocrit value is
not included in the claim, the claim is returned to the facility (CR
7593). If a hemoglobin or hematocrit value is not available for a
patient, a facility can enter a default value of 99.99 on the claim and
the claim will not be returned, provided the facility is not billing
for an ESA. The default value is not acceptable when the claim includes
an ESA, in such a case, the claim will be returned to the facility.
---------------------------------------------------------------------------

\4\ Hematocrit values are used to calculate hemoglobin levels by
taking the hematocrit value and dividing by three.
---------------------------------------------------------------------------

We stated in the proposed rule that we are concerned that our
current policy of paying claims that include a default hemoglobin or
hematocrit value of 99.99 could lead to the under-reporting of
patients' hemoglobin or hematocrit levels and ESA dosage by facilities;
we are specifically concerned that we will not receive complete and
accurate hemoglobin/hematocrit readings for those patients not
receiving ESAs because a default value of 99.99 can be reported on
claims, and these claims will be paid, if no ESA is administered to the
patient. Additionally, we believe that facilities might choose to
strategically not report certain patients' hemoglobin or hematocrit
levels on certain claims--those where the patient's hemoglobin levels
are greater than 12 g/dL--in order to make the performance rate of
their Hemoglobin Greater Than 12 g/dL measure seem better and reduce
the likelihood of a payment reduction under the ESRD QIP.
Because it is possible that facilities could under-report
hemoglobin or hematocrit levels, we proposed to adopt an Anemia
Management reporting measure for the PY 2015 ESRD QIP, and future
payment years of the program. For this measure, we proposed to require
facilities to report a hemoglobin or hematocrit value and, as
applicable, an ESA dosage for all Medicare patients at least once per
month via claims. We proposed to consider claims with 99.99 values as
not meeting the requirements of this measure (that is, claims reporting
99.99 will be counted as if the hemoglobin or hematocrit value were
left blank).
We stated that we do not intend for this proposed measure to
encourage unnecessary testing or unduly burden a facility.
Consequently, for purposes of scoring the measure, we considered
proposing to require facilities to report the required information for
less than 100 percent of their patients. Specifically, we considered
lowering the threshold to reporting 98 percent of patients for a month
in order to receive credit for that month. We ultimately proposed that
a facility should be required to take and report these values for every
patient at least once per month so that each beneficiary receives the

[[Page 67492]]

highest standard of care. We realize, however, that there are
circumstances beyond a facility's control wherein it may not be able to
draw a sample for this patient. Therefore, we did not propose that the
facility itself must draw blood for each patient. If, for example, a
patient is hospitalized or transient during a claim month, the facility
may report the hemoglobin/hematocrit readings and ESA dosage (if
applicable) for the patient for a month if a patient has labs drawn by
another provider/facility and those labs are evaluated by an accredited
laboratory (a laboratories that is accredited by, for example, the
Joint Commission, the College of American Pathologists, the AAB
(American Association of Bioanalysts), or State or Federal agency), and
the dialysis facility obtains the hemoglobin/hematocrit readings and
ESA dosage. Additionally, we proposed to only consider a patient
qualified for this measure (i) if the patient is alive at the end of
the month; (ii) if the patient is treated in-center, that patient was
treated at that facility at least twice during the claim month; and
(iii) if the patient receives dialysis at home, a claim is submitted
for that patient. We believe that these proposals will provide more
flexibility for facilities and will also discourage facilities from
drawing blood, even when not necessary for fear that the patient will
fail to come to the facility again during that month. We requested
comment on this proposal. We also requested comment on whether
facilities should only have to report data for 98 percent of their
patients.
The proposed Anemia Management reporting measure was not included
in the list of measures under consideration in accordance with section
1890A(a)(2) of the Act because we had not yet fully assessed the impact
of the new FDA-approved ESA labeling on the ESRD population. We have
since received and analyzed more, but still incomplete, anemia
management data; we believe it is necessary to require facilities to
provide complete data so that we may fully understand the effect of the
changes to ESA labeling and other factors. The proposed Anemia
Management reporting measure will play a critical role in patient
safety. As noted above, our monitoring activities indicate that there
has been a slight but noticeable increase in transfusions since the
adoption of the ESRD PPS. Additionally, a United States Renal Data
System analysis presented in May 2012 found an increase in blood
transfusion rates among ESRD patients concurrent with the
implementation of the ESRD PPS. Although the association of changes in
transfusion rates with the ESRD PPS, FDA labeling changes, and other
factors are not yet known, we believe proactive facility engagement in
regular monitoring of patient hemoglobin or hematocrit levels
regardless of ESA use is critical to maintaining safe care, protecting
the safety of beneficiaries, and monitoring the program effectively. We
further believe that the data collected from the proposed measure are
necessary for measure development in a clinical area of critical
significance to patient safety--anemia and transfusion. A delay in
proposing to adopt this reporting measure may prevent us from creating
clinical measures for use in future years of the program and pose a
risk to patients. Finally, we noted that section 1881(h) of the Act
specifically highlights the importance of anemia management measures,
and we do not believe it would be in the best interest of the program
to wait an additional year to propose this measure.
For the reasons stated above, we proposed to adopt an Anemia
Management reporting measure for the PY 2015 ESRD QIP and subsequent
payment years. We provided the technical specifications for this
measure, at https://www.dialysisreports.org/pdf/esrd/public-measures/AnemiaManagement-Reporting-2015-NPRM.pdf. We requested public comment
on these proposals.
The comments we received on these proposals and our responses are
set forth below.
Comment: Some commenters supported the measure, stating that they
believe this measure will allow us to closely monitor the
underutilization of ESAs and the increase in transfusions. Commenters
also stated that they believe that this measure will assist in
explaining and monitoring timely ESA discontinuation and studying the
potential effect of altitude on patients. Many commenters supported
this measure, but requested that we make modifications to our proposed
exclusions. These commenters suggested that we exclude, for all of the
reporting measures, the following patients: (i) Beneficiaries who are
regularly treated at the facility and who fit into one of these
categories: (a) beneficiaries who die within the applicable month; (b)
beneficiaries that receive fewer than 7 treatments in a month; and (c)
beneficiaries receiving home dialysis therapy who miss their in-center
appointments when there is a documented, good faith effort to have them
participate in such a visit during the applicable month; (ii) transient
dialysis patients; (iii) pediatric patients (unless the measure is
specific to this population); and (iv) kidney transplant recipients
with a functioning graft. Commenters stated that these exclusions would
be consistent with our own measures reported on DFC; commenters also
stated that these exclusions seek to hold facilities accountable only
for those beneficiaries to whom they regularly give care and for whose
care they can affect. Another commenter, however, stated that we should
not implement other commenters' suggestions that we exclude
beneficiaries receiving home dialysis therapy who miss their in-center
appointments when there is a documented, good faith effort to have them
participate in such a visit during the applicable month; this commenter
stated that it is the responsibility of the facilities to educate
patients on the importance of making and keeping appointments.
Additionally this commenter argued that ``good faith'' is too vague;
commenter requested that, if we did adopt this exclusion, we clearly
define a ``good faith effort.'' Another commenter stated that
peritoneal dialysis patients do not need to be seen at a facility once
per month and the measure should be accordingly revised.
Response: Consistent with the Mineral Metabolism reporting measure,
we agree with commenters who believe that the exclusions should be
modified. We recognize that treating a patient twice may not provide
enough time to effectuate quality patient care. We agree with the
commenters who suggested that an in-center hemodialysis patient should
be excluded if treated by a facility fewer than seven times during the
month, regardless of whether the patient is officially admitted to that
facility. With seven treatments, we believe that a facility should have
had adequate opportunities to draw blood necessary to report
hemoglobin/hematocrit. We also believe that the threshold of seven will
discourage unnecessary testing of in-center hemodialysis patients by
facilities because they will know that, since in-center patients are
typically treated three times per week, a patient must have been
treated by the facility for at least two weeks to be included; thus,
the facility need not feel pressure to draw blood for every patient
during the first few visits of the month. Based on these
considerations, we will not finalize our proposal to only exclude in-
center patients who have been treated fewer than two times by the
facility during the claim month. Instead, we will exclude any patient
who is treated by the facility

[[Page 67493]]

fewer than seven times during the reporting month.
We do not believe that it is necessary to specifically exclude
transient patients from this measure because, as noted, any patient
that is treated by the facility at least seven times during the
applicable reporting month is present at the facility for enough time
that the facility should be able to measure that patient's hemoglobin/
hematocrit. Likewise, for the same reasons, we do not believe we need
to separately exclude patients who are deceased at the end of the
reporting month. Provided that the patient was treated by the facility
at least seven times during that month, the facility should be able to
draw blood necessary to obtain hemoglobin/hematocrit values even if the
patient is deceased at the end of the month.
Additionally, we do not agree that facilities should not be held
accountable for drawing blood from home dialysis patients who fail to
attend a monthly appointment. We believe that it is incumbent upon a
facility to make home dialysis patients aware that they must attend
monthly appointments to be properly treated. Therefore, we will
finalize our proposal that we will include any home hemodialysis
patient for which a facility submits a claim with respect to the
reporting month in this measure.
Finally, we believe it is important to include transplant patients
until they are officially discharged from a facility; regular
monitoring can help ensure that a transplant remains effective and the
facility is continuing to provide the best care possible.
For the reasons stated above, we will modify our proposals for the
exclusions for this measure and finalize that, for the PY 2015 ESRD
QIP, facilities must report hemoglobin/hematocrit at least once per
month via claims for (i) in-center Medicare patients who have been
treated at least seven times by the facility; and (ii) home
hemodialysis Medicare patients for whom the facility submits a claim.
If the facility administers an ESA to these patients, it must also
report the HCPCS code and corresponding unit for that patient. We will
interpret an empty HCPCS field to mean that no ESA was administered.
Comment: Several commenters encouraged us to not adopt a percentage
reporting threshold because it does not distinguish between
beneficiaries legitimately excluded and those that were merely missed.
Other commenters requested that we use both exclusions and a threshold;
one commenter suggested a threshold of 90 percent or an allowance of
two patients to ensure that small facilities are not disproportionally
affected. Another commenter stated that requiring 98 percent reporting
may make it difficult for patients to travel because dialysis
facilities may encourage them otherwise in order to ensure compliance
with the measure. One commenter requested that we provide guidance
regarding the standardization of blood-draws so that data can be
reliable before we implement a reporting threshold.
Response: We agree with the commenters who argued that, even with
exclusions, there are circumstances in which facilities cannot report
the hemoglobin/hematocrit and ESA dosage, as applicable, for every
patient at least once per month. It is possible that these exclusions
alone may hold a facility responsible for a patient who was technically
treated by the facility but who did not receive actual treatment from
the facility during the applicable month. For example, a facility may
wait to draw blood from a patient because it believes that the patient
will be treated there for the entirety of the month, but learns that
the patient has been hospitalized unexpectedly for all or part of the
applicable month. Therefore, we believe that we should not require
facilities to report for 100 percent of their patients. Based on data
from CROWNWeb, we believe that facilities report hemoglobin/hematocrit
and ESA dosage for approximately 99 percent of their patients on a
monthly basis. We believe it is appropriate to assume that a similar
percentage was reported via claims. Although, as commenters have argued
with regard to the Mineral Metabolism reporting and the Hypercalcemia
measures, this information in CROWNWeb was voluntarily reported which
may mean that the data is biased toward facilities that value
reporting; additionally, the data from the CROWNWeb pilot was mainly
supplied by LDOs that may be more likely to have more resources and
corporate policies that require reporting compliance.
Taking all of these issues into consideration, we finalize a
normative reporting threshold for this measure; facilities will be
required to report at the lesser of the 50th percentile of all
facilities in 2013 or 99 percent, in total, of their (i) in-center
Medicare patients who have been treated at least seven times by the
facility; and (ii) home hemodialysis Medicare patients for whom the
facility submits a claim. This floor ensures that facilities are not
penalized as long as they report at a high rate that is consistent with
CROWNWeb data; that is, facilities know that, provided they reach 99
percent for each month of the performance period, they will meet the
requirements of the measure. We believe that this methodology fairly
balances the concerns that the reporting in CROWNWeb is skewed with our
desire to encourage continued excellence in the community.
We are concerned that small facilities may be disproportionately
impacted by the reporting threshold because, for example, a facility
with 10 patients could fail to report for only one patient and,
therefore, fail to meet the threshold. As we discuss below, we believe
that 11 cases is an appropriate minimum for purposes of scoring
clinical measures. As we have stated, we intend to use the information
collected from reporting measures for purposes of scoring clinical
measures based on the same data in subsequent payment years. Therefore,
we will not require a facility to report this measure if it treats less
than 11 (i) in-center Medicare patients who have been treated at least
seven times by the facility; or (ii) home hemodialysis Medicare
patients for whom the facility submits a claim. If a facility does not
treat at least 11 of these patients during the performance period, it
will be required to attest to this fact via CROWNWeb. If a facility
does not make the attestation, we will score it accordingly.
Comment: Several commenters do not support this measure because
facilities already collect these data so the measure is unlikely to
improve care. Some of these commenters asked us to require facilities
to report this information separate from the ESRD QIP on at least one
monthly claim to ensure anemia is properly treated.
Response: As we noted in the proposed rule (77 FR 40974), we
believe that this measure will discourage underreporting of ESAs and
hemoglobin. Currently, facilities may report a value of 99.99 as
default hemoglobin for claims that do not include an ESA. Since the
bundle includes ESAs, it may not be financially beneficial for a
facility to report an ESA, especially if a patient's hemoglobin is
greater than 12--negatively affecting its Hemoglobin Greater than 12 g/
dL measure score. Additionally, we are concerned that the 99.99 value
will be overutilized and will not allow us to properly monitor
hemoglobin levels across the ESRD population. If we are able to closely
and accurately monitor ESA dosage and hemoglobin, we believe we will be
able to improve care by using this information to monitor the effects
of the bundle and the ESRD QIP on beneficiaries; we also believe we may

[[Page 67494]]

utilize these data in the future to develop an anemia management
clinical measure.
Comment: Many commenters noted that it is impractical for
facilities to obtain lab values from other providers because other
providers are not required to measure these data, do not share data
with dialysis facilities, and, even if facilities could obtain these
data, they could not be sure that the labs were consistent or reported
under the same standards. Additionally, one commenter argued that
hemoglobin levels from other facilities will be of little use without
further information regarding why the patient was at that facility. One
commenter agreed that hemoglobin/hematocrit values can be supplied by
another provider provided the labs are evaluated by an accredited
facility.
Response: We recognize that it may be difficult for facilities to
coordinate with hospitals and other providers in order to obtain lab
values. We, however, are not mandating facilities to do so. In the
proposed rule (77 FR 40974), we stated that facilities may obtain lab
values from other providers. This proposal was specifically designed to
afford facilities more flexibility in acquiring and reporting
hemoglobin and hematocrit values, as well as ESA dosage. Facilities are
highly encouraged to coordinate with other providers, but this measure
does not mandate them to do so. We believe that the commenters'
concerns about inconsistent lab data are mitigated by the requirement
that the lab must be accredited. Further, we do not believe that data
from another provider will be of little use. We can use these values to
monitor hemoglobin and hematocrit levels of ESRD patients, as well as
ESA dosage; additionally, collecting these data may encourage providers
to engage one another about the patient's conditions and care.
Comment: One commenter noted that hemoglobin values on claims are
from the prior month; therefore the 99.99 is used for the claim in the
first month of a patient's dialysis or if a patient had a transplant.
The commenter requested clarification on what it should report in these
circumstances. Other commenters argued that 99.99 should be available
without penalty to facilities because in some instances, it is
appropriate. One commenter supported disincentivizing 99.99 reporting
in order to stop facilities from not reporting patients with high
hemoglobin.
Response: The commenter is correct in that the Erythropoietin
Monitoring Policy (2006) \5\ requests that the hemoglobin/hematocrit
reading reported on claims be defined as ``the most recent reading
taken before the start of this billing period. For patients beginning
dialysis, use the most recent value prior to the onset of treatment.''
We recognize that, for some patients, specifically those new to
dialysis, this hemoglobin/hematocrit values may not be available.
Therefore, we will not require a facility to report a hemoglobin/
hematocrit value for a patient if that patient has been on dialysis for
less than one month (including when dialysis is resumed after a
transplant); facilities may report the default value without being
penalized in this circumstance. We remind facilities that if an ESA is
reported on a claim, the facility must also report a hemoglobin/
hematocrit level, regardless of whether that patient is new to dialysis
(CR 7460).
---------------------------------------------------------------------------

\5\ https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM4135.pdf.
---------------------------------------------------------------------------

Comment: One commenter asked us to include Omontys, an ESA new to
the market, in this measure. Other commenters generally requested that
we monitor new ESAs and their effects on hemoglobin levels.
Response: We intend to monitor ESA dosage for all ESAs used by
dialysis facilities. Using HCPCS codes, a facility must indicate which
ESA it administered, including Omontys.
Comment: One commenter noted that it supports the reporting of
hemoglobin, but not hematocrit because the data set should be
standardized to require only hemoglobin reporting.
Response: Facilities can report either hemoglobin or hematocrit on
claims. Either will count for the purpose of this measure. (For the
Hemoglobin Greater than 12 g/dL measure, hematocrit values are changed
to hemoglobin by dividing by 3). As of 2011, only 14 percent of
facilities reported hemoglobin, while 70 percent reported hematocrit.
We believe that requiring 70 percent of all facilities to alter their
reporting method would generate undue burden on the dialysis facility
community, for relatively little gain, as we have an established method
for incorporating both hemoglobin and hematocrit into the measure
calculation.
Comment: Some commenters asked us to state the purposes of the
anemia management reporting measure with more specificity. Some
commenters requested that we clarify how we intend to report and make
publicly available hemoglobin/hematocrit levels and ESA dosages.
Commenters asked us to clarify the plans for the use of the information
and how we will account for patient weight in our analyses.
Response: We believe that the anemia management reporting measure
emphasizes the importance of anemia management for the ESRD population
and will support efforts to establish more meaningful, evidence-based
clinical measures of anemia management in the future. We intend to
publicly report the anemia management reporting measure rates in the
same manner that we use to publicly report other measure rates under
the ESRD QIP but will not score facilities based on those rates.
Facilities will be able to preview the reporting data to be publicly
reported before we post it on DFC. At present, the Anemia Management
reporting measure does not take patient weight into account, but we
will consider whether this type of adjustment is appropriate for future
years of the ESRD QIP. We would also like to clarify that we will use
HCPCS codes that indicate ESA administration and their corresponding
units for assessing whether an ESA was administered. We will interpret
an empty HCPCS field to mean that no ESA was administered.
Comment: One commenter supports this measure but suggests that the
data be captured in CROWNWeb since hemoglobin levels are only reported
on claims with ESA doses.
Response: The commenter is correct that CROWNWeb only requires a
hemoglobin/hematocrit if an ESA is entered.
Since January 1, 2012, however, facilities have been required to
report hemoglobin/hematocrit on claims regardless of whether an ESA
dose was administered (CR 7460). Facilities are expected to report the
anemia management reporting measure on their claims.
Comment: One commenter supports the measure but only for patients
with hemoglobin less than 10 g/dL. It is more likely, the commenter
argues, that one will identify a patient with a low hemoglobin (even if
that patient is not on ESAs) if a new reporting measure is instituted.
The commenter believes that reporting hemoglobin for patients not on
ESAs who have a hemoglobin greater than 12 g/dL is not necessary
because these patients are not at risk for the complications that arise
from targeting high hemoglobin levels using ESAs.
Response: It is our intention to use the data we collect from this
reporting measure to develop an anemia management clinical measure and
monitor anemia management trends. In order to better understand the
ESRD population as a whole and collect a

[[Page 67495]]

robust data set, we believe it is important to collect hemoglobin/
hematocrit levels for patients regardless of their values or if an ESA
was administered. Using this information, we can, among other things,
assess trends across the entire population and use these data for
measure development and monitoring purposes.
As explained above, we are modifying our proposed exclusions and
finalizing that a facility must report hemoglobin/hematocrit and ESA
dosage (via HCPCS codes and their units) for the lesser of the 50th
percentile of facilities in 2013 or 99 percent, in total, of its (i)
in-center Medicare patients who have been treated at least seven times
by the facility; and (ii) home hemodialysis Medicare patients for whom
the facility submits a claim. We will interpret an empty HCPCS field to
mean that no ESA was administered. We also finalize that we will only
apply this measure to facilities with at least 11 (i) in-center
Medicare patients who have been treated at least seven times by the
facility; and (ii) home hemodialysis Medicare patients for whom the
facility submits a claim. Facilities who treat less than 11 of these
patients during the performance period must attest to this fact in
CROWNWeb. If they do not make this attestation, we will score them
accordingly. Additionally, we will not penalize facilities for using
the default 99.99 value for a patient in his/her first month of
treatment at that facility. The technical specifications for this
finalized measure can be found at https://www.dialysisreports.org/pdf/esrd/public-measures/AnemiaManagement-Reporting-2015-FR.pdf.
4. Measures Under Consideration for Future PYs of the ESRD QIP
In addition to the PY 2015 ESRD QIP, we noted in the proposed rule
that we are considering measures for future payment years of the
program. We are specifically considering whether we should propose in
future rulemaking to adopt the following two measures,
NQF 1463: Standardized Hospitalization Ratio for
Admissions (SHR) and
NQF 0369: Dialysis Facility Risk-adjusted
Standardized Mortality Ratio (SMR).

We stated that we intend to adopt these measures for future payment
years of the ESRD QIP, possibly beginning with the PY 2018 program. We
notified facilities of our intent and solicited comments on
incorporating these measures into future payment years of the ESRD QIP.
a. Standardized Hospitalization Ratio (SHR)
Hospitalizations are an important indicator of patient quality of
life and morbidity. The SHR is an NQF-endorsed (1463), risk-
adjusted measure of hospitalization for dialysis patients. The measure
is claims-based and describes, as a ratio, the number of ESRD Medicare
patient actual admissions versus expected hospitalizations adjusted for
the facility's Medicare patient case mix. Please refer to the NQF Web
site (www.qualityforum.org) to obtain more detail about this measure.
b. Standardized Mortality Ratio (SMR)
The SMR measure is an NQF-endorsed (0396) critical
patient-centered, outcome measure of overall patient care furnished by
facilities. We believe that the SMR measure would encourage appropriate
overall patient care by facilities and incentivize facilities to
examine the holistic health of the patient rather than treating the
patient based on an individual measure-by-measure basis. The SMR
measure describes, as a ratio, the number of ESRD Medicare patient
actual deaths versus expected deaths adjusted for the facility's
Medicare patient case mix. Please refer to the NQF Web site
(www.qualityforum.org) to obtain more detail about this measure.
c. Public Reporting of SHR and SMR Measures
Although the SHR and SMR measures may not be adopted for the ESRD
QIP until a future payment year, we intend to publicly report these
measure ratios to the public via Dialysis Facility Compare (DFC) to
encourage facilities to improve their care. Section 4558(b) of the
Balanced Budget Act of 1997 (Pub. L. 105-33) (BBA) directs the
Secretary to develop, not later than January 1, 1999, and implement,
not later than January 1, 2000, a method to measure data reflective of
the quality of renal dialysis services provided under the Medicare
program. Under this authority, we began reporting the SMR measure on
DFC in January, 2001 as a survival measure and used three categories to
rate facility performance: ``as expected,'' ``worse than expected,''
and ``better than expected.'' The SMR measure that we are considering
adopting for the ESRD QIP was developed in 1999 and facilities are
required to submit these data via form 2746. The SHR measure that we
are considering adopting for the ESRD QIP was developed in 1995,
presented to a Technical Expert Panel after modifications to risk
adjustment and statistical modeling in 2007, and received NQF-
endorsement in 2011. The data needed to calculate the SHR measure have
been regularly reported to DFR since 1995 and have been used by
facilities for quality improvement activities. We plan to add the SHR
data to the DFC effective January 2013; additionally we will report the
actual SMR rates/ratio on the DFC beginning January 2013.
We originally proposed to adopt the SHR measure for the PY 2014
ESRD QIP, but did not finalize the proposal, in part, because
commenters voiced concerns regarding the accuracy of the co-morbidity
data used in the calculation of the measures. Details on public
comments and why we did not adopt the SHR measure are articulated in
the CY 2012 ESRD PPS final rule (76 FR 70267). Since that time, we have
identified that the claim form UB 92 with the type of bill (TOB) field
72x allows a facility to input up to 17 co-morbid conditions per claim
submission. We acknowledge that patient co-morbidities can change with
time and since the capability already exists on the UB 92 TOB, we
believe the best means for facilities to update patient co-morbidities
is through the ESRD 72x claims form. Details on this form can be found
in the Medicare Claims Processing Manual, Chapter 8--Outpatient ESRD
Hospital, Independent Facility, and Physician/Supplier Claims (https://www.cms.gov/manuals/downloads/clm104c08.pdf).
In addition, because the NQF-endorsed SHR and SMR measures are
risk-adjusted for ESRD patients that reside in nursing homes, in order
to calculate the measure rates on DFC, we will utilize data from the
Minimum Data Set (MDS) to identify those individuals in nursing homes.
We would use these data not only for reporting the measure rates on DFC
at present, but also for calculating the measures if we adopted them
for use in future years of the ESRD QIP. The Omnibus Budget
Reconciliation Act (OBRA) of 1987 requires that all Medicare and
Medicaid certified nursing homes complete MDS assessments on all of
their patients.
We requested comment regarding the feasibility of adopting these
measures for future payment years of the ESRD QIP.
The comments we received on these proposals and our responses are
set forth below.
Comment: Although most commenters agreed that measures for
hospitalization are important for quality reporting purposes, many
commenters strongly opposed that the SHR measure be included in the
ESRD QIP in subsequent payment years. These

[[Page 67496]]

commenters argued that the SHR measure is a measure over which
facilities have little control because patients often follow the advice
of their primary care physician or visit a hospital without consulting
the facility to receive treatments that could be furnished in the
outpatient setting. Commenters expressed concern that the measure could
lead to cherry-picking, disincentivize appropriate hospitalization, and
is not transparent enough for facilities to make improvements in this
area because of they are confused about the risk-adjustment
methodology. Other commenters stated that the measure needs further
refinement and validation, specifically regarding risk adjustment for
frail patients such as those in nursing homes, cultural factors,
socioeconomic factors, and health factors specific to the ESRD
population. Commenters asked that these adjusters be made public. One
commenter believes that this measure would create a bias for facilities
on the basis of location. Some commenters suggested that, instead of
implementing this measure, CMS consider a coordinated care model. Other
commenters requested that we adopt a pilot for this measure wherein
only aggregate data is reported until the measure can be further
assessed and validated. Several commenters suggested that we implement
an SHR measure focused on admissions that could have been prevented by
interventions from dialysis facilities; one commenter suggested that
the SHR measure be modified to calculate a ``risk-adjusted standardized
hospitalization ratio for dialysis access-related infections and fluid
overload,'' since these are elements facilities can control.
Response: We thank commenters for these opinions. We will take
these comments into consideration as we further assess the
appropriateness of adopting the SHR measure for the ESRD QIP.
Comment: Many commenters strongly supported the consideration of
SHR for future years of the ESRD QIP. One commenter requested that we
implement the measure as soon as possible. Commenters also supported
reporting measure rates on DFC beginning in CY 2013. One commenter
supports the addition of SHR data to DFC as long as a caveat is
included explaining that dialysis facilities can influence but do not
control hospitalization rates. This commenter also requested that the
``expected,'' ``better than expected,'' and ``less than expected''
categories remain on DFC. One commenter argued that there is not enough
data on SHR to report rates on DFC.
Response: We thank the commenters who supported the future
consideration of the SHR for implementation. We intend to begin public
reporting of the SHR on DFC as of January 2013 to indicate the relative
performance of facilities. We believe that dialysis facilities own
partial responsibility for the rate at which their patients are
hospitalized, in particular when that rate is substantially higher than
at other peer facilities and may not be explained by variation in the
illness of patients. We do acknowledge that care provided by dialysis
facilities is not the sole determinant of the hospitalization of ESRD
patients and this measure would not support the assertion that they
are. The SHR is only shown for patients with at least 5 patient years
at risk, which corresponds to approximately 10 expected
hospitalizations. The confidence interval for the SHR will also be
reported on DFC to show the uncertainty in the value due to random
variation, which will help to address the issue of limited data for the
SHR. We appreciate these suggestions and will take them into
consideration as we further assess the appropriateness of adopting the
SHR measure for the ESRD QIP.
Comment: Some commenters strongly support using the 72x claims as
indicators of risk factors for facilities and patients. One commenter
suggested that this information could be used in creating an access to
care measure/adjustment in the future. Other commenters, however,
believe that reporting comorbidities on the 72x claim could be a huge
administrative burden for facilities, including time associated with
validating that the data they submit on these claims is valid.
Response: We recognize that reporting co-morbidities on 72x claims
could be burdensome to some facilities. We believe, however, that this
information is valuable, specifically in the context of future measure
development. We will continue to assess the best means available for
risk-adjustment for both the SHR and SMR measures, taking both the
benefits of the information and the burden to facilities into account,
should we propose to adopt these measures in future rulemaking.
Comment: One commenter argued that SHR is not a measure whereby
facilities can make meaningful improvement because the measure's rates
cannot be calculated in real-time; the commenter asked that claims be
made available to the facility in a timely manner if the measure is
adopted so that they can become aware of hospitalizations and other co-
morbidities and calculate their SHR in real-time.
Response: We will consider this suggestion if we decide to propose
to adopt the SHR measure for the ESRD QIP in future rulemaking.
Comment: One commenter noted that the SHR measure should be at
least a two to three year measure as 1 year of data is not sufficient
for an accurate assessment.
Response: We recognize that the NQF-specifications call for a
measurement period that is longer than 1 year, and we continue to
assess how to implement such an extended measure period effectively in
the ESRD QIP if we propose to adopt the SHR measure in future
rulemaking.
Comment: Many commenters opposed the use of SMR in future years for
reasons similar to that of SHR. Commenters expressed concern that the
measure could lead to cherry-picking and is not transparent enough for
facilities to make improvements in this area because of they are
confused about the risk-adjustment methodology. Other commenters stated
that the measure needs further refinement and validation, specifically
regarding risk adjustment for frail patients such as those in nursing
homes, cultural factors, socioeconomic factors, and health factors
specific to the ESRD population. Commenters asked that these adjusters
be made public. One commenter believes that this measure would create a
bias for facilities on the basis of location. Another commenter argued
that the measure should only account for catheter/dialysis
complications and should not include ``sudden deaths.'' One commenter
stated that literature suggests that the measure is invalid in small
facilities and only valid in large facilities when averaged over
several years. Some commenters suggested that, instead of implementing
this measure, CMS consider a coordinated care model. Other commenters
requested that we adopt a pilot for this measure wherein only aggregate
data is reported until the measures can be further assessed and
validated.
Response: We thank the commenters who shared concerns and provided
suggestions regarding the future consideration of the SMR for
implementation in the ESRD QIP. We will continue to consider these
suggestions as we decide whether to propose to adopt the SMR measure.
In the DFR, we limit reporting to facilities with at least 3 expected
events for the time period. Similarly, we only calculated SHR based on
at least 5 patient years at risk, which corresponds

[[Page 67497]]

to approximately 10 expected hospitalizations. We incorporated these
limitations on the measures to account for potentially imprecise
estimates resulting from small facility size.
Comment: One commenter stated that the SMR measure should not be
adopted until CMS can articulate how it fits into the ESRD QIP's
strategic vision.
Response: While we recognize that the ESRD population is at high
risk for mortality by definition, we believe that mortality rates are
susceptible to the quality of care provided by dialysis facilities. We
believe the SMR may help distinguish the quality of care offered by
dialysis facilities as determined by mortality, a key health care
outcome used to assess quality of care in other settings, such as
hospitals. We believe the SMR may also fill an important gap in the
ESRD QIP by assessing the outcome of all ESRD care provided at the
dialysis facilities, rather than individual processes of care. For
these reasons, we will continue to consider the inclusion of the SMR in
future rulemaking cycles.
Comment: Many commenters strongly supported the consideration of
SMR for future program years, noting that death is the most important
measurement of negative outcomes. One commenter requested that we
implement the measure as soon as possible. One commenter suggested that
the measure specifically focus on patients within their first 90-120
days of dialysis since these patients are generally more likely to die.
Commenters also supported reporting measure rates on DFC beginning in
CY 2013.
Response: We thank commenters for their support of this measure. At
this time, we do not believe it should be included in the PY 2015 ESRD
QIP due to the concerns voiced by other commenters. We will consider
the measure's assessment of patients in their first months of dialysis
for future rulemaking. Finally, we will begin reporting the SMR measure
rates on DFC in 2013 and are attempting to address potential
shortcomings pointed out by commenters that we described in the CY 2012
ESRD PPS final rule (76 FR 70267) prior to proposing the measure for
ESRD QIP.
Comment: One commenter argued that SMR is not a measure whereby
facilities can make meaningful improvement because the measure's rates
cannot be calculated in real-time; the commenter asked that claims be
made available to the facility in a timely manner if the measure is
adopted so that they can become aware of hospitalizations and other co-
morbidities and may calculate their SMR in real-time.
Response: We will consider this suggestion if we decide to propose
to adopt the SMR measure for the ESRD QIP in future rulemaking.
Comment: One commenter noted that the SMR measure should be at
least a two to three year measure as 1 year is not sufficient for an
accurate assessment.
Response: We recognize that the NQF-specifications call for a
measurement period that is longer than 1 year, and we continue to
assess how to implement this measurement period effectively in the ESRD
QIP if we decide to propose to adopt the SMR measure.
Comment: One commenter requested clarification regarding whether
the facility's rates would be compared to current or past national
averages when assessing the number of expected deaths.
Response: The SMR measure estimates the relative death rate ratio
for a facility, as compared to the national death rate. The relative
death rate ratio and the national results are all determined during the
same (current) time period.
In response to comments, we will continue to consider the SMR and
SHR measures for future years of the program. We will, as proposed,
begin displaying the rates/ratios for these measures on DFC beginning
in early 2013.
5. Other Potential Future Measures Under Development
As part of our effort to continuously improve the ESRD QIP, we are
working on developing additional, robust measures that provide valid
assessments of the quality of care furnished to ESRD patients by ESRD
facilities. Some areas of measure development are discussed below. In
addition, we are considering the feasibility of developing quality
measures in other areas such as kidney transplantation, quality of
life, health information technology for quality improvement at the
point of care and the electronic exchange of information for care
coordination, and transfusions. We requested comment on these potential
areas of future measurement and welcomed suggestions on other topics
for measure development.
The comments we received on these proposals and our responses are
set forth below.
Comment: We received suggestions for many future measures. These
included: (i) A CAHPS/experience of care measure for home dialysis and
pre-dialysis patients; (ii) a measure assessing catheter access site
infections; (iii) a measure for adequate serum albumin; (iv) a measure
promoting immunizations; (v) measures assessing iron management; (vi)
patient fluid management measures; (vii) measures incentivizing home
hemodialysis; (viii) an NHSN measure for home patients that includes
peritonitis; (ix) measures that specifically monitor nursing sensitive
indicators; (x) a measure that tracks which modalities a facility
offers; (xi) a measure that tracks whether a facility exceeds the
average percentage of patients between 18 and 54 who are employed;
(xii) a measure that tracks whether facilities have shifts after 5:00
p.m.; (xiii) an emergency department use measure; (xiv) a measure on
transplantations/referrals; (xv) a measure on dialysis adequacy for
frequent dialyzers; (xvi) measures on phosphorus and PTH; (xvii) a
composite measure which takes into account the interdependability of
calcium, phosphorus, and parathyroid hormone in bone mineral
metabolism; (xviii) measures assessing quality of life; and (xix)
palliative care measures.
Response: We thank the commenters for your comments regarding
measure implementation. We will take these suggestions into
consideration during future measure development and rulemaking.
Comment: Some commenters specifically requested that we broaden the
use of pediatric measures in the ESRD QIP. These commenters recommended
that we (i) develop (a) a dialysis adequacy measure for peritoneal
pediatric patients and (b) a CAHPS/experience of care measure for
pediatric patients; and (ii) consider the following NQF-endorsed
measures: (a) Measure 1418: Frequency of Adequacy Measurement for
Pediatric Hemodialysis Patients; (b) Measure 1421: Method of Adequacy
Measurement for Pediatric Hemodialysis Patients; (c) Measure 1425:
Measurement of nPCR for Pediatric Hemodialysis Patients; (d) Measure
1433: Use of Iron Therapy for Pediatric Patients; and (e) 1424: Monthly
hemoglobin measurement for Pediatric Patients.
Response: We thank the commenters for suggesting additional
measures relevant to the pediatric portion of the ESRD population for
future consideration in the ESRD QIP. We recognize the importance of
assessing the quality of care furnished to pediatric ESRD patients. To
this end, we are adopting in this final rule a measure of pediatric
hemodialysis adequacy for PY 2015. We will consider whether it is
appropriate to propose to adopt

[[Page 67498]]

additional pediatric measures for the ESRD QIP.
Comment: Some commenters specifically discouraged us from
considering certain measures for future ESRD QIP adoption. These
included (i) a quality of life measure, because no research shows that
facilities can improve this aspect of patient life and patients often
refuse to take surveys; and (ii) measures on electronic information
exchange because it is unclear what these measures would entail or how
they could be carried-out.
Response: We appreciate the comments and will take them into
consideration during future measure development.
Comment: Many commenters supported a measure on transfusions if
this measure assessed transfusions that are within the control of ESRD
facilities. One commenter suggested that, before the measure is
adopted, we wait to see the results of studies looking at when
transfusions are and are not within a facility's control. One commenter
requested clarification regarding where CMS accesses transfusion data,
whether the information shows the underlying reason for the
transfusion, and the timeframe for CMS' access and analysis of the
data.
Response: We appreciate the comments and will take them into
consideration during future measure development.
Comment: Commenters also discussed the general principles CMS
should embrace in future years of the program. Commenters encouraged us
to work with the kidney care community to adopt a strategic vision for
the ESRD QIP, specifically the criteria and process for the adoption of
measures and domains. One commenter requested that CMS and other
stakeholders agree on the timeline and process for future measure
development. Commenters also urged us to provide the criteria used to
select measures, recommending the NQF selection criteria, and engage
the Measures Application Partnership in identifying measures to include
in the program and their weighting. In selecting measures, commenters
stated that every measure should (i) have a verified entity responsible
to maintain and update it at least once every three years; and (ii) be
fully and clearly specified and tested for reliability and validity.
Commenters also recommended that we phase measures into the program,
requiring reporting of the measure outside of the ESRD QIP for at least
1year, and once a measure is added, we score facilities based on the
lesser of the facility's performance or the national performance rate,
at least for the first year. One commenter stated that all future
measures should be NQF-endorsed before they are adopted. Another
commenter noted that NQF-endorsement does not mean a measure is
appropriate for the ESRD QIP.
Response: We remain dedicated to a transparent, consensus-based
measure development process that offers multiple opportunities for
input from stakeholders. The measure development process that we
currently use includes using Technical Expert Panels and public comment
periods, seeking NQF endorsement, providing measures to the Measures
Application Partnership for feedback, and the rulemaking process in
which we respond to stakeholder comments. We encourage continued
engagement by the kidney care community in this process, both in
prioritizing additional measures, supporting ongoing measure
development, and providing feedback for currently implemented measures.
At present, we analyze all clinical measures for validity and
reliability, and NQF endorsement is a key consideration we take into
account when deciding whether to propose to adopt clinical measures.
Where endorsed measures are not available to address key issues
relevant to the ESRD population, we intend to consider unendorsed
measures until such endorsed measures are available. We agree that
clinical measures should be fully specified at the time they are
proposed.
We believe that, generally, it is helpful to both the ESRD QIP
community and CMS to phase-in measures as the commenter suggests. We do
not entirely understand the comment stating that we should score
facilities based on the lesser of the facility's performance or the
national performance rate. We take this to mean that we should use a
scoring methodology similar to PY 2012 and PY 2013 for new measures. At
this time, we believe the objectives of the program are best served by
scoring facilities using the achievement and improvement scoring
methodology for the reasons discussed below.
Comment: Some commenters support additional measures but requested
that they be implemented no sooner than PY 2018 since CROWNWeb has just
launched and data collection would likely be through CROWNWeb.
Response: We recognize that CROWNWeb is a new data collection
system and plan to take that into consideration while developing and
implementing ESRD QIP measures in the future.
Comment: In designing future years of the ESRD QIP, commenters
urged us to focus on the most important measures because adding
measures could dilute each measure's weight in the calculation of the
Total Performance Score.
Response: We acknowledge the commenter's concern and note that we
will seek to balance appropriateness of the measures, importance of the
measures, and parsimony as we consider what measures to implement
through future rulemaking.
Comment: Some commenters made broad suggestions about measure
adoption in the future, suggesting that we use a phased approach for
measure implementation whereby the measures would be reported outside
of the ESRD QIP for 1 year prior to adoption of the measure in the ESRD
QIP; commenters argued that this reporting period will allow us to set
a proper baseline for clinical measures.
Response: We thank commenters for their suggestions. In general, we
seek to collect at least 1 year of data through claims or CROWNWeb
before adopting a measure for the ESRD QIP. However, we make this
assessment on a case-by-case basis because of the importance of timely
implementation of some measures (for example, measures that directly
affect patient safety). We will continue to consider these issues as
the ESRD QIP evolves.
Comment: One commenter encouraged us to improve the program by
maintaining a reasonable number of measures in order to reduce
administrative costs and publicly reporting quality measures on DFC.
Response: As the ESRD QIP evolves from year-to-year, we seek to
continuously evaluate the effectiveness of the measure set, burden to
providers, and clarity for beneficiaries.
a. Thirty-Day Hospital Readmissions
One of the major areas our VBP programs seek to promote is care
coordination. Care coordination measures assess caregivers not only on
the care directly under their control, but also on their success in
coordinating care with other providers and suppliers. Hospital
readmission is often the outcome of uncoordinated care. Care
coordination measures encourage primary caregivers, ESRD facilities,
physicians, and hospitals to work together to improve the quality of
care. A 30-day hospital readmissions measure is a primary example of
care coordination. This measure is currently under development for the
ESRD QIP, and we requested comment regarding our use of such a measure
in future payment years.

[[Page 67499]]

The comments we received on this topic and our responses are set
forth below.
Comment: Commenters made many suggestions with regard to a 30-Day
Readmissions measure. Some commenters did not support the adoption of
this measure for the ESRD QIP, arguing that facilities cannot always
control hospitalization, and suggested that facilities would be better
suited to use this type of measure in a coordinated care setting. One
commenter encouraged us to adopt this measure in place of an SHR
measure because a 30-Day Readmission measure is more likely to increase
care coordination and less likely to encourage cherry-picking. One
commenter suggested that a 30-Day Readmission measure include a grace
period of 10-14 days for which the facility would not be held
responsible, preventing facilities from being penalized if the patient
received low-quality care in the hospital, and limiting the possibility
that facilities could turn away patients who have recently been
hospitalized. This commenter also pointed out that the hospital 30-Day
Readmissions measure does not include ESRD patients and argued that
hospitals should be held responsible for readmissions during the grace
period the commenter suggests. One commenter requested that the
community be able to review the findings of the Hospitalization TEP
that CMS held in May 2012 before this type of measure is adopted.
Response: We appreciate the comments regarding our consideration of
a 30-day readmission measure and will take them into consideration in
future rulemaking. We note that it is our policy to make publicly
available the results of measure development TEPs through https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/MMS/TechnicalExpertPanels.html.
b. Efficiency
One of the main goals of our VBP programs is not only to enhance
quality of care but also improve efficiency in providing that care. At
present, we are not aware of an efficiency measure that is appropriate
for the ESRD population. We noted, however, that we were interested in
receiving comments regarding this concept.
The comments we received on this topic and our responses are set
forth below.
Comment: We received many comments regarding our proposal of
developing and adopting an efficiency measure in future years. Several
commenters noted that an efficiency measure is not necessary because of
the bundled payment. Many commenters asked that, if such a measure is
developed, it be case-mix adjusted for nursing home residents, homeless
patients, and drug and alcohol abuse to discourage cherry-picking. One
commenter cautioned us to explore the unintended consequences which may
result from this measure, and another commenter requested that we
engage in more studies defining ``efficiency'' before we adopt a
measure.
Response: We thank our commenters for their input regarding the
consideration of an efficiency measure for implementation in the ESRD
QIP. We will take these suggestions into account as we develop measures
for future years of the ESRD QIP.
c. Population/Community Health
We are aware that unintended consequences, specifically those
involving access to care, may result from the ESRD QIP. To address
these concerns, we are currently monitoring access to care and
exploring the development of new measures or adjustments to existing
measures that would mitigate the unintended consequences and/or
incentivize facilities caring for patients who may, generally,
contribute to lower facility measure rates. We requested comment on
developing such a measure or adjustments to measures, specifically with
regard to access to care issues.
The comments we received on this topic and our responses are set
forth below.
Comment: Many commenters provided feedback on a possible access to
care measure. Some commenters encouraged the development of such
measures. Many of these commenters suggested that, instead of creating
a measure to assess access to care, we develop comorbidity adjustments
for quality measures that would ease facilities' concerns about
treating these patients. Commenters who serve aging patients with
multiple comorbidities believe there needs to be further consideration
for facilities caring for these types of patient populations. Other
commenters noted that present and future measures should exclude
homeless patients, nursing home patients, and patients with
comorbidities of drug/alcohol abuse and mental health issues to protect
access to care for these patients. Several commenters believe that care
coordination is important but is not practical due to data timing
issues and knowledge of staff; these commenters suggested that CMS fund
additional staff and technology prior to implementing care coordination
measures. One commenter suggested that we analyze the following factors
when assessing access to care: (i) Miles traveled to facility; (ii)
time required to commute to facility; and (iii) method of
transportation/responsible party.
Response: We thank the commenters for expressing interest in
addressing the issue of access to care. We are sensitive to the
particular role access to care can play for ESRD patients, and the
limitations encountered in collecting relevant data. Clinical measures
assessing mortality and hospitalization in the ESRD population were
proposed in the PY 2014 ESRD QIP, and we have incorporated risk
adjustment for comorbidities in the specifications for these measures,
but it is not clear to us how effectively this risk-adjustment can
address problems with access. Factors such as distance traveled are not
captured by claims data. We believe that exclusion of the suggested
groups (homeless, nursing home patients, etc.) from quality measures
may protect access for these groups, but would fail to adequately
address issues for quality of care in those patients who are most at
risk for poor health outcomes. We are also concerned that such
exclusions may excuse facilities from taking steps toward more
effective coordination of care. We respectfully disagree that care
coordination is not practical. Rather, we believe it is a vital element
of care for a population that is by definition at particular risk for
transitions into and out of care settings such as acute care hospitals.
It is particularly important for those patients who reside in long-term
care facilities such as nursing homes, or who must seek care for
chronic conditions related to mental health issues or drug/alcohol
abuse to receive care that is coordinated since these individuals often
receive extensive care from various types of providers.
6. Scoring Background and General Considerations for the PY 2015 ESRD
QIP
Section 1881(h)(3)(A)(i) of the Act requires the Secretary to
develop a methodology for assessing the total performance of each
facility based on the performance standards established with respect to
the measures selected for the performance period. For the PY 2014 ESRD
QIP, we adopted a performance scoring methodology that assessed
facilities on both their achievement and improvement on clinical
measures. We stated that we believe that this scoring methodology will
more accurately reflect a facility's performance on the measures
because it

[[Page 67500]]

will enable us to differentiate between facilities that simply meet the
performance standards, those that exceed the performance standards by
varying amounts, and those that fall short of the performance
standards. We also stated that we believe that the PY 2014 methodology
appropriately incentivizes facilities to both achieve high Total
Performance Scores and improve the quality of care they provide (76 FR
70272). We believe that the methodology set forth for PY 2014 continues
to incentivize facilities to meet the goals of the ESRD QIP; therefore,
with the exception of the proposed changes in the proposed rule (77 FR
40976), we proposed to adopt a scoring methodology for the PY 2015 ESRD
QIP that is nearly identical to the PY 2014 ESRD QIP.
The comments we received on this proposal and our responses are set
forth below.
Comment: Several commenters supported our proposal to use the PY
2014 scoring methodology in the PY 2015 ESRD QIP.
Response: We thank commenters for their support. We will finalize
our proposals to use the PY 2014 scoring methodology for use in the PY
2015 program with the modifications discussed below. We believe that
these modifications improve the efficacy of the program for the reasons
discussed.
7. Performance Period for the PY 2015 ESRD QIP
Section 1881(h)(4)(D) of the Act requires the Secretary to
establish the performance period with respect to a year. For the PY
2014 ESRD QIP, we finalized a performance period of CY 2012. We stated
that we believe that, at this point, a 12-month performance period is
the most appropriate for the program because this period accounts for
any potential seasonal variations that might affect a facility's score
on some of the measures, and also provides adequate incentive and
feedback for facilities and Medicare beneficiaries (76 FR 70271). We
continue to believe that a 12-month performance period will best meet
these policy objectives, and we considered what 12-month period would
be closest in time to the payment year but would still allow us to time
to operationalize the program, calculate scores, and allow facilities a
period of time to preview and ask questions regarding these scores
before they are published and impact payment. We determined that CY
2013 is the latest period of time during which we can collect a full 12
months of data and still implement the payment reductions beginning
with January 1, 2015 services. Therefore, for the PY 2015 ESRD QIP, we
proposed to establish CY 2013 as the performance period for all of the
measures. We requested comments on this proposal.
The comments we received on these proposals and our responses are
set forth below.
Comment: Commenters supported our proposal to use CY 2013 as the
performance period for the PY 2015 ESRD QIP; some commenters
specifically supported a performance period that allows us to set
standards before the performance period begins. Some commenters, while
supporting this performance period, cautioned us against using data
from CROWNWeb from this period since CY 2013 will be the first full
year CROWNWeb is implemented.
Response: We thank commenters for their support. We note that,
because we are not finalizing the Hypercalcemia measure, we are no
longer using data from CROWNWeb for purposes of scoring any clinical
measure for the PY 2015 ESRD QIP. For purposes of the PY 2015 ESRD QIP,
we will be using CROWNWeb to collect data only for the Mineral
Metabolism reporting measure. We believe that this is appropriate since
facilities will only be required to report data, but will not be scored
based on these data for PY 2015. We believe that CROWNWeb is
sufficiently implemented to allow successful reporting for CY 2013. We
will continue to assess the appropriateness of CROWNWeb data for
inclusion for purposes of clinical measures in the ESRD QIP.
Comment: Many commenters asked us to shorten the data lag between
the performance period and the payment reduction/public reporting of
the data so that the data can remain relevant. Commenters suggested
that CROWNWeb could be used to reduce these data lag.
Response: For PY 2015, we have determined that data derived from
claims is the most appropriate source on which to score facilities on
clinical measures because this source is the most complete and
representative of the greatest number of facilities. Because claims
take more time to compile and calculate than other data sources to
ensure reliability, there is a lag between the time when the claims are
submitted for processing and the time that the claims become available
to calculate ESRD QIP measure rates. We also believe it is important to
allow facilities a period of time to review their scores before the
payment adjustments take place. We are considering how we might be able
to shorten this timeline in the future. We believe that CROWNWeb will
be valuable in this effort once it has been successfully launched for a
period of time, and we are confident that the data submission and
validity issues have been resolved.
Comment: One commenter suggested that we consider employing rolling
12-month performance periods with payment updated quarterly.
Response: At this time, we are not able to implement a rolling 12-
month performance period that is updated on a quarterly basis because
we do not have the systems or resources in place to calculate scores,
answer inquiries, and provide Performance Score Certificates more than
once per year. We will, however, continue to consider this suggestion
as the ESRD QIP evolves.
For the reasons stated above, we finalize CY 2013 as the
performance period for the PY 2015 ESRD QIP as proposed.
8. Performance Standards for the PY 2015 ESRD QIP
Similar to the PY 2014 ESRD QIP, we proposed to adopt performance
standards for the PY 2015 ESRD QIP measures under section 1881(h)(4)(A)
of the Act. This section provides that ``the Secretary shall establish
performance standards with respect to measures selected * * * for a
performance period with respect to a year.'' Section 1881(h)(4)(B) of
the Act further provides that the ``performance standards * * * shall
include levels of achievement and improvement, as determined
appropriate by the Secretary.'' We use the performance standards to
establish the minimum score a facility must achieve to avoid a payment
reduction.
a. Clinical Measure Performance Standards
With respect to the seven proposed clinical measures, we proposed
to set the PY 2015 improvement performance standard and achievement
performance standard (collectively, the ``performance standard'') for
each measure at the national performance rate (which we would define as
the 50th percentile) of all facilities' performance on the measure
during CY 2011 (the proposed comparison period--discussed in more
detail below).
For the PY 2014 ESRD QIP, we set the performance standards at the
national performance rate during a baseline period of July 1, 2010-June
30, 2011. This period of time, however, did not allow us to publish the
numerical values for the performance standards concurrently with the
final rule because of the length of time needed for us to compile
claims-based measure data at

[[Page 67501]]

the individual facility level and calculate the measure rates. Instead,
we included an estimate of the numerical values for the performance
standards in the final rule, using nine months of data, and posted the
numerical values of the performance standards based on the full 12
months of data on https://www.dialysisreports.org/pdf/esrd/public-measures/UpdatedBaseline-2014-FR.pdf by the end of December 2011. In
order to ensure that we have enough time to calculate and assign
numerical values to the proposed performance standards for the PY 2015
program, we proposed to set the performance standards based on the
national performance rate (that is, the 50th percentile) of facility
performance in CY 2011. We noted that by choosing this time period for
PY 2015, however, the data on which we base the performance standards
would only capture 6 months of more recent data when compared to PY
2014 and would also overlap with 6 months of the data used to calculate
the PY 2014 performance standards. We stated our concern that if we
finalize this period of time, we would not be adequately addressing
stakeholder requests that we take steps to minimize the length of
``data lag'' between the dates used to calculate the performance
standards and the payment year. We recognized that stakeholders might
prefer that we base performance standards on data as close in time to
PY 2015 as possible.
We stated that the period of time closest to the payment year that
would allow us to post the numerical values for the performance
standards before the end of the first month of the performance period
is parallel to that of PY 2014, from July 1, 2011 through June 30,
2012. As with PY 2014, selecting this time period for purposes of
calculating numerical values for the performance standards would not
allow us to publish these numerical values until late 2012 or early
2013, which is closer in time and may possibly be during the
performance period. However, as in PY 2014, we would still be able to
provide estimates for the numerical values of the performance standards
at the time of final rule publication and post the actual numbers as
soon as they are available in December 2012 or January 2013.
Based on these considerations, we proposed CY 2011 as the basis for
the performance standards (that is, the national performance rates). We
did, however, request comment concerning whether we should instead use
data closer in time to the payment year and set the performance
standards using July 1, 2011 through June 30, 2012 data.
For two of the PY 2015 measure topics, Kt/V Dialysis Adequacy and
Hypercalcemia, we noted that we do not possess data for the entirety of
CY 2011, the year on which we proposed to base the performance
standards. We did not begin collecting uniform data on the Kt/V
hemodialysis adequacy measure until January 1, 2012 (see Change Request
7460), and, under the conditions for coverage, facilities were not
required to report serum calcium values that will be used to calculate
the Hypercalcemia clinical measure until their submission of May, 2012
data with the June 2012 national implementation of CROWNWeb. Despite
these issues, we stated that we do have data on which we can base
performance standards. We noted that although facilities are not yet
required to report serum calcium levels, approximately 63 percent of
facilities, which treat approximately 80 percent of the Medicare ESRD
patient population, have been voluntarily reporting these data via
CROWNWeb piloting since July 2008. Additionally, we compared the serum
calcium values reported by facilities in 2010 as part of a clinical
data reporting program called ELab,\6\ to values that have been
voluntarily reported by facilities in 2010 through CROWNWeb, and the
values are significantly similar. We stated our belief that these
similarities will also extend to data reported in 2011. Therefore, we
proposed to calculate performance standards for the Hypercalcemia
measure using the data that we collected via CROWNWeb Pilots collected
during CY 2011.
---------------------------------------------------------------------------

\6\ https://www.esrdnet11.org.
---------------------------------------------------------------------------

Uniform Kt/V reporting for hemodialysis patients did not begin
until January 1, 2012 (CR 7640). Before this time, facilities could use
a number of different methodologies to calculate Kt/V values, with the
result that the values could be different depending on which
methodology was used. We stated in the proposed rule that we have
analyzed the data collected during the CROWNWeb pilot and found that 88
percent of facilities that reported to CROWNWeb had reported Kt/V
values using a NQF specified calculation method (this method is also
specified in Change Request 7640) that yields consistent results and
that is part of the specifications for each of the hemodialysis Kt/V
measures that we proposed to adopt for the PY 2015 program. Though we
are not able to tell what calculation method a facility used by
reviewing a claim, we believe it is reasonable to assume that roughly
the same percentage of facilities reported Kt/V on their claims prior
to 2012 using the same formula that they used to report it under the
CROWNWeb pilot. For this reason, we proposed to calculate the
performance standards for the three proposed Kt/V measures using CY
2011 claims data. This is the best data we have available at this time
to set reliable performance standards for Kt/V. We stated that we
understand that stakeholders may be concerned about the nuances of the
data and we invited public comment on this proposal.
We noted that if, after consideration of the comments, we decided
to not adopt the adult, hemodialysis Kt/V measure for PY 2015, we would
continue to use URR as a measure of hemodialysis adequacy for this
population. We also noted that the NQF-endorsed measure for Kt/V
measure for peritoneal dialysis adequacy does not specify the body
surface area formulae or the total body water formulae to utilize; and
we would accept the submission of peritoneal adequacy Kt/V values that
utilize the methods currently in use as industry standards. We believe
it is important to include peritoneal dialysis patients in the ESRD QIP
and we solicited comments on the inclusion of the peritoneal dialysis
Kt/V adequacy measure. We proposed that, were we to retain the URR
measure for adult hemodialysis, we would still adopt the Kt/V
peritoneal dialysis measure. We proposed that these measures would
still comprise a Dialysis Adequacy measure topic and would be scored in
the same manner as we proposed for the Kt/V measures, below.
Even with the challenges outlined above, we believed that the
advantages of adopting the Kt/V hemodialysis measure for PY 2015
outweigh the disadvantages. Therefore, we proposed Kt/V as the measure
for hemodialysis adequacy for PY 2015, but we specifically solicited
comments regarding whether we should continue to use URR for adult
hemodialysis patients for PY 2015.\7\
---------------------------------------------------------------------------

\7\ Note that, as further explained below, the issue we have
discussed with respect to the reporting of Kt/V values prior to CY
2012 would not be an issue for the calculation of improvement scores
because we proposed CY 2012 as the period used to calculate the
improvement threshold; beginning January 1, 2012, all facilities are
required to report Kt/V uniformly on their claims.
---------------------------------------------------------------------------

We also considered calculating performance standards for the Kt/V
Dialysis Adequacy measure topic based on data from January 1, 2012-June
30, 2012, to ensure that the data was calculated consistently. We are,
however, aware that a shortened data period may affect the measure
rates' reliability. Therefore, we proposed to calculate performance
standards based

[[Page 67502]]

on the data from CY 2011 discussed above, but we invited comment on an
alternative 6 month period beginning on or after the date on which
uniform reporting began, January 1, 2012.
The comments we received on these proposals and our responses are
set forth below.
Comment: Many commenters agreed with our proposal to use CY 2011 as
the comparison period for purposes of calculating the performance
standards because this period will allow facilities to view these
standards when the final rule is published. Others, however, expressed
support for using data from July 1, 2011-June 30, 2012 to calculate the
performance standards because this period is closest in time to the
performance period. Some commenters did not have a preference for the
comparison period, but requested that we be consistent in the time
periods we choose. Many commenters suggested that, regardless of the
time period, we do not use CROWNWeb data to calculate performance
standards because the data in CROWNWeb from this time period is largely
from large dialysis organizations (LDOs).
Response: Although we appreciate that July 1, 2011-June 30, 2012 is
closer in time to the performance period, we believe that it will be
more beneficial to facilities if they are familiar with the performance
standards against which their performance will be evaluated before the
performance period begins. We will continue to evaluate whether it will
be feasible in the future to adopt performance standards using data
from a period closer in time to the performance period and also make
those standards public before the beginning of the performance period.
Additionally, as we stated above, we will not be finalizing the
Hypercalcemia measure for PY 2015. All of the other clinical measures
we are adopting for PY 2015 are claims-based, and we can set the
performance standards for those measures without using CROWNWeb data.
Comment: One commenter expressed concern that the standards are too
rigid and we expect perfection.
Response: We believe that the standards that we are setting are
appropriate. It is the past performance of facilities nationally which
determine the performance standards; thus, ESRD facilities have
demonstrated their ability to achieve these standards. Additionally, to
avoid a payment reduction, facilities need only meet the minimum Total
Performance Score. As discussed below, a facility need not have a
perfect score on all, or any, of the measures to meet this minimum.
Furthermore, we believe it is important to incentivize the best care
possible.
For these reasons, we finalize our proposal to establish
performance standards for the PY 2015 ESRD QIP clinical measures at the
50th percentile of national performance during CY 2011. The numerical
values for the performance standards are set forth below in Table 5.
b. Performance Standards

Table 5--Finalized Numerical Values for the Performance Standards for
the PY 2015 ESRD QIP Clinical Measures
------------------------------------------------------------------------
Performance
Measure standard %
------------------------------------------------------------------------
Hemoglobin > 12 g/dL.................................... 1
Vascular Access Type.................................... ..............
% Fistula............................................. 60
% Catheter............................................ 13
Kt/V ..............
Adult Hemodialysis.................................... 93
Adult, Peritoneal Dialysis............................ 84
Pediatric Hemodialysis................................ 93
------------------------------------------------------------------------

In accordance with our statements in the CY 2012 ESRD PPS final
rule (76 FR 70273), if the final numerical values for the PY 2015
performance standards are worse than PY 2014 for a measure, we proposed
to substitute the PY 2014 performance standard for that measure. We
stated our belief that the ESRD QIP should not have lower standards
than previous years. We requested comments on this proposal.
The comments we received on these proposals and our responses are
set forth below.
Comment: One commenter did not support our proposal to keep
performance standards at least as high as they were the previous year
and suggests that we, instead, investigate why a performance standard
would drop. Another commenter agreed with our proposal and stated that
the only reason that performance standards should be lower than they
were the previous year is if we discover a major technical issue with
the previous year's standards, such as that the performance standards
were miscalculated.
Response: We believe it is important to encourage improvement as
the ESRD QIP evolves to ensure that beneficiaries continue to receive
quality care at achievable levels. Therefore, we will finalize our
proposal to utilize previous years' performance standards if they are
higher than those of the next year. The performance standards for the
measures used in previous years of the ESRD QIP (the Hemoglobin Greater
than 12 g/dL measure and the Vascular Access Type measure topic) have
not declined. Therefore, for PY 2015, we will use the performance
standards in the above table. If we discover that performance on any of
the measures is declining in future years, we also intend to
investigate the precipitating causes and modify the ESRD QIP as
necessary to ensure high quality care for beneficiaries.
c. Performance Standards for the PY 2015 Reporting Measures
We established the performance standards for the reporting measures
for PY 2014 based upon whether facilities met certain reporting
requirements rather than achieved or improved on specific clinical
values. We proposed to establish the same performance standard for the
ICH CAHPS reporting measure for PY 2015 that we established for PY
2014. Under this proposed performance standard, facilities would be
required to provide an attestation that they successfully administered
the ICH CAHPS survey via a third party in accordance with the measure
specifications. We proposed that this attestation must be completed in
CROWNWeb by January 31, 2014.
For the NHSN Dialysis Event reporting measure, we proposed to set
the performance standard as successfully reporting 12 months of data
from CY 2013. If a facility has not yet enrolled and trained in the
NHSN dialysis event system, we proposed that the performance standard
for that facility would also include completion of these requirements.
For the Mineral Metabolism reporting measure, we proposed to set
the performance standard as successfully reporting serum phosphorus and
calcium values for all qualified patients for 12 months.
For the Anemia Management reporting measure we proposed to set the
performance standard as successfully reporting hemoglobin or hematocrit
and ESA dosage (if applicable) for all qualified patients for 12
months.
We requested comment on these proposals. We did not receive any
comments on these proposals. We will, therefore, finalize the reporting
measure performance standards as proposed.
9. Scoring for the PY 2015 ESRD QIP Measures
In order to assess whether a facility has met the performance
standards, we finalized a methodology for the PY 2014 program under
which we separately score each clinical and reporting measure. We score
facilities based on an

[[Page 67503]]

achievement and improvement scoring methodology for purposes of
assessing their performance on the clinical measures. Under the PY 2014
ESRD QIP scoring methodology, a facility's performance on each of the
clinical measures is determined based on the higher of (i) an
achievement score or (ii) an improvement score (76 FR 70273). We
proposed to use a similar methodology for purposes of scoring facility
performance on each of the clinical measures for the PY 2015 ESRD QIP.
As in PY 2014, in determining a facility's achievement score for
the PY 2015 program, we proposed that facilities would, based on their
performance in CY 2013 (the proposed performance period), receive
points along an achievement range, which we would define as a scale
that runs from the achievement threshold to the benchmark. We proposed
to define the achievement threshold for each of the proposed clinical
measures as the 15th percentile of national facility performance during
CY 2011. We stated our belief that this achievement threshold will
provide an incentive for facilities to continuously improve their
performance while not reducing the incentives to facilities that score
at or above the national performance rate for the clinical measures (76
FR 70276). We proposed to define the benchmark as the 90th percentile
of the national facility performance during CY 2011 because it
represents a demonstrably high but achievable standard of excellence
that the best performing facilities reached. We further proposed that,
for the proposed Kt/V Dialysis Adequacy measures and the proposed
Hypercalcemia measure, we would use the same data we proposed above to
calculate the performance standards for purposes of calculating the
achievement thresholds and the benchmarks for these measures. We
requested comment on these proposals.
In determining an improvement score for the clinical measures, we
proposed that facilities would receive points along an improvement
range, defined as a scale running between the improvement threshold and
the benchmark. We proposed to define the improvement threshold as the
facility's rate on the measure during CY 2012. The facility's
improvement score would be calculated by comparing its performance on
the measure during CY 2013 (the proposed performance period) to its
performance on the measure during CY 2012. We proposed to base the
improvement threshold on data from CY 2012 rather than CY 2011 (the
period of time we had proposed to use to calculate the performance
standards, achievement thresholds, and benchmarks) because, as we
explained above, we do not have complete facility level CY 2011 data
that we can use to calculate an improvement threshold for every
facility on the Kt/V Dialysis Adequacy measures. Rather than proposing
to adopt a policy under which no facility could receive an improvement
score on these measures, we proposed to use data from CY 2012 to
calculate the improvement thresholds. Additionally, we stated our
belief that by using CY 2012 to calculate the improvement thresholds,
we will more closely align timing of the payment reduction with the
period of time we use to calculate improvement thresholds. We requested
comments on our proposal to use data from CY 2012 to calculate
improvement thresholds.
When considering the time period we would use to calculate
improvement thresholds, we sought to mitigate data lag issues as much
as possible by selecting a period in time as close as possible to the
performance period. However, to entirely mitigate this data lag, we
also considered a period that would take place during the performance
period. Using this approach, to calculate an improvement score, we
would derive an improvement threshold from either the first quarter of
CY 2013 or the first 6 months of CY 2013 and compare it to the
facility's measure rate in the last quarter of CY 2013 or the last 6
months of CY 2013, respectively. We ultimately decided to not propose
this approach because, when possible, we prefer to use 12 months of
data to calculate measure rates to ensure more reliable rates,
particularly for low-volume facilities. Additionally, using this
approach, part of the performance period for purposes of calculating
the facility's performance rate and achievement score (all of CY 2013)
could overlap with the data we use to calculate the improvement
threshold (first quarter or 6 months of CY 2013). Although we proposed
to calculate improvement thresholds based on data from CY 2012, we also
requested comment regarding use of these alternative periods for
purposes of calculating the improvement thresholds.
The comments we received on these proposals and our responses are
set forth below.
Comment: One commenter stated that, to foster continued
improvement, we should consider raising the achievement threshold over
time to a level greater than 15 percent.
Response: We believe that, at this time, it is appropriate to set
the achievement threshold at the 15th percentile so that lower-
performing facilities are incentivized to provide high quality care; if
the thresholds are set too high, it is possible that a facility would
not be incentivized to perform well because the cost to meet the
achievement threshold would be so high that it would outweigh the
overall loss of revenue resulting from the ESRD QIP payment reduction.
Although we do not believe we should award low-performing facilities a
large number of points, we do believe it is important to set the
standards to incentivize all facilities to perform better.
Comment: One commenter suggested that we rename the achievement
threshold the ``Statistical Performance Floor'' because ``achievement''
seems misleading if the floor is set at the 15th percentile. This
commenter also recommended that the facility performance rate be
renamed the ``Facility's Current Year Performance Rate,'' the benchmark
be renamed the ``Exceptional Performance Rate'' since it is at the 90th
percentile, and the performance standard be renamed the ``National
Average/Median Performance Rate in the Base Year.''
Response: One of the ways we can make the ESRD QIP transparent is
by seeking to achieve consistency from year-to-year, provided there is
not a contravening interest. Changing the terminology of the
achievement threshold, performance rate, performance standards, and
benchmark could unnecessarily confuse both facilities and
beneficiaries. Additionally, we seek to harmonize CMS' value-based
purchasing programs as much as possible, and we use these naming
conventions across programs.
Comment: Several commenters argued that we are creating
inconsistencies between the Conditions for Coverage (CfCs) and the ESRD
QIP; these commenters specifically argued that the CfCs state that a
facility cannot be penalized for patient non-compliance, but many of
the ESRD QIP measures effectively penalize facilities for patient non-
compliance. The commenter suggested that we make allowances for patient
noncompliance in the ESRD QIP's design; one commenter specifically
recommended that we should require only 90 percent compliance from
patients that visit the facility at least seven times per month to
reconcile the CfCs and the ESRD QIP.
Response: We do not believe that we are creating inconsistencies
between the CfCs and the ESRD QIP, nor do we believe that the ESRD QIP
penalizes facilities for patient non-compliance. Although patients'
compliance with the plan of care is a factor in some of the

[[Page 67504]]

measures, the quality of care is largely controlled by the facility's
treatment of patients. Additionally, to the extent that patient non-
compliance may be a factor, facilities are not required to obtain
perfect results for every patient. To avoid a payment reduction, as we
explain below, a facility need only meet the performance standards
(that is, the 50th percentile of national performance) for each
clinical measure during the comparison period (for PY 2015, this will
be CY 2011) and score half of the possible points for the reporting
measures.
Comment: Commenters agreed with our proposal to use the facility's
rate in CY 2012 to calculate improvement thresholds.
Response: We thank the commenters for their support.
Comment: One commenter suggested that the improvement threshold be
renamed the ``Facility's Base Year Performance Rate'' since the
improvement threshold does not represent a gain or level of
improvement.
Response: As noted above, we believe it is important to use
consistent terminology from year-to-year to ensure transparency and
comprehension in both the ESRD QIP and across CMS' VBP programs.
For the reasons discussed above, we finalize our proposed
definitions of the achievement thresholds, benchmarks, and improvement
thresholds. We have calculated the numerical values for the achievement
threshold and benchmarks based on data from CY 2011; we will calculate
the numerical values for the improvement thresholds based on individual
facilities' data from CY 2012. The numerical values for the achievement
thresholds and benchmarks for the PY 2015 ESRD QIP clinical measures
are set forth below in Table 6.

Table 6--Finalized Numerical Values of Achievement Thresholds and
Benchmarks for the PY 2015 ESRD QIP Clinical Measures
------------------------------------------------------------------------
Achievement
Measure threshold Benchmark
(percent) (percent)
------------------------------------------------------------------------
Hemoglobin > 12 g/dL.................... 5 0
Vascular Access Type:
% Fistula........................... 47 75
% Catheter.......................... 22 5
Kt/V:
Adult Hemodialysis.................. 86 97
Adult, Peritoneal Dialysis.......... 63 94
Pediatric Hemodialysis.............. 83 97
------------------------------------------------------------------------

In accordance with our statements in the CY 2012 ESRD PPS final
rule (76 FR 70273), if the final PY 2015 numerical values for the
achievement thresholds and benchmarks are worse than PY 2014 for a
measure, we proposed to substitute the PY 2014 achievement thresholds
and benchmarks for that measure. We believe that the ESRD QIP should
not have lower standards than previous years. We requested comments on
this proposal.
The comments we received on these proposals and our responses are
set forth below.
Comment: One commenter did not support our proposal to keep
achievement thresholds and benchmarks at least as high as they were the
previous year and suggests that we, instead, investigate why these
values would drop. Another commenter agreed with our proposal and
stated that the only reason that performance standards should be lower
than they were the previous year is if we discover a major technical
issue with the previous year's standards, such as that the performance
standards were miscalculated.
Response: We believe it is important to encourage improvement as
the ESRD QIP evolves to ensure that beneficiaries continue to receive
quality care at achievable levels. Therefore, we will finalize our
proposal to utilize previous years' achievement threshold and
benchmarks if they are higher than those of the next year. The
achievement thresholds and benchmarks for the measures used in previous
years of the ESRD QIP (the Hemoglobin Greater than 12 g/dL measure and
the Vascular Access Type measure topic) have not declined. Therefore,
for PY 2015, we will use the performance standards in the above table.
If we discover that performance on any of the measures is declining in
future years, we also intend to investigate the precipitating causes
and modify the ESRD QIP as necessary to ensure high quality care for
beneficiaries.
a. Scoring Facility Performance on Clinical Measures Based on
Achievement
We proposed to award between 0 and 10 points for each of the
clinical measures. As noted, we proposed that this score be based upon
the higher of an achievement or improvement score on the measure. For
purposes of scoring achievement for the measures, we proposed to base
the score on where a facility's performance falls relative to the
achievement threshold and the benchmark for that measure. We proposed
that, identical to PY 2014, if a facility's measure rate during the
performance period is:
Equal to or greater than the benchmark, the facility would
receive 10 points for achievement;
Less than the achievement threshold, the facility would
receive 0 points for achievement; or
Equal to or greater than the achievement threshold, but
below the benchmark, the following formula would be used to derive the
achievement score:
[9 * ((Facility's performance period rate--achievement threshold)/
(benchmark--achievement threshold))] + .5, with all scores rounded to
the nearest integer, with half rounded up. Using this formula, a
facility would receive a score of 1 to 9 points based on a linear scale
disturbing all points proportionately between the achievement threshold
and the benchmark so that the interval in performance between the score
needed to receive a given number of achievement points and one
additional achievement point is the same throughout the range of
performance from the achievement threshold to the benchmark.
b. Scoring Facility Performance on Clinical Measures Based on
Improvement
We proposed that facilities would earn between 0 and 9 points for
each of

[[Page 67505]]

the clinical measures based on how much their performance on the
measure during CY 2013 improved from their performance on the measure
during CY 2012. A unique improvement range for each measure would be
established for each facility. We proposed that if a facility's measure
rate during the performance period is:
Less than the improvement threshold, the facility would
receive 0 points for improvement; or
Equal to or greater than the improvement threshold, but
below the benchmark, the following formula would be used to derive the
improvement score:
[10 * ((Facility performance period rate--Improvement threshold)/
(Benchmark--Improvement threshold))]--.5, with all scores rounded to
the nearest integer, with half rounded up.

We note that if the facility's score is equal to or greater than the
benchmark, it would receive 10 points on the measure per the
achievement score methodology discussed above.
The comment we received on these proposals and our responses are
set forth below.
Comment: One commenter requested clarification on whether (i) a
facility can earn points if its performance rate is below the
improvement threshold but above the achievement threshold and (ii) a
facility can earn points if its performance rate is below the
achievement threshold but above the improvement threshold. A commenter
also requested clarification regarding whether, when scoring
improvement, we multiply the ((Facility performance period rate--
Improvement threshold)/(Benchmark--Improvement threshold))] by 10
before or after we subtract 0.5. Likewise, this commenter requested
clarification for the achievement scoring on whether we multiply the
((Facility's performance period rate--achievement threshold)/
(benchmark--achievement threshold))] by 9 before or after we add 0.5.
Response: It is possible for a facility to earn achievement points
even if that facility did not improve during the performance period as
long as that facility's performance period rate exceeds the improvement
threshold. Likewise, a facility can earn improvement points even if its
measure rate during the performance period is below the achievement
threshold provided that facility improved during the performance
period. Additionally, the 0.5 is added or subtracted, for achievement
and improvement respectively, as the last step in the equations.
For the reasons stated above, we will finalize the proposed
methodology for scoring measures on achievement and improvement.
c. Calculating the Reporting Measure Scores
As noted, reporting measures differ from clinical measures in that
they are not scored based on clinical values, but rather, are scored
based on whether facilities are successful in achieving the reporting
requirements associated with each of the measures. The criteria that
would apply to each reporting measure are discussed below.
With respect to the proposed Anemia Management, Mineral Metabolism,
and NHSN Dialysis Event reporting measures, for each measure, we
proposed to award facilities:
(i) 0 points for meeting the reporting requirements for less than
6-consecutive months during the performance period;
(ii) 5 points for meeting the reporting requirements for at least
6-consecutive months during the performance period; and
(iii) 10 points for meeting the reporting requirements for all 12
months of the performance period.
We believe that requiring 6-consecutive months of data rather than
6 non-consecutive months of data for a facility to receive points on
these measures will hold facilities to the highest level of quality,
therefore, facilities will be encouraged to continue to improve their
reporting mechanisms throughout the performance period. We are
concerned that awarding points for 6 non-consecutive months of
reporting may cause facilities to be less diligent in their reporting
efforts overall. We specifically requested comment regarding whether
the proposed 6-consecutive month reporting requirement will improve
quality more than a non-consecutive month reporting requirement. We
also proposed, as discussed in more detail below, that facilities would
need to receive a CCN prior to July 1, 2013 in order to receive a score
on a reporting measure. Finally, for purposes of the NHSN Dialysis
Event reporting measure, we proposed that to be awarded 5 or 10 points,
any facility that has not yet enrolled and trained in the NHSN dialysis
event system must do so and must agree to the required consent (https://www.cdc.gov/nhsn/PDFs/PurposesEligibilityRequirementsConfidentiality.pdf).
With respect to the proposed ICH CAHPS reporting measure, we
proposed to retain the PY 2014 scoring methodology for the PY 2015 ESRD
QIP. An in-center hemodialysis facility will receive a score of 10
points if it attests that it successfully administered the ICH CAHPS
survey via a third party during the performance period according to the
specification found at https://www.cahps.ahrq.gov/Surveys-Guidance/ICH.aspx. Eligible facilities (facilities providing adult, in-center
hemodialysis) that do not provide such an attestation would receive 0
points on the measure. We proposed that this attestation must be
entered via CROWNWeb by January 31, 2014. We note that the ICH CAHPS
survey is only available to adult patients who are treated in-center.
For purposes of the ICH CAHPS reporting measure, we determine whether a
facility treats adult, in-center patients by referencing the facility's
information in CMS data sources (that is, SIMS and CROWNWeb).
Facilities report the types of patients that they serve in these data
sources. If a facility lists adult in-center services, we proposed that
the facility would be required to comply with the ICH CAHPS reporting
measure.
We requested comment on the proposed methodology for scoring the PY
2015 ESRD QIP reporting measures. We also requested comment regarding
whether facilities should receive points for partially reporting data
and whether such reporting need be for consecutive months.
The comments we received on these proposals and our responses are
set forth below.
Comment: Several commenters requested that we award points for
partial or non-consecutive reporting of data. Other commenters
recommended that we modify our scoring of the NHSN Dialysis Event,
Anemia Management, and Mineral Metabolism reporting measures to allow
facilities to gain points for non-consecutive reporting on a point
scale of 0-10. Commenters suggested that two should be subtracted from
the number of months for which the dialysis facility successfully meets
the reporting requirements (rounding negative scores to zero), meaning
that a facility would have to report two months of data before
receiving points on the measure. Commenters argued that this approach
will encourage facilities to consistently report even if consecutive
reporting is not possible. One commenter argued that facilities should
be required to report for all months in order to receive any points on
this measure; alternatively, this commenter urged us to require
facilities to report consecutive months of data.
Response: We thank commenters for these suggestions. The NHSN
participation requirements state that facilities must report at least 6
months of data during a calendar year to the

[[Page 67506]]

dialysis event module to maintain active status in the NHSN. We believe
it is important to align the scoring requirements for the NHSN dialysis
event reporting measure for the ESRD QIP with the NHSN requirements,
which are intended to improve the quality of the data submitted to the
NHSN. Furthermore, we believe the severity of bloodstream infections
and other vascular access-related infections among dialysis patients
warrants more extensive monitoring in order to prevent future events.
We will, therefore, require a minimum of 6 months of NHSN Dialysis
Event reporting before awarding facilities points. We believe that
facilities should receive credit for reporting non-consecutive months
for this measure; we agree with commenters that this approach will
encourage reporting because, even if a facility misses a month or many
months, it can still receive points on the measure. Additionally, NHSN
requirements allow non-consecutive reporting, but strongly encourage
regular monthly reporting. We also agree with the commenters who stated
that facilities should be awarded points on an incremental scale to
incentivize reporting as much as possible. Therefore, we will begin
awarding points for 6 months of reporting, and will not require
consecutive monthly reporting during the performance period.
Additionally, we will award incremental points for reporting more than
6 months of data. We will award points to facilities as follows:
(i) 0 points for reporting less than 6 months of data;
(ii) 5 points for reporting 6 months of data; and
(iii) 10 points for reporting 12 months of data.
(iv) If the facility reports more than 6 but less than 12 months of
data, we will award incremental points using the following formula:
[GRAPHIC] [TIFF OMITTED] TR09NO12.000

We will round the result of this formula (with half rounded up) to
generate a measure score from 5-10 points; as noted, facilities will
earn points for reporting non-consecutive months.
As we discuss below, because of the time it takes to train and
enroll in the NHSN Dialysis Event module, we do not believe that it is
feasible for all facilities receiving a CCN in the performance period
to report at least 6 months of data. We will not apply the 6 month
minimum requirement on these newly opened facilities, as we believe
this requirement would place significant undue burden on these
facilities to report data during their initial year of operation
starting up their care delivery and administration. Therefore, the NHSN
Dialysis Event reporting measure will not apply to any facility
receiving a CCN on or after January 1, 2013.
For the Mineral Metabolism and Anemia Management reporting
measures, we believe that it is beneficial to encourage less than 6
months of reporting so that we can receive data from as many facilities
as possible and use this data to develop a robust clinical measure in
these areas. We believe that the Anemia Management and Mineral
Metabolism reporting measures should also allow facilities to receive
credit for reporting non-consecutive months because we believe that
this approach will encourage reporting even if a facility fails to
report for a month or more. We agree with commenters that a facility
should be required to report at least two months before it is awarded
points. Two months of reporting translates to reporting at a rate
roughly equal to our achievement threshold for clinical measures--15
percent. We have determined that this threshold is an appropriate
marker for where a facility should start earning achievement points on
the clinical measures, and we believe it should also apply to these
reporting measures. Additionally, as we discuss below, we will apply
the scoring methodology for the Anemia Management and Mineral
Metabolism reporting measures to facilities that receive a CCN during
the first 6 months of the performance period. Taking all of these
elements into consideration, we are finalizing a scoring methodology
that will allow facilities to score points on the Mineral Metabolism
and Anemia Management reporting measures provided that they receive a
CCN before July 1, 2013. In order to score above a zero on these
measures, a facility must report at least three months of data.
Therefore, we finalize that facilities receiving a CCN before July
1, 2013 will score 0-10 points on the Anemia Management and Mineral
Metabolism reporting measures using the following formula:
[GRAPHIC] [TIFF OMITTED] TR09NO12.001

We will round the result of this formula (with half rounded up) to
generate a measure score from 0-10, and we will allow facilities to
earn points using the same formula for reporting non-consecutive
months.
Additionally, we finalize the ICH CAHPS measure scoring as
proposed.
10. Weighting the PY 2015 ESRD QIP Measures and Calculation of the PY
2015 ESRD QIP Total Performance Score
Section 1881(h)(3)(A)(iii) of the Act provides that the methodology
for assessing facility total performance shall include a process to
weight the performance scores with respect to individual measures to
reflect priorities for quality improvement such as weighting the scores
to ensure that facilities have strong incentives to meet or exceed
anemia management and dialysis adequacy performance standards, as
determined appropriate by the Secretary. In determining how to

[[Page 67507]]

appropriately weight the PY 2015 ESRD QIP measures for purposes of
calculating Total Performance Scores, we considered two criteria.
Specifically, we considered the number of measures we had proposed to
include in the PY 2015 ESRD QIP as well as the National Quality
Strategy priorities.
a. Weighting Individual Measures To Compute Measure Topic Scores for
the Kt/V Dialysis Adequacy Measure Topic and the Vascular Access Type
Measure Topic
Because the Kt/V Dialysis Adequacy measure topic and the Vascular
Access Type measure topic are comprised of multiple measures, it is
necessary for us to discuss how we will derive an overall score for
each measure topic. For these measure topics, we proposed that each
measure be scored separately for each facility using the achievement
and improvement methodology discussed above. After calculating the
individual measure scores within a measure topic, we proposed to
calculate a measure topic score using the following steps: (1) Dividing
the number of patients in the denominator of each measure by the sum of
the denominators for all of the applicable measures in the measure
topic; (2) multiplying that figure by the facility's score on the
measure; (3) summing the results achieved for each measure; and (4)
rounding this sum (with half rounded up). We proposed that, if a
facility does not have enough patients to receive a score on one of the
measures in the measure topic (this proposal is discussed below), that
measure would not be included in the measure topic score for that
facility. Only one measure within the measure topic need have enough
cases to be scored in order for the measure topic to be scored and
included in the calculation of the Total Performance Score. We stated
that we believe it is important to proportionately weight the measures
within a measure topic because we seek to give equal importance to each
patient. Finally, we proposed that the measure topic score would be
equal to one clinical measure in the calculation of the Total
Performance Score.
For additional explanation of our proposals to calculate measure
topic scores, we provided the following examples:

Example 1: Facility X serves hemodialysis (HD), peritoneal
dialysis (PD), and pediatric patients. For HD patients, Facility X's
Kt/V measure rate is 50/60. For PD patients, Facility's X's Kt/V
measure rate is 15/20. For pediatric patients, Facility X's Kt/V
measure rate is 10/20. There are 100 patients included in the
measure topic (60+20+20). Assume that the facility's measure rates
lead to the following measure scores: HD--7; PD--8; pediatric--5. To
compute the Kt/V Dialysis Adequacy measure topic score for Facility
X, we would calculate the following: (7*60/100)+(8*20/100)+(5*20/
100) = 6.8, which we would round to 7. The Kt/V Dialysis Adequacy
measure topic score would then be treated as one clinical measure
when calculating the Total Performance Score.
Example 2: Facility Y serves HD patients and PD patients. For
HD patients, Facility Y's Kt/V measure rate is 50/60; assume that
this rate leads to a score of 6. For PD patients, Facility Y's Kt/V
measure rate is \4/7\. Facility Y has no Kt/V measure rate for
pediatric patients because it does not serve this population. Assume
that the minimum case number for scoring a measure is 11. Because
there are only seven cases in Facility Y's denominator, Facility Y
would not receive a PD Kt/V measure score. Furthermore, Facility Y
did not treat any pediatric patients, so it would not receive a
pediatric Kt/V measure score. Therefore, the Kt/V Dialysis Adequacy
measure topic score for Facility Y would be 6. The Kt/V Dialysis
Adequacy would then be treated as one clinical measure when
calculating the Total Performance Score.

We requested comment on the proposed method of weighting individual
measure scores to derive a measure topic score.
The comments we received on these proposals and our responses are
set forth below.
Comment: Some commenters supported our proposals for weighting
measure topics. Some commenters, however, raised concerns that, given
the small number of pediatric patients relative to adult patients,
combining the adequacy measures might result in a score that does not
accurately reflect the quality of care provided to pediatric patients
treated in adult dialysis facilities. Other commenters suggested that
the measure topics should be weighted consistently across facilities to
allow meaningful comparisons between facilities; these commenters
requested that we modify the weighting so that each measure is weighted
based on clinical relevance, importance, and the number of patients in
a ``typical'' facility's population.
Response: We disagree with the commenters' statement that combining
the adequacy measures might not reflect the quality of care given to
certain patients. The weighting scheme ensures that emphasis on each
measure in the Kt/V measure topic is proportionate to the number of
patients that facility treats. If we were to weight the measure topics
consistently across facilities or base the weight on clinical relevance
or the typical facility, the scoring methodology would not equally
weight the quality of care provided to each, individual patient. That
is, one patient's results could count for more points than another
patient's results, perhaps incentivizing better care for only certain
ESRD populations. It is the goal of the ESRD QIP to provide the best
care for every patient, and we believe the proposed weighting for
measure topics meets this goal. Therefore, we are finalizing the
methodology of weighting measure topics as proposed.
b. Weighting the Total Performance Score
In the proposed rule we stated our belief that weighting the
finalized clinical measures/measure topics equally will incentivize
facilities to improve and achieve high levels of performance across all
of the measures, resulting in overall improvement in the quality of
care provided to ESRD patients. We also stated our belief that, while
the reporting measures are valuable, the clinical measures value actual
patient outcomes and therefore justify a higher combined weight. We
did, however, propose to weight the clinical measures slightly less for
the PY 2015 ESRD QIP than we did for the PY 2014 ESRD QIP. For the PY
2015 ESRD QIP, we believe it is important to begin to more rigorously
incentivize reporting, specifically since for three of the four
reporting measures, we now require actual data submission. We intend to
use these data for purposes of developing and creating clinical
measures in the future; thus, complete and correct data submission in
these areas is essential to the program's overall goal of continued and
improved ESRD quality care. For these reasons, we proposed to equally
weight the clinical measures/measure topics for which a facility
receives a score equal to 80 percent of the Total Performance Score; we
also proposed to equally weight the reporting measures for which a
facility receives a score as 20 percent of the Total Performance Score.
We requested comment on this proposed methodology for weighting the
clinical and reporting measures.
We have also considered the issue with awarding a Total Performance
Score to facilities that do not report data on the proposed minimum
number of cases with respect to one or more of the finalized measures/
measure topics. As we stated in the CY 2012 ESRD PPS final rule, we
believe it is important to include as many facilities as possible in
the ESRD QIP. We did, however, revisit our policy of including any
facility that receives a score on one measure, whether that measure is
a clinical or reporting measure, and we proposed a different approach
for PY 2015. We stated our belief that it is preferable to

[[Page 67508]]

require a facility to have at least one clinical and one reporting
measure to receive a Total Performance Score. By requiring this
minimum, we ensure that a facility is not included in the program
unless it meets the minimum case requirement for at least one clinical
measure/measure topic. In the case of a facility that has sufficient
data (11 cases, as discussed below) from the performance period, but
lacks sufficient data (11 cases, as discussed below) to calculate the
improvement threshold, we proposed to only calculate its achievement
score, because it would not be possible to calculate its improvement
score. We requested comment on our proposals to require a facility to
qualify for a score on at least one reporting and one clinical measure
in order to receive a Total Performance Score.
Finally, we proposed that all Total Performance Scores be rounded
to the nearest integer, with half being rounded up, and we requested
comment on this proposal. For further examples regarding the proposed
measure and Total Performance Score calculations, we refer readers to
the figures below.
The comments we received on these proposals and our responses are
set forth below.
Comment: Many commenters supported our proposed scoring
methodology. Commenters specifically supported our proposal to require
a facility to have a score for both a clinical and a reporting measure
to receive a Total Performance Score. One commenter stated that,
because of the importance of preventing HAIs, we should weight the
reporting measures at 50 percent of the Total Performance Score. Some
commenters stated their belief that we should maintain the 90/10 Total
Performance Score weighting because clinical outcomes are more
important than simply tracking and relaying information.
Response: We believe, at this time, that it is appropriate to
weight all of the clinical measures topics equally and all of the
reporting measures equally in order to equally incentivize quality in
all of these areas of care. We do, however, agree with the commenter
that noted that because of the importance of reporting measures, such
the NHSN Dialysis Event measure which tracks HAIs, we should give
greater weight to the reporting measures in calculating the Total
Performance Score. As stated above, we are not finalizing the
Hypercalcemia clinical measure due to our lack of consistent baseline
data. Instead, we will collect calcium data through the Mineral
Metabolism reporting measure until we have baseline data that is robust
enough to support a clinical measure's adoption. Because of our need to
collect data from not only LDOs, as we did in the CROWNWeb pilot, but
all types of dialysis facilities, our decision to not finalize the
Hypercalcemia measure, and the importance of collecting HAI data
through the NHSN Dialysis Event reporting measure, we believe it is
appropriate to weight the reporting measures more than we had proposed.
We continue to believe, however, that clinical outcomes should
constitute the majority of the Total Performance Score. Therefore, we
finalize that, for the PY 2015 ESRD QIP, each clinical measure/measure
topic will be equally weighted to comprise 75 percent of the Total
Performance Score, and the reporting measures will be equally weighted
to comprise 25 percent of the Total Performance Score.
c. Examples of the PY 2015 ESRD QIP Scoring Methodology
Below, we provide examples to illustrate the scoring methodology
for the PY 2015 ESRD QIP. Figures 1-3 illustrate the scoring for a
clinical measure. Figure 1 shows Facility A's performance on an example
clinical measure. Note that for this example clinical measure, the
facility is attempting to achieve a high rate (that is, the higher the
measure rate, the higher the measure score). The example benchmark
(which is the 90th percentile of performance nationally in CY 2011)
calculated for this measure is 74 percent, and the example achievement
threshold (which is the 15th percentile of performance nationally in CY
2011) is 46 percent. Facility A's performance rate of 86 percent during
the performance period meets or exceeds the benchmark of 76 percent, so
Facility A would earn 10 points (the maximum) for achievement for this
measure. (Because, in this example, Facility A has earned the maximum
number of points possible for this measure, its improvement score is
irrelevant.)
[GRAPHIC] [TIFF OMITTED] TR09NO12.002

Figure 2 shows the scoring for another facility, Facility B. As
illustrated below, the facility's performance on the example clinical
measure improved from 26 percent in CY 2012 to 54 percent during the
performance period. The achievement threshold is 46 percent, the
performance standard is 58 percent, and the benchmark is 74 percent.

[[Page 67509]]

[GRAPHIC] [TIFF OMITTED] TR09NO12.003

Because the facility's performance during the performance period is
within both the achievement range and the improvement range, we must
calculate both the improvement and achievement score to find the
example clinical measure score. To calculate the achievement score, we
would employ the formula discussed above.
[GRAPHIC] [TIFF OMITTED] TR09NO12.004

The result of this formula for this example is [9 * ((54 - 46)/(74 -
46))] + .5, which equals 3.07 and we round to 3.
Likewise, to calculate the improvement score, we employ the
improvement formula discussed above.
[GRAPHIC] [TIFF OMITTED] TR09NO12.005

The result of this formula for this example is [10 * ((54 - 26)/(74 -
26))] - .5, which equals 5.33 and we round to 5. Therefore, for this
example clinical measure, Facility B's achievement score is 3, and its
improvement score is 5. We award Facility B the higher of the two
scores. Thus, Facility B's score on this example measure is 5.
In Figure 3 below, Facility C's performance on the example clinical
measure drops from 53 percent in CY 2012 to 40 percent in CY 2013, a
decline of 13 percent.

[[Page 67510]]

[GRAPHIC] [TIFF OMITTED] TR09NO12.006

Because Facility C's performance during the performance period falls
below the achievement threshold of 46 percent, it receives 0 points for
achievement. Facility C also receives 0 points for improvement because
its performance during the performance period was lower than its
improvement threshold (its performance during CY 2012). Therefore, in
this example, Facility C would receive 0 points for the example
clinical measure.
The method illustrated above would be applied to each clinical
measure in order to obtain a score for each measure. Scores for
reporting measures are calculated based upon their individual criteria,
as proposed.
After calculating the scores for each measure, we calculate the
Total Performance Score. As an example, applying the weighting criteria
to a facility that receives a score on all finalized measures, we would
calculate the facility's Total Performance Score using the following
formula:

Total Performance Score = [(.25 * Hemoglobin Greater Than 12g/dL
Measure) + (.25 * Kt/V Dialysis Adequacy Measure Topic) + (.25 *
Vascular Access Type Measure Topic) + (..0625 * NHSN Dialysis Event
Reporting Measure) + (.0625 * ICH CAHPS Survey Reporting Measure) +
(.0625 * Mineral Metabolism Reporting Measure) + (.0625 * Anemia
Management Reporting Measure)] * 10.

The Total Performance Score would be rounded to the nearest integer
(and any individual measure values ending in .5 would be rounded to the
next higher integer).
However, if, for example, a facility did not receive a score on the
Vascular Access Type measure topic, the facility's Total Performance
Score would be calculated as follows:

Total Performance Score = [(.375 * Hemoglobin Greater Than 12g/dL
Measure) + (.375 * Kt/V Dialysis Adequacy Measure Topic) + (.0625 *
NHSN Dialysis Event Reporting Measure) + (.0625 * ICH CAHPS Survey
Reporting Measure) + (.0625 * Mineral Metabolism Reporting Measure) +
(.0625 * Anemia Management Reporting Measure)] * 10

Again, the Total Performance Score would be rounded to the nearest
integer (and any individual measure values ending in .5 would be
rounded to the next higher integer).
Finally, if, for example, a facility qualified for only two of the
reporting measures, the facility's Total Performance Score would be
calculated as follows:

Total Performance Score = [(.25 * Hemoglobin Greater Than 12g/dL
Measure) + (.25 * Kt/V Dialysis Adequacy Measure Topic) + (.25 *
Vascular Access Type Measure Topic) + (.125 * Mineral Metabolism
Reporting Measure) + (.125 * Anemia Management Reporting Measure)] *
10.

Again, the Total Performance Score would be rounded to the nearest
integer (and any individual measure values ending in .5 would be
rounded to the next higher integer).
11. Minimum Data for Scoring Measures for the PY 2015 ESRD QIP
We proposed to only score facilities on clinical measures for which
they have a minimum number of cases during the performance period. We
assessed how reliable each clinical measure is using the currently
available data. Specifically, we studied the degree the measures assess
the actual differences in performance among facilities as opposed to
the variation within a facility. Thus, in order for a facility to be
scored on any clinical measure, we proposed that the facility must
report a minimum number of cases qualifying for that measure over the
course of the 12-month performance period. This proposed minimum seeks
to ensure that facilities are being evaluated based on the care they
provide.
a. Minimum Data for Scoring Clinical Measures for the PY 2015 ESRD QIP
Dialysis facilities tend to have a small, relatively stable patient
census, with each facility reporting on an average of 50-60 cases per
measure. In previous rules, commenters have asked that we consider the
effect of case size on measure reliability in the context of the ESRD
QIP. We recognize that as a general principle, reliability improves
with increasing case size; that is, the reliability of a measure or
score describes numerically to what extent that measure or score
assesses the actual differences in performance among facilities as
opposed to the random variation within facilities. Furthermore, we wish
to be responsive to public comment and to ensure that dialysis
facilities with extremely small numbers of patients are not penalized
by the ESRD QIP due to random variation in their patient samples. Thus,
we developed and proposed a new methodology to make favorable
adjustments to the clinical measure rates of facilities with very small
numbers of patients. We also proposed a case minimum \8\ for clinical
measures to protect patient privacy, which we believe could be
compromised if the

[[Page 67511]]

publicly reported data for a facility is based on a small patient
population.
---------------------------------------------------------------------------

\8\ For clarification purposes, as in previous years, a ``case''
refers to a patient that is included in the measure.
---------------------------------------------------------------------------

Given the ESRD QIP's potential to encourage quality improvement,
our goal is to ensure the full participation of as many facilities as
possible in the program. However, we must ensure that all measure rates
capture a large enough number of patients so that the privacy of each
patient is protected. A case minimum allows us to achieve these policy
objectives of measurement reliability and patient privacy.
For the first 3 payment years of the ESRD QIP, we set the minimum
number of cases to be scored on a clinical measure at 11. Eleven cases
has historically been the case minimum for displaying measures on DFC.
We have determined that in the context of DFC, 11 cases will meet the
requirement that individual patients are not identifiable in the
aggregate measure rate. Given that we believe that 11 cases is
sufficient to address privacy concerns and that our policy objective is
to maximize the number of facilities that participate in the ESRD QIP,
we proposed to set a proposed case minimum threshold of 11 cases. Under
this proposal, facilities must report at least 11 qualifying cases over
the course of the 12-month performance period to be scored on a given
clinical measure. We sought public comment on this proposal.
We indicated in the CY 2012 ESRD PPS final rule that we would
continue to assess the reliability of our measures in future payment
years of the program (76 FR 70259). To further explore this issue in
response to comments, we evaluated the reliability of measure rates and
the Total Performance Score for facilities of various sizes using the
PY 2014 program clinical measures. Specifically, we performed a
simulation of the PY 2014 QIP to calculate the Inter-Unit Reliability
(IUR) stratified by facility size. The IUR is a statistic commonly
adopted for assessing the reliability of measures or scores, and is the
ratio of the between-facility variance to the sum of the between-
facility variance and the within-facility variance.
We found the reliability of the Total Performance Score to be
acceptable for all strata (IUR>0.6). However, we recognize that
facilities with very small numbers of patients are more likely to have
a lower IUR. In a facility with a low IUR, the case mix might
potentially shift its measure rate higher or lower than the rate the
same facility would report if it were treating an ``average'' ESRD
population. In the context of the ESRD QIP, a favorable skew would not
have a negative effect on facility payment, but an unfavorable skew
potentially could result in the facility receiving a payment reduction.
We cannot identify which specific facilities will have a low IUR until
after the performance period has concluded. However, in performing the
stratification analysis, we found that a favorable adjustment to the
two strata with the lowest number of cases would reduce the risk of
penalizing facilities in those strata for random within-facility
variation. The average number of cases contributing to the Total
Performance Score in the second stratum is 25. Accordingly, we
developed and proposed below a favorable adjustment to the measure
rates for facilities with at least the minimum case threshold of 11 and
fewer than the adjustment threshold of 26 cases. This methodology would
give facilities ``the benefit of the doubt'' and ensure that any error
in measure rates due to a small number of cases will not adversely
affect payment.
Specifically, we proposed that if a facility reports at least 26
cases during the 12-month performance period on a measure, it would be
scored based on its raw performance rate on the measure. If the
facility reports between 11 and 25 cases during the 12-month
performance period, it would be scored based on its raw performance
rate plus a favorable reliability adjustment to account for a possible
unfavorable skew in the measure rate due to small sample size.
We proposed the following methodology to adjust the measure rate
used to score facilities with 11-25 cases for a given measure. The
adjustment factors in facility size and the standard error of the
measure, which can be estimated using an analysis of variance (ANOVA).
This analysis allows us to estimate how much better the measure rate
could have been if that facility were treating an ``average''
population of patients and make a favorable adjustment to the
facility's score in that amount. For example, as a facility treats more
patients, the reliability of the measure rate improves, and the
difference between the facility's measure rate and the measure rate we
statistically would expect to see if the facility were treating an
``average'' panel of patients decreases. Thus, the magnitude of the
adjustment factor increases as the number of cases decreases from 25 to
11.
Because the adjustment factor takes into account a facility's
performance (standard error of the measure) and the number of cases for
the measure, it is computed separately for each measure. The specific
methodology we proposed follows:
ANOVA provides an estimate sw of the square root of within
facility variance, given by the within subject mean square.
Then for the ith facility, the standard error of the
average measure (denoted by xi is given by
[GRAPHIC] [TIFF OMITTED] TR09NO12.007

where ni is the number of patients in the ith facility. Now denote C as
the minimum case number. We proposed the following adjustment for the
original score xi by introducing a weight depending on facility size.
[GRAPHIC] [TIFF OMITTED] TR09NO12.019

where C is the lower bound of cases for facilities that will not
receive any adjustment.
For measures where large values of xi are good (that is,
for the PY 2015 ESRD QIP, the fistula measure and the Kt/V Dialysis
Adequacy measure topic):
o The new score is: ti = xi + wi * SE(xi). (If ti > 100%, we set ti
= 100%).
In cases where lower values of xi are better (that is, for
the PY 2015 ESRD QIP, the Hemoglobin Greater Than 12g/dL and catheter
measures):
o The new score is: ti = xi - wi * SE(xi). (If ti < 0%, we set ti =
0%).
We stated our belief that this approach gives facilities an
allowance to account for the uncertainty in the estimate xi by
accounting for the size of the patient population in both weights and
standard errors. As explained above, this allowance decreases when the
case size increases (from 11 to 26 or more)--the larger the case size,
the smaller the allowance. For example, when C=26, this implies that
for measures with 26 cases and above, no allowance is made. We sought
public comment on this methodology and the proposed adjustment
threshold. While one model is presented above, we invited comment on
alternative approaches that are consistent with our intent to include
as many facilities as possible in the ESRD QIP and at the same time
address concerns from stakeholders regarding the reliability of

[[Page 67512]]

measures where there are small numbers of cases. We stated our belief
that this adjustment is appropriate for the ESRD QIP considering the
particular measure set and scoring methodology for PY 2015. As the
program grows and evolves, we noted that we will continue to assess
reliability based on the measures and scoring methodology for that
payment year.
The comments we received on these proposals and our responses are
set forth below.
Comment: Many commenters supported our proposal to use an
adjustment for measure rates, especially because aging patients and
patients with comorbidities can negatively affect a small facility's
score. Commenters also supported our proposal to use the adjuster for
measures with 11-25 cases. Other commenters did not support the
proposed adjustment because it is overly complicated, could mislead
patients, and could make low-volume facilities appear better than high-
volume facilities when they are not, in fact; these commenters
suggested that we raise the case minimum to at least 25 cases instead
of employing the proposed adjustment methodology. Some commenters
expressly stated that the proposed case minimum is not sufficient;
other commenters argued that the proposed case minimum should be
lowered because the proposal could preclude participation from many
low-volume facilities, specifically pediatric facilities.
Response: Were we to set the case minimum at 26 rather than 11, we
estimate that an additional 520, or an additional 10 percent of,
facilities would be excluded from the program. Although lowering the
case minimum would include even more facilities, we do not believe it
is appropriate to do so because of not only reliability but also
privacy concerns. As we stated in the proposed rule (77 FR 40984), we
believe the adjustment balances the competing concerns of reliability,
privacy, and inclusion.
Although it can be difficult to understand the adjustment
methodology, we do not believe that this concern alone should prevent
us from finalizing it as proposed. The adjustment will result in no
harm to any facility; although a facility may not be able to predict
its Total Performance Score if some of its measures are subject to the
adjustment, the facility will know that the adjuster will not
negatively affect its score. It could continue to predict its minimum
score and use this score as a baseline for assessing whether or not it
will receive a payment reduction. Additionally, we believe that the
argument that the adjuster could allow smaller facilities to seem
better than they are is of little concern. Although the adjuster will
affect the measure score, it will not affect the measure rate. The
rates that are displayed to the public will be shown without an
adjustment. Thus, a beneficiary could continue to meaningfully compare
facilities, regardless of the number of patients these facilities
serve.
Comment: Some commenters requested that, if we adopted the proposed
adjustment, we publish tables with the values of sw to make the ESRD
QIP as transparent and predictable as possible.
Response: The sw values represent the within facility variation. It
is specific to each facility and, because it will be based on 2013
data, it cannot be derived until the end of the performance period.
Therefore, we are not able to publish the sw values at this time.
Comment: Some commenters encouraged us to continue to conduct
analyses to determine the appropriate reliability of measures and the
minimum case number for future years of the program. Some commenters
suggested that, if we are concerned with reliability and minimum case
numbers, we employ longer performance periods spanning multiple years.
Commenters also encouraged us to align the ESRD QIP minimum case number
with other VBP programs.
Response: We will continue to study the reliability of measures and
the Total Performance Score. We have and will continue to consider
using longer performance periods on a measure-by-measure basis.
Although we strive to align the VBP programs as much as possible, each
program has unique measures which may necessitate different minimum
case numbers. We will continue to look for harmonization as much as is
appropriate.
For the reasons stated above, we finalize the case minimum and
adjustment for clinical measures as proposed.
b. Minimum Data Requirements for Reporting Measures by New Facilities
For purposes of the PY 2014 ESRD QIP, we stated that a facility
that receives a CCN on or after July 1, 2012 has the option to choose
whether or not it is scored on each reporting measure (76 FR 70275). We
considered using the same approach for PY 2015 as we did in PY 2014
(that is, allowing new facilities to choose whether or not they will be
scored on each reporting measure). Under that approach, if a new
facility reports enough information to receive 10 points on a reporting
measure, the facility is scored on that measure. If a new facility
scores zero or 5 points on a reporting measure, it is not scored on
that measure. As the program evolves, we believe it is important to
continuously push improvement in all facilities--both old and new.
Additionally, we wish to incentivize new facilities to put reporting
mechanisms in place as soon as possible. For these reasons, we proposed
to modify the reporting measure minimum data requirement from that of
PY 2014.
For PY 2015, we proposed that any facility receiving a CCN before
July 1, 2013 be scored on the reporting measures. However, since a
facility receiving a CCN after January 1, 2013 would not be able to
report a full 12 months of data, we stated our belief that it is not
appropriate to require it to do so in order to receive a full 10 points
on the reporting measures. Instead, we proposed to score these
facilities proportionately for the time for which they have a CCN
during the performance period. To earn 10 points on the ICH CAHPS
reporting measure, we proposed to require that a facility receiving a
CCN between January 1, 2013 and June 30, 2013 attest that it
successfully administered the survey during the time for which it had a
CCN during the performance period. For purposes of the Anemia
Management, NHSN Dialysis Event, and Mineral Metabolism reporting
measures, we proposed that if a facility receives a CCN on or after
January 1, 2013, but before July 1, 2013, it would receive 10 points
for reporting for all months for which it has a CCN and 5 points for
consecutively reporting half of the months for which it has a CCN
during the performance period. If a facility has a CCN for an odd
number of months, we proposed to round down to calculate the number of
months for which it must report to receive 5 points. Finally, we
proposed to begin counting the number of months for which a facility is
open on the first day of the month after the facility receives a CCN.
For example, assume a facility receives a CCN on March 15, 2013. In
order for this facility to receive 10 points on the applicable
reporting measure, we proposed that it must report data from April 1,
2013-December 31, 2013 (or 9 months of data). In order for it to
receive 5 points, we proposed that it must report half of the months
for which it is open, consecutively. For the example facility to
receive 5 points, it would need to report 4.5 months of data. Since we
proposed to round down, this facility

[[Page 67513]]

would be required to report 4 months of data to receive 5 points.
We realized that facilities receiving a CCN on or after July 1,
2013, may have difficulty meeting the requirements of the reporting
measures, such as enrolling and training for the NHSN Dialysis Event
reporting measure or hiring a third-party to administer the ICH CAHPS
survey, because of the short period of time left in the performance
period. We also stated our belief that it is appropriate to reduce
payment for a 1-year period based on less than 6 months of performance.
Therefore, we proposed to exclude facilities receiving a CCN on or
after July 1, 2013 from the requirements of the reporting measures.
Because we finalized, as discussed above, that a facility will not
receive a Total Performance Score unless it receives a score on at
least one clinical and one reporting measure, finalizing this proposal
would result in facilities not being eligible for a payment reduction
if they receive a CCN on or after July 1, 2013. We requested comment
regarding these proposals. We also elicited comments regarding whether
there would be a more appropriate way to score these new facilities on
reporting measures so that they may be eligible for inclusion in the
ESRD QIP.
The comments we received on these proposals and our responses are
set forth below.
Comment: Commenters supported our proposals regarding the reporting
measures' minimum data requirements for new facilities; specifically,
commenters supported our proposal to exempt facilities receiving a CCN
after June 30, 2013 from the reporting measures. Some commenters
suggested that a facility that receives a CCN between January 2013 and
June 2013 should be required to begin reporting on the first day of the
third month after the facility receives a CCN to allow the facility to
deploy its IT system and enroll in CROWNWeb and NHSN.
Response: Consistent with our change to allow facilities to score
0-10 incremental points on the Anemia Management and Mineral Metabolism
reporting measures, we will finalize changes to our proposed scoring
methodology for these measures for facilities receiving a CCN between
January 1, 2013 and June 30, 2013. Facilities receiving a CCN between
January 1, 2013 and June 30, 2013, will be able to score points in
proportion to their overall rate of monthly reporting on the Anemia
Management and Mineral Metabolism reporting measures. As we noted
above, we believe it is important to require a minimum threshold for
facilities to earn points on this measure. Thus, we finalize that a
facility receiving a CCN after January 1, 2013 but before June 30, 2013
can score points on the Mineral Metabolism and Anemia Management
reporting measures using the following formula:
[GRAPHIC] [TIFF OMITTED] TR09NO12.008

We will round the result of this formula (with half rounded up) to
achieve a measure score from 0-10.
For purposes of the Anemia Management and Mineral Metabolism
reporting measures, we do not agree with commenters that facilities
should be required to report the first day of the third month after
they receive their CCN. A facility with a CCN may submit claims to
Medicare. If a facility is submitting claims, it should be reporting
hemoglobin and ESA levels. It should also be reporting in CROWNWeb.
Therefore, we do not believe it is necessary to allow facilities more
time on these measures, and we finalize that facilities must begin
reporting for these measures on the first day of the month after they
receive their CCN.
As we have previously noted, we believe that a facility needs a
period of time after it receives its CCN to ensure that its systems are
in place to report to the NHSN system. As we explained above, we are
requiring facilities to report 6 non-consecutive months of data to
receive points on the NHSN Dialysis Event measure. Because of the time
required to enroll and train in the NHSN system, we do not believe it
is equitable to require facilities receiving a CCN during the
performance period to comply with this measure. Therefore, we are
finalizing that a facility that receives a CCN during the performance
period will be not be scored on the NHSN Dialysis Event reporting
measure.
For the ICH CAHPS measure, we believe that facilities receiving a
CCN before July 1, 2013 should be able to hire a third-party
administrator in time to administer the ICH CAHPS survey. Although it
may take some time for facilities to put this administrator in place,
it can begin doing so before it receives a CCN. Therefore, we finalize
our proposals that, to earn 10 points on the ICH CAHPS reporting
measure, a facility receiving a CCN between January 1, 2013 and June
30, 2013 must attest that it successfully administered the survey
during the time for which it had a CCN during the performance period.
We also finalize that facilities receiving a CCN after June 30,
2013 will be exempt from the Mineral Metabolism, Anemia Management, and
ICH CAHPS reporting measures. For the NHSN Dialysis Event reporting
measure, facilities will be exempt if they receive a CCN on or after
January 1, 2013.
12. Payment Reductions for the PY 2015 ESRD QIP
Section 1881(h)(3)(A)(ii) of the Act requires the Secretary to
ensure that the application of the scoring methodology results in an
appropriate distribution of payment reductions across facilities such
that facilities achieving the lowest Total Performance Scores receive
the largest payment reductions. For PY 2014, we adopted an approach
under which a facility did not have to meet or exceed the performance
standards with respect to each of the finalized clinical measures to
avoid receiving a payment reduction under the ESRD QIP. Rather, even if
a facility failed to meet or exceed the performance standards with
respect to one or more of these measures, the facility could avoid a
payment reduction if it achieved a minimum Total Performance Score that
is equal to or greater than the minimum Total Performance Score it
would receive if it had met the performance standards for each of the
clinical measures or, in the case of the Vascular Access Type Measure,
for the two subcomponent measures.
For PY 2014, in calculating this minimum Total Performance Score,
we excluded the reporting measures

[[Page 67514]]

because we believed this approach best underscored the importance of
the clinical measures. For PY 2015, we proposed to retain the same
approach as in PY 2014. We discuss the methodology for deriving the
performance standards for the measure topics, above. We requested
comments on these proposals.
Alternately, in order to better incentivize compliance with
reporting measures, we also considered raising the minimum Total
Performance Score to include 50 percent of the total points a facility
could have received had it met all of the reporting requirements for
each measure. In other words, because a facility could receive up to 40
points in PY 2015 for meeting all of the reporting measure
requirements, we considered raising the minimum Total Performance Score
by 20 points (one-half of 40). This approach would ensure that
facilities receiving a CCN before August 1, 2013 could still achieve
the minimum Total Performance Score by meeting, on average, the
performance standards for the clinical measures and achieving as many
points on the reporting measures as is possible. We requested comment
regarding whether the reporting measures should be scored at greater
than 0 when calculating the minimum Total Performance Score.
Section 1881(h)(3)(A)(ii) of the Act requires that facilities
achieving the lowest Total Performance Scores receive the largest
payment reductions. For PY 2014, we adopted an approach we intend to
continue for PY 2015. We believe that this consistency will allow the
program to be more understandable to both facilities and the general
public. Accordingly, we proposed that the payment reduction scale be
the same as the PY 2014 program. Therefore, for each 10 points a
facility falls below the minimum Total Performance Score, it would
receive an additional 0.5 percent payment reduction on its ESRD
payments for PY 2015, with a maximum reduction of 2.0 percent. As we
stated in the CY 2012 ESRD PPS final rule (76 FR 70281), we believe
that such a sliding scale will incentivize facilities to meet the
performance standards and continue to improve their performance because
even if a facility fails to achieve the minimum Total Performance
Score, the facility will still be incentivized to strive for, and
attain, better performance rates in order to reduce the amount of its
payment reduction. We requested comments on the proposed payment
reduction scale.
The comments we received on these proposals and our responses are
set forth below.
Comment: Commenters agreed with our proposal to use the PY 2014
payment reductions scale for the PY 2015 ESRD QIP. Some commenters,
however, supported placing more emphasis on the reporting measures in
calculating the minimum Total Performance Score since these are the
measures over which facilities have the most control. Some commenters
suggested that we base payment reductions on actual impact rather than
projections of impact, setting tiers of reductions by percentage of
facilities we wish to be in each tier. Another commenter urged us to
create a more individualized approach to payment reductions because
high quality care is markedly different from patient to patient.
Response: At this time, we do not believe it is in the best
interest of the program to base payment reductions on actual impact and
the percentage of facilities to which we wish to provide payment
reductions. Regardless of the impact, we believe that facilities that
do not meet the performance standards for each of the clinical measures
should face a payment reduction. Were we to base reductions on
percentages, the result could be that some high performing facilities
receive a payment reduction. Our current payment reduction scale allows
every facility to avoid a payment reduction provided that they meet the
minimum Total Performance Score.
We agree that it is important to provide individualized care to
patients. We believe that the program, incentivizes facilities to
furnish individualized care within a certain range of established,
clinical acceptable guidelines.
Finally we agree with the commenters that requested we place more
emphasis on the reporting measures when calculating the minimum Total
Performance Score. We specifically believe that this approach is
appropriate now that we have weighted the reporting measure to comprise
25 percent of the Total Performance Score. Were we to continue to score
the reporting measures at zero when calculating the minimum Total
Performance Score, by increasing the weight of the reporting measures,
we would be decreasing the minimum Total Performance Score. This result
is contrary to our belief stated in this final rule that the reporting
measures should be afforded more importance. Therefore, we will
finalize the alternative approach we requested comment on in the
proposed rule to include the reporting measures in the minimum Total
Performance Score at 50 percent of the total points a facility could
have received had it met all of the reporting requirements. As noted
above, it is possible to gain a total of 40 points from the reporting
measures; thus, we will include half, or 20 of these points, in our
calculation of the minimum Total Performance Score. We believe this
approach is consistent with our methodology for the clinical measures
since we calculate the clinical measure component of the minimum Total
Performance Score as the score a facility would have received if it had
reached the 50th percentile for all clinical measures.
Comment: One commenter suggested that the 2 percent payment
reduction be revisited since such a small percentage will not be a
worthwhile incentive as new measures are added. Several commenters
expressed concern that the ESRD QIP works as a penalty system and
suggested that the ESRD QIP provide incentives as well as penalties,
and on balance, be budget-neutral. One commenter suggested that the
payment reductions be returned to the penalized facilities for use only
to improve care in the areas where they failed to meet quality
standards.
Response: Section 1881(h) of the Act does not provide us with the
authority to issue bonus payments to facilities based on their
performance under the ESRD QIP, to make reductions of more than 2.0
percent, or to redistribute the payment reductions to the originally
penalized facilities.
For the reasons stated above, we finalize our proposals for
calculating payment reductions except that we will include reporting
measures in calculating the minimum Total Performance Score. The
reporting measure component of the minimum Total Performance Score will
equal the score a facility would have received if it is awarded half of
the maximum points it could have received on the reporting measures
(that is, 5 points on each measure). Based on this approach, the
minimum Total Performance Score is 60 points. Facilities failing to
meet this minimum will receive payment reductions in the amounts
indicated in Table 7 below.

Table 7--Finalized Payment Reduction Scale for PY 2015
------------------------------------------------------------------------
Total performance score Reduction (%)
------------------------------------------------------------------------
100-60................................................. 0
59-50.................................................. 0.5
49-40.................................................. 1.0
39-30.................................................. 1.5
29-0................................................... 2.0
------------------------------------------------------------------------

[[Page 67515]]

13. Data Validation
One of the critical elements of the ESRD QIP's success is ensuring
that the data submitted to calculate measure scores and Total
Performance Scores is accurate. To that end, we have procured the
services of a data validation contractor who will be tasked with
validating a national sample of facilities' records as they report data
under the ESRD QIP. Beginning in CY 2013, we proposed to begin a pilot
data validation program for the ESRD QIP. Because data validation for
the ESRD QIP is new to both facilities as well as CMS, we believe that
the first year of validation should result in no payment reductions to
facilities. Accordingly, we proposed that, beginning in CY 2013, we
would randomly sample the records of approximately 750 facilities. We
anticipate that a CMS-designated contractor would request approximately
10 records from each of these facilities. We proposed that the facility
must comply with this request for records within 60-days of receiving
notice. The contractor would review these records to ensure accuracy
and reliability of the data reported by the facility for purposes of
the ESRD QIP.
As noted above, we proposed that, in the first year of this
program, no facility will receive a payment reduction resulting from
the data validation process. In future years of the program, we noted
our intent to evolve our pilot program into a full, data validation
effort. We are also discussing a data validation measure whereby
facilities would be scored based on the accuracy of their records.
Finally, we are contemplating increasing a facility's payment reduction
by one tier (for example, from 0.5 percent to 1.0 percent) if its data
are incorrect beyond a certain threshold. In future years, we stated
our intention to propose more detailed procedures regarding our data
validation process that may result in penalties. We requested comment
on our data validation proposals for PY 2015 and the methods we are
considering for PY 2016.
The comments we received on these proposals and our responses are
set forth below.
Comment: Many commenters supported our proposal to have a data
validation pilot program that would result in no payment reductions.
Some commenters suggested that we continue the pilot until we can
evaluate the data from the program, and some commenters suggested that
we should share the results of the pilot with the dialysis community
before the official program is launched. One commenter requested that,
before the pilot program begins, we define the errors being sought and
publish these for public comment. Another commenter stated that, before
data validation efforts are initiated, CMS should provide clear
specifications, data definitions, and reporting requirements because it
would be inappropriate to penalize facilities when clarification
questions or reporting issues have not been resolved. Commenters also
recommended that CMS include the initial data validation in the routine
Comprehensive Error Rate Testing (CERT) request for RACs (Recovery
Audit Contractors), but cautioned against paying auditors on a
contingency fee.
Response: We thank commenters for their support of the pilot data
validation program. At this time, we are still finalizing the processes
and procedures for the pilot. We will provide this information before
the pilot program begins on a publicly available Web site. We will
consider the commenters' suggestions as we continue this process.
Additionally, as discussed in the sections of this rule outlining the
measures, we believe that the specifications, data definitions, and
reporting requirements are clear and transparent. If it becomes
apparent that there is some significant confusion as to any of these
elements, we will clarify these them using the most appropriate means.
Comment: One commenter stated that it does not believe it is
appropriate for CMS to develop a data validation measure for the ESRD
QIP. This commenter argued that CMS must first explain the scope of
accuracy and errors (for example, does it include missing values,
transcriptional errors) that CMS requires. Other commenters requested
that, before payment is tied to validation, CMS should publish for
comment the relationship of errors to payment reductions (with some
accorded more weight than others depending on their scope and type) and
allow the dialysis community to review the results of the pilot.
Response: We thank commenters for these suggestions. We believe
that ensuring data accuracy of reported data is an important component
to ensure accurate performance scores and corresponding payments. We
continue to consider whether and how we will tie payment to any data
validation issues. We will publish any future proposals in rulemaking
for public comment.
Comment: Some commenters expressed concern with the burden data
validation may place on facilities. One commenter is concerned that
producing records within 60 days is too monetarily burdensome and
suggests a 120 day period. Another commenter requested that we limit
the number of document requests based on provider size and resources
and reimburse facilities for data requests. One commenter suggested
that the requested data sample be a percentage of patients rather than
a fixed number so that small facilities are not disproportionally
affected. One commenter asked that the requested records be as current
as possible so that they can be easily accessed by facilities that many
have data storage protocols. Another commenter specifically noted its
support for HAI data validation, but stated its concern that we
underestimated the burden on facilities; this commenter requested that
we provide more detail on the validation process, specifically the
facilities' responsibilities, and encouraged us to partner with NHSN
and state and public health partners in developing a standardized
process for the validation of HAI data.
Response: We do not believe that our proposals place an undue
burden on facilities. We proposed to request only ten records, and we
will provide the facility 60 days to produce these records. We do not
believe that collecting such a small amount of documentation in such a
great deal of time should pose problems for facilities. As we explain
later in this rule, we estimate that it will take each facility only
2.5 hours to comply with the requests for these records and will cost
approximately $83.08 per facility. We do not believe that 2.5 hours in
the span of 2 months (or 2.5 minutes per day) is too little time to
comply with these requests nor do we believe it warrants an additional
60 days for compliance. Further, we do not agree that we should request
a percentage of documents from facilities rather than a fixed number.
If a facility is large, asking for even one percent of its records
could prove to be a large burden. Alternatively, requesting that a
small facility provide even 10 percent of its records would not provide
our data contractor with enough information to assess the validity of
the data. By requesting 10 records from each facility, we can ensure a
similar burden (2.5 hours and approximately $83.08) for each facility
and an analysis of its validity based on the same volume of
information.
As noted above, at this time, we are still finalizing the processes
and procedures for the pilot. We will provide further information on a
publicly available Web site. As we finalize these procedures, we intend
to engage various stakeholders to encourage the development of a

[[Page 67516]]

standardized process for the validation of data, including data from
the CDC for HAIs.
Comment: One commenter requested that we specify a data validation
appeals process.
Response: We will consider proposing a data validation appeals
process in future rulemaking. Because the proposed program is a pilot
and will not have any impact on payment, we do not believe an appeals
process is necessary at this time.
Comment: One commenter believes that the various technological
resources facilities have should be taken into account when evaluating
data validity. This commenter encouraged us to evaluate manual/
electronic medical records (EMR) data entry in CROWNWeb.
Response: We will consider commenter's suggestion when we evaluate
the data in the pilot program. We will specifically consider if there
are variations in the accuracy of data because of the mode of data
entry.
Comment: One commenter encouraged us not to implement a payment
reduction until all facilities have been asked to submit medical
records for purposes of data validation at least one time. Another
commenter stated that each facility should have the opportunity to
identify data transmission/download errors without the risk of payment
penalty.
Response: We thank commenters for the suggestions and will consider
them as our pilot program advances.
For the reasons stated above, we finalize our pilot data validation
program as proposed, and we will specify the processes and procedures
of this pilot on https://www.dialysisreports.org.
14. Scoring Facilities Whose Ownership Has Changed
During our first year of implementation of the ESRD QIP, PY 2012,
facilities requested guidance regarding how a change in ownership
affects any applicable ESRD QIP payment reduction. We proposed that,
for all future years of the ESRD QIP, the application of an ESRD QIP
payment reduction would depend on whether the facility retains its CCN
after the ownership transfer. If the facility's CCN remains the same
after the facility is transferred, for purposes of the ESRD QIP, we
would consider the facility to be the same facility (despite the change
in ownership) and we would apply any ESRD QIP payment reduction for the
transferor to the transferee. Likewise, as long as the facility retains
the same CCN, we would calculate the measure scores using the data
submitted during the applicable period regardless of whether the
ownership changed during one of these periods. If, however, a facility
receives a new CCN as a result of a change in ownership, we would treat
the facility as a new facility for purposes of the ESRD QIP as of the
date it received the new CCN. We stated our belief that these proposals
are the most operationally efficient and will allow facilities the most
certainty when they change ownership. We proposed to apply these rules
beginning with the PY 2014 ESRD QIP, and we requested public comment on
these proposals.
The comments that we received and our responses to these comments
are set forth below.
Comment: Many commenters strongly supported our proposals for
scoring transferred facilities. One commenter expressed concern that
the proposals will change the marketplace in ways that are not yet
known.
Response: We thank commenters for their support. We realize that
this proposal may impact how dialysis facilities are acquired in the
future. However, we believe that creating rules around how we will
treat transferred facilities for purposes of the ESRD QIP will create a
marketplace that is more predictable. Therefore, we finalize these
rules for transferred facilities as proposed.
15. Public Reporting Requirements
Section 1881(h)(6)(A) of the Act requires the Secretary to
establish procedures for making information regarding facilities'
performance under the ESRD QIP available to the public, including
information on the Total Performance Score (as well as appropriate
comparisons of facilities to the national average with respect to such
scores) and performance scores for individual measures achieved by each
facility. Section 1881(h)(6)(B) of the Act further requires that a
facility have an opportunity to review the information to be made
public with respect to that facility prior to such information's
publication. In addition, section 1881(h)(6)(C) of the Act requires the
Secretary to provide each facility with a certificate containing its
Total Performance Score to post in patient areas within the facility.
Finally, section 1881(h)(6)(D) of the Act requires the Secretary to
post a list of facilities and performance-score data on the CMS Web
site.
In the PY 2012 ESRD QIP final rule, we adopted uniform requirements
based on sections 1881(h)(6)(A) through 1881(h)(6)(D) of the Act,
establishing procedures for facilities to review the information to be
made public and the procedures for informing the public through
facility-posted certificates for the first 3 payment years of the ESRD
QIP (76 FR 636 through 639). We proposed that these requirements
generally apply to PY 2015 and subsequent payment years. However, we
proposed to make some modifications, as outlined below, to these
requirements and that these modifications become effective upon the
effective date of this final rule. Thus, these requirements, if
finalized, would apply in PY 2014 and for subsequent payment years. All
other previously finalized requirements would remain the same.
First, for the first year of the program, PY 2012, we did not
explicitly state that we would be publishing a list of facility
performance on or after December 1 of the year before the payment
consequence year. We did, however, make this list available for the
pubic via the CMS Web site. For the PY 2013 ESRD QIP and subsequent
payment years, and in accordance with section 1881(h)(6)(D) of the Act,
we proposed to publish such aggregate list on the CMS Web site at
www.cms.gov and any other Web site controlled by CMS. This list will
include information on the facility, specifically:
(i) Name and address;
(ii) Measure rates (which may include numerators and denominators)
and scores;
(iii) And Total Performance Scores.

This list will also indicate those facilities that do not have enough
data to calculate one or more measure rates and/or a Total Performance
Score. We believe it is important to publish such a list because it
allows beneficiaries, the public, and facilities access to this
information without having to individually download a certificate for
each facility, and, because of such access, we believe it will
ultimately improve quality. The data will be more accessible, Medicare
beneficiaries and their families will have the information more easily
to make choices about their care, and facilities can more readily
compare their performance to other facilities or across facilities.
Therefore, beginning in January 2013, we proposed to publish a list of
facility information described above for each payment year after
facilities have the ability to review their scores.
Second, for PY 2012, we required facilities to prominently post
certificates within 5 days of us making these certificates available
for download from www.dialysisreports.org in accordance with section
1881(h)(6)(C) of the Act (76 FR 637). We proposed to modify the

[[Page 67517]]

previously finalized requirements for posting certificates in two ways.
We no longer believe it is necessary for facilities to post these
certificates within 5 days of their availability. The certificates are
provided in late December, and it was our experience in the PY 2012
program that many individuals responsible for the certificates were
away on holiday during this period of time. Therefore, we proposed to
change this requirement so that, beginning with the PY 2014 program,
facilities will be required to post their certificates on or before the
first business day after January 1 of each payment year. Certificates
are typically available for download on or around December 15, and we
believe that this two week amount of time is long enough to allow
facilities to post them. Therefore, beginning PY 2014, we proposed that
facilities be required to post their Performance Score Certificates
(PSCs) on or before the first business day after January 1 of each
payment year in a prominent place for the duration of that payment year
and otherwise comply with the requirements listed in the PY 2012 final
rule (76 FR 637).
Third, for the PY 2012 ESRD QIP, we required facilities to post one
copy of the certificate in their facility (76 FR 637). Beginning in PY
2014, we proposed to require facilities to post two copies of this
certificate, one copy in English and one copy in Spanish. Both of these
certificates (which are posted as a single file) will be provided by
CMS, both must be posted by the first business day after January 1 of
the payment year, and both must be posted for the entirety of such year
in a prominent location. We proposed to require the certificate to be
posted in both English and Spanish to make the certificate more
understandable to native Spanish speakers. Thus, to best serve a
greater number of ESRD patients, we proposed to finalize the
requirement that facilities must post both an English and a Spanish
certificate prominently in their facility. The only additional burden
for facilities in adding this Spanish certificate is its printing and
posting.
The comments we received on these proposals and our responses are
set forth below.
Comment: Commenters supported our proposal to allow facilities
until the first business day after January 1 to post certificates. Most
commenters agreed with our proposal to require facilities to post both
English and Spanish versions of the PSC beginning in PY 2014, stating
that the additional burden is very small; one commenter argued that
Spanish versions of the PSC are not necessary in all locations and
recommended that individual facility administrators determine whether
posting a PSC in Spanish is necessary or beneficial based upon the
population that the facility serves. Another commenter suggested not
only requiring a Spanish PSC but also developing Spanish-language
materials explaining the PSCs.
Response: We agree with commenters that the burden of posting a
Spanish as well as an English PSC is very little and far outweighs the
benefits it could convey upon beneficiaries. We do not agree that it is
appropriate for facility administrators to determine whether posting
the Spanish PSC is necessary. A facility that does not furnish services
to native Spanish speaking patients in 1 year could begin to do so
during the next year. As the ESRD QIP evolves, we seek to make the
program as transparent as possible for all beneficiaries.
Comment: Some commenters believe that the ESRD QIP should be
clearer, and we should develop and make public guidance documents for
patients and clinics. These commenters also suggested that we hold open
door forums specifically for patients so that they do not interpret the
quality of care information incorrectly.
Response: As we noted above, we seek to make the program as
transparent as possible, specifically to beneficiaries. We intend to
continue to assess the modes and efficacy of our communications to
beneficiaries. We will take these comments into account as we do so.
Comment: Some commenters requested that we make available on our
Web site individual measure scores (including the numerator and
denominator) and the Total Performance Scores; commenters stated that
these scores should be organized by facility and state to facilitate
choice in care. One commenter requested that this information be
published in both English and Spanish. One commenter encouraged us to
create a ``one-stop-shop'' for quality information on the internet.
Response: Since the PY 2012 program, we have made aggregate
information on measure scores and Total Performance Scores available on
https://www.cms.gov/Medicare/End-Stage-Renal-Disease/ESRDQualityImproveInit/. This information includes numerators
and denominators for each clinical measure, the scores for each
measure, and Total Performance Scores for every facility. The
information is organized in alphabetical order by state and facility.
We will consider publishing this information in Spanish in future
years. Additionally, we seek to align the ESRD QIP with CMS' other VBP
program; we continue to assess how information across programs should
be presented, and we will considering creating a ``one-stop-shop'' for
information related to CMS' programs. At present, a great deal of
information on these programs can be found here: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/.
Comment: One commenter believes that the NHSN measure should be
included in DFC because it is key to patient safety.
Response: We thank comments and will consider the appropriateness
for inclusion of this measure on DFC in future Web site releases.
Comment: One commenter requested that we confirm that there is
consistency in measures reported in DFR, DFC, PSR, and for ESRD QIP
purposes.
Response: We thank the commenter for its inquiry regarding the
consistency of measures reported through DFR, DFC, the Performance
Score Reports (PSR), and for ESRD QIP purposes. There are some
differences in the measure descriptions between DFR, DFC, and QIP
because each serves its own purposes; the measure rates for the ESRD
QIP that are posted on DFR, DFC, and in the PSR are the same. For
example, for DFR/DFC, the denominators for the Kt/V measures include
out of range values, whereas the ESRD QIP Kt/V measure denominators do
not. We seek to align reporting mechanisms as much as possible, but, in
some cases, we believe that it is appropriate to present this
information differently.
Comment: One commenter recommended that we timely monitor quality
data and intervene if trends indicate a decrease in the quality of
care.
Response: We are committed to monitoring and evaluating the impacts
of the ESRD QIP.
Comment: One commenter urged us to prioritize the development and
implementation of a single system to which facilities would report
their data in order to simplify reporting and minimize unnecessary
burdens on providers, particularly staff members otherwise providing
direct care to patients.
Response: We continue to evaluate our reporting systems; we seek to
minimize provider burden as much as possible, and we will continue to
evaluate ways in which we can do so as the program moves forward.

[[Page 67518]]

IV. Limitation on Payments to All Providers, Suppliers and Other
Entities Entitled to Bad Debt

A. Background

In accordance with section 1861(v)(1) of the Act and current
regulations at 42 CFR 413.89, Medicare pays some or all of the
uncollectible deductible and coinsurance amounts to those entities
eligible to receive reimbursement for bad debt. To determine if bad
debt amounts are allowable, the requirements at Sec. 413.89 must be
met. Chapter 3 of the Provider Reimbursement Manual (PRM) (CMS Pub. 15,
Part I) provides additional guidance on the standards governing bad
debt reimbursement.
Prior to the passage of the Middle Class Tax Extension and Job
Creation Act of 2012 (Pub. L. 112-96), under section 1861(v)(1)(T) of
the Act and Sec. 413.89(h)(1) of our regulations, Medicare payments
for allowable bad debt amounts for hospitals were reduced by 30 percent
for cost reporting periods beginning on or after October 1, 2001.
Likewise, under section 1861(v)(1)(V) of the Act and Sec. 413.89(h)(2)
of our regulations, Medicare payments for allowable bad debt amounts
for patients in skilled nursing facilities (SNFs) that were not dual
eligible individuals beginning with cost reporting periods beginning on
or after October 1, 2005, were reduced by 30 percent. Section
413.89(h)(2) defines a dual eligible individual for bad debt purposes
as an individual that is entitled to benefits under Part A of Medicare
and is determined eligible by the State for Medical Assistance under
Title XIX of the Act as described in 42 CFR 423.772 paragraph (2) under
the definition of a ``full-benefit dual eligible individual.''
For all other providers, suppliers, and entities eligible to
receive bad debt payment, including critical access hospitals (CAHs),
rural health clinics (RHCs), Federally qualified health centers
(FQHCs), community mental health centers (CMHCs), end stage renal
diease (ESRD) facilities, swing bed hospitals, as defined at 42 CFR
413.114(b), and patients that are dual eligible individuals in SNFs,
Medicare paid 100 percent of allowable bad debt amounts. Additionally,
for health maintenance organizations (HMOs) reimbursed on a cost basis
and competitive medical plans (CMPs) defined under section 1876 of the
Act, and for health care prepayment plans (HCPPs) defined under section
1833(a)(1)(A) of the Act, Medicare pays a portion of bad debt amounts
under 42 CFR 417.536(f) of our regulations. Although Medicare
previously paid ESRD facilities 100 percent of allowable bad debt
amounts, these payments were capped at the facility's reasonable cost
in accordance with Sec. 413.178(a). In the proposed rule, we proposed
to maintain the cap on bad debt reimbursement to an ESRD facility up to
the facility's unrecovered costs. We also proposed to apply the bad
debt reduction percentages mandated by section 3201 of the Middle Class
Tax Extension and Job Creation Act of 2012 (Pub. L. No. 112-96), prior
to applying the cap up to the ESRD facility's unrecovered costs.

B. Section 3201 of The Middle Class Tax Extension and Job Creation Act
of 2012 (Pub. L. 112-96)

Sections 3201(a) and (b) of the Middle Class Tax Extension and Job
Creation Act of 2012 (Pub. L. 112-96) amended section 1861(v)(1)(T) and
section 1861(v)(1)(V) of the Act, respectively, by further reducing the
percentage of allowable bad debt attributable to the deductibles and
coinsurance amounts payable to hospitals (section 1861(v)(1)(T)) and
SNFs (section 1861(v)(1)(V)). Section 3201(b) of Public Law 112-96 also
revised the SNF bad debt reductions to include both dual eligible
beneficiaries and non-dual eligible beneficiaries under section
1861(v)(1)(V) of the Act, and to apply such reductions to swing bed
hospitals for cost reporting periods beginning during fiscal year 2013
and subsequent fiscal years.
Finally, section 3201(c) of The Middle Class Tax Extension and Job
Creation Act of 2012 added a new subparagraph 1861(v)(1)(W) to the Act,
which applied a reduction in bad debt payments to ``providers'' not
addressed under subparagraphs 1861(v)(1)(T) or 1861(v)(1)(V) of the
Act. For the purpose of subparagraph 1861(v)(1)(W) of the Act, section
3201(c) Public Law 112-96 defined ``providers'' as those providers not
previously described in subsections 3201(a) or (b), suppliers, or any
other type of entity that receives payment for bad debts under the
authority of section 1861(v)(1)(A) of the Act. These providers include,
but are not limited to, CAHs, RHCs, FQHCs, CMHCs, HMOs reimbursed on a
cost basis, CMPs, HCPPs and ESRD facilities.

C. Summary of Provisions of This Final Rule

1. Self-Implementing Provisions of Section 3201 Public Law 112-96
The provisions of subsections 3201(a), (b), and (c) of The Middle
Class Tax Extension and Job Creation Act of 2012 permit no discretion
on the part of the Secretary and thus, are self implementing, with the
exception of the proposal to maintain the cap on bad deb reimbursement
for ESRD facilities, as discussed below.
Comment: We received comments from commenters suggesting that the
bad debt reduction percentages be implemented in single digit percent
reductions instead of the double digit percent reductions, as mandated
by section 3201 of the Middle Class Tax Extension and Job Creation Act
of 2012.
Response: While we appreciate the concerns of the provider
community regarding bad debt payments to providers eligible to receive
bad debt, the percent reductions of bad debt payments are statutorily
mandated by section 3201 of the Middle Class Tax Extension and Job
Creation Act of 2012 and do not provide for discretion. Therefore, we
are codifying these provisions, as summarized below, in our
regulations.
Payment of allowable bad debt to hospitals for cost
reporting periods beginning during fiscal year 2013 and subsequent
fiscal years will be reduced by 35 percent.
Payment of allowable bad debt to SNFs and swing bed
hospitals for cost reporting periods beginning during fiscal year 2013
or a subsequent fiscal year will be reduced by 35 percent for
coinsurance amounts for services furnished to a beneficiary who is not
a dual eligible individual.
Payment of allowable bad debt to SNFs and swing bed
hospitals for coinsurance for services furnished to a beneficiary who
is a dual eligible individual will be:
For cost reporting periods beginning during fiscal year
2013, reduced by 12 percent;
For cost reporting periods beginning during fiscal year
2014, reduced by 24 percent and;
For cost reporting periods beginning during fiscal year
2015, reduced by 35 percent.
Payment of allowable bad debt to all other providers,
suppliers and any other entity that receives payment for bad debts
under the authority of section 1861(v)(1)(A) of the Act will be:
For cost reporting periods beginning during fiscal year
2013, reduced by 12 percent;
For cost reporting periods beginning during fiscal year
2014, reduced by 24 percent;
And for cost reporting periods beginning during fiscal
year 2015 and subsequent fiscal years, by 35 percent.
A summary of the changes in Medicare bad debt payment percentages
required by section 3201 of The Middle Class Tax Extension and Job
Creation

[[Page 67519]]

Act of 2012 is reflected in Table 8 below:

Table 8--Summary of Medicare Bad Debt Reimbursement by Provider Types for Cost Reporting Periods That Begin
During FY 2013, 2014, 2015 and Subsequent Years
----------------------------------------------------------------------------------------------------------------
Allowable bad
Allowable bad Allowable bad Allowable bad debt amount
Provider type debt amount debt amount debt amount during FY 2015 &
during FY 2012 during FY 2013 during FY 2014 subsequent FYs
(percent) (percent) (percent) (percent)
----------------------------------------------------------------------------------------------------------------
Hospitals........................... 70 65 65 65
SNFs: Non-Full Dual Eligibles....... 70 65 65 65
Swing Bed Hospitals: Non-Full Dual 100 65 65 65
Eligibles..........................
SNFs: Full Dual Eligibles........... 100 88 76 65
Hospital Swing Beds: Full Dual 100 88 76 65
Eligibles..........................
CAHs................................ 100 88 76 65
ESRD Facilities..................... 100 88 76 65
CMHCs............................... 100 88 76 65
FQHCs............................... 100 88 76 65
RHCs................................ 100 88 76 65
Cost Based HMOs..................... 100 88 76 65
Health Care Pre-Payment Plans....... 100 88 76 65
Competitive Medical Health Plans.... 100 88 76 65
----------------------------------------------------------------------------------------------------------------

2. ESRD Bad Debt Cap and Remove and Reserve Sec. 413.178
In the proposed rule, we proposed to maintain the cap on bad debt
reimbursement up to an ESRD facility's unrecovered costs. Bad debt
payments are made under section 1861(v)(1)(A) of the Act to prevent
non-Medicare patients from subsidizing Medicare patients and vice-
versa, also known as the anti-cross subsidization principle. The cap at
an ESRD facility's unrecovered costs for bad debt reimbursement was
originally implemented to assure that the combination of the composite
rate payment and the bad debt payment did not exceed the ESRD
facility's total allowable costs of providing services to Medicare
beneficiaries, as well as to avoid violating the anti-cross
subsidization principle. Thus, by applying the cap, an ESRD facility
would not be paid for bad debt amounts that exceeded its unrecovered
costs under the composite rate payment system implemented in 1983.
Comment: We received comments from commenters suggesting the
maintenance of the cap on bad debt reimbursement to ESRD facilities up
to the facilities' unrecovered costs was inconsistent with the bad debt
reimbursement policies for all other types of providers eligible to
receive bad debt reimbursement and was also inconsistent with Federal
court rulings.
Response: After careful consideration of the policy implications of
removing the cap on bad debt reimbursement at an ESRD facility's
unrecovered costs, we have decided to eliminate the cap. The
elimination of the cap on bad debt reimbursement to ESRD facilities
will allow ESRD facilities to claim bad debts at an amount exceeding
unrecovered costs incurred under a prospective payment system. In
addition, removal of the cap on bad debt reimbursement to ESRD
facilities complies with the order of the D.C. Circuit Court in Kidney
Center of Hollywood, et al. v. Shalala, 133 F.3d 78 (D.C. Circuit
1998), and will allow us to apply our bad debt policies consistently
across all the types of providers eligible to receive bad debt
payments. Therefore, we believe the removal of the bad debt
reimbursement cap at an ESRD facility's unrecovered cost, is an
equitable and reasonable policy choice with respect to bad debt
reimbursement to ESRD facilities.
We are eliminating the cap for ESRD facilities for cost reporting
periods beginning on or after January 1, 2013, the effective date of
this final rule. With this change, ESRD facilities will be reimbursed
for bad debt reduced as outlined in the proposed changes to Sec.
413.89(h)(3), described above. However, because the new bad debt
reductions for ESRD facilities become effective October 1, 2012, and
the removal of the cap on bad debt reimbursement to ESRD facilities
will not be effective until January 1, 2013, for cost reporting periods
beginning between October 1, 2012 and December 31, 2012, the cap on bad
debt reimbursement to ESRD facilities will be calculated with both the
required bad debt reductions and the cap on bad debt reimbursement to
ESRD facilities. For illustrative purposes only, the following examples
present the interaction of the application of the cap on ESRD bad debt
payments until January 1, 2013 and the ESRD bad debt reduction
effective October 1, 2012:

Example (A), for cost reporting periods beginning before October
1, 2012, only the cap applies as follows:
1. Unrecovered costs = $100.00
2. Aggregate Gross bad debt = $110.00
3. Bad debt amount of $110.00 is capped at the unrecovered costs
of $100.00, therefore, the facility receives $100.00.

Example (B), for cost reporting periods beginning between
October 1, 2012 and December 31, 2012, the 12 percent reduction
applies up to the facilities' unrecovered costs as follows:
1. Unrecovered costs = $100.00
2. Aggregate Gross bad debt = $110.00
3. Bad debt amount of $110.00 is reduced by 12 percent (bad debt
reduction in FY 2013) which equals $96.80. Since the reduction is
less than the cap, the facility receives $96.80.

Example (C), for cost reporting periods beginning on or after
January 1, 2013 and before October 1, 2013, only the 12 percent
reduction applies:
1. Unrecovered costs = $100.00
2. Aggregate Gross bad debt = $110.00
3. The $110.00 bad debt amount is reduced by 12 percent (bad
debt reduction in FY 2013). The facility receives $96.80 with no cap
applied.

We are moving current regulations text at Sec. 413.178(a) to
proposed Sec. 413.89(h)(3). The revised regulation text will remove
the bad debt cap for ESRD facilities, and include the bad debt
reduction percentages applicable to ESRD facilities in accordance with
1861(v)(1)(W).
We are removing current paragraphs (b), (c), and (d)(1) of Sec.
413.178 since these provisions already are set out at Sec. 413.89,
Chapter 3 of the PRM Part I,

[[Page 67520]]

and in the Medicare cost report instructions in the PRM Part II.
In addition, we are moving the bad debt exception provision
applicable to ESRD facilities discussed at Sec. 413.178(d)(2) to
proposed Sec. 413.89(i)(2). For consistency, we are also moving the
current general bad debt exception set out at Sec. 413.89(i) to new
paragraph Sec. 413.89(i)(1).
We are removing and reserving Sec. 413.178.
3. Technical Corrections
We are making a technical correction to 42 CFR 417.536(f)(1) to
refer to 42 CFR 413.89 as the appropriate cross reference to Medicare
bad debt reimbursement policy, to revise the existing language
describing bad debt to conform to Sec. 413.89(a), and to remove
requirements that already are set out at Sec. 413.89.

D. Changes to Medicare Bad Debt Policy

In this rule, we are conforming existing regulations text found at
Sec. 413.89(h) to the self-implementing provisions of section 3201 of
Public Law 112-96. Previously, bad debt reimbursement to an ESRD
facility was capped up to the facility's reasonable costs under Sec.
413.178(a). In this final rule, we are moving the current provision at
Sec. 413.178(a) to Sec. 413.89(h)(3), and adding ESRD facilities to
the list of facilities to which Sec. 413.89 ``Bad debts, charity, and
courtesy allowances,'' applies. We are also eliminating duplicate
provisions in Sec. 413.178 and reserving Sec. 413.178 for future use.
In addition, we are making a technical correction to Sec.
417.536(f)(1) to clarify Medicare bad debt reimbursement policy.
1. Changes to 42 CFR 413.89(h)
Under each paragraph of our existing regulations at Sec.
413.89(h), we describe the limits on bad debt payment to be reductions
to the amount of bad debt otherwise treated as allowable costs. Under
Sec. 413.89(a), bad debts are deductions from revenue and are not to
be included in allowable cost. Therefore, we are clarifying that the
limits on bad debt payments are reductions to amount of allowable bad
debt.
We are revising Sec. 413.89(h)(1)(iv) to set forth the percentage
reduction in reimbursable bad debt payments to hospitals for cost
reporting periods beginning during fiscal years 2001 through 2012.
We are adding a new Sec. 413.89(h)(1)(v), which will set forth the
percentage reduction in reimbursable bad debt payments required by
section 1861(v)(1)(T)(v) of the Act to hospitals for cost reporting
periods beginning during fiscal year 2013 and subsequent fiscal years.
We are revising Sec. 413.89(h)(2) to add paragraphs (h)(2)(i) and
(h)(2)(ii). Paragraph (h)(2)(i) will set forth the percentage reduction
in reimbursable bad debt payments required by section 1861(v)(1)(V)(ii)
of the Act for SNFs and swing bed hospitals for cost reporting periods
beginning during fiscal years 2006 through 2012 for a patient that was
not a dual eligible individual. Paragraph (h)(2)(ii) will set forth the
reduction in reimbursable bad debt payments for SNFs and swing bed
hospitals, for cost reporting periods beginning during fiscal year 2013
and subsequent fiscal years, for a patient that was a dual eligible
individual.
We are revising Sec. 413.89(h)(3) to set forth the percentage
reduction in allowable bad debt payments required by section
1861(v)(1)(W) of the Act for ESRD facilities for cost reporting periods
beginning during fiscal year 2013, fiscal year 2014 and subsequent
fiscal years. We are also revising Sec. 413.89(h)(3) to set forth the
applicability of the cap on bad debt reimbursement to ESRD facilities
for cost reporting periods beginning between October 1, 2012 and
December 31, 2012.
We are adding a new Sec. 413.89(h)(4) to set forth the percentage
reduction in reimbursable bad debt payments for all other entities
required by section 1861(v)(1)(W) of the Act not described in Sec.
413.89(h)(1), (h)(2), or (h)(3) that are eligible to receive
reimbursement of bad debt for cost reporting periods beginning during
fiscal year 2013, fiscal year 2014, and subsequent fiscal years.
2. Rationale for Removing 42 CFR 413.178
Previously, Sec. 413.178(a) stated that CMS will reimburse each
ESRD facility its allowable Medicare bad debts, as defined in Sec.
413.89(b), up to the facility's costs, as determined under Medicare
principles, in a single lump sum payment at the end of the facility's
cost reporting period. This cap on bad debt reimbursements will be
eliminated and the new reductions in bad debt reimbursements will be
applied, as discussed above.
We are revising Sec. 413.89(h)(3) to implement the ESRD
facilities' bad debt reduction effective October 1, 2012 in accordance
with section 1861(v)(1)(W) of the Act.
We are also removing and reserving Sec. 413.178, since the revised
provisions already are set out at Sec. 413.89, in Chapter 3 of the PRM
Part I, and in the Medicare cost report instructions in the PRM Part
II. We are moving the current general bad debt exception at Sec.
413.89(i) to new paragraph Sec. 413.89(i)(1) in order to move the ESRD
facilities' bad debt exception provision previously discussed at Sec.
413.178(d)(2) to new paragraph Sec. 413.89(i)(2).
3. Technical Corrections to 42 CFR 417.536(f)(1)
In this final rule, we are revising the regulations text at
417.536(f)(1) to correct the cross-reference to the Medicare bad debt
reimbursement regulation, so that Sec. 417.536(f)(1) will reference 42
CFR 413.89 instead of the outdated reference to Sec. 413.80. In
addition, we are revising the language at 42 CFR 417.536(f)(1) to
conform to the description of bad debt in Sec. 413.89(a) and we are
removing Sec. 417.536(f)(1)(i) and (ii) since these provisions already
are set out at Sec. 413.89, in Chapter 3 of the PRM Part I, and in the
Medicare cost report instructions in the PRM Part II.

V. Collection of Information Requirements

A. Legislative Requirement for Solicitation of Comments

Under the Paperwork Reduction Act of 1995, we are required to
provide 30-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. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.

B. Requirements in Regulation Text

We did not propose and therefore are not finalizing any changes to
regulatory text for the ESRD PPS in CY 2013.

C. Additional Information Collection Requirements

This final rule does not impose any new information collection
requirements in the regulation text, as specified above. However, this
final rule does make reference to several associated information
collections that

[[Page 67521]]

are not discussed in the regulation text contained in this document.
The following is a discussion of these information collections. We are
soliciting public comment on each of these issues.
1. ESRD QIP
a. Display of Certificates for the PY 2015 ESRD QIP
Section III.D.15 of this final rule discusses a disclosure
requirement for the PY 2014 and PY 2015 ESRD QIP. As stated earlier in
this final rule, section 1881(h)(6)(C) of the Act requires the
Secretary to provide certificates to dialysis care providers and
facilities with their Total Performance Scores under the ESRD QIP. This
section also requires each facility that receives an ESRD QIP
certificate to display it prominently at the facility.
To comply with this requirement, we proposed to issue one English
and one Spanish ESRD QIP certificate beginning in PY 2014 to facilities
via a generally accessible electronic file format. We had previously
finalized other display requirements for the program, including that
each facility prominently display the applicable ESRD QIP certificate
in the patient area, take the necessary measures to ensure the security
of the certificate in the patient areas, and have staff available to
answer questions about the certificate in an understandable manner,
taking into account that some patients might have limited English
proficiency.
The burden associated with the aforementioned requirements is the
time and effort necessary for facilities to print the applicable ESRD
QIP certificates, display the certificates prominently in patient
areas, ensure the safety of the certificates, and respond to patient
inquiries in reference to the certificates. We do not anticipate that
posting the Spanish certificate will add more time or burden to the
Collection of Information requirements outlined in the CY 2011 ESRD PPS
final rule (76 FR 70298 through 70299) for the PY 2014 ESRD QIP.
Therefore, this analysis only applies to the burden associated with the
PY 2015 and beyond requirements.
We estimate that approximately 5,726 facilities will receive ESRD
QIP certificates in PY 2015 and will be required to display them. We
also estimate that it will take each facility 10 minutes per year to
print, prominently display, and secure the ESRD QIP certificates, for a
total estimated annual burden of 954 hours (10/60 hours *5,726
facilities). According to the Bureau of Labor Statistics, the mean
hourly wage of a registered nurse is $33.23.\9\ Since we anticipate
nurses (or administrative staff) will post these certificates, we
estimate that the aggregate cost of this requirement will be $31,701
($33.23/hour x 954 hours). We estimate that approximately one-third of
ESRD patients, or 100,000 patients, will ask a question about the ESRD
QIP certificate. We further estimate that it will take each facility
approximately 5 minutes to answer each patient's question about the
applicable ESRD QIP certificate, or 1.52 hours per facility each year.
The total estimated annual burden associated with this requirement is
8,704 hours (1.52 hours/facility x 5,726 facilities). The total
estimated annual burden for both displaying the ESRD QIP certificates
and answering patients' questions about the certificates is 9,658 hours
(8,704 hours + 954 hours). While the total estimated annual burden
associated with both of these requirements as discussed is 9,658 hours,
we do not believe that there will be a significant cost associated with
these requirements because we are not requiring facilities to complete
new forms. We estimate that the total cost for all ESRD facilities to
comply with the collection of information requirements associated with
the certificates each year would be less than $320,935 ($33.23/hour x
9,658 hours).
---------------------------------------------------------------------------

\9\ This hourly wage is absent any fringe benefits.
---------------------------------------------------------------------------

b. NHSN Dialysis Event Reporting Requirement for the PY 2015 ESRD QIP
As stated above in section III.D.2.a of this finalrule, we
finalized a measure requiring facilities to reporting dialysis events
to the NHSN for he PY 2015 ESRD QIP. Specifically, we will require
facilities to submit 12 months of dialysis event data to the NHSN to
receive 10 points on the measure. The burden associated with this
requirement for existing facilities is the time and effort necessary
for facilities to submit 12 months of data in order to receive the
maximum number of points. According to our most recent data, 5,525
facilities treat adult in-center hemodialysis and/or pediatric in-
center hemodialysis patients and are, then, eligible to receive a score
on this measure; therefore, we estimate that approximately 5,525
facilities will submit the required data. Based on data previously
collected, we further estimate that the average number of dialysis
events is 0.008 per patient per month and that each facility has
approximately 75 patients. Accordingly, we estimate the number of
dialysis events in a 12-month period for all facilities to be 397,800
(0.09 events/patient/month x 75 patiens/facility x 5,525 facilities x
12 mohths) for the PY 201 ESRD QIP performance period. We estimae it
will require 10 minutes to collect and submit data on these events, and
the estimated burden for submiting 12 mohths of data will be 66,300
hours (397,800 dialysis events x 10/60 minute). If the dialysis events
were distributed evenly across all 5,525 facilities, the reporting
would result in an additional 12 hour (66, 300 hours/5,525 facilities),
burden for each facility at a cost of $399 ($33.23/hour x 12 hours) per
facility. Again, we estimate the mean hourly wage of a registered nurse
is $33.23, and we anticipate nurses (for administrative staff) will be
responsible for this reporting. In total, we believe that the cost for
all ESRD facilities to comply with the reporting requirements
associated with NHSN Dialysis Event reporting measure will be
approximately $2.2 million ($399 x 5,525 facilities= $2,204,475) per
year.
c. ICH CAHPS Survey Attestation Requirement for the PY 2015 ESRD QIP
As stated above in section III.D.1.c of this final rule, we
finalized a measure that assesses facility usage of the ICH CAHPS
survey as a reporting measure for the PY 2015 ESRD QIP. The burden
associated with this requirement is the time and effort necessary for
facilities to administer the ICH CAHPS survey through a third party and
submit an attestation to CMS that they successfully administered the
survey.
We estimate that approximately 5,523 facilities treat adult, in-
center hemodialysis patients and are, therefore, eligible to receive a
score on this measure. We estimate that all 5,523 facilities will
administer the ICH CAHPS survey through a third-party and submit an
attestation to that effect. We estimate that it will take each
facility's third-party administrator 16 hours per year to be trained on
the survey features. We further estimate that it will take each
facility approximately 5 minutes to submit the attestation each year.
The estimated total annual burden on facilities is 88,829 hours ((16
hours x 5,523 facilities) + ((5/60 minutes) x 5,523 facilities) which
is equal to $2,952,818 (88,829 hours x $33.23), or $534 per facility
($2,952, 818/5,523). Again, we estimate the mean hourly wage of a
registered nurse is $33.23, and we anticipate nurses (or administrative
staff) will be responsible for this reporting. We estimate that it
would take each patient 30 minutes to complete the survey (to account
for variability in education levels) and that approximately 75 surveys
per year

[[Page 67522]]

would be taken per facility.\10\ Interviewers from each facility would
spend a total of approximately 37.5 hours per year with patients
completing these surveys (30/60 minutes * 75 minutes) or $1,247 (37.5
hours x $33.23) for an estimated annual burden of 207,113 hours (37.5
hours * 5,523 facilities) which is equal to $6.9 million (207,113 hours
x 33.23/hour). We estimate that time burden for ESRD facilities to
comply with the collection of information requirements associated with
administering the ICH CAHPS survey each year would be approximately
$1,781 ($534 + $1,247) for each facility, or $9.9 million ($1,781 x
5,523 facilities =$9,836,463) across all ESRD facilities.
---------------------------------------------------------------------------

\10\ Last year, we stated that we believed that 200 surveys
would be administered per facility per year (76 FR 70299). Upon
further review, however, we note that the ICH CAHPS specifications
require a sample of 200 surveys only for those facilities with a
large patient population. Faculties with fewer than 200 patients are
required to survey all patients, aiming for a 40 percent response
rate. (https://www.cahps.ahrq.gov/~/media/Files/SurveyDocuments/ICH/
Admin--Survey/53--fielding--the--ich--survey.pdf). Since we estimate
that each facility serves approximately 75 patients, we believe that
the average facility, at most, would survey 75 patients per year.
---------------------------------------------------------------------------

d. Data Validation Requirements
Section III.D.13 of this final rule outlines the data validation
processes we are finalizing. We will randomly sample records from 750
facilities; each sampled facility would be required to produce
approximately 10 records. The burden associated with this validation
requirement is the time and effort necessary to submit validation data
to a CMS contractor. Because we anticipate that the sampled facilities
will be reimbursed by our validation contractor for the costs
associated with copying and mailing the requested records, we only
estimate the burden of retrieving and submitting the necessary records.
We estimate that it will take each facility approximately 2.5 hours to
comply with these requirements. If 750 facilities are tasked with
providing the required documentation, the estimated annual burden
across all facilities will be 1,875 hours (750 facilities x 2.5 hours)
at a total of $62,307 (1,875 hours x $33.23/hour) or $83.08 ($62,307/
750) per facility in the sample. Again, we estimate the mean hourly
wage of a registered nurse is $33.23, and we anticipate nurses (or
administrative staff) will be responsible for providing this
information.
The comments we received on this analysis are set forth below.
Comment: One commenter believes that the underlying premise for the
CAHPS burden analysis is incorrect. This commenter stated that if the
average facility serves 75 patients, it would survey at most 75
patients per year.
Response: We believe that this assumption is a good approximation
for this analysis. We realize that facilities may have more than 75
patients or less than 75 patients. Across the ESRD population, however,
we believe 75 patients per facility is accurate. According to the ICH
CAHPS specifications, if a facility has less than 200 patients, it must
draw a census of patients from this facility. Therefore, if the average
facility has 75 patients, we believe it would survey at most 75
patients.
Comment: One commenter expressed concern that responding to
questions from patients about the Performance Score Certificates (PSCs)
could consume too many staff hours.
Response: We recognize that patients may have questions about the
PSCs. The ESRD QIP is designed not only to incentivize care, but also
to stimulate discussion about the quality of dialysis care. Therefore,
we believe that these questions and answers are important in promoting
the goals of the program and improvement in care in that they promote
patient awareness and understanding of the care they are receiving.
Additionally, we believe that these questions will be answered during
the course of usual patient care. We will continue to monitor the
burden these questions may place upon facilities.
To obtain copies of the supporting statement and any related forms
for the paperwork collections referenced above, access CMS' Web site at
https://www.cms.gov/PaperworkReductionActof1995/PRAL/list.asp#TopOfPage.
If you comment on these information collection and recordkeeping
requirements, please submit your comments to the Office of Information
and Regulatory Affairs, Office of Management and Budget, Attention: CMS
Desk Officer, [CMS-1352-F]; Fax: (202) 395-6974; or Email: OIRA_submission@omb.eop.gov.
2. Reductions to Bad Debt Payments for All Medicare Providers
The statutorily mandated reductions of bad debt payments to
providers, suppliers, and other entities that are currently receiving
bad debt payments will not result in any changes to or any additional
collection of information requirements. The removal of the cap on bad
debt reimbursement to ESRD facilities will result in fewer collection
of information requirements for ESRD facilities.

VI. Economic Analyses

A. Regulatory Impact Analysis

1. Introduction
We examined the impacts of this final rule as required by Executive
Order 12866 (September 30, 1993, Regulatory Planning and Review) and
Executive Order 13563 on Improving Regulation and Regulatory Review
(January 18, 2011). 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).
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and of
promoting flexibility. This rule has been designated economically
significant under section 3(f)(1) of Executive Order 12866.
Accordingly, the rule has been reviewed by the Office of Management and
Budget. We have prepared a Regulatory Impact Analysis that to the best
of our ability presents the costs and benefits of the final rule.
2. Statement of Need
This rule finalizes a number of routine updates for renal dialysis
items and services in CY 2013, implements the third year of the ESRD
PPS transition, and makes several policy changes and clarifications to
the ESRD PPS. These include updates and changes to the ESRD PPS and
composite rate base rates, wage index values, wage index budget-
neutrality adjustment factors, outlier payment policy, and transition
budget-neutrality adjustment. Failure to publish this final rule would
result in ESRD facilities not receiving appropriate payments in CY
2013.
This final rule also implements the QIP for PY 2015 and beyond by
establishing measures, a scoring system, and payment reductions to
incentivize improvements in dialysis care as directed by section
1881(h) of the Act. Failure to establish QIP program parameters in this
rule would prevent continuation of the QIP beyond PY 2014.
This final rule also implements the reduction percentages of bad
debt reimbursement required by section 3201 of The Middle Class Tax
Extension and Job Creation Act of 2012. This final rule also removes
the cap on bad debt reimbursement to an ESRD facility up to the
facility's unrecovered costs. Section 3201(c) of The Middle Class Tax

[[Page 67523]]

Extension and Job Creation Act of 2012 adds a new subparagraph--
1861(v)(1)(W) to the Act and applies a reduction in bad debt payments
to ``providers'' not addressed under subparagraphs 1861(v)(1)(T) or
1861(v)(1)(V) of the Act. For the purpose of subparagraph 1861(v)(1)(W)
of the Act, section 3201(c) of The Middle Class Tax Extension and Job
Creation Act of 2012 defined ``providers'' as a supplier or any other
type of entity that receives payment for bad debts under the authority
of section 1861(v)(1)(A) of the Act. These providers include, but are
not limited to, CAHs, RHCs, FQHCs, CMHCs, HMOs reimbursed on a cost
basis, CMPs, HCPPs and ESRD facilities.
3. Overall Impact
We estimate that the final revisions to the ESRD PPS will result in
an increase of approximately $250 million in payments, from Medicare,
to ESRD facilities in CY 2013, which includes the amount associated
with the increase in the ESRDB market basket reduced by the
productivity adjustment, updates to outlier amounts, and the effect of
changing the blended payments from 50 percent under the composite rate
payment and 50 percent under the ESRD PPS to 25 percent under the
composite rate payment and 75 percent under the ESRD PPS.
We estimate that the requirements related to the ESRD QIP for PY
2015 will cost approximately $12.4 million and the predicted payment
reductions will equal about $12.1 million to result in a total impact
from the proposed ESRD QIP requirements of $24.6 million.
In section IV of this final rule, we discuss the provisions
required by section 3201 of The Middle Class Tax Extension and Job
Creation Act of 2012, which apply percentage reductions in bad debt
reimbursement to all providers eligible to receive bad debt
reimbursement; these provisions are specifically prescribed by statute
and thus, are self-implementing. Table 9 in section IV.C.1 of the CY
2013 proposed rule (77 FR 40988) depicts a comparison of the bad debt
payment percentages prior to and after FY 2013. We estimate these self
implementing provisions of section 3201 of The Middle Class Tax
Extension and Job Creation Act of 2012 will result in savings to the
Medicare program of $10.92 billion over the period from 2012 through
2022.

------------------------------------------------------------------------
Medicare program savings from
Fiscal year reductions in bad debt
------------------------------------------------------------------------
2013................................. 240 million.
2014................................. 600 million.
2015................................. 900 million.
2016................................. 1.06 billion.
2017................................. 1.14 billion.
2018................................. 1.21 billion.
2019................................. 1.30 billion.
2020................................. 1.39 billion.
2021................................. 1.49 billion.
2022................................. 1.59 billion.
----------------------------------
Aggregate FY Total Savings......... 10.92 billion.
------------------------------------------------------------------------

Additionally, in section IV of this final rule, we discuss the
removal of the cap on bad debt reimbursement to ESRD facilities. We
estimate the removal of this cap will result in a cost to the Medicare
program in the amount of $170 million from 2013 through 2022.

------------------------------------------------------------------------
Medicare program cost resulting
Fiscal year from cap removal
------------------------------------------------------------------------
2013................................. 10 million.
2014................................. 20 million.
2015................................. 10 million.
2016................................. 10 million.
2017................................. 20 million.
2018................................. 20 million.
2019................................. 20 million.
2020................................. 20 million.
2021................................. 20 million.
2022................................. 20 million.
----------------------------------
Aggregate FY Total Cost............ 170 million.
------------------------------------------------------------------------

B. Detailed Economic Analysis

1. CY 2013 End-Stage Renal Disease (ESRD) Prospective Payment System
(PPS)
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 (that is, payments made under the 100 percent ESRD
PPS and those under the ESRD PPS blended payment during the transition)
in CY 2012 to estimated payments in CY 2013. To estimate the impact
among various classes of ESRD facilities, it is imperative that the
estimates of payments in CY 2012 and CY 2013 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 the June 2012 update of CY 2011
National Claims History file as a basis for Medicare dialysis
treatments and payments under the ESRD PPS. We updated the 2011 claims
to 2012 and 2013 using various updates. The updates to the ESRD PPS
base rate and the base composite rate portion of the blended rate
during the transition are described in section II.C of this final rule.
In addition, in order to prepare an impact analysis, since some ESRD
facilities opted to be paid the blended payment amount during the
transition, we made various assumptions about price growth for the
formerly separately billable drugs and laboratory tests with regard to
the composite portion of the ESRD PPS blended payment during the
transition. These rates of price growth are briefly outlined below, and
are described in more detail in the CY 2011 ESRD PPS final rule (75 FR
49078 through 49080).
We used the CY 2011 amounts for the CYs 2012 and 2013 amounts for
Supplies and Other Services, since this category primarily includes the
$0.50 administration fee for separately billable Part B drugs and this
fee continues to be an appropriate amount. Because some ESRD facilities
will receive blended payments during the transition and receive payment
for ESRD drugs and biologicals based on their average sales price plus
6 percent (ASP+6), we estimated price growth for these drugs and
biologicals based on ASP+6 percent. We updated the last available
quarter of actual ASP data for the top twelve drugs (the fourth quarter
of 2012) thru 2013 by using the quarterly growth in the Producer Price
Index (PPI) for Drugs, consistent with the method for addressing price
growth in the ESRDB market basket. This resulted in increases of 3.0
percent, 0.2 percent, 1.4 percent and 1.0 percent, respectively, for
the first quarter of 2013 thru the fourth quarter of 2013. Since the
top twelve drugs account for over 99 percent of total former separately
billable Part B drug payments, we used a weighted average growth of the
top twelve drugs for the remainder. Table 8 below shows the updates
used for the drugs.
We updated payments for laboratory tests paid under the laboratory
fee schedule to 2012 and 2013 using the statutorily required update of
the CPI-U increase with any legislative adjustments. For this final
rule, the growth from 2011 to 2012 is 0.7 percent and the growth from
2011 to 2013 is -1.1 percent.

[[Page 67524]]

Table 9--Price Increases From 2011 to 2012 and 2011 to 2013 of Former
Separately Billable Part B Drugs
------------------------------------------------------------------------
Total growth 2011 to Total growth 2011 to
Separately billable drugs 2012 (percent) 2013 (percent)
------------------------------------------------------------------------
EPO......................... -0.3 5.0
Paricalcitol................ -31.6 -36.5
Sodium--ferric--glut........ -24.8 -33.3
Iron--sucrose............... -14.7 -14.2
Levocarnitine............... 12.2 -2.3
Doxercalciferol............. -68.3 -68.5
Calcitriol.................. 64.6 15.7
Vancomycin.................. -12.4 -15.4
Alteplase................... 15.5 24.4
Aranesp..................... 6.5 12.3
Daptomycin.................. 11.5 19.0
Ferumoxytol................. -7.8 -4.3
Weight for others........... -8.1 -4.6
------------------------------------------------------------------------

Table 10 below shows the impact of the estimated CY 2013 ESRD
payments compared to estimated payments to ESRD facilities in CY 2012.

Table 10--Impact of Changes in Payments to ESRD Facilities for the CY 2013 ESRD Final Rule
[Percent change in total payments to ESRD facilities (both program and beneficiaries)]
----------------------------------------------------------------------------------------------------------------
A B C D E
-------------------------------------------------------------------------------
Effect of 2013 Effect of 2013 Effect of
Number of Number of changes in changes in total 2013
facilities treatments (in outlier policy wage indexes changes \4\
millions) \3\ (percent) (percent) (percent)
Facility type
----------------------------------------------------------------------------------------------------------------
All Facilities.................. 5,726 41.4 0.4 0.0 3.0
Type
Freestanding................ 5,176 38.0 0.5 0.0 2.9
Hospital based.............. 550 3.4 0.3 0.1 3.6
Ownership Type
Large dialysis organization. 3,719 27.3 0.5 0.0 2.9
Regional chain.............. 926 7.1 0.3 0.1 3.0
Independent................. 636 4.4 0.2 0.0 3.0
Hospital based \1\.......... 434 2.6 0.3 0.2 3.6
Unknown......................... 11 0.0 0.3 1.5 4.4
Geographic Location
Rural....................... 1,267 6.8 0.5 -0.2 2.9
Urban....................... 4,459 34.6 0.4 0.0 3.0
Census Region
East North Central.......... 941 6.3 0.5 0.1 3.1
East South Central.......... 472 3.1 0.6 -0.5 2.5
Middle Atlantic............. 641 5.1 0.4 0.0 3.1
Mountain.................... 335 1.9 0.3 -0.3 2.6
New England................. 171 1.4 0.5 0.5 3.5
Pacific..................... 667 5.6 0.2 0.6 3.4
Puerto Rico and Virgin 41 0.3 0.2 -2.4 0.6
Islands....................
South Atlantic.............. 1,259 9.5 0.6 -0.2 2.8
West North Central.......... 416 2.2 0.4 0.1 3.2
West South Central.......... 783 6.0 0.5 -0.2 2.8
Facility Size
Less than 4,000 treatments 1,105 2.5 0.4 0.0 3.0
\2\........................
4,000 to 9,999 treatments... 2,225 11.6 0.5 0.0 3.0
10,000 or more treatments... 2,370 27.2 0.4 0.0 3.0
Unknown..................... 26 0.0 0.2 0.1 3.2
Percentage of Pediatric Patients
Less than 2%................ 5,616 41.0 0.5 0.0 3.0
Between 2% and 19%.......... 44 0.4 0.3 -0.1 3.0
Between 20% and 49%......... 8 0.0 0.1 -0.1 4.1
More than 50%............... 58 0.1 -0.2 0.0 2.2
----------------------------------------------------------------------------------------------------------------
\1\ Includes hospital based facilities not reported to have large dialysis organization or regional chain
ownership.
\2\ Of the 1,105 Facilities with less than 4,000 treatments, only 332 qualify for the low-volume adjustment. The
low-volume adjustment is mandated by Congress, and is not applied to pediatric patients. The impact to these
Low volume Facilities is a 3.3% increase in payments.
\3\ Includes the effects of the final payment policy on thrombolytics for those facilities that are paid under
the blend.

[[Page 67525]]

\4\ Includes the effect of Market Basket minus productivity increase of 2.3% to the ESRD PPS base and the
Composite Rate.
Includes the effect of the change in the drug add-on percentage from 14.3% to 14.0% for those facilities that
opted to be paid under the transition.
Includes the effect of the blend changing from 50/50 to 25/75 for those facilities that choose to be paid under
the transition.
Includes the effect of the Transition Budget-Neutrality Factor of 0.1 percent for all facilities.
Note: Totals do not necessarily equal the sum of rounded parts.

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.C.7 of
this final rule is shown in column C. For CY 2013, the impact on all
facilities as a result of the changes to the outlier payment policy
would be a 0.4 percent increase in estimated payments. The estimated
impact of the changes to outlier payment policy ranges from a 0.2
percent decrease to a 0.6 percent increase. Most ESRD facilities are
anticipated to experience a positive effect in their estimated CY 2013
payments as a result of the final outlier policy changes.
Column D shows the effect of the wage index on ESRD facilities and
reflects the CY 2013 wage index values for the composite rate portion
of the blended payment during the transition and the ESRD PPS payments.
Facilities located in the census region of Puerto Rico and the Virgin
Islands would receive a 2.4 percent decrease in estimated payments in
CY 2013. Since most of the facilities in this category are located in
Puerto Rico, the decrease is primarily due to the reduction in the wage
index floor, (which only affects facilities in Puerto Rico in CY 2013).
The other categories of types of facilities in the impact table show
changes in estimated payments ranging from a 0.5 percent decrease to a
1.5 percent increase due to the update of the wage index.
Column E reflects the overall impact (that is, the effect of the
final outlier policy changes, the effect of the final wage index, the
effect of the ESRDB market basket increase minus productivity
adjustment, the effect of the change in the blended payment percentage
from 50 percent of payments based on the composite rate system and 50
percent based on the ESRD PPS in 2012, to 25/75, respectively, for
2013, for those facilities that opted to be paid under the transition,
and the effect of the 0.1 percent transition budget-neutrality
adjustment increase). We expect that overall, ESRD facilities will
experience a 3.0 percent increase in estimated payments in 2013. ESRD
facilities in Puerto Rico and the Virgin Islands are expected to
receive a 0.6 percent increase in their estimated payments in CY 2013.
This smaller increase is primarily due to the negative impact of the
wage index. The other categories of types of facilities in the impact
table show positive impacts ranging from an increase of 2.2 percent to
4.4 percent in their 2013 estimated payments.
b. Effects on Other Providers
Under the ESRD PPS, ESRD facilities are paid directly for the renal
dialysis bundle and other provider types such as laboratories, DME
suppliers, and pharmacies, may no longer bill Medicare directly for
renal dialysis services. Rather, effective January 1, 2011, such other
providers can only furnish renal dialysis services under arrangements
with ESRD facilities and must seek payment from ESRD facilities rather
than Medicare. Under the ESRD PPS, Medicare pays ESRD facilities one
payment for renal dialysis services, which may have been separately
paid to suppliers by Medicare prior to the implementation of the ESRD
PPS. Therefore, in CY 2013, the third year of the ESRD PPS, we estimate
that the final ESRD PPS will 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 2013 will be approximately $8.4
billion. This estimate is based on various price update factors
discussed in section VI.B in this final rule and takes into account a
projected increase in fee-for-service Medicare dialysis beneficiary
enrollment of 4.0 percent in CY 2013.
d. Effects on Medicare Beneficiaries
Under the ESRD PPS, beneficiaries are responsible for paying 20
percent of the ESRD PPS payment amount or blended payment amount for
patients treated in facilities going through the ESRD PPS transition.
As a result of the projected 3.0 percent overall increase in the ESRD
PPS payment amounts in CY 2013, we estimate that there will be an
increase in beneficiary co-insurance payments of 3.0 percent in CY
2013, which translates to approximately $60 million.
e. Alternatives Considered
We considered eliminating the AY modifier use by ESRD facilities in
CY 2013, which could address program integrity concerns but could also
require Medicare beneficiaries to incur additional injections, medical
visits and co-insurance liabilities and accordingly, we did not pursue
this alternative. Rather, we decided to monitor the use of the AY
modifier and consider the elimination of the AY modifier in future
rulemaking if we determine that it is being used inappropriately.
2. ESRD QIP
a. Effects of the PY 2015 ESRD QIP
The ESRD QIP provisions are intended to prevent possible reductions
in the quality of ESRD dialysis facility services provided to
beneficiaries as a result of payment changes under the ESRD PPS by
implementing an ESRD QIP that reduces ESRD payments by up to 2 percent
for dialysis facilities that fail to meet or exceed a Total Performance
Score with respect to performance standards established by the
Secretary with respect to certain specified measures. The methodology
that we are finalizing to determine a facility's Total Performance
Score is described in section III.D.9 and III.D.10 of this final rule.
Any reductions in ESRD payments would begin on January 1, 2015 for
services furnished on or after January 1, 2015.
As a result, based on the ESRD QIP outlined in this final rule, we
estimate that, of the total number of dialysis facilities (including
those not receiving an ESRD QIP Total Performance Score), approximately
20 percent or 1,093 of the facilities would likely receive a payment
reduction for PY 2015. Facilities that do not receive a TPS are not
eligible for a payment reduction.
The ESRD QIP impact assessment assumes an initial count of 5,726
dialysis facilities paid through the ESRD PPS. Table 11 shows the
overall estimated distribution of payment reductions resulting from the
PY 2015 ESRD QIP.

[[Page 67526]]

Table 11--Estimated Distribution of PY 2015 ESRD QIP Payment Reductions
------------------------------------------------------------------------
Number of Percent of
Payment reduction (percent) facilities facilities
------------------------------------------------------------------------
0.0......................................... 4308 79.8
0.5......................................... 599 11.1
1.0......................................... 309 5.7
1.5......................................... 97 1.8
2.0......................................... 88 1.6
------------------------------------------------------------------------
* Note: this table excludes 325 facilities that did not receive a score
because they did not have enough data to receive a Total Performance
Score.

To estimate whether or not a facility would receive a payment reduction
under the proposed approach, we scored each facility on achievement and
improvement for each of the proposed clinical measures using the most
recent data available for each measure shown in Table 12.

Table 12--Data Used To Estimate PY 2015 ESRD QIP Payment Reductions
----------------------------------------------------------------------------------------------------------------
Period of time used to calculate
achievement thresholds, performance
Measure standards, benchmarks, and Performance period
improvement thresholds
----------------------------------------------------------------------------------------------------------------
Hemoglobin Greater Than 12 g/dL.. Jan 2010-Dec 2010..................... Jan 2011-Dec 2011.
Vascular Access Type
% Fistula.................... Oct 2010-Apr 2011..................... May 2011-Dec 2011.
% Catheter................... Oct 2010-Apr 2011..................... May 2011-Dec 2011.
Kt/V
Adult HD..................... Jul 2010-Mar 2011..................... Apr 2011-Dec 2011.
Adult PD..................... Jul 2010-Mar 2011..................... Apr 2011-Dec 2011.
Pediatric HD................. Jul 2010-Mar 2011..................... Apr 2011-Dec 2011.
----------------------------------------------------------------------------------------------------------------

We used claims data for these calculations. Clinical measures with
less than 11 cases for a facility were not included in that facility's
Total Performance Score. Clinical measures with 11-25 cases for a
facility received an adjustment as outlined in section III.C.11.a of
this final rule. Each facility's Total Performance Score was compared
to the estimated minimum Total Performance Score and the payment
reduction table found in section III.D.12 of this final rule.
Facilities were required to have a score on at least one clinical
measure to receive a Total Performance Score. For these simulations,
reporting measures were not included due to lack of data availability.
Therefore, the simulated facility Total Performance Scores were
calculated using only the clinical measure scores.
To estimate the total payment reductions in PY 2015 for each
facility resulting from this final rule, we multiplied the total
Medicare payments to the facility during the 1-year period between
January 2011 and December 2011 by the facility's estimated payment
reduction percentage expected under the ESRD QIP, yielding a total
payment reduction amount for each facility: (Total ESRD payment in
January 2011 and December 2011 times the estimated payment reduction
percentage). For PY 2015 the total payment reduction for all of the
1,093 facilities expected to receive a reduction is approximately $12
million ($12,087,940). Further, we estimate that the total costs
associated with the collection of information requirements for PY 2015
described in section V.C. of this final rule would be approximately
$12.4 million for all ESRD facilities. As a result, we estimate that
ESRD facilities will experience an aggregate impact of $24.5 million
($12,087,940 + 12,424,180 = $24,512,120) as a result of the PY 2015
ESRD QIP.
Table 13 below shows the estimated impact of the finalized ESRD QIP
payment reductions to all ESRD facilities for PY 2015. The table
details the distribution of ESRD facilities by facility size (both
among facilities considered to be small entities and by number of
treatments per facility), geography (both urban/rural and by region),
and by facility type (hospital based/freestanding facilities). Given
that the time periods used for these calculations will differ from
those we will use for the PY 2015 ESRD QIP, the actual impact of the PY
2015 ESRD QIP may vary significantly from the values provided here.

Table 13--Impact of ESRD QIP Payment Reductions to ESRD Facilities for CY 2015
----------------------------------------------------------------------------------------------------------------
Number of Payment
Number of facilities reduction
Number of Medicare Number of expected to (percent
facilities treatments facilities receive a change in
2009 (in with QIP score payment total ESRD
millions) reduction payments)
----------------------------------------------------------------------------------------------------------------
All Facilities.................. 5,726 41.4 5,401 1,093 -0.17
Facility Type:
Freestanding................ 5,176 38.0 4,989 931 -0.15
Hospital-based.............. 550 3.4 412 162 -0.41
Ownership Type:
Large Dialysis.............. 3,719 27.3 3,612 662 -0.14
Regional Chain.............. 926 7.1 882 151 -0.14

[[Page 67527]]

Independent................. 636 4.4 584 150 -0.22
Hospital-based (non-chain).. 434 2.6 318 128 -0.43
Unknown..................... 11 0.0 5 2 -0.30
Facility Size:
Large Entities.............. 4,645 34.4 4,494 813 -0.14
Small Entities \1\.......... 1,070 7.0 902 278 -0.30
Unknown..................... 11 0.0 5 2 -0.30
Urban/Rural Status:
1) Rural.................... 1,267 6.8 1,188 263 -0.18
2) Urban.................... 4,459 34.6 4,213 830 -0.16
Census Region:
Northeast................... 810 6.5 752 166 -0.20
Midwest..................... 1,352 8.5 1,238 310 -0.21
South....................... 2,510 18.7 2,420 445 -0.15
West........................ 1,001 7.5 952 154 -0.13
U.S. Territories \2\........ 53 0.3 39 18 -0.37
Census Division:
East North Central.......... 941 6.3 856 227 -0.23
East South Central.......... 472 3.1 451 77 -0.15
Middle Atlantic............. 641 5.1 593 143 -0.22
Mountain.................... 335 1.9 321 64 -0.15
New England................. 171 1.4 159 23 -0.13
Pacific..................... 667 5.6 631 90 -0.11
South Atlantic.............. 1,259 9.5 1,217 236 -0.16
West North Central.......... 416 2.2 382 83 -0.17
West South Central.......... 783 6.0 752 132 -0.13
U.S. Territories \2\........ 41 0.3 39 18 -0.37
Facility Size (# of total
treatments):
Less than 4,000 treatments.. 1,105 2.5 864 214 -0.27
4,000-9,999 treatments...... 2,225 11.6 2,190 420 -0.15
Over 10,000 treatments...... 2,370 27.2 2,345 459 -0.14
Unknown..................... 26 0.0 2 0 -0.00
----------------------------------------------------------------------------------------------------------------
\1\ Small Entities include hospital-based and satellite facilities and non-chain facilities based on DFC self-
reported status.
\2\ Includes Puerto Rico and Virgin Islands.

The comments we received on this analysis are set forth below.
Comment: Several commenters requested that we provide, for both PY
2014 and PY 2015, the data, assumptions, and methodology used to
calculate the rate of improvement, performance standards, achievement
thresholds, and benchmarks for all measures to allow stakeholders to
have the opportunity to assess the impact on facilities so that the
community may provide meaningful comment. Commenters also argued that
we have underestimated the PY 2014 average payment reduction (i.e., by
36 percent), and requested that we provide the model, data, and
assumption we used for these estimates.
Response: As we noted above, the PY 2014 final rule was finalized
on November 1, 2011 (76 FR 70228). We direct commenters to this rule
for our analysis of the PY 2014 ESRD QIP. The methodology and
assumptions that we used to calculate the estimated rate of
improvement, performance standards, achievement thresholds, and
standards are set forth in this section.
b. Alternatives Considered for the PY 2015 ESRD QIP In developing
the PY 2015 ESRD QIP, we selected measures that we believe are
important indicators of patient outcomes and quality of care as
discussed in sections III.C, and III.D of this final rule. Poor
management of anemia and inadequate dialysis, for example, can lead to
otherwise-avoidable hospitalizations, decreased quality of life, and
death. Infections are also a leading cause of hospitalization and death
among hemodialysis patients, but there are proven infection control
methods that have been shown effective in reducing morbidity and
mortality. We also considered proposing to adopt the Standardized
Hospitalization Ratio Admissions (SHR) measure and the Standardized
Mortality Ratio (SMR) measures as part of the PY 2015 ESRD QIP. While
we decided not to propose to adopt the SHR and SMR measures for the PY
2015 ESRD QIP, we will publicly report these measure rates/ratios via
DFC to encourage facilities to improve their care. We believe the
measures selected for the ESRD QIP will allow us to continue focusing
on improving the quality of care that Medicare beneficiaries receive
from ESRD dialysis facilities.
In developing the scoring methodology for the PY 2015 ESRD QIP, we
considered a number of alternatives including various improvement
ranges, achievement thresholds, and benchmarks. We also considered
whether some of the new measures should be scored based only on
achievement. We also discussed scoring some of the clinical measures
using a binary methodology (that is, facilities receive either zero or
10 points for missing or achieving a standard, respectively). We
ultimately decided to mirror the PY 2014 ESRD QIP scoring methodology
as closely as possible. We aim to design a scoring methodology that is
straightforward and transparent to facilities, patients, and other
stakeholders, and we believe that one of

[[Page 67528]]

the ways to obtain this transparency is to be as consistent as possible
from year-to-year of the program. We believe that this consistency will
allow us to better assess the impacts of the ESRD QIP upon facilities
and beneficiaries. Finally, we believe that all scoring methodologies
for Medicare VBP programs should be aligned as appropriate given their
specific statutory requirements, and the scoring methodology for the
ESRD QIP is similar to the Hospital Inpatient VBP Program.
When deciding upon how to best score the Vascular Access Type and
Kt/V Dialysis Adequacy measure topics, we considered combining all of
the measures within the measure topic into one composite measure (that
is, having one, combined numerator and one, combined denominator for
all of the measures within the topic) rather than individually scoring
each measure and weighting it appropriately in the measure topic. We
believe that it is important to mirror the NQF specifications for each
measure as much as possible; we also heeded the suggestion of the
Measures Application Partnership to further test composite measures
before implementing them. Therefore, we decided to score measure topics
where each measure within the measure topic is scored individually and
then weighted appropriately.
We considered requiring facilities to report data for 100 percent
of their patients for the Mineral Metabolism and Anemia Management
reporting measures in order to ensure complete, accurate data
collection. We ultimately decided that, because there are some
situations where a facility cannot control whether a patient's blood is
drawn (for example, hospitalization), we should adopt a reporting
threshold of less than 100 percent.
We also considered multiple baseline periods for purposes of
scoring facilities on achievement and improvement. We considered
periods of the same time and duration, periods occurring at different
times, and periods with various durations. We ultimately decided that a
baseline period of 12-months for both the achievement and improvement
scores is best because it is consistent with the PY 2014 program.
Additionally, a 12-month baseline period prevents issues related to
seasonality. We finalized achievement and improvement baseline periods
occurring over different periods of time because we believe that this
approach mitigates data lag as much as possible and also allows us to
score all of the measures on both achievement and improvement. Finally,
we finalized an achievement baseline period spanning a calendar year
(CY 2011) because this approach allows us to publish the numerical
values for the performance standards before the beginning of the
performance period.
In deciding upon the minimum number of cases required for a
facility to be scored on a measure, we reviewed and discussed many
options. We considered keeping the program the same as PY 2014 by
excluding measures with less than 11 cases and applying no adjustment.
We also discussed including an adjustment for measures with 11-25
cases. Finally, we discussed an adjustment applicable to measures with
26-50 cases. We believe that we should set the case minimum at 11 and
adopt an adjustment for measures with 11-25 cases.
Finally, in deciding upon the calculation of the minimum Total
Performance Score, we considered scoring the reporting measures at
zero, consistent with PY 2014. We decided, however, to finalize a
minimum Total Performance Score that includes half of the maximum score
a facility could receive on these measures. We believe that this
methodology appropriately places emphasis on complete reporting from
all facilities.
We did not receive any comments related to this analysis of the
alternatives that we considered for the PY 2015 ESRD QIP.
3. Reductions to Bad Debt Payments for All Medicare Providers
Section 3201 of The Middle Class Tax Extension and Job Creation Act
of 2012 that requires reductions in bad debt reimbursement to all
providers, supplies and other entities eligible to receive bad debt
reimbursement will have a significant impact on the operations of all
affected entities. However, these provisions are specifically
prescribed by statute and thus, are self-implementing. It is estimated
that these provisions will result in savings in CY 2013 of $330
million. Removal of the cap on bad debt reimbursement to ESRD
facilities up to a facility's unrecovered cost will have an impact on
ESRD facilities by increasing their bad debt reimbursement amounts. It
is estimated that the removal of this cap will result in $10 million in
increased payments to ESRD facilities for CY 2013. Therefore, it is
estimated that the combined overall savings in the CY 2013 would be
$320 million.

C. Accounting Statement

As required by OMB Circular A-4 (available at https://www.whitehouse.gov/omb/circulars_a004_a-4), in Table 14 below, we
have prepared an accounting statement showing the classification of the
transfers and costs associated with the various provisions of this
final rule.

Table 14--Accounting Statement: Classification of Estimated Transfers
and Costs/Savings
ESRD PPS for CY 2013
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers......... $250 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 2015
------------------------------------------------------------------------
Annualized Monetized Transfers......... -$12.1 million.*
From Whom to Whom...................... Federal government to ESRD
providers.
------------------------------------------------------------------------
Category Costs
------------------------------------------------------------------------
Annualized Monetized ESRD Provider 12.4 million.**
Costs.
------------------------------------------------------------------------

[[Page 67529]]

Savings from Congressionally Mandated Reductions of Bad Debt Payments in
CY 2013
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Bad Debt Payments. $-320 million.
From Whom to Whom...................... Federal government to Medicare
providers.
------------------------------------------------------------------------
* It is the reduced payment to the ESRD facilities, which fall below the
quality standards as stated in section III.D.12 of this proposed rule.

** It is the cost associated with the collection of information
requirements for all ESRD facilities.

VII. Regulatory Flexibility Act Analysis

The Regulatory Flexibility Act (September 19, 1980, Pub. L. 96-354)
(RFA) 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
include small businesses, nonprofit organizations, and small
governmental jurisdictions. Approximately 19 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 $34.5 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 Web site
at https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf (Kidney Dialysis Centers are listed as 621492 with a size
standard of $34.5 million).
The claims data used to estimate payments to ESRD facilities in
this RFA analysis and RIA do not identify which dialysis facilities are
part of a large dialysis organization (LDO), regional chain, or other
type of ownership because each individual dialysis facility has its own
provider number and bills Medicare using this number. Therefore, in
previous RFA analyses and RIAs presented in proposed and final rules
that updated the basic case-mix adjusted composite payment system, we
considered each ESRD facility to be a small entity for purposes of the
RFA analysis. However, we conducted a special analysis for this final
rule that enabled us to identify the ESRD facilities that are part of
an LDO or regional chain and therefore, were able to identify
individual ESRD facilities that will be considered small entities.
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 19 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 9. Using the
definitions in this ownership category, we consider the 636 facilities
that are independent and the 434 facilities that are shown as hospital-
based to be small entities. The ESRD facilities that are owned and
operated by LDOs and regional chains would have total revenues of more
than $34.5 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 in this rule, a hospital-based ESRD
facility (as defined by ownership type) is estimated to receive a 3.6
percent increase in payments for CY 2013. An independent facility (as
defined by ownership type) is estimated to receive a 3.0 percent
increase in payments for 2013.
Based on the ESRD QIP payment reduction impacts to ESRD facilities
for PY 2015, we estimate that of the 1,093 ESRD facilities expected to
receive a payment reduction, 278 ESRD small entity facilities will
experience a payment reduction (ranging from 0.5 percent up to 2.0 of
total payments). We anticipate the payment reductions to average
approximately $11,059 per facility among the 1,093 facilities receiving
a payment reduction, with an average of $12,866 per small entity
facilities receiving a payment reduction. The projected impacts for
these small entities are estimates based on current data. The actual
impacts may differ. Using our projections of facility performance, we
then estimated the impact of anticipated payment reductions on ESRD
small entities, by comparing the total payment reductions for the 278
small entities expected to receive a payment reduction, with the
aggregate ESRD payments to all small entities. We estimate that there
are a total of 1,070 small entity facilities. For this entire group of
1,070 ESRD small entity facilities, a decrease of 0.30% percent in
aggregate ESRD payments is observed.
The comment we received on this analysis is set forth below.
Comment: One commenter expressed concern that we have not provided
additional funding for the ESRD QIP COI requirements to alleviate the
aggregate associated cost; commenter is specifically concerned of the
impact on small facilities.
Response: We recognize that a facility may have additional costs
resulting from the ESRD QIP. We believe that these costs, however, are
necessary in improving care and do not outweigh the utility of the
program. We will continue to monitor these costs, paying specific
attention to their effect upon small facilities.
Therefore, the Secretary has determined that this final rule will
not have a significant economic impact on a substantial number of small
entities.
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. Any
such regulatory impact 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 will have a significant impact on operations of
a substantial number of small rural hospitals because most dialysis
facilities are freestanding. While there are 180 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 180 rural
hospital-based dialysis facilities will experience an estimated 3.5
percent increase in payments. As a result, this final rule is estimated
to not have a significant impact on small rural hospitals. Therefore,
the Secretary has determined that this final rule will not have a
significant economic impact on a substantial number of small entities.

[[Page 67530]]

Section 3201 of The Middle Class Tax Extension and Job Creation Act
of 2012 that requires reductions in bad debt reimbursement to all
providers, supplies and other entities eligible to receive bad debt
reimbursement will have a significant impact on the operations of a
substantial number of small entities and small rural hospitals.
However, these provisions are specifically prescribed by the Congress
and thus, are self-implementing. Additionally, we do not believe that
the removal of the cap on bad debt reimbursements to ESRD facilities up
to their unrecovered costs will have a significant impact on the
operations of a substantial number of small entities and small rural
hospitals. Thus, we are not providing a Regulatory Flexibility Act
Analysis to codify the statutorily mandated reductions in bad debt
payments, nor for the removal of the cap on bad debt reimbursement as
it pertains to ESRD facilities.

VIII. Unfunded Mandates Reform Act Analysis

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
(Pub. L. 104-4) also requires that agencies assess anticipated costs
and benefits before issuing any rule whose mandates require spending in
any 1 year $100 million in 1995 dollars, updated annually for
inflation. In 2012, that threshold is approximately $139 million. This
final rule does not include any mandates that will impose spending
costs on State, local, or Tribal governments in the aggregate, or by
the private sector, of $139 million.

IX. Federalism Analysis

Executive Order 13132 on Federalism (August 4, 1999) establishes
certain requirements that an agency must meet when it promulgates a
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.

X. Files Available to the Public via the Internet

This section lists the Addenda referred to in the preamble of this
final rule. Beginning in CY 2012, 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. We will continue to post the Addenda through the Internet.
Readers who experience any problems accessing the Addenda that are
posted on the CMS Web site at https://www.cms.gov/ESRDPayment/PAY/list.asp, should contact Michelle Cruse at (410) 786-7540.

List of Subjects

42 CFR Part 413

Health facilities, Kidney diseases, Medicare, Reporting and
recordkeeping requirements.

42 CFR Part 417

Administrative practice and procedure, Grant programs--health,
Health care, Health insurance, Health maintenance organizations (HMO),
Loan programs--health, 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; OPTIONAL PROSPECTIVELY DETERMINED
PAYMENT RATES FOR SKILLED NURSING FACILITIES

0
1. The authority citation for part 413 is revised to read as follows:

Authority: Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (i), and
(n), 1861(v), 1871, 1881, 1883 and 1886 of the Social Security Act
(42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a), (i), and (n),
1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww); and sec. 124 of Pub.
L. 106-113 (113 Stat. 1501A-332) and sec. 3201 of Pub. L. 112-96
(126 Stat. 156).

Subpart F--Specific Categories of Costs

0
2. Section 413.89 is amended by revising paragraphs (h)(1) introductory
text, (h)(1)(iv), (h)(2), (h)(3), and (i), and by adding paragraphs
(h)(1)(v) and (h)(4) to read as follows:

Sec. 413.89 Bad debts, charity, and courtesy allowances.

* * * * *
(h) * * *
(1) Hospitals. In determining reasonable costs for hospitals, the
amount of allowable bad debt (as defined in paragraph (e) of this
section) is reduced:
* * * * *
(iv) For cost reporting periods beginning during fiscal years 2001
through 2012, by 30 percent.
(v) For cost reporting periods beginning during a subsequent fiscal
year, by 35 percent.
(2) Skilled nursing facilities and swing bed hospitals. For the
purposes of this paragraph (h)(2), a dual eligible individual is
defined as an individual that is entitled to benefits under Part A of
Medicare and is determined eligible by the State for medical assistance
under Title XIX of the Act as described under paragraph (2) of the
definition of a ``full-benefit dual eligible individual'' at Sec.
423.772 of this chapter. In determining reasonable costs for a skilled
nursing facility and for post-hospital SNF care furnished in a swing
bed hospital, as defined in Sec. 413.114(b), the amount of allowable
bad debt (as defined in paragraph (e) of this section) is reduced:
(i) For non-dual eligible individuals--(A) For cost reporting
periods beginning during fiscal years 2006 through 2012, by 30 percent,
for a patient in a skilled nursing facility.
(B) For cost reporting periods beginning during a subsequent fiscal
year, by 35 percent, for a patient in a skilled nursing facility or
receiving post-hospital SNF care in a swing bed hospital.
(ii) For dual eligible individuals--(A) For cost reporting periods
beginning during fiscal year 2013, by 12 percent, for a patient in a
skilled nursing facility or a patient receiving post-hospital SNF care
in a swing bed hospital.
(B) For cost reporting periods beginning during fiscal year 2014,
by 24 percent, for a patient in a skilled nursing facility or a patient
receiving post-hospital SNF care in a swing bed hospital.
(C) For cost reporting periods beginning during a subsequent fiscal
year, by 35 percent, for a patient in a skilled nursing facility or a
patient receiving post-hospital SNF care in a swing bed hospital.
(3) End-stage renal dialysis facilities. In determining reasonable
costs for an end-stage renal dialysis facility, the amount of allowable
bad debt (as defined in paragraph (e) of this section) is:
(i) For cost reporting periods beginning before October 1, 2012,
reimbursed up to the facility's costs.
(ii) For cost reporting periods beginning on or after October 1,
2012 and before January 1, 2013, reduced by 12 percent with the
resulting amount reimbursed up to the facility's costs.
(iii) For cost reporting periods beginning on or after January 1,
2013 and before October 1, 2013, reduced by 12 percent.

[[Page 67531]]

(iv) For cost reporting periods beginning during fiscal year 2014,
reduced by 24 percent.
(v) For cost reporting periods beginning during a subsequent fiscal
year, reduced by 35 percent.
(4) All other providers. In determining reasonable costs for all
other providers, suppliers and other entities not described elsewhere
in paragraph (h) of this section that are eligible to receive
reimbursement for bad debts under this section, the amount of allowable
bad debts (as defined in paragraph (e) of this section) is reduced:
(i) For cost reporting periods beginning during fiscal year 2013,
by 12 percent.
(ii) For cost reporting periods beginning during fiscal year 2014,
by 24 percent.
(iii) For cost reporting periods beginning during a subsequent
fiscal year, by 35 percent.
(i) Exceptions applicable to bad debt reimbursement. (1) Bad debts
arising from covered services paid under a reasonable charge-based
methodology or a fee schedule are not reimbursable under the program.
(2) For end-stage renal dialysis services furnished on or after
January 1, 2011 and paid for under the end-stage renal dialysis
prospective payment system described in Sec. 413.215, bad debts
arising from covered items or services that, prior to January 1, 2011
were paid under a reasonable charge-based methodology or a fee
schedule, including but not limited to drugs, laboratory tests, and
supplies are not reimbursable under the program.

Sec. 413.178 [Removed and Reserved]

0
3. Section 413.178 is removed and reserved.

PART 417--HEALTH MAINTENANCE ORGANIZATIONS, COMPETITIVE MEDICAL
PLANS, AND HEALTH CARE PREPAYMENT PLANS

0
4. The authority citation for part 417 continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh), secs. 1301, 1306, and 1310 of the Public
Health Service Act (42 U.S.C. 300e, 300e-5, and 300e-9), and 31
U.S.C. 9701.

Subpart O--Medicare Payment: Cost Basis

0
5. Section 417.536 is amended by revising paragraph (f)(1) to read as
follows:

Sec. 417.536 Cost payment principles.

* * * * *
(f) * * *
(1) Bad debts attributable to Medicare deductible and coinsurance
amounts are allowable only if the requirements of Sec. 413.89 of this
chapter are met, subject to the limitations described under Sec.
413.89(h) and the exceptions for services described under Sec.
413.89(i).
* * * * *

(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)

Dated: October 26, 2012.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2012-26903 Filed 11-2-12; 4:15 pm]
BILLING CODE 4120-01-P

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