Medicare Program; End-Stage Renal Disease Prospective Payment System, Payment for Renal Dialysis Services Furnished to Individuals With Acute Kidney Injury, and End-Stage Renal Disease Quality Incentive Program, 71398-71487 [2020-24485]
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Federal Register / Vol. 85, No. 217 / Monday, November 9, 2020 / Rules and Regulations
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid
Services
42 CFR Part 413
[CMS–1732–F]
RIN 0938–AU08
Medicare Program; End-Stage Renal
Disease Prospective Payment System,
Payment for Renal Dialysis Services
Furnished to Individuals With Acute
Kidney Injury, and End-Stage Renal
Disease Quality Incentive Program
Centers for Medicare &
Medicaid Services (CMS), Health and
Human Services (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)
2021. This rule also updates the
payment rate for renal dialysis services
furnished by an ESRD facility to
individuals with acute kidney injury
(AKI). In addition, this rule updates
requirements for the ESRD Quality
Incentive Program (QIP).
DATES: These regulations are effective
on January 1, 2021.
FOR FURTHER INFORMATION CONTACT:
ESRDPayment@cms.hhs.gov, for issues
related to the ESRD PPS and coverage
and payment for renal dialysis services
furnished to individuals with AKI.
Delia Houseal, (410) 786–2724, for
issues related to the ESRD QIP.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Table of Contents
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To assist readers in referencing
sections contained in this preamble, we
are providing a Table of Contents.
I. Executive Summary
A. Purpose
B. Summary of the Major Provisions
C. Summary of Cost and Benefits
II. Calendar Year (CY) 2021 End-Stage Renal
Disease (ESRD) Prospective Payment
System (PPS)
A. Background
B. Summary of the Proposed Provisions,
Public Comments, and Responses to
Comments on the Calendar Year (CY)
2021 ESRD PPS
C. Transitional Add-On Payment
Adjustment for New and Innovative
Equipment and Supplies (TPNIES) for
CY 2021 Payment
III. Calendar Year (CY) 2021 Payment for
Renal Dialysis Services Furnished to
Individuals With Acute Kidney Injury
(AKI)
A. Background
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B. Summary of the Proposed Provisions,
Public Comments, and Responses to
Comments on the Annual Payment Rate
Update for CY 2021
IV. End-Stage Renal Disease Quality
Incentive Program (ESRD QIP)
A. Background
B. Summary of the Proposed Provisions,
Public Comments, Responses to
Comments, and Finalized Policies for the
ESRD QIP
C. Updates to Requirements Beginning
With the PY 2023 ESRD QIP
D. Updates for the PY 2024 ESRD QIP
V. Collection of Information Requirements
A. Legislative Requirement for Solicitation
of Comments Requirements in
Regulation Text
C. Additional Information Collection
Requirements
VI. Economic Analyses
A. Regulatory Impact Analysis
B. Detailed Economic Analysis
C. Accounting Statement
D. Regulatory Flexibility Act Analysis
(RFA)
E. Unfunded Mandates Reform Act
Analysis (UMRA)
F. Federalism
G. Regulatory Reform Under Executive
Order 13771
H. Congressional Review Act
VII. Files Available to the Public via the
Internet
I. Executive Summary
A. Purpose
This final rule finalizes changes
related to the End-Stage Renal Disease
(ESRD) Prospective Payment System
(PPS), payment for renal dialysis
services furnished to individuals with
acute kidney injury (AKI), and the ESRD
Quality Incentive Program (QIP).
1. End-Stage Renal Disease (ESRD)
Prospective Payment System (PPS)
On January 1, 2011, we implemented
the ESRD PPS, a case-mix adjusted,
bundled PPS for renal dialysis services
furnished by ESRD facilities as required
by section 1881(b)(14) of the Social
Security Act (the Act), as added by
section 153(b) of the Medicare
Improvements for Patients and
Providers Act of 2008 (MIPPA) (Pub. L.
110–275). Section 1881(b)(14)(F) of the
Act, as added by section 153(b) of
MIPPA, and amended by section
3401(h) of the Patient Protection and
Affordable Care Act (the Affordable Care
Act) (Pub. L. 111–148), established that
beginning calendar year (CY) 2012, and
each subsequent year, the Secretary of
the Department of Health and Human
Services (the Secretary) shall annually
increase payment amounts by an ESRD
market basket increase factor, reduced
by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II)
of the Act. This rule updates and makes
revisions to the ESRD PPS for CY 2021.
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2. Coverage and Payment for Renal
Dialysis Services Furnished to
Individuals With Acute Kidney Injury
(AKI)
On June 29, 2015, the President
signed the Trade Preferences Extension
Act of 2015 (TPEA) (Pub. L. 114–27).
Section 808(a) of the TPEA amended
section 1861(s)(2)(F) of the Act to
provide coverage for renal dialysis
services furnished on or after January 1,
2017, by a renal dialysis facility or a
provider of services paid under section
1881(b)(14) of the Act to an individual
with acute kidney injury (AKI). Section
808(b) of the TPEA amended section
1834 of the Act by adding a new
subsection (r) that provides for payment
for renal dialysis services furnished by
renal dialysis facilities or providers of
services paid under section 1881(b)(14)
of the Act to individuals with AKI at the
ESRD PPS base rate beginning January
1, 2017. This rule updates the AKI
payment rate for CY 2021.
3. End-Stage Renal Disease Quality
Incentive Program (ESRD QIP)
The End-Stage Renal Disease Quality
Incentive Program (ESRD QIP) is
authorized by section 1881(h) of the
Act. The Program fosters improved
patient outcomes by establishing
incentives for dialysis facilities to meet
or exceed performance standards
established by the Centers for Medicare
& Medicaid Services (CMS). This final
rule finalizes several updates for the
payment year (PY) 2023. Although no
new requirements were proposed for the
PY 2024 ESRD QIP, this final rule
includes policies continuing for PY
2024.
B. Summary of the Major Provisions
1. ESRD PPS
• Update to the ESRD PPS base rate
for CY 2021: The final CY 2021 ESRD
PPS base rate is $253.13. This amount
reflects the application of the wage
index budget-neutrality adjustment
factor (.999485), the addition to the base
rate of $9.93 to include calcimimetics,
and a productivity-adjusted market
basket increase as required by section
1881(b)(14)(F)(i)(I) of the Act (1.6
percent), equaling $253.13 (($239.33 ×
.999485) + $9.93) × 1.016 = $253.13).
• Annual update to the wage index:
We adjust wage indices on an annual
basis using the most current hospital
wage data and the latest core-based
statistical area (CBSA) delineations to
account for differing wage levels in
areas in which ESRD facilities are
located. For CY 2021, we are updating
the wage index values based on the
latest available data.
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Federal Register / Vol. 85, No. 217 / Monday, November 9, 2020 / Rules and Regulations
• 2018 Office of Management and
Budget (OMB) delineations and 2-year
transition policy: We are updating the
Office of Management and Budget
(OMB) delineations as described in the
September 14, 2018 OMB Bulletin No.
18–04, beginning with the CY 2021
ESRD PPS wage index. In addition, we
are finalizing the application of a 5
percent cap on any decrease in an ESRD
facility’s wage index from the ESRD
facility’s wage index from the prior CY.
This transition will be phased in over 2
years, such that the reduction in an
ESRD facility’s wage index will be
capped at 5 percent in CY 2021, and no
cap will be applied to the reduction in
the wage index for the second year, CY
2022.
• Update to the outlier policy: We are
updating the outlier policy using the
most current data, as well as updating
the outlier services fixed-dollar loss
(FDL) amounts for adult and pediatric
patients and Medicare allowable
payment (MAP) amounts for adult and
pediatric patients for CY 2021 using CY
2019 claims data. Based on the use of
the latest available data, the final FDL
amount for pediatric beneficiaries will
increase from $41.04 to $44.78, and the
MAP amount will decrease from $32.32
to $30.88, as compared to CY 2020
values. For adult beneficiaries, the final
FDL amount will increase from $48.33
to $122.49, and the MAP amount will
increase from $35.78 to $50.92. The 1.0
percent target for outlier payments was
not achieved in CY 2019. Outlier
payments represented approximately
0.5 percent of total payments rather than
1.0 percent.
• Inclusion of calcimimetics in the
ESRD PPS base rate: We are finalizing
the methodology for modifying the
ESRD PPS base rate to include
calcimimetics in the ESRD PPS bundled
payment. Using the final methodology
based on the latest available data, we are
adding $9.93 to the CY 2021 ESRD PPS
base rate.
• Changes to the eligibility criteria for
the transitional add-on payment
adjustment for new and innovative
equipment and supplies (TPNIES): For
CY 2021, we are finalizing the proposed
changes to the TPNIES eligibility
criteria in light of the changes
implemented in CY 2020 to provide a
biannual coding cycle for code
applications for new Healthcare
Common Procedure Coding System
(HCPCS) codes for durable medical
equipment, orthotics, prosthetics and
supplies (DMEPOS) items and services.
We are finalizing that for purposes of
eligibility for the TPNIES, a complete
HCPCS code application must be
submitted by the HCPCS Level II code
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application deadline for biannual
Coding Cycle 2 for DMEPOS items and
services as specified in the HCPCS Level
II coding guidance on the CMS website.
In addition, a copy of the applicable
Food and Drug Administration (FDA)
marketing authorization must be
submitted to CMS by the HCPCS Level
II code application deadline for
biannual Coding Cycle 2 for DMEPOS
items and services as specified in the
HCPCS Level II coding guidance on the
CMS website in order for the equipment
or supply to be eligible for the TPNIES
the following year. We are also
finalizing the proposed definition of
‘‘new’’ for purposes of the TPNIES
policy as within 3 years beginning on
the date of the FDA marketing
authorization.
• Expansion of the TPNIES to include
new and innovative capital-related
assets that are home dialysis machines
when used in the home for a single
patient: We are expanding eligibility for
the TPNIES to include certain capitalrelated assets that are home dialysis
machines when used in the home for a
single patient. As with other renal
dialysis equipment and supplies
potentially eligible for the TPNIES, CMS
will evaluate the application to
determine whether the home dialysis
machine represents an advance that
substantially improves, relative to renal
dialysis services previously available,
the diagnosis or treatment of Medicare
beneficiaries, and meets the other
requirements under 42 CFR 413.236(b).
We are finalizing the additional steps
that the Medicare Administrative
Contractors (MACs) must follow to
establish the basis of payment of the
TPNIES for these capital-related assets
that are home dialysis machines when
used in the home, including an offset to
the pre-adjusted per treatment amount
to account for the cost of the home
dialysis machine that is already in the
ESRD PPS base rate. We will pay 65
percent of the MAC-determined preadjusted per treatment amount reduced
by an offset for 2-calendar years. We are
finalizing that after the 2-year TPNIES
period, the home dialysis machines will
not become outlier services and that no
change will be made to the ESRD PPS
base rate.
• Low-Volume Payment Adjustment
(LVPA): We are finalizing our proposal
to hold harmless ESRD facilities that
would otherwise qualify for the LVPA
but for a temporary increase in dialysis
treatments furnished in 2020 due to the
Public Health Emergency (PHE) for the
coronavirus disease 2019 (COVID–19)
pandemic. For purposes of determining
LVPA eligibility for payment years
2021, 2022, and 2023, we will only
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consider total dialysis treatments
furnished for any 6 months of a facility’s
cost-reporting period ending in 2020;
ESRD facilities will select those 6
months (consecutive or nonconsecutive) during which treatments
will be counted for purposes of the
LVPA determination. We are finalizing
that ESRD facilities will attest that their
total dialysis treatments for those 6
months of their cost-reporting period
ending in 2020 are less than 2,000 and
that, although the total number of
treatments furnished in the entire year
otherwise exceeded the LVPA
threshold, the excess treatments
furnished were due to temporary patient
shifting resulting from the COVID–19
PHE. MACs will annualize the total
dialysis treatments for the total
treatments reported in those 6 months
by multiplying by 2. ESRD facilities will
be expected to provide supporting
documentation to the MACs upon
request.
2. Payment for Renal Dialysis Services
Furnished to Individuals With AKI
We are updating the AKI payment rate
for CY 2021. The final CY 2021 payment
rate is $253.13, which is the same as the
base rate finalized under the ESRD PPS
for CY 2021.
3. ESRD QIP
We are finalizing our proposal to
update the scoring methodology used to
calculate the Ultrafiltration Rate
reporting measure so that facilities are
scored based on the number of eligible
patient-months, instead of facilitymonths. We are also finalizing our
proposal to reduce the number of
records that facilities selected for
National Health Safety Network (NHSN)
validation are required to submit. This
final rule also clarifies the timeline for
facilities to make changes to their NHSN
Bloodstream Infection (BSI) clinical
measure and NHSN Dialysis Event
reporting measure data for purposes of
the ESRD QIP. This final rule also
announces final performance standards
and payment reductions that will apply
for PY 2023.
This final rule describes several
policies continuing for PY 2024, but
does not include any new requirements
beginning with the PY 2024 ESRD QIP.
C. Summary of Costs and Benefits
In section VI of this final rule, we set
forth a detailed analysis of the impacts
of the finalized changes for affected
entities and beneficiaries. The impacts
include the following:
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Federal Register / Vol. 85, No. 217 / Monday, November 9, 2020 / Rules and Regulations
1. Impacts of the Final CY 2021 ESRD
PPS
The impact chart in section VI.B of
this final rule displays the estimated
change in payments to ESRD facilities in
CY 2021 compared to estimated
payments in CY 2020. The overall
impact of the CY 2021 changes is
projected to be a 2.0 percent increase in
payments. Hospital-based ESRD
facilities have an estimated 0.2 percent
decrease in payments compared with
freestanding facilities with an estimated
2.0 percent increase.
We estimate that the aggregate ESRD
PPS expenditures will increase by
approximately $250 million in CY 2021
compared to CY 2020. This reflects a
$210 million increase from the payment
rate update, a $50 million increase due
to the updates to the outlier threshold
amounts, and an $10 million decrease
from the finalized addition to the ESRD
PPS base rate to include calcimimetics
and no longer provide the transitional
drug add-on payment adjustment
(TDAPA) for calcimimetics. As a result
of the projected 2.0 percent overall
payment increase, we estimate there
will be an increase in beneficiary coinsurance payments of 2.0 percent in CY
2021, which translates to approximately
$60 million.
These figures do not reflect increases
or decreases in expenditures based on
expanding the TPNIES to include
certain capital-related assets that are
home dialysis machines when used in
the home for a single patient. The fiscal
impact of this cannot be determined
because these new and innovative home
dialysis machines are not yet identified
and would vary in uniqueness and
costs.
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2. Impacts of the Final CY 2021
Payment for Renal Dialysis Services
Furnished to Individuals With AKI
The impact chart in section VI.B of
this final rule displays the estimated
change in payments to ESRD facilities in
CY 2021 compared to estimated
payments in CY 2020. The overall
impact of the final CY 2021 changes is
projected to be a 5.7 percent increase in
payments for individuals with AKI.
Hospital-based ESRD facilities have an
estimated 5.8 percent increase in
payments compared with freestanding
ESRD facilities with an estimated 5.7
percent increase. The overall impact
reflects the effects of the updated wage
index, the finalized addition to the
ESRD PPS base rate of $9.93 to include
calcimimetics in the ESRD PPS bundled
payment, and the payment rate update.
We estimate that the aggregate
payments made to ESRD facilities for
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renal dialysis services furnished to AKI
patients at the final CY 2021 ESRD PPS
base rate will increase by $4 million in
CY 2021 compared to CY 2020.
3. Impacts of the Final ESRD QIP
We estimate that the overall economic
impact of the PY 2023 ESRD QIP would
be approximately $224 million as a
result of the policies we have previously
finalized and the proposals we are
finalizing in this final rule. The $224
million figure for PY 2023 includes
costs associated with the collection of
information requirements, which we
estimate would be approximately $208
million, and $16 million in estimated
payment reductions across all facilities.
We note that the total overall economic
impact and the collection of information
requirements have been updated from
the estimates in the proposed rule due
to updated information about the total
number of facilities participating in the
ESRD QIP and the total number of
patients. We also estimate that the
overall economic impact of the PY 2024
ESRD QIP would be approximately $224
million as a result of the policies we
have previously finalized. The $224
million figure for PY 2024 includes
costs associated with the collection of
information requirements, which we
estimate would be approximately $208
million, and has been updated from the
estimates in the proposed rule due to
updated information about the total
number of facilities participating in the
ESRD QIP and the total number of
patients.
II. Calendar Year (CY) 2021 End-Stage
Renal Disease (ESRD) Prospective
Payment System (PPS)
A. Background
1. Statutory Background
On January 1, 2011, we implemented
the End-Stage Renal Disease (ESRD)
Prospective Payment System (PPS), a
case-mix adjusted bundled PPS for renal
dialysis services furnished by ESRD
facilities, as required by section
1881(b)(14) of the Social Security Act
(the Act), as added by section 153(b) of
the Medicare Improvements for Patients
and Providers Act of 2008 (MIPPA).
Section 1881(b)(14)(F) of the Act, as
added by section 153(b) of MIPPA and
amended by section 3401(h) of the
Patient Protection and Affordable Care
Act (the Affordable Care Act),
established that beginning with CY
2012, and each subsequent year, the
Secretary of the Department of Health
and Human Services (the Secretary)
shall annually increase payment
amounts by an ESRD market basket
increase factor, reduced by the
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productivity adjustment described in
section 1886(b)(3)(B)(xi)(II) of the Act.
Section 632 of the American Taxpayer
Relief Act of 2012 (ATRA) (Pub. L. 112–
240) included several provisions that
apply to the ESRD PPS. Section 632(a)
of ATRA added section 1881(b)(14)(I) to
the Act, which required the Secretary,
by comparing per patient utilization
data from 2007 with such data from
2012, to reduce the single payment for
renal dialysis services furnished on or
after January 1, 2014 to reflect the
Secretary’s estimate of the change in the
utilization of ESRD-related drugs and
biologicals (excluding oral-only ESRDrelated drugs). Consistent with this
requirement, in the CY 2014 ESRD PPS
final rule we finalized $29.93 as the
total drug utilization reduction and
finalized a policy to implement the
amount over a 3- to 4-year transition
period (78 FR 72161 through 72170).
Section 632(b) of ATRA prohibited
the Secretary from paying for oral-only
ESRD-related drugs and biologicals
under the ESRD PPS prior to January 1,
2016. And section 632(c) of ATRA
required the Secretary, by no later than
January 1, 2016, to analyze the case-mix
payment adjustments under section
1881(b)(14)(D)(i) of the Act and make
appropriate revisions to those
adjustments.
On April 1, 2014, the Protecting
Access to Medicare Act of 2014 (PAMA)
(Pub. L. 113–93) was enacted. Section
217 of PAMA included several
provisions that apply to the ESRD PPS.
Specifically, sections 217(b)(1) and (2)
of PAMA amended sections
1881(b)(14)(F) and (I) of the Act and
replaced the drug utilization adjustment
that was finalized in the CY 2014 ESRD
PPS final rule (78 FR 72161 through
72170) with specific provisions that
dictated the market basket update for
CY 2015 (0.0 percent) and how the
market basket should be reduced in CY
2016 through CY 2018.
Section 217(a)(1) of PAMA amended
section 632(b)(1) of ATRA to provide
that the Secretary may not pay for oralonly ESRD-related drugs under the
ESRD PPS prior to January 1, 2024.
Section 217(a)(2) of PAMA further
amended section 632(b)(1) of ATRA by
requiring that in establishing payment
for oral-only drugs under the ESRD PPS,
the Secretary must use data from the
most recent year available. Section
217(c) of PAMA provided that as part of
the CY 2016 ESRD PPS rulemaking, the
Secretary shall establish a process for (1)
determining when a product is no
longer an oral-only drug; and (2)
including new injectable and
intravenous products into the ESRD PPS
bundled payment.
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Finally, on December 19, 2014, the
President signed the Stephen Beck, Jr.,
Achieving a Better Life Experience Act
of 2014 (ABLE) (Pub. L. 113–295).
Section 204 of ABLE amended section
632(b)(1) of ATRA, as amended by
section 217(a)(1) of PAMA, to provide
that payment for oral-only renal dialysis
services cannot be made under the
ESRD PPS bundled payment prior to
January 1, 2025.
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2. System for Payment of Renal Dialysis
Services
Under the ESRD PPS, a single, pertreatment payment is made to an ESRD
facility for all of the renal dialysis
services defined in section
1881(b)(14)(B) of the Act and furnished
to individuals for the treatment of ESRD
in the ESRD facility or in a patient’s
home. We have codified our definitions
of renal dialysis services at § 413.171,
which is in 42 CFR part 413, subpart H,
along with other ESRD PPS payment
policies. The ESRD PPS base rate is
adjusted for characteristics of both adult
and pediatric patients and accounts for
patient case-mix variability. The adult
case-mix adjusters include five
categories of age, body surface area, low
body mass index, onset of dialysis, four
comorbidity categories, and pediatric
patient-level adjusters consisting of two
age categories and two dialysis
modalities (§ 413.235(a) and (b)).
The ESRD PPS provides for three
facility-level adjustments. The first
payment adjustment accounts for ESRD
facilities furnishing a low volume of
dialysis treatments (§ 413.232). The
second adjustment reflects differences
in area wage levels developed from core
based statistical areas (CBSAs)
(§ 413.231). The third payment
adjustment accounts for ESRD facilities
furnishing renal dialysis services in a
rural area (§ 413.233).
The ESRD PPS provides a training
add-on for home and self-dialysis
modalities (§ 413.235(c)) and an
additional payment for high cost
outliers due to unusual variations in the
type or amount of medically necessary
care when applicable (§ 413.237).
The ESRD PPS provides for a
transitional drug add-on payment
adjustment (TDAPA) for certain new
renal dialysis drugs and biological
products (§ 413.234(c)).
The ESRD PPS also provides for a
transitional add-on payment adjustment
for new and innovative equipment and
supplies (TPNIES) for certain qualifying,
new and innovative renal dialysis
equipment and supplies (§ 413.236(d)).
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3. Updates to the ESRD PPS
Policy changes to the ESRD PPS are
proposed and finalized annually in the
Federal Register. The CY 2011 ESRD
PPS final rule was published on August
12, 2010 in the Federal Register (75 FR
49030 through 49214). That rule
implemented the ESRD PPS beginning
on January 1, 2011 in accordance with
section 1881(b)(14) of the Act, as added
by section 153(b) of MIPPA, over a 4year transition period. Since the
implementation of the ESRD PPS, we
have published annual rules to make
routine updates, policy changes, and
clarifications.
On November 8, 2019, we published
a final rule in the Federal Register
titled, ‘‘Medicare Program; End-Stage
Renal Disease Prospective Payment
System, Payment for Renal Dialysis
Services Furnished to Individuals with
Acute Kidney Injury, End-Stage Renal
Disease Quality Incentive Program,
Durable Medical Equipment,
Prosthetics, Orthotics and Supplies
(DMEPOS) Fee Schedule Amounts,
DMEPOS Competitive Bidding Program
(CBP) Amendments, Standard Elements
for a DMEPOS Order, and Master List of
DMEPOS Items Potentially Subject to a
Face-to-Face Encounter and Written
Order Prior to Delivery and/or Prior
Authorization Requirements,’’ referred
to as the ‘‘CY 2020 ESRD PPS final
rule’’. In that rule, we updated the ESRD
PPS base rate, wage index, and outlier
policy, for CY 2020. We also finalized
revisions to the eligibility criteria for the
TDAPA for certain new renal dialysis
drugs and biological products that fall
within an existing ESRD PPS functional
category, modified the basis of payment
for the TDAPA for calcimimetics,
established a new policy to condition
the TDAPA payment on our receipt of
average sales price (ASP) data,
established the TPNIES to support ESRD
facilities in their uptake of certain new
and innovative renal dialysis equipment
and supplies, and discontinued the
erythropoiesis-stimulating agent (ESA)
monitoring policy under the ESRD PPS.
For further detailed information
regarding these updates, see 84 FR
60648.
B. Summary of the Proposed Provisions,
Public Comments, and Responses to
Comments on the Calendar Year (CY)
2021 ESRD PPS
The proposed rule, titled ‘‘Medicare
Program; End-Stage Renal Disease
Prospective Payment System, Payment
for Renal Dialysis Services Furnished to
Individuals with Acute Kidney Injury,
and End-Stage Renal Disease Quality
Incentive Program’’ (85 FR 42132
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71401
through 42208), referred to as the ‘‘CY
2021 ESRD PPS proposed rule,’’ was
published in the Federal Register on
July 13, 2020, with a comment period
that ended on September 4, 2020. In that
proposed rule, we proposed to make a
number of annual updates for CY 2021,
including updates to the ESRD PPS base
rate, wage index, and outlier policy. We
also proposed to modify the ESRD PPS
base rate to incorporate calcimimetics,
revise the eligibility criteria for the
TPNIES, and expand the TPNIES to
include capital-related assets that are
home dialysis machines when used in
the home by a single patient. We also
proposed revisions to the low-volume
payment adjustment (LVPA) regulations
in response to the Public Health
Emergency (PHE) for the coronavirus
disease 2019 (COVID–19) pandemic. We
received 114 public comments on our
proposals, including comments from:
ESRD facilities; national renal groups,
nephrologists and patient organizations;
patients and care partners;
manufacturers; health care systems; and
nurses.
We also received many comments
related to issues that we either did not
discuss in the proposed rule or that we
discussed for the purpose of background
or context, but for which we did not
propose changes. These include, for
example, refinements to modeling
payment and accounting for new and
innovative items and services under the
ESRD PPS, incentives for home dialysis,
reporting furnished services on the
ESRD claim, network fee, and issues
related to the COVID–19 pandemic.
While we are not addressing those
comments in this final rule because they
are either out of scope of the proposed
rule or concern topics for which we did
not propose changes, we thank the
commenters for their input and will
consider the recommendations in future
rulemaking.
In this final rule, we provide a
summary of each proposed provision, a
summary of the public comments
received and our responses to them, and
the policies we are finalizing for the CY
2021 ESRD PPS.
1. Inclusion of Calcimimetics Into the
ESRD PPS Bundled Payment
a. Background on Oral-Only Renal
Dialysis Drugs
Section 1881(b)(14)(A)(i) of the Act
requires the Secretary to implement a
payment system under which a single
payment is made to a provider of
services or a renal dialysis facility for
renal dialysis services in lieu of any
other payment. Section 1881(b)(14)(B) of
the Act defines renal dialysis services,
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and clause (iii) of such section states
that these services include other drugs
and biologicals that are furnished to
individuals for the treatment of ESRD
and for which payment was made
separately under this title, and any oral
equivalent form of such drug or
biological.
We interpreted this provision as
including not only injectable drugs and
biological products used for the
treatment of ESRD (other than ESAs and
any oral form of ESAs, which are
included under clause (ii) of section
1881(b)(14)(B) of the Act), but also all
oral drugs and biological products used
for the treatment of ESRD and furnished
under Title XVIII of the Act. We also
concluded that, to the extent oral-only
drugs or biological products used for the
treatment of ESRD do not fall within
clause (iii) of section 1881(b)(14)(B) of
the Act, such drugs or biological
products would fall under clause (iv) of
such section, and constitute other items
and services used for the treatment of
ESRD that are not described in clause (i)
of section 1881(b)(14)(B) of the Act.
We finalized and promulgated the
payment policies for oral-only renal
dialysis service drugs and biological
products in the CY 2011 ESRD PPS final
rule (75 FR 49038 through 49053),
where we defined renal dialysis services
at § 413.171 as including other drugs
and biological products that are
furnished to individuals for the
treatment of ESRD and for which
payment was made separately prior to
January 1, 2011 under Title XVIII of the
Act, including drugs and biological
products with only an oral form. We
further described oral-only drugs as
those that have no injectable equivalent
or other form of administration (75 FR
49038 through 49039). Although we
included oral-only renal dialysis service
drugs and biological products in the
definition of renal dialysis services in
the CY 2011 ESRD PPS final rule (75 FR
49044), we also finalized a policy to
delay payment for these drugs under the
PPS until January 1, 2014. In the CY
2011 ESRD PPS proposed and final
rules (74 FR 49929 and 75 FR 49038,
respectively), we noted that the only
oral-only drugs and biological products
that we identified were phosphate
binders and calcimimetics, which fall
into the bone and mineral metabolism
ESRD PPS functional category. We
stated that there were certain advantages
to delaying the implementation of
payment for oral-only drugs and
biological products, including allowing
ESRD facilities additional time to make
operational changes and logistical
arrangements in order to furnish oralonly renal dialysis service drugs and
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biological products to their patients.
Accordingly, we codified the delay in
payment for oral-only renal dialysis
service drugs and biological products at
§ 413.174(f)(6), and provided that
payment to an ESRD facility for renal
dialysis service drugs and biological
products with only an oral form is
incorporated into the PPS payment rates
effective January 1, 2014. Since oralonly drugs are generally not a covered
service under Medicare Part B, this
delay of payment under the ESRD PPS
also allowed the coverage under
Medicare to continue under Part D.
On January 3, 2013, ATRA was
enacted. Section 632(b) of ATRA
precluded the Secretary from
implementing the policy under
§ 413.176(f)(6) relating to oral-only renal
dialysis service drugs and biological
products prior to January 1, 2016.
Accordingly, in the CY 2014 ESRD PPS
final rule (78 FR 72185 through 72186),
we delayed payment for oral-only renal
dialysis service drugs and biological
products under the ESRD PPS until
January 1, 2016. We implemented this
delay by revising the effective date at
§ 413.174(f)(6) from January 1, 2014 to
January 1, 2016. In addition, we
changed the date when oral-only renal
dialysis service drugs and biological
products would be eligible for outlier
services under the outlier policy
described in § 413.237(a)(1)(iv) from
January 1, 2014 to January 1, 2016.
On April 1, 2014, PAMA was enacted.
Section 217(a)(1) of PAMA amended
section 632(b)(1) of ATRA and
precluded the Secretary from
implementing the policy under
§ 413.174(f)(6) relating to oral-only renal
dialysis service drugs and biological
products prior to January 1, 2024. We
implemented this delay in the CY 2015
ESRD PPS final rule (79 FR 66262) by
modifying the effective date for
providing payment for oral-only renal
dialysis service drugs and biological
products under the ESRD PPS at
§ 413.174(f)(6) from January 1, 2016 to
January 1, 2024. We also changed the
date in § 413.237(a)(1)(iv) regarding
outlier payments for oral-only renal
dialysis service drugs made under the
ESRD PPS from January 1, 2016 to
January 1, 2024. Section 217(a)(2) of
PAMA further amended section
632(b)(1) of ATRA by requiring that in
establishing payment for oral-only drugs
under the ESRD PPS, the Secretary must
use data from the most recent year
available.
On December 19, 2014, ABLE was
enacted. Section 204 of ABLE amended
section 632(b)(1) of ATRA, as amended
by section 217(a)(1) of PAMA, and
precluded the Secretary from
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implementing the policy under
§ 413.174(f)(6) relating to oral-only renal
dialysis service drugs and biological
products prior to January 1, 2025. We
implemented this delay in the CY 2016
ESRD PPS final rule (80 FR 69027
through 69028) by modifying the
effective date for providing payment for
oral-only renal dialysis service drugs
and biological products under the ESRD
PPS at § 413.174(f)(6) from January 1,
2024 to January 1, 2025. We also
changed the date in § 413.237(a)(1)(iv)
regarding outlier payments for oral-only
renal dialysis service drugs made under
the ESRD PPS from January 1, 2024 to
January 1, 2025.
b. ESRD PPS Drug Designation Process
and Calcimimetics
In addition to delaying
implementation of the policy for oralonly renal dialysis service drugs and
biological products under the ESRD
PPS, discussed previously in this final
rule, PAMA included section 217(c),
which provided that as part of the CY
2016 ESRD PPS rulemaking, the
Secretary shall establish a process for (1)
determining when a product is no
longer an oral-only drug; and (2)
including new injectable and
intravenous products into the ESRD PPS
bundled payment. Therefore, in the CY
2016 ESRD PPS final rule (80 FR 69013
through 69027), we finalized a process
that allows us to recognize when an
oral-only renal dialysis service drug or
biological product is no longer oralonly, and a process to include new
injectable and intravenous (IV) products
into the ESRD PPS bundled payment,
and when appropriate, modify the ESRD
PPS payment amount to reflect the costs
of furnishing that product.
In accordance with section 217(c)(1)
of PAMA, we established § 413.234(d),
which provides that an oral-only drug is
no longer considered oral-only if an
injectable or other form of
administration of the oral-only drug is
approved by FDA. We defined an oralonly drug at § 413.234(a) to mean a drug
or biological with no injectable
equivalent or other form of
administration other than an oral form.
Additionally, in accordance with
section 217(c)(2) of PAMA, we codified
the drug designation process at
§ 413.234(b). In the CY 2016 ESRD PPS
final rule (80 FR 69024), we finalized
that the drug designation process is
dependent upon the ESRD PPS
functional categories, consistent with
our policy since the implementation of
the PPS in 2011. We provided a detailed
discussion on how we accounted for
renal dialysis drugs and biological
products in the ESRD PPS base rate
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since its implementation on January 1,
2011 (80 FR 69013 through 69015). We
explained that, in the CY 2011 ESRD
PPS final rule (75 FR 49044 through
49053), in order to identify drugs and
biological products that are used for the
treatment of ESRD and therefore meet
the definition of renal dialysis services
(defined at § 413.171) that would be
included in the ESRD PPS base rate, we
performed an extensive analysis of
Medicare payments for Part B drugs and
biological products billed on ESRD
claims and evaluated each drug and
biological product to identify its
category by indication or mode of
action. We stated in the CY 2011 ESRD
PPS final rule that categorizing drugs
and biological products on the basis of
drug action allows us to determine
which categories (and therefore, the
drugs and biological products within
the categories) would be considered
used for the treatment of ESRD (75 FR
49047).
In the CY 2016 ESRD PPS final rule,
we also explained that, in CY 2011
ESRD PPS rulemaking, we grouped the
injectable and IV drugs and biological
products into ESRD PPS functional
categories based on their action (80 FR
69014). This was done for the purpose
of adding new drugs or biological
products with the same functions to the
ESRD PPS bundled payment as
expeditiously as possible after the drugs
become commercially available so that
beneficiaries have access to them. In the
CY 2016 ESRD PPS final rule, we
finalized the definition of an ESRD PPS
functional category in § 413.234(a) as a
distinct grouping of drugs or biologicals,
as determined by CMS, whose end
action effect is the treatment or
management of a condition or
conditions associated with ESRD (80 FR
69077).
We finalized a policy in the CY 2016
ESRD PPS final rule (80 FR 69017
through 69022) that, effective January 1,
2016, if a new injectable or IV product
is used to treat or manage a condition
for which there is an ESRD PPS
functional category, the new injectable
or IV product is considered included in
the ESRD PPS bundled payment and no
separate payment is available. The new
injectable or IV product qualifies as an
outlier service. The ESRD bundled
market basket updates the PPS base rate
annually and accounts for price changes
of the drugs and biological products
reflected in the base rate.
We established in § 413.234(b)(2) that,
if the new injectable or IV product is
used to treat or manage a condition for
which there is not an ESRD PPS
functional category, the new injectable
or IV product is not considered
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included in the ESRD PPS bundled
payment and the following steps occur.
First, an existing ESRD PPS functional
category is revised or a new ESRD PPS
functional category is added for the
condition that the new injectable or IV
product is used to treat or manage. Next,
the new injectable or IV product is paid
for using the TDAPA described in
§ 413.234(c). Finally, the new injectable
or IV product is added to the ESRD PPS
bundled payment following payment of
the TDAPA.
In the CY 2016 ESRD PPS final rule,
we finalized a policy in § 413.234(c) to
base the TDAPA on pricing
methodologies under section 1847A of
the Act and pay the TDAPA until
sufficient claims data for rate setting
analysis for the new injectable or IV
product are available, but not for less
than 2 years. During the time a new
injectable or IV product is eligible for
the TDAPA, it is not eligible as an
outlier service. We established that,
following payment of the TDAPA, the
ESRD PPS base rate will be modified, if
appropriate, to account for the new
injectable or IV product in the ESRD
PPS bundled payment.
We also established, in the CY 2016
ESRD PPS final rule (80 FR 69024
through 69027), an exception to the
drug designation process for
calcimimetics. We noted that in the CY
2011 ESRD PPS proposed and final
rules (74 FR 49929 and 75 FR 49038,
respectively), the only oral-only drugs
and biological products we identified
were phosphate binders and
calcimimetics, which fall into the bone
and mineral metabolism ESRD PPS
functional category. We stated that we
defined these oral-only drugs as renal
dialysis services in our regulations at
§ 413.171 (75 FR 49044), delayed the
Medicare Part B payment for these oralonly drugs until CY 2014 at
§ 413.174(f)(6), and continued to pay for
them under Medicare Part D. We
explained in the CY 2016 ESRD PPS
final rule that, under § 413.234(b)(1), if
injectable or IV forms of phosphate
binders or calcimimetics are approved
by FDA, these drugs would be
considered reflected in the ESRD PPS
bundled payment because these drugs
are included in an existing functional
category, so no additional payment
would be available for inclusion of these
drugs.
However, we recognized the
uniqueness of these drugs and stated
that we will not apply this process to
injectable or IV forms of phosphate
binders and calcimimetics when they
are approved because payment for the
oral forms of these drugs was delayed
and dollars were never included in the
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71403
ESRD PPS base rate to account for these
drugs. Instead, we finalized a policy that
once the injectable or IV phosphate
binder or calcimimetic is FDA approved
and has a Healthcare Common
Procedure Coding System (HCPCS)
code, we will issue a change request to
pay for all forms of the phosphate
binder or calcimimetic using the
TDAPA based on the payment
methodologies under section 1847A of
the Act, which could include ASP + 6
percent, for a period of at least 2 years.
We explained in the CY 2016 ESRD PPS
final rule that this will allow us to
collect data reflecting current utilization
of both the oral and injectable or IV
forms of the drugs, as well as payment
patterns and beneficiary co-pays, before
we add these drugs to the ESRD PPS
bundled payment. We stated that during
this period we will not pay outlier
payments for these drugs. We further
stated that at the end of the 2 or more
years, we will adopt the methodology
for including the phosphate binders and
calcimimetics into the ESRD PPS
bundled payment through notice-andcomment rulemaking.
In 2017, FDA approved an injectable
calcimimetic. In accordance with the
policy finalized in the CY 2016 ESRD
PPS final rule, we issued a change
request to implement payment under
the ESRD PPS for both the oral and
injectable forms of calcimimetics using
the TDAPA. Change Request 10065,
Transmittal 1889, issued August 4,
2017, replaced by Transmittal 1999,
issued January 10, 2018, and
implemented the TDAPA for
calcimimetics effective January 1, 2018.
In CYs 2019 and 2020 ESRD PPS final
rules (83 FR 56927 through 56949 and
84 FR 60653 through 60677,
respectively), we made several revisions
to the drug designation process
regulations at § 413.234. In the CY 2019
ESRD PPS final rule, for example, we
revised regulations at § 413.234(a), (b),
and (c) to reflect that the process applies
for all new renal dialysis drugs and
biological products that are FDA
approved regardless of the form or route
of administration, that is, new
injectable, IV, oral, or other form or
route of administration (83 FR 56932).
In addition, we revised § 413.234(b) and
(c) to expand the TDAPA to all new
renal dialysis drugs and biological
products, not just those in new ESRD
PPS functional categories (83 FR 56942
through 56943). We also revised
§ 413.234(c) to reflect that we base the
TDAPA on 100 percent of ASP (ASP +
0) instead of the pricing methodologies
available under section 1847A of the
Act (which includes ASP + 6). We
explained that the 6 percent add-on to
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ASP has been used to cover
administrative and overhead costs,
however, the ESRD PPS base rate
includes dollars for administrative
complexities and overhead costs for
drugs and biological products, so we
believe ASP + 0 is a reasonable basis for
the TDAPA under the ESRD PPS (83 FR
56943 through 56944). For
circumstances when ASP data is not
available, we finalized that the TDAPA
is based on wholesale acquisition cost
(WAC) + 0 and, when WAC is not
available, the TDAPA is based on the
drug manufacturer’s invoice (83 FR
56948). We also finalized a revision to
§ 413.234(c) to reflect that the basis of
payment for the TDAPA for
calcimimetics would continue to be
based on the pricing methodologies
available under section 1847A of the
Act, which includes ASP + 6 (83 FR
56948). These provisions all had an
effective date of January 1, 2020.
In the CY 2020 ESRD PPS final rule,
we made several additional revisions to
the ESRD PPS drug designation process
regulations at § 413.234. For example,
we revised § 413.234(b) and added
paragraph (e) to codify certain eligibility
criteria changes for new renal dialysis
drugs and biological products that fall
within an existing ESRD PPS functional
category. That is, we excluded certain
drugs from being eligible for the
TDAPA, effective January 1, 2020 (84 FR
60672). Specifically, as detailed in the
CY 2020 ESRD PPS final rule (85 FR
60565 through 60673), we excluded
generic drugs approved by FDA under
section 505(j) of the Federal Food, Drug,
and Cosmetic Act (FD&C Act) and drugs
for which the new drug application
(NDA) is classified by FDA as Type 3,
5, 7 or 8, Type 3 in combination with
Type 2 or Type 4, or Type 5 in
combination with Type 2, or Type 9
when the ‘‘parent NDA’’ is a Type 3, 5,
7 or 8—from being eligible for the
TDAPA. We also established at
§ 413.234(c) a policy to condition
application of the TDAPA on our receipt
of ASP data (84 FR 60681).
In the CY 2020 ESRD PPS final rule
(84 FR 60673), we also discussed the
duration of payment of the TDAPA for
calcimimetics and changed the basis of
the TDAPA for such products. We stated
that in accordance with our policy for
calcimimetics under the drug
designation process, we would pay for
calcimimetics using the TDAPA for a
minimum of 2 years until sufficient
claims data for rate setting analysis is
available for these products. We noted
that at the time of the CY 2020 ESRD
PPS proposed rule we were still in the
process of collecting utilization claims
data for both the oral and injectable
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form of calcimimetics. Therefore, in the
CY 2020 ESRD PPS proposed rule, we
stated that we would continue to pay for
calcimimetics using the TDAPA in CY
2020 (84 FR 38347).
However, we also noted in the CY
2020 ESRD PPS proposed rule that we
had provided the TDAPA for
calcimimetics at ASP + 6 percent for 2full years (that is, January 1, 2018
through December 31, 2019), and we
believed that was sufficient time for
ESRD facilities to address any
administrative complexities and
overhead costs that may have arisen
with regard to furnishing the
calcimimetics. We noted that it was
clear that ESRD facilities were
furnishing calcimimetics because
payment for them using the TDAPA had
increased Medicare expenditures by
$1.2 billion in CY 2018 (84 FR 60673).
We explained that one of the rationales
for the 6 percent add-on to ASP was to
cover administrative and overhead
costs, however, the ESRD PPS base rate
has dollars included for administrative
complexities and overhead costs for
drugs and biological products.
Therefore, in the CY 2020 ESRD PPS
final rule, we finalized a revision to
§ 413.234(c) to reflect that the basis of
payment for the TDAPA for
calcimimetics, beginning in CY 2020,
would be 100 percent of ASP (84 FR
60676). We explained this policy change
provided a balance between supporting
ESRD facilities in their uptake of these
products and limiting the financial
burden that increased payments place
on beneficiaries and Medicare
expenditures. We also noted that this
policy is consistent with the policy
finalized for all other new renal dialysis
drugs and biological products in the CY
2019 ESRD PPS final rule (83 FR 56948).
c. Methodology for Modifying the ESRD
PPS Base Rate to Account for
Calcimimetics in the ESRD PPS
Bundled Payment
As we discussed in the CY 2021 ESRD
PPS proposed rule (85 FR 42138), under
§ 413.234(d), calcimimetics were no
longer considered to be an oral-only
drug once FDA approved an injectable
calcimimetic in 2017. We explained that
we have paid for calcimimetics under
the ESRD PPS using the TDAPA since
January 1, 2018. We stated in the CY
2016 ESRD PPS final rule that for
calcimimetics—for which there is an
ESRD PPS functional category, but no
money in the base rate—we would
utilize the TDAPA to collect utilization
data before adding this drug to the ESRD
PPS base rate. This would allow us to
collect data reflecting current utilization
of both the oral and injectable or IV
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forms of the drug, as well as payment
patterns and beneficiary co-pays. The
collection of this data for 2 or more
years would allow us, with sufficient
data, to incorporate these drugs into the
ESRD PPS bundled payment through
notice-and-comment rulemaking.
As we stated in the proposed rule, we
believe we have collected sufficient
claims data for a rate setting analysis for
calcimimetics. Specifically, we have
collected robust claims data for 2 full
years and analyzed the utilization of
every generic and brand name oral
calcimimetic, along with the utilization
of the injectable calcimimetic. We also
monitored the ASP data for the
calcimimetics coinciding with the
specific utilization periods. Our overall
analysis of ESRD claims data for CYs
2018 and 2019 indicated an increase in
the utilization of the oral generic
calcimimetic drugs and a steep decline
in the utilization of brand-name oral
calcimimetic. Weighting the ASP price
data based on the utilization data
resulted in an overall lower ASP
because the generic calcimimetic drugs
are less expensive than the brand
calcimimetics. Since beneficiaries have
a 20 percent co-pay under the ESRD
PPS, a decrease in the payment for
calcimimetics results in a decrease in
the beneficiary co-pay.
Therefore, as we stated in the CY 2021
ESRD PPS proposed rule (85 FR 42138),
we believed that we were at the step of
the ESRD PPS drug designation process
where we should propose to adopt the
methodology for modifying the ESRD
PPS base rate to account for
calcimimetics in the ESRD PPS bundled
payment, which we did in the CY 2021
ESRD PPS proposed rule. In this final
rule, we are adding a per treatment
amount to the ESRD PPS base rate to
include the calcimimetics in the ESRD
PPS bundled payment amount.
In developing the methodology for
including calcimimetics into the ESRD
PPS base rate, we considered the
methodology that we used when we
included Part B drugs and biological
products in the ESRD PPS base rate as
part of our implementation of the ESRD
PPS. In the CY 2011 ESRD PPS final
rule (75 FR 49074 through 49079), we
discussed how we established which
renal dialysis drugs and biological
products would be reflected in the
ESRD PPS base rate. We used the
utilization of those drugs and biological
products from Medicare claims data and
applied ASP + 6 percent to establish the
price for each drug. Then we inflated
each drug’s price to 2011 using the
Producer Price Index (PPI) for
prescription drugs.
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In addition, as discussed in the CY
2011 ESRD PPS final rule (75 FR 49064),
we established a dialysis treatment as
the unit of payment. Consistent with the
approach we used initially to include
drugs and biological products into the
ESRD PPS base rate and the ESRD PPS
unit of payment, we proposed a similar
methodology to calculate a one-time
modification to the ESRD PPS base rate
on a per-treatment basis to account for
calcimimetics. We stated that the
methodology is similar to the CY 2011
approach because we would determine
utilization of the drug, in this case,
calcimimetics, along with the payment
amounts associated with each oral and
injectable form based on the ASP + 0
instead of ASP + 6, as discussed in the
CY 2020 ESRD PPS final rule.
The following sections discuss each
element of our proposed methodology
in detail. As an overview, we proposed
to calculate a per-treatment amount for
calcimimetics that would be added to
the ESRD PPS base rate. We proposed to
apply the value from the most recent
calendar quarter ASP calculations at 100
percent of ASP (that is, ASP + 0)
available to the public for calcimimetics
to the utilization data for calcimimetics
from CYs 2018 and 2019 Medicare
ESRD claims data to provide the
calcimimetic expenditure amount. We
proposed to divide the calcimimetic
expenditure amount by the total number
of hemodialysis (HD)-equivalent
dialysis treatments paid in CYs 2018
and 2019 under the ESRD PPS. We
proposed to reduce this average per
treatment amount by 1 percent to
account for the outlier policy, since
calcimimetics would be ESRD outlier
services eligible for outlier payments
beginning January 1, 2021. We proposed
to add the resulting amount to the ESRD
PPS base rate. We noted that this
amount would be permanently included
in the ESRD PPS base rate and be
subject to the annual ESRD PPS
payment updates (that is, the
productivity-adjusted market basket
increase and wage index budget
neutrality adjustment factor). Under the
proposal, CMS would stop paying for
these drugs using the TDAPA for dates
of service on or after January 1, 2021.
In the CY 2021 ESRD PPS proposed
rule (85 FR 42141), we proposed to
revise our drug designation regulation at
§ 413.234, by adding paragraph (f), to
describe the methodology for modifying
the ESRD PPS base rate to account for
the costs of calcimimetics, including the
data sources and the steps we would
take to calculate a per treatment
amount. We proposed, for dates of
service on or after January 1, 2021,
calcimimetics would no longer be paid
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for under the ESRD PPS using the
TDAPA (§ 413.234(c)) and would be
paid for through the ESRD PPS base rate
and eligible for outlier payments as
ESRD outlier services under § 413.237.
We noted that the proposed
methodology would only modify the
ESRD PPS base rate for calcimimetic
drugs. As stated in the CY 2016 ESRD
PPS final rule (80 FR 69022), the
TDAPA would be paid for a minimum
of 2 years, during which time we would
collect and analyze utilization data. At
the end of that time, the drug would be
included within its new functional
category and the base rate would
potentially be modified to account for
the cost of the drug, depending upon
what the utilization data show.
Accordingly, we explained, our policy
is to propose and adopt this
methodology when including any future
eligible new renal dialysis drugs and
biological products into the ESRD PPS
base rate through notice-and-comment
rulemaking.
(1) Determining Utilization of
Calcimimetics
For use in the proposed calculation,
we analyzed the utilization of both the
oral and injectable forms of
calcimimetics reported on the ESRD
facility claims for CYs 2018 and 2019.
ESRD facilities report this information
to CMS on Medicare ESRD facility
claims, that is, the 837-institutional
form with bill type 072X. The oral
calcimimetic is reported as HCPCS
J0604 (Cinacalcet, oral, 1 mg, (for ESRD
on dialysis)) and the injectable
calcimimetic is reported as HCPCS
J0606 (Injection, etelcalcetide, 0.1 mg),
that is, one unit of J0604 is 1 mg, and
one unit of J0606 is 0.1 mg. For
purposes of this rate setting analysis, we
considered utilization of calcimimetics
as the units of the product furnished to
an ESRD beneficiary.
For the CY 2018 utilization data for
calcimimetics, we proposed to use the
latest available claims data based on the
CY 2018 ESRD facility claims updated
through June 30, 2019 (that is, claims
with dates of service from January 1
through December 31, 2018, that were
received, processed, paid, and passed to
the National Claims History (NCH) File
as of June 30, 2019) to calculate 2018
utilization. Claims that are received,
processed, paid, and passed to the NCH
file are considered to be ‘‘complete’’
because they have been adjudicated.
For the CY 2019 utilization data for
calcimimetics, we proposed to use the
latest available claims data based on the
CY 2019 ESRD facility claims updated
through January 31, 2020 (that is, claims
with dates of service from January 1
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through December 31, 2019, that were
received, processed, paid, and passed to
the NCH File as of January 31, 2020).
In the CY 2021 ESRD PPS proposed
rule (85 FR 42139), we stated that for
the final rule, the latest available CY
2019 ESRD facility claims are those
updated through June 30, 2020 (that is,
claims with dates of service from
January 1 through December 31, 2019,
that were received, processed, paid, and
passed to the NCH File as of June 30,
2020).
We explained that while we have
continued to pay the TDAPA for
calcimimetics for dates of service in CY
2020, we did not propose to use
utilization data from this period because
practice patterns in CY 2020 have been
altered due to the COVID–19 pandemic
and the resulting impact on data was
unknown at that time. However, we
noted that our policy to continue paying
for calcimimetics using the TDAPA in
CY 2020 allowed us to analyze 2 full
years of adjudicated Medicare claims
since CY 2019 claims include those
claims from January 1, 2019 through
December 31, 2019.
We solicited comments on the
proposed use of CYs 2018 and 2019
claims data to determine the utilization
of calcimimetics for purposes of
calculating the proposed addition to the
ESRD PPS base rate to account for
calcimimetics at proposed § 413.234(f).
We stated that we believed using claims
data from CYs 2018 and 2019 is
appropriate because those years provide
us with not only the most complete data
set, but also the most accurate data set
reflecting paid claims. We also solicited
comments as to whether we should
instead use a single year (CY 2018 or CY
2019) rather than both CYs 2018 and
2019 in our methodology.
(2) Pricing of Calcimimetics—
Methodology
We proposed to set the price for
calcimimetics using values from the
most recent calendar quarter of ASP
calculations available to the public, at
100 percent of ASP (ASP + 0). As we
explained in the CY 2021 ESRD PPS
proposed rule, the ASP-based value is a
CMS-derived weighted average of all of
the National Drug Code (NDC) sales
prices submitted by drug manufacturers
and assigned by CMS to the two existing
HCPCS codes for calcimimetics. For
each billing code, CMS calculates a
weighted average sales price using data
submitted by manufacturers, which
includes the following: ASP data at the
11-digit NDC level, the number of units
of the 11-digit NDC sold and the ASP for
those units. Next, the number of billing
units in an NDC is determined by the
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amount of drug in the package. CMS
uses the following weighting
methodology to determine the payment
limit: (1) Sums the product of the
manufacturer’s ASP and the number of
units of the 11-digit NDC sold for each
NDC assigned to the billing and
payment code; (2) divides this total by
the sum of the product of the number of
units of the 11-digit NDC sold and the
number of billing units in that NDC for
each NDC assigned to the billing and
payment code, and (3) weights the ASP
for an NDC by the number of billing
units sold for that NDC. This calculation
methodology is discussed in the CY
2009 Physician Fee Schedule (PFS) final
rule (73 FR 69752). The general
methodology for determining ASP-based
payments for the PFS is authorized in
section 1847A of the Act.
We noted that ASP-based payment
limits published in the quarterly ASP
Drug Pricing files include a 6 percent
add-on as required in section 1847A of
the Act; however, consistent with the
TDAPA basis of payment for CY 2020,
we proposed to use 100 percent of the
weighted ASP value, in other words,
ASP + 0. In the CY 2020 ESRD PPS final
rule, we noted that the ESRD PPS
accounts for storage and administration
costs and that ESRD facilities do not
have acquisition price variation issues
when compared to physicians. We
explained that we believed ASP + 0 is
reasonable for new renal dialysis drugs
and biological products that fall within
an existing functional category because
there are already dollars in the per
treatment base rate for a new drug’s
respective category. We also explained
that we believed ASP + 0 is a reasonable
basis for payment for the TDAPA for
new renal dialysis drugs and biological
products that do not fall within the
existing functional category because the
ESRD PPS base rate has dollars built in
for administrative complexities and
overhead costs for drugs and biological
products (83 FR 56946).
As stated in the CY 2021 ESRD PPS
proposed rule, we believe using a value
based on the most recent calendar
quarter ASP calculations available to the
public for both oral and injectable
versions of the calcimimetics provides
an accurate representation of the price
of calcimimetics for ESRD facilities
because it uses manufacturer sales
information that includes discounts
(that is, rebates, volume discounts,
prompt payment, cash payment
specified in section 1847A of the Act).
Every calendar quarter, CMS publishes
ASP-based payment limits for certain
Part B drugs and biological products
that are used for payment of such Part
B covered drugs and biological products
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for a specific quarter. The amount that
we proposed to use for the base rate
modifications associated with the oral
and injectable versions of the
calcimimetics is based on the most
recent information on average sales
prices net of discounts specified in
section 1847A submitted by the
manufacturers of each of the drugs.
For the CY 2021 ESRD PPS proposed
rule, values from the most recent
calendar quarter of ASP calculations
available to the public was the second
quarter of 2020,1 and as a result of the
two-quarter data lag this reflects
manufacturer sales data submitted into
CMS for the fourth quarter of 2019. We
stated that for the CY 2021 ESRD PPS
final rule, the most recent calendar
quarter of ASP calculations available to
the public would be the fourth quarter
of 2020, which reflects manufacturer
sales data submitted into CMS for the
second quarter of 2020, and we would
use that value for purposes of our final
calculation.
We proposed to update these prices
by the proposed CY 2021 ESRD PPS
base rate update to reflect the estimated
costs in CY 2021. That is, we would first
add the calculated per treatment
payment amount to the ESRD PPS base
rate to include calcimimetics, and then
we would apply the annual payment
rate update. The proposed calculation
for the addition to the ESRD PPS base
rate is discussed in the following
section.
Therefore, we proposed to add
§ 413.234(f) to specify that CMS would
use 100 percent of the values from the
most recent calendar quarter ASP
calculations available to the public for
the oral and injectable calcimimetic to
calculate a price for each form of the
drug. We solicited comments on the
proposed use of the values from the
most recent calendar quarter ASP + 0
calculations available to the public for
calcimimetics for setting the price and
the proposed language at § 413.234(f).
(3) Calculation of the Addition to the
ESRD PPS Base Rate To Include
Calcimimetics
To calculate the proposed amount for
calcimimetics that would be added to
the ESRD PPS base rate, we applied the
values from the most recent calendar
quarter 2020 ASP + 0 calculations
available to the public for calcimimetics
to CYs 2018 and 2019 calcimimetic
utilization data to calculate the
calcimimetic expenditure amount for
both years. As stated in the proposed
1 https://www.cms.gov/medicare/medicare-part-bdrug-average-sales-price/2020-asp-drug-pricingfiles, April 2020 ASP Pricing File.
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rule and section II.B.1.c.(1) of this final
rule, one unit of J0604 (oral
calcimimetic, cinacalcet) is 1 mg and
one unit of J0606 (injectable
calcimimetic etelcalcetide) is 0.1 mg.
That is, we determined that
1,824,370,957 total units (mg) of oral
calcimimetics were used in CYs 2018
and 2019. With regard to injectable
calcimimetics, we determined that
306,714,207 total units (0.1 mg) were
used in CYs 2018 and 2019. This use
indicates that 33.9 percent of ESRD
beneficiaries received calcimimetics in
CYs 2018 and 2019. For the CY 2021
ESRD PPS proposed rule, we used the
values from the most recent calendar
quarter ASP + 0 calculations available to
the public, which at the time of
rulemaking was the second quarter of
2020. This information can be found on
the ESRD Payment website: https://
www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/ESRDpayment/
ESRD-Transitional-Drug. We used
$0.231 per mg for the oral calcimimetic
and $2.20 per 0.1 mg for the injectable
calcimimetic. The prices per unit
correspond to 1 mg and 0.1 mg for
cinacalcet and etelcalcetide
respectively. (We noted that, for the CY
2021 ESRD PPS final rule, we would
update the ASP + 0 based value on the
most recent calendar quarter
calculations available to the public.)
Multiplying the utilization of the oral
and injectable calcimimetics by their
respective ASP and then adding the
expenditure amount for both forms of
calcimimetics together would be the
total 2-year (CYs 2018 and 2019)
calculated calcimimetic expenditure
amount. That is, for the CY 2021 ESRD
PPS proposed rule, we calculated the
total calcimimetic expenditure amount
of $1,096,200,947. The total number of
paid HD-equivalent dialysis treatments
furnished to Medicare ESRD
beneficiaries in CYs 2018 and 2019 was
90,014,098. This total number of paid
treatments reflects all paid dialysis
treatments regardless of whether a
calcimimetic was furnished. Dividing
the calcimimetic expenditure amount by
the total number of paid HD-equivalent
dialysis treatments provides an average
per treatment payment amount of
$12.18.
We then reduced this amount by 1
percent to account for the outlier policy
under § 413.237 to get a total of $12.06
($12.18 × .99 = $12.06). Under our
proposal, we would apply this 1 percent
reduction before increasing the base rate
to account for outlier payments that
would be paid beginning January 1,
2021 for calcimimetics since they would
become ESRD outlier services eligible
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for outlier payments under § 413.237.
As we discussed in the proposed rule
and section II.B.1.c of this final rule, in
developing the proposed methodology
for including calcimimetics in the ESRD
PPS base rate, we considered the
methodology applied when we
developed the ESRD PPS base rate. In
the CY 2011 ESRD PPS final rule (75 FR
49074 through 49075), we explained the
budget neutrality adjustments applied to
the unadjusted ESRD PPS base rate to
account for statutorily mandated
reductions. Because calcimimetics
would become ESRD outlier services
beginning January 1, 2021, we focused
on the outlier adjustment. That is, in CY
2011 we applied a 1 percent reduction
to the unadjusted ESRD PPS base rate to
account for outlier payments. In order
for the application of the 1 percent
outlier to be maintained, we stated that
we believe the 1 percent must be
excluded from the addition to the ESRD
PPS base rate for calcimimetics.
Then, to determine the estimated
costs in CY 2021 we proposed to inflate
the average per treatment payment
amount for calcimimetics ($12.06) to
2021 using the CY 2021 ESRD PPS base
rate update. As discussed in section
II.B.4.d of the CY 2021 ESRD PPS
proposed rule (85 FR 42164), the
proposed CY 2021 ESRD PPS base rate
was $255.59. This amount reflected a
proposed CY 2021 wage index budgetneutrality adjustment factor of .998652,
a proposed base rate addition of $12.06
to include calcimimetics, and the
proposed CY 2021 ESRD PPS payment
rate update of 1.8 percent. We stated
that using the annual payment rate
update effectively updates the prices set
for calcimimetics from CY 2020 to CY
2021 because this is consistent with
how the other components of the base
rate are updated for inflation each year,
which includes drugs. We noted, that
the inflation factor used for drugs and
biological products for the ESRD
bundled market basket is the Producer
Price Index as discussed in the CY 2019
ESRD PPS final rule (83 FR 56958
through 56959).
Therefore, we proposed to add
§ 413.234(f) to specify that CMS would
multiply the utilization of the oral and
injectable calcimimetics by their
respective prices and add the
expenditure amount for both forms
together to calculate the total
calcimimetic expenditure amount.
Then, CMS would divide the total
calcimimetic expenditure amount by the
total number of paid HD-equivalent
dialysis treatments in CYs 2018 and
2019, to calculate the average pertreatment payment amount. CMS would
reduce the average per-treatment
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payment amount by 1 percent to
account for the outlier policy under
§ 413.237 in order to determine the
amount added to the ESRD PPS base
rate.
We stated in the CY 2021 ESRD PPS
proposed rule that, in keeping with the
principles of a PPS, which include
motivating healthcare providers to
structure cost-effective, efficient patient
care that avoids unnecessary services,
thereby reining in costs, we believe the
cost of the calcimimetics should be
spread across all the dialysis treatments,
rather than be directed only to the
patients receiving the calcimimetics.
We solicited comments on the
proposed revisions to § 413.234 to add
paragraph (f) to § 413.234 to establish
the methodology for modifying the
ESRD PPS base rate to account for
calcimimetics in the ESRD PPS bundled
payment.
As an alternative methodology, we
considered dividing the total Medicare
expenditures for all calcimimetics in
CYs 2018 and 2019 (approximately $2.3
billion) by the total number of paid HDequivalent dialysis treatments furnished
during that same time period. However,
we noted that this approach would not
factor in the impact of oral generic
calcimimetics, which entered the
market from late December 2018
through early January 2019. For
example, under the proposed
methodology, the ASP calculations
incorporate the more recent pricing of
the oral generic calcimimetics into the
weighting which has resulted in a
significant decline in the ASP-based
value. In addition, this alternative
methodology would not reflect our
current policy to base the TDAPA on
ASP + 0, since in CYs 2018 and 2019
we paid for calcimimetics using the
TDAPA at ASP + 6. We stated that we
believe it is more appropriate for the
ESRD PPS base rate to reflect the values
from the most recent calendar quarter of
ASP calculations available since that
aligns with how ESRD facilities would
be purchasing and furnishing the oral
calcimimetics rather than using
expenditure data from previous periods.
We further stated that we believe that
ESRD facilities would want to support
CMS’s goal of lower drug and biological
products prices for its beneficiaries. In
addition, we noted, this alternative
methodology would have a more
significant impact on beneficiary cost
sharing in terms of a higher 20 percent
co-pay than the methodology in the
proposed rule. We solicited comment on
this alternative methodology, which
would entail dividing the total Medicare
expenditures (that is, actual spend) for
all calcimimetics in CYs 2018 and 2019
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by the total number of paid HDequivalent dialysis treatments furnished
during that same time period.
The comments and our responses to
the comments on our proposed
methodology for including
calcimimetics in the ESRD PPS base rate
are set forth below.
Comment: The majority of
commenters recommended that CMS
trim the analysis data set to exclude
data that is not representative of steady
utilization trends. The commenters were
supportive of CMS collecting 2 full
years of data for rate-setting purposes,
but disagreed with the methodology to
incorporate the full data set into the
analysis. Specifically, the commenters
recommended CMS remove CY 2018
claims utilization from the analysis
because it includes early utilization data
from CY 2018, the first year that CMS
began paying for calcimimetics under
the ESRD PPS using the TDAPA.
Commenters described various changes
occurring with regard to calcimimetics,
including changes in prescriber
behavior, facility operational systems,
and the use of oral and IV calcimimetic
products. The commenters asserted that
the following factors make utilization
data from 2018 inaccurate because the
data fails to account for: (1) Slow
adoption of the intravenous form of
calcimimetics due to the change in
payment for the drugs under Part D to
Part B; (2) the time it takes for ESRD
facilities to adopt new treatment
methods; and (3) a recent steady
increase in clinical utilization.
The commenters stated that the first
quarter of 2018 is not an accurate
depiction of utilization because many
beneficiaries had a supply of oral
calcimimetics that was paid under the
Part D benefit from 2017, being used at
the start of 2018, which reduced
utilization under Part B. The
commenters also stated that moving the
payment from Medicare Part D to Part
B disrupted business and billing
practices for ESRD facilities. The
commenters maintained that small and
independent ESRD facilities had a
difficult time incorporating
calcimimetics into clinical practice
compared to larger and hospital-based
facilities. The commenters explained
that ESRD facilities usually need a
longer time to institute system
modifications and adjust business
practices when new treatment methods
become available.
The commenters stated that in the
beginning of 2018 the new intravenous
form of calcimimetics was approved for
treatment, and clinical adoption has
been gradual because it was a new form
of treatment, which is evidenced by
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very low utilization in the early part of
CY 2018 followed by steady growth
throughout the year, as shown in the
Part B claims data. The commenters
stated that, while use of the intravenous
drug increased each quarter in 2018, the
pace of that increase flattened out
during CY 2019.
The commenters stated that due to
these challenges and shifts in
utilization, they believed that claims
data from CY 2018 reflected lower units
of calcimimetics being reported. A few
commenters who disagreed with
including CY 2018 claims in the
analysis, suggested CMS trim the first
and second quarter of 2018 utilization
data from the data set; however, another
subset of commenters recommended
CMS remove the entire year of 2018 data
and use CY 2019 data only, since their
analysis shows that year of data to be
stable. The majority of the commenters
who disagreed with including the CY
2018 data recommended that CMS use
the most recent 12 months for which
complete claims data are available for
rate-setting purposes. In addition, the
commenters asserted that using the most
recent utilization data would align with
the proposed approach to use the most
recent ASP.
MedPAC supported increasing the
ESRD PPS base rate to include the costs
of calcimimetics in the ESRD PPS
bundled payment. However, MedPAC
recommended refinements to CMS’s
proposed methodology to use units
reported on claims from both CYs 2018
and 2019 to determine utilization for
calcimimetics. MedPAC recommended
that CMS use only the single year of
claims data that would result in the
lowest add-on payment amount for
these products. MedPAC stated that this
approach would be consistent with the
methodology used to establish the ESRD
PPS base rate beginning January 1, 2011,
as required under MIPPA, which
provided that the estimated amount of
total payments under the ESRD PPS for
2011 must be made based on the lowest
per patient utilization data from 2007,
2008, or 2009. (Based on CMS’s analysis
in the CY 2011 ESRD PPS final rule,
claims data from CY 2007 reflected the
lowest utilization of ESRD services.)
MedPAC noted the increase of
utilization in ESAs prior to the CY 2011
ESRD PPS final rule and recommended
that our methodology to include
calcimimetics in the base rate be
consistent with the lowest per patient
utilization methodology. Therefore,
MedPAC recommended that CMS use
the year that would result in the lowest
average payment amount per treatment
for calcimimetics.
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Response: We appreciate the feedback
on our proposal and the viewpoints
expressed by the commenters. Based on
the recommendations we received to
use a single year or the most recent 12
months of claims data, we re-examined
the most recently available data. First,
an approach that uses the most recent
12 months of claims data would result
in a base rate increase that is larger than
when both 2018 and 2019 data are used.
Second, using the most recent 12
months of claims data would not
sufficiently capture the developments
with calcimimetics that took place at the
end of 2018. For these reasons, we
believe this is not the better approach.
Next, using only 2019 claims data
would diminish the impact of the entry
of oral generic calcimimetics into the
market in mid-2018. In examining the 2
full years of data, we see a continued
increase in the utilization of the oral
generic calcimimetic drugs, a steep
decline in the brand-name oral
calcimimetic, and a slow increase in the
brand-name injectable version. Using
only CY 2019 claims data would also
result in a base rate increase that is
larger than when both CYs 2018 and
2019 data are used. We recognize the
2018 claims data may have
demonstrated low uptake for the
injectable calcimimetic, but it also may
reflect that the significant upswings in
utilization of the injectable calcimimetic
in 2019 were from ESRD facilities
anticipating CMS ending the TDAPA for
calcimimetics beginning January 2020.
As MedPAC noted, when the ESRD PPS
was implemented in 2011, there had
been a pattern of ESA overutilization
before the ESRD PPS bundled payment
was implemented and a decline in
utilization of ESAs post-implementation
of the ESRD PPS that required a
rebasing of the amount included in the
ESRD PPS bundled payment for ESAs.
We believe it is appropriate to consider
both the slow uptake of the injectable
calcimimetic and the ramping up of
utilization of generic oral calcimimetics,
following the loss of the exclusivity of
the brand name product in addition to
the anticipation of the TDAPA ending in
2019. If we used only CY 2019 data, we
believe that we would be overestimating
the use of calcimimetics in the ESRD
PPS bundled payment. For these
reasons, we also believe using only 2019
claims data for rate setting is not the
better approach.
Lastly, we examined an approach that
would take into account some
commenters’ request for the lowest addon payment amount, other commenters’
request to focus on more recent data,
and CMS’s goal to use a robust data set
that accounts for the different types of
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medication and innovation. For this
approach, we examined 18 months of
claims data starting with the third
quarter of 2018 through the fourth
quarter of 2019. In reviewing the 18
months of data, we continue to capture
the increase in the utilization of the oral
generic calcimimetic drugs and the
decline in the brand-name oral
calcimimetic, which, as we noted above,
was apparent to us when we examined
the full 2 years of data. Using the 18
months of data from the third quarter of
2018 through the fourth quarter of 2019
would result in a base rate increase that
is larger than when both CYs 2018 and
2019 data are used, but smaller than
when only CY 2019 is used. We believe
the data set should reflect both the slow
uptake of the injectable calcimimetic
and the ramping up of utilization of
generic oral calcimimetics. We also
believe that the commenters are
reasonable in wanting to incorporate
more recent data in the utilization, and
view the use of 18 months of data as a
mid-point between the proposal and
what commenters suggested is
appropriate. Accordingly, we have
concluded that using 18 months of
claims data is the most appropriate
approach. We also agree with
commenters that there have been shifts
in the utilization of calcimimetics. We
believe that the shifts in utilization
reveal a rapidly changing market. We
plan to revisit the calcimimetic
Medicare expenditures in the future,
such as when a generic injectable comes
on the market.
We believe using 18 months of claims
data provides us with the most accurate
data set reflecting paid claims for
generic and brand-name oral
calcimimetic, along with the injectable
calcimimetic. Therefore, for this final
rule, we used adjudicated claims from
the third quarter of 2018 through the
fourth quarter of 2019 in the final
calculation of the modification to the
base rate. For the CY 2018 utilization
data for calcimimetics, we used the
latest available claims data based on the
third and fourth quarters of CY 2018
ESRD facility claims, updated through
June 30, 2019 (that is, claims with dates
of service from July 1 through December
31, 2018, that were received, processed,
paid, and passed to the NCH file as of
June 30, 2019). For CY 2019 utilization
data, we used the latest available CY
2019 ESRD facility claims, updated
through June 30, 2020 (that is, claims
with dates of service from January 1
through December 31, 2019, that were
received, processed, paid, and passed to
the NCH file as of June 30, 2020).
Comment: MedPAC recommended
that we set the price for calcimimetics
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using values from the calendar quarter
of ASP data that would result in the
lowest total expenditures for these
drugs, at ASP+0. MedPAC also stated
that using the most recent calendar
quarter of 2020 ASP data would best
reflect the increasing use of oral generic
calcimimetics, which entered the
market in late December 2018, and how
ESRD facilities are likely to purchase
and furnish the oral calcimimetics in
the future. MedPAC recommended this
methodology because it is consistent
with how CMS bases the price for
calcimimetics under current regulations.
MedPAC strongly supported pricing for
calcimimetics under the proposed
methodology at ASP+0.
The majority of the commenters
recommended that CMS calculate the
price using the most recent quarter ASP
data available at ASP+6 because they
believed this would more accurately
reflect the cost ESRD facilities incur
when purchasing and administering
these drugs. Commenters stated that
most small and independent providers
experience less favorable acquisition
costs for calcimimetics than other
provider types, with costs that exceed
100 percent of ASP. The commenters
stated that CMS’s methodology should
account for actual acquisition costs
incurred by providers, especially small
and independent providers with limited
resources, and for these reasons,
recommended that the methodology be
refined to add the price for
calcimimetics at ASP+6 rather than
ASP+0.
Response: We appreciate the feedback
we received from the commenters with
regard to our proposal to base pricing
for calcimimetics at ASP+0. We agree
with MedPAC that ASP+0 is appropriate
as the basis for calcimimetics. Although
some commenters suggested that the
base pricing for calcimimetics should be
ASP + 6, we believe this would be a
duplicative payment because the 6
percent accounts for storage and
administration of drugs and drug
products, along with routine
administrative costs, and these costs are
already included in the ESRD PPS base
rate. We understand the concerns
expressed by the commenters about
ASP, and the difficulties that small
ESRD facilities may encounter if they
are unable to negotiate the lower drug
prices attributed to volume, and
inaccessibility to supply chain
discounts; however, we do not think
this overrides the concern about
providing duplicative payment. As we
discussed in the CY 2019 ESRD PPS
final rule (83 FR 56945), the intent of
the TDAPA is to support ESRD facilities
in the uptake of the drugs and biological
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products that are eligible for the add-on
payment adjustment. In addition to the
reasons discussed previously, and since
our payment policy for the TDAPA is
based on ASP+0, we believe basing the
price for calcimimetics in the ESRD PPS
base rate on ASP+0 is appropriate and
consistent with our policy; therefore we
are finalizing as proposed.
Comment: A few commenters
recommended CMS create a
methodology for a beneficiary-targeted
add-on payment to the ESRD PPS base
rate. The commenters recommended a
targeted adjustment for the oral
calcimimetic and a separate adjustment
for the intravenous calcimimetic, given
that only a subset of beneficiaries
receive calcimimetics and the costs of
calcimimetics would be targeted to only
beneficiaries receiving the drug.
MedPAC agreed with our proposal to
spread the cost of calcimimetics across
all dialysis treatments, rather than just
for the treatments of beneficiaries
receiving the drugs.
Response: The ESRD PPS is a
payment system based on the ‘‘average
patient,’’ which means it is based on the
costs of the average patient. Currently,
payment under the ESRD PPS is not
targeted towards patients who utilize
specific drugs, items, or services. Our
proposed methodology would result in
a flat increase to the base rate for all
treatments and would not vary when
facilities use more or less than the
average amount. We believe the
proposed methodology aligns with how
other services are paid under the
bundled payment system and reflects
the average cost for furnishing renal
dialysis services to patients. Therefore,
we are finalizing this aspect of our
proposal as proposed.
Comment: A few commenters
disagreed with the proposed
methodology to reduce the average pertreatment payment amount by 1 percent.
The commenters stated that it would be
harder for ESRD facilities to meet the
eligibility requirements for outlier
payments in CY 2021 and beyond.
Response: Beginning January 1, 2021,
calcimimetics are eligible for outlier
payments. In the CY 2011 ESRD PPS
final rule, we applied a 1 percent
reduction to the unadjusted ESRD PPS
base rate to account for outlier
payments. An ESRD facility that treats
beneficiaries with unusually high
resource requirements, as measured by
their use of identified services beyond a
specified threshold, is entitled to outlier
payments. In order for the application of
the 1 percent outlier to be maintained,
we believe 1 percent must be excluded
from the addition to the ESRD PPS base
rate for calcimimetics. We continue to
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believe that a 1 percent outlier payment
adjustment balances the need to pay for
unusually costly resource-intensive
cases, while also ensuring an adequate
add-on to the base rate for beneficiaries
who do not qualify for outlier payments.
Therefore, we are finalizing this aspect
of our proposal as proposed.
Comment: Some commenters stated
that CMS should not use the alternative
method discussed in the CY 2021 ESRD
PPS proposed rule, under which total
calcimimetic expenditures would be
divided by the total number of HDequivalent dialysis treatments in 2018
and 2019. The commenters stated that
the alternative method expenditures for
calcimimetics is based upon the
previous policy of paying ASP+6
percent and does not reflect ASP+0. The
commenters stated that the alternative
method would likely result in a much
higher increase to the base rate, which
in turn would result in higher costsharing for beneficiaries. The
commenters agreed that the alternative
method does not factor in the impact of
the oral generic calcimimetics, whereas
the proposed methodology incorporates
the recent pricing of oral generic
calcimimetics into the weighting.
Response: We agree with the
commenters’ assessment of the
alternative methodology, that it does not
factor in the impact of oral generic
calcimimetics and does not reflect
ASP+0, and we are not adopting it in
this final rule. We continue to believe
that it is more appropriate for the ESRD
PPS base rate to reflect the values from
the most recent calendar quarter of ASP
calculations available, since that aligns
with how ESRD facilities would be
purchasing and furnishing the oral
calcimimetics, rather than using
expenditure data from previous periods.
Further, including the higher payment
for oral calcimimetics that have lower
priced generic equivalents is not in
keeping with the agency’s overall goals
of lowering drug prices.
Comment: We received several
comments that were beyond the scope
of the proposed rule. Some commenters
stated that CMS should apply the 3-year
data collection policy to all TDAPAeligible therapies in the future because
it is critical for CMS to have 2-full
calendar years of claims data (which
requires 3 years of payment of the
TDAPA to address data lags) to enable
an appropriate understanding of actual
product utilization in clinical care.
Response: Currently, the TDAPA
payment is applicable for a minimum
period of 2 years. For new drugs and
biological products that are eligible for
the TDAPA in the future and are not
considered included in the ESRD PPS
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base rate, CMS will continue to require
that the TDAPA is paid until sufficient
claims data for rate setting analysis is
available, as required by the regulations.
When a new renal dialysis drug or
biological product is already included
in a functional category, then the
purpose of the TDAPA is to facilitate
uptake of the new product into the
business process of the ESRD facility.
Although we would collect the data for
purposes of analyzing utilization, we
would not collect it for purposes of a
potential modification to the base rate.
Therefore we would not need 3 years of
data for those drugs.
Comment: Some commenters stated
concerns with the payment increase to
the patient’s out-of-pocket cost due to
the proposed increase to the ESRD PPS
bundled payment for calcimimetics, and
recommended CMS keep the financial
burden to the beneficiary population in
consideration.
Response: We understand that
beneficiary coinsurance is a concern.
When evaluating the methodology for
modifying the ESRD PPS base rate for
calcimimetics, we were cognizant of the
burden of beneficiary co-insurance and
worked to strike a balance with
beneficiary need for access at a
reasonable price, and supporting a new
therapy for a significant portion of the
dialysis population. We believe the final
policy for the inclusion of dollars in the
base rate strikes the balance we are
seeking.
Final Rule Action: After consideration
of the comments we received, we are
finalizing § 413.234 to add paragraph (f),
which establishes the methodology for
modifying the ESRD PPS base rate to
account for calcimimetics in the ESRD
PPS bundled payment, as proposed,
with one modification. We are using
claims data from the third quarter of CY
2018 through the fourth quarter of CY
2019, instead of CYs 2018 and 2019
claims data, to determine the utilization
of calcimimetics for purposes of our
methodology.
Specifically, to calculate the final
amount for calcimimetics to be added to
the ESRD PPS base rate beginning
January 1, 2021, we applied the values
from the most recent calendar quarter
2020 ASP + 0 calculations available to
the public for calcimimetics to the
utilization period of third quarter of
2018 through the fourth quarter of 2019
to calculate the calcimimetic
expenditure amount for 18 months.
We determined that 1,350,414,515
total units (mg) of oral calcimimetics
were used from Q3 2018 through Q4
2019. With regard to injectable
calcimimetics, we determined that
280,998,916 total units (0.1 mg) were
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used from Q3 2018 through Q4 2019.
We used the values from the most recent
calendar quarter ASP + 0 calculations
available to the public, which is the
fourth quarter of 2020. We used $0.085
per mg for the oral calcimimetic and
$2.023 per 0.1 mg for the injectable
calcimimetic. The prices per unit
correspond to 1 mg and 0.1 mg for
cinacalcet and etelcalcetide,
respectively. Multiplying the utilization
of the oral and injectable calcimimetics
by their respective ASP and then adding
the expenditure amount for both forms
of calcimimetics together results in the
total 18-months (Q3 2018 through Q4
2019) calculated calcimimetic
expenditure amount. That is, for this
final rule, we calculated the total
calcimimetic expenditure amount to be
$683,246,041.
The total number of paid HDequivalent dialysis treatments furnished
to Medicare ESRD beneficiaries from the
third quarter of CY 2018 through the
fourth quarter of CY 2019 was
68,148,651. This total number of paid
treatments reflects all paid dialysis
treatments regardless of whether a
calcimimetic was furnished. Dividing
the calcimimetic expenditure amount by
the total number of paid HD-equivalent
dialysis treatments provides an average
per treatment payment amount of
$10.03. We then reduced this amount by
1 percent to account for the outlier
policy under § 413.237 to get a total of
$9.93 ($10.03 × .99 = $9.93). Due to the
effect of generic calcimimetics in
lowering the drug prices for
calcimimetics, $9.93 is the final amount
added to the CY 2021 ESRD PPS base
rate to account for calcimimetics in the
ESRD PPS bundled payment.
2. Changes to the TPNIES Eligibility
Criteria
a. Background
In the CY 2020 ESRD PPS final rule
(84 FR 60681 through 60698), CMS
established a transitional add-on
payment adjustment for certain new and
innovative renal dialysis equipment and
supplies under the ESRD PPS, under the
authority of section 1881(b)(14)(D)(iv) of
the Act, in order to support ESRD
facility use and beneficiary access to
these new technologies. We established
this payment adjustment to help address
the unique circumstances experienced
by ESRD facilities when incorporating
new and innovative equipment and
supplies into their businesses and to
support ESRD facilities transitioning or
testing these products during the period
when they are new to market. We added
§ 413.236 to establish the eligibility
criteria and payment policies for the
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transitional add-on payment adjustment
for new and innovative renal dialysis
equipment and supplies, which we call
the TPNIES.
We established in § 413.236(b) that for
dates of service occurring on or after
January 1, 2020, CMS will provide the
TPNIES to an ESRD facility for
furnishing a covered equipment or
supply only if the item: (1) Has been
designated by CMS as a renal dialysis
service under § 413.171, (2) is new,
meaning it is granted marketing
authorization by FDA on or after
January 1, 2020, (3) is commercially
available by January 1 of the particular
calendar year, meaning the year in
which the payment adjustment would
take effect, (4) has a HCPCS application
submitted in accordance with the
official Level II HCPCS coding
procedures by September 1 of the
particular calendar year, (5) is
innovative, meaning it meets the criteria
specified in § 412.87(b)(1) and related
guidance, and (6) is not a capital-related
asset that an ESRD facility has an
economic interest in through ownership
(regardless of the manner in which it
was acquired).
Regarding the innovation requirement
in § 413.236(b)(5), in the CY 2020 ESRD
PPS final rule (84 FR 60690), we stated
that CMS will use the following criteria
to evaluate substantial clinical
improvement (SCI) for purposes of the
TPNIES under the ESRD PPS, based on
the inpatient hospital prospective
payment system (IPPS) SCI criteria in
§ 412.87(b)(1) and related guidance.
Section 412.87(b)(1) includes the
criteria used under the IPPS new
technology add-on payment (NTAP) to
determine whether a new technology
represents an advance that substantially
improves, relative to renal dialysis
services previously available, the
diagnosis or treatment of Medicare
beneficiaries.
The totality of the circumstances is
considered when making a
determination that a new renal dialysis
equipment or supply represents an
advance that substantially improves,
relative to renal dialysis services
previously available, the diagnosis or
treatment of Medicare beneficiaries.
A determination that a new renal
dialysis equipment or supply represents
an advance that substantially improves,
relative to renal dialysis services
previously available, the diagnosis or
treatment of Medicare beneficiaries
means one of the following:
• The new renal dialysis equipment
or supply offers a treatment option for
a patient population unresponsive to, or
ineligible for, currently available
treatments; or
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• The new renal dialysis equipment
or supply offers the ability to diagnose
a medical condition in a patient
population where that medical
condition is currently undetectable, or
offers the ability to diagnose a medical
condition earlier in a patient population
than allowed by currently available
methods, and there must also be
evidence that use of the new renal
dialysis service to make a diagnosis
affects the management of the patient; or
• The use of the new renal dialysis
equipment or supply significantly
improves clinical outcomes relative to
renal dialysis services previously
available as demonstrated by one or
more of the following: (1) A reduction
in at least one clinically significant
adverse event, including a reduction in
mortality or a clinically significant
complication; (2) a decreased rate of at
least one subsequent diagnostic or
therapeutic intervention; (3) a decreased
number of future hospitalizations or
physician visits; (4) a more rapid
beneficial resolution of the disease
process treatment including, but not
limited to, a reduced length of stay or
recovery time; (5) an improvement in
one or more activities of daily living; (6)
an improved quality of life; or (7) a
demonstrated greater medication
adherence or compliance; or,
• The totality of the circumstances
otherwise demonstrates that the new
renal dialysis equipment or supply
substantially improves, relative to renal
dialysis services previously available,
the diagnosis or treatment of Medicare
beneficiaries.
Evidence from the following
published or unpublished information
sources from within the United States
(U.S.) or elsewhere may be sufficient to
establish that a new renal dialysis
equipment or supply represents an
advance that substantially improves,
relative to renal dialysis services
previously available, the diagnosis or
treatment of Medicare beneficiaries:
Clinical trials, peer reviewed journal
articles; study results; meta-analyses;
consensus statements; white papers;
patient surveys; case studies; reports;
systematic literature reviews; letters
from major healthcare associations;
editorials and letters to the editor; and
public comments. Other appropriate
information sources may be considered.
The medical condition diagnosed or
treated by the new renal dialysis
equipment or supply may have a low
prevalence among Medicare
beneficiaries.
The new renal dialysis equipment or
supply may represent an advance that
substantially improves, relative to renal
dialysis services previously available,
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the diagnosis or treatment of a
subpopulation of patients with the
medical condition diagnosed or treated
by the new renal dialysis equipment or
supply.
We also established a process
modeled after IPPS’s process of
determining if a new medical service or
technology meets the SCI criteria
specified in § 412.87(b)(1). Specifically,
similar to the IPPS NTAP, we wanted to
align our goals with the agency’s efforts
to transform the healthcare delivery
system for the ESRD beneficiary through
competition and innovation to provide
patients with better value and results.
As we discuss in the CY 2020 ESRD PPS
final rule (84 FR 60682), we believe it
is appropriate to facilitate access to new
and innovative equipment and supplies
through add-on payments similar to the
IPPS NTAP program and to provide
innovators with standard criteria for
both inpatient and outpatient settings.
In § 413.236(c), we established a process
for our announcement of TPNIES
determinations and a deadline for
consideration of new renal dialysis
equipment or supply applications under
the ESRD PPS. CMS will consider
whether a new renal dialysis equipment
or supply meets the eligibility criteria
specified in § 413.236(b) and summarize
the applications received in the annual
ESRD PPS proposed rules. Then, after
consideration of public comments, we
will announce the results in the Federal
Register as part of our annual updates
and changes to the ESRD PPS in the
ESRD PPS final rule. The TPNIES
applications for CY 2021 were discussed
in section II.C.2 of the CY 2021 ESRD
PPS proposed rule as well as section
II.C.2 of this final rule. CMS will only
consider a complete application
received by CMS by February 1 prior to
the particular calendar year, meaning
the year in which the payment
adjustment would take effect, and FDA
marketing authorization for the
equipment or supply must occur by
September 1 prior to the particular
calendar year. We stated in the CY 2020
ESRD PPS final rule (80 FR 60690) that
we would establish a workgroup of CMS
medical and other staff to review the
studies and papers submitted as part of
the TPNIES application, the public
comments we receive, and the FDA
marketing authorization and HCPCS
application information and assess the
extent to which the product provides
SCI over current technologies.
We established § 413.236(d) to
provide a payment adjustment for a new
and innovative renal dialysis equipment
or supply. Section 413.236(d)(1) states
that the TPNIES is paid for 2-calendar
years. Section 413.236(d)(2) provides
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71411
that, following payment of the TPNIES,
the ESRD PPS base rate will not be
modified and the new and innovative
renal dialysis equipment or supply will
become an eligible outlier service as
provided in § 413.237.
Under § 413.236(e)(1), the Medicare
Administrative Contractors (MACs), on
behalf of CMS, will establish prices for
the new and innovative renal dialysis
equipment and supplies that meet the
eligibility criteria specified in
§ 413.236(b) using verifiable information
from the following sources of
information, if available: (1) The invoice
amount, facility charges for the item,
discounts, allowances, and rebates; (2)
the price established for the item by
other MACs and the sources of
information used to establish that price;
(3) payment amounts determined by
other payers and the information used
to establish those payment amounts;
and (4) charges and payment amounts
required for other equipment and
supplies that may be comparable or
otherwise relevant.
b. Changes to Eligibility for the TPNIES
Currently, in § 413.236(b)(2), one
eligibility requirement for the TPNIES is
that an equipment or supply must be
new, meaning it is granted marketing
authorization by FDA on or after
January 1, 2020. In establishing this
requirement, we tied what is considered
new to January 1, 2020, the effective
date of the TPNIES policy. We
explained in the CY 2020 ESRD PPS
final rule (84 FR 60685) that by
including FDA marketing authorizations
on or after January 1, 2020, we intended
to support ESRD facility use and
beneficiary access to the latest
technological improvements to renal
dialysis equipment and supplies. As we
stated in the CY 2021 ESRD PPS
proposed rule, while we continue to
believe it is appropriate to tie the
newness requirement to the date of the
FDA marketing authorization for the
reasons discussed in the CY 2020 ESRD
PPS final rule, we do not believe
newness should be tied to the effective
date of the TPNIES policy going
forward, for the reasons discussed
below. In addition, we believe this
eligibility criterion should address
when an equipment or supply is no
longer considered new. Under the
current requirement at § 413.236(b)(2),
we could receive an application for the
TPNIES for equipment and supplies
many years after FDA marketing
authorization, when the equipment is
no longer new.
In the CY 2020 ESRD PPS proposed
rule (84 FR 38353), while we proposed
to define new renal dialysis equipment
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and supplies as those that are granted
marketing authorization by FDA on or
after January 1, 2020, we also solicited
comment on whether a different FDA
marketing authorization date, for
example, on or after January 1, 2019,
might be appropriate. We explained in
the CY 2020 ESRD PPS final rule (84 FR
60688 through 60689) that while some
commenters expressed support for the
proposed definition, most of the
comments were focused on the merits of
establishing a date for newness that
precedes the effective date of the
TPNIES policy and whether all renal
dialysis equipment and supplies must
seek FDA marketing authorization.
None of the comments addressed
whether tying TPNIES eligibility to the
TPNIES policy effective date or any
fixed date would limit the TPNIES to
new and innovative equipment and
supplies.
After careful consideration of these
comments, in the CY 2020 ESRD PPS
final rule, we finalized the proposed
definition of new to mean the renal
dialysis equipment or supply was
granted marketing authorization by FDA
on or after January 1, 2020. We stated
that while we appreciated that
manufacturers of renal dialysis
equipment and supplies that were
granted FDA marketing authorization in
prior years would want these products
to be eligible for the TPNIES, our goal
is not to provide a payment adjustment
for all the products that have received
FDA marketing authorization or for
products that have had limited market
uptake, but rather to establish an addon payment adjustment for certain new
and innovative products in order to
support uptake by ESRD facilities of
new and innovative renal dialysis
equipment and supplies. In addition, we
stated in the CY 2020 ESRD PPS final
rule that we appreciated the complex
issues the commenters raised if we were
to select an earlier FDA marketing
authorization date, and believed our
approach will avoid the need to address
those issues. We noted that the ESRD
PPS is a prospective payment system, in
which changes are generally made
prospectively, including eligibility
requirements for add-on payment
adjustments. In addition, we noted that
this FDA marketing authorization date
of January 1, 2020 or later is consistent
with the TDAPA’s definition of a new
renal dialysis drug or biological
product.
As we stated in the CY 2021 ESRD
PPS proposed rule (85 FR 42142
through 42143), we no longer believe an
item should be considered new, based
on the TPNIES policy effective date of
January 1, 2020. Rather, we believe that
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it is important for the TPNIES policy to
provide a window of time when a new
renal dialysis equipment or supply is
considered new to provide transparency
to potential applicants. We noted that,
under the proposal, the TPNIES policy
would still be effective as of January 1,
2020 and therefore no equipment or
supply receiving FDA marketing
authorization before January 1, 2020
would be eligible for the TPNIES.
However, we proposed to revise
§ 413.236(b)(2) to remove ‘‘on or after
January 1, 2020’’ and to reflect the
definition of new to mean, within 3
years beginning on the date of FDA
marketing authorization. By defining
new in this manner, we would be giving
entities wishing to apply for the TPNIES
for their equipment or supply 3 years
beginning on the date of FDA marketing
authorization in which to submit their
applications, while still limiting
eligibility for the TPNIES to new
technologies. We proposed a 3-year
newness window to be consistent with
the timeframes under the IPPS NTAP
requirements in § 412.87(b)(2). Under
the NTAP, new technologies are
considered to be new for 2 to 3 years
after the point at which data begin to
become available reflecting the inpatient
hospital code assigned to the new
service or technology. We noted that
under the hospital outpatient PPS the
pass-through payment application for a
medical device must also be submitted
within 3 years from the date of the
initial FDA approval or clearance, if
required, unless there is a documented,
verifiable delay in U.S. market
availability after FDA approval or
clearance is granted, in which case CMS
will consider the pass-through payment
application if it is submitted within 3
years from the date of market
availability.
In addition, we proposed to revise
§ 413.236(b) to remove ‘‘For dates of
service occurring on or after January 1,
2020’’ and to revise § 413.236(a) to
reflect the January 1, 2020 effective date
of the TPNIES policy finalized in the CY
2020 ESRD PPS final rule. We also
proposed other revisions to this
paragraph, which are discussed in
section II.B.3.b.(1) of this final rule.
We sought comment on our proposal
to define new for purposes of the
TPNIES eligibility as within 3 years
beginning on the date of FDA marketing
authorization. In addition, we stated
that we understood there may be
situations in which a manufacturer has
FDA marketing authorization for an
item, but the process of manufacturing
the item has been delayed, for example,
by a PHE, such as the current COVID–
19 pandemic. Therefore, we also sought
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comment on the number of years for an
item to be considered new, or if
newness should be based on different
criteria such as the later of marketing
availability or the date of FDA
marketing authorization.
Currently, § 413.236(b)(4) requires
applicants for the TPNIES to have a
HCPCS application submitted in
accordance with the official Level II
HCPCS coding procedures by September
1 of the particular calendar year. Section
413.236(c) currently requires applicants
for TPNIES to have the FDA marketing
authorization for the equipment or
supply by September 1 prior to the
particular calendar year.
After publication of the CY 2020
ESRD PPS final rule, CMS updated its
HCPCS Level II coding procedures to
enable shorter and more frequent
HCPCS code application cycles.
Beginning in January 2020, CMS
implemented quarterly HCPCS code
application opportunities for drugs and
biological products, and biannual
application opportunities for durable
medical equipment, prosthetics,
orthotics, and supplies (DMEPOS) and
other non-drug, non-biological items
and services.
As the Administrator of CMS
announced 2 in May 2019, this change is
part of CMS’ broader, comprehensive
initiative to foster innovation and
expedite adoption of and patient access
to new medical technologies. CMS’
delivery on this important goal
necessitated procedural changes that
balance the need to code more
frequently with the amount of time
necessary to accurately process
applications. CMS has released two
documents with detailed information on
the updated HCPCS Level II coding
procedures, application instructions,
and deadlines for 2020. Both
documents, HCPCS Level II Coding
Procedures 3, and HCPCS Level II Code
Modification Application Instructions
for the 2020 Coding Cycle 4 are available
on the CMS website. Under the new
guidance, coding cycles for DMEPOS
items and services will occur no less
frequently than biannually. For 2020,
the deadline for HCPCS Level II code
applications for biannual Coding Cycle
1 for DMEPOS items and services was
January 6, 2020 with issuance of final
code decisions occurring July 2020.
2 https://www.cms.gov/newsroom/press-releases/
cms-outlines-comprehensive-strategy-fosterinnovation-transformative-medical-technologies.
3 https://www.cms.gov/Medicare/Coding/
MedHCPCSGenInfo/Downloads/2018-11-30HCPCS-Level2-Coding-Procedure.pdf.
4 https://www.cms.gov/Medicare/Coding/
MedHCPCSGenInfo/Downloads/2020-HCPCSApplication-and-Instructions.pdf.
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These final code decisions are effective
October 1, 2020. For biannual Coding
Cycle 2, the code application deadline
for DMEPOS items and services is June
29, 2020 with issuance of final code
decisions occurring January 2021 or
earlier. These final code decisions are
effective April 1, 2021. These dates are
specific for 2020 and may change
annually. Specific dates for biannual
Coding Cycles 1 and 2 for future years
will be published on the HCPCS website
annually.
Under the new biannual Coding Cycle
2 for DMEPOS items and services, in
order to obtain a final HCPCS Level II
code decision by January 1, 2021, the
applicant must have submitted a
complete HCPCS Level II code
application along with the FDA
marketing authorization documentation
to CMS by June 29, 2020. In light of the
change to biannual coding cycles, we
stated in the CY 2021 ESRD PPS
proposed rule that we reassessed the
TPNIES eligibility criterion in
§ 413.236(b)(4), which is related to
submission of the HCPCS Level II code
application as well as § 413.236(c),
which discusses the deadlines for
consideration of new renal dialysis
equipment or supply applications and
found that they conflict with the current
HCPCS Level II coding guidelines.
Because our HCPCS Level II coding
guidelines require that applicants
submit complete code applications for
DMEPOS items and services to CMS by
the deadline for biannual Coding Cycle
2 as specified in the HCPCS Level II
coding guidance on the CMS website in
order for a final HCPCS Level II code
decision to be made by the following
January 1 and require that
documentation of FDA marketing
authorization be submitted by the
applicant to CMS by the HCPCS Level
II code application deadline, we
proposed to align the TPNIES regulation
at § 413.236(b)(4) and (c) with these
guidelines. We stated in the CY 2021
ESRD PPS proposed rule (85 FR 42144)
that we believe this alignment would
provide consistency across CMS
processes and transparency on
deadlines for applicants for the TPNIES.
We further stated that in the event of a
delay in the final HCPCS Level II coding
decision, a miscellaneous code will be
used in the interim until a final coding
decision is made.
We also proposed to correct a
technical error in § 413.236(b)(4), which
requires the HCPCS application to be
submitted by September 1 ‘‘of’’ the
particular calendar year, meaning the
year in which the payment adjustment
would take effect. As we explained in
the CY 2021 ESRD PPS proposed rule
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(85 FR 42144), in accordance with the
TPNIES policy, we would need to have
the HCPCS application submitted ‘‘prior
to’’ the particular calendar year to be
able to make a determination of TPNIES
eligibility for payment to occur in the
particular calendar year.
Therefore, we proposed to revise
§ 413.236(b)(4) to add the word
‘‘complete’’ and to replace ‘‘September
1’’ with ‘‘the HCPCS Level II code
application deadline for biannual
Coding Cycle 2 for DMEPOS items and
services as specified in the HCPCS Level
II coding guidance on the CMS
website,’’ and replace the word ‘‘of’’
with ‘‘prior to’’ to reflect that the HCPCS
code application for biannual Coding
Cycle 2 must be complete and submitted
as specified in the HCPCS Level II
coding guidance on the CMS website
prior to the particular calendar year. We
explained in the CY 2021 ESRD PPS
proposed rule that this HCPCS
application submission deadline for a
HCPCS Level II code application may
result in a final HCPCS code
determination by January 1, when the
TPNIES payment would begin. We
noted that, for 2020 biannual Coding
Cycle 2, final decisions on HCPCS Level
II codes issued by January 1, 2021 are
not effective until April 1, 2021. For this
reason, during this interim period, we
proposed to use a miscellaneous HCPCS
code to provide the TPNIES payment.
We stated that in the event of a delay
in the final HCPCS Level II coding
decision, a miscellaneous code will be
used in the interim until the later
effective date. In addition, we proposed
a technical change to § 413.236(b)(4) to
be consistent with how CMS references
the HCPCS Level II coding procedures.
That is, we proposed to revise
§ 413.236(b)(4) from ‘‘official Level II
HCPCS coding procedures’’ to ‘‘HCPCS
Level II coding procedures on the CMS
website’’.
In addition, we proposed to revise
§ 413.236(c) to replace ‘‘September 1’’
with ‘‘the HCPCS Level II code
application deadline for biannual
Coding Cycle 2 for DMEPOS items and
services as specified in the HCPCS Level
II coding guidance on the CMS website’’
to reflect that FDA marketing
authorization for the new and
innovative equipment or supply must
accompany the HCPCS application prior
to the particular calendar year in order
for the item to qualify for the TPNIES in
the next calendar year. Although
applicants for the TPNIES may submit
a TPNIES application while the
equipment or supply is undergoing the
FDA marketing authorization process
(since the deadline for the TPNIES
application is February 1), under our
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proposal, FDA marketing authorization
of the equipment or supply must be
granted prior to the HCPCS Level II code
application deadline. If FDA marketing
authorization is not granted prior to the
HCPCS Level II code application
deadline, the TPNIES application would
be denied and the applicant would need
to reapply and submit an updated
application by February 1 of the
following year or within 3 years
beginning on the date of FDA marketing
authorization, in accordance with the
proposed revisions to § 413.236(b)(2)
discussed previously in this final rule.
Currently, § 413.236(b)(5) requires
that the new equipment or supply be
innovative, meaning it meets the criteria
specified in § 412.87(b)(1) of this
chapter and related guidance. As
discussed previously in the CY 2021
ESRD PPS proposed rule and this final
rule, § 412.87(b)(1) includes the criteria
used under the IPPS NTAP to determine
whether a new technology represents an
advance that substantially improves,
relative to technologies previously
available, the diagnosis or treatment of
Medicare beneficiaries. In
§ 413.236(b)(5) we adopted the same SCI
criteria to determine if a new renal
dialysis equipment or supply is
innovative for purposes of the TPNIES
under the ESRD PPS. We also stated in
the CY 2020 ESRD PPS final rule (84 FR
60690) our intention to adopt any future
modifications to the IPPS SCI criteria so
that innovators would have standard
criteria to meet for both settings. While
we adopted the IPPS SCI criteria under
§ 412.87(b)(1), we did not adopt the
alternative pathway for breakthrough
devices (84 FR 42296) under the ESRD
PPS.
In the fiscal year (FY) 2020 IPPS final
rule (84 FR 42180 through 42181), CMS
codified additional SCI criteria that had
been included in manuals and other
sub-regulatory guidance. In accordance
with the reference to § 412.87(b)(1), we
adopted the FY 2020 IPPS changes to
the SCI criteria, and any future changes
to the SCI criteria, by reference, unless
and until we make any changes to the
criteria through notice-and-comment
rulemaking. Although the codification
of the related guidance for the IPPS SCI
occurred prior to the publication of the
CY 2020 ESRD PPS final rule, we
inadvertently included a reference to
related guidance in § 413.236(b)(5).
Therefore, we proposed to revise
§ 413.236(b)(5) to remove ‘‘and related
guidance’’ to reflect that all related SCI
guidance has now been incorporated
into § 412.87(b)(1).
The comments and our responses to
the comments on our proposed changes
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to the eligibility criteria for the TPNIES
are set forth below.
Comment: Several national
associations of dialysis stakeholders,
including organizations representing
large dialysis organizations (LDO) and
non-profit facilities, expressed support
for the proposal to change the current
definition of ‘‘new’’ to give entities
wishing to apply for the TPNIES 3 years
beginning on the date of FDA marketing
authorization in which to submit their
applications. An LDO requested that
CMS monitor this window to ensure
that 3 years is sufficient to allow
manufacturers time to gather highquality evidence of SCI for their
technologies. However, a software
company that developed a renal product
that has demonstrated SCI, but was
approved by the FDA almost 7 years
ago, commented that 3 years is not long
enough for its product to qualify for
TPNIES consideration. The software
company asked CMS to consider a
longer period of eligibility for the
TPNIES primarily because the dialysis
industry is slow to uptake innovations.
The company suggested that CMS could
extend the window selectively if the
applicant can show that an innovative
technology has no other FDA-authorized
counterpart with similar technology.
The software company asserted that by
lengthening the period of eligibility for
the TPNIES program, with added
criteria to maintain a high level of
selectivity, CMS would allow that
company and other worthy innovators
to receive the TPNIES. The company
asked that CMS consider making
changes to the eligibility criteria for
TPNIES that will open up the potential
for providers to receive reimbursement
for the use of technologies that can still
be proven to be innovative and
demonstrate SCI even though their FDA
authorization is beyond the 3-year
period.
Response: We appreciate the
commenters’ support for the proposal
and want to point out that TPNIES
applicants may submit an application
while the equipment or supply is
pending marketing authorization by the
FDA, however, FDA marketing
authorization must be submitted with
the HCPCS application. We believe that
3 years is sufficient time for
manufacturers to gather high-quality
evidence of SCI for their product and
establish their manufacturing,
marketing, and distribution strategies.
This is consistent with the period of
time during which qualifying items and
services under the Hospital Inpatient
Prospective Payment System NTAP are
considered new. We intend to monitor
the process to ensure we provide the
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TPNIES to new and innovative renal
dialysis equipment and supplies.
Regarding the suggestion that CMS
extend the window of TPNIES eligibility
if the applicant can show an innovative
technology has no other FDA-authorized
counterpart with similar technology, we
thank the commenter for this input. We
did not propose this policy in the CY
2021 ESRD PPS proposed rule, but will
take this into consideration for future
rulemaking.
Comment: Several national
associations of dialysis stakeholders,
including organizations representing
LDOs and non-profit facilities,
expressed support for the proposal to
align the TPNIES with the new biannual
Coding Cycle 2 application deadline as
specified in the HCPCS Level II coding
guidance on the CMS website. One
commenter pointed out the alignment of
the TPNIES and HCPCS processes can
promote developer and manufacturer
confidence by enabling them to better
navigate multiple processes,
specifically, marketing authorization at
the FDA and HCPCS coding at CMS,
both critical to bringing a product to
market.
Response: We appreciate the support
for the proposal.
Comment: We did not receive
comments on the proposed technical
change to § 413.236(b)(5) to remove
‘‘and related guidance’’ to reflect that all
related SCI guidance has been
incorporated into § 412.87(b)(1).
However, several commenters expressed
their views about the SCI criteria. While
most commenters expressed support for
the use of the SCI criteria to target the
increase in Medicare payments and
beneficiary coinsurance to clinically
meaningful and innovative items, others
stated that the criteria are overly
restrictive. One commenter stated that
some of the SCI criteria do not seem
relevant to home dialysis machines and
suggested that the user-friendly nature
of these devices should be considered in
the SCI criteria. Several commenters
requested that CMS establish a two-way
process for the review of evidence for
TPNIES applicants that allows for rapid
patient access to new and innovative
products and that CMS provide
reasonable and clear parameters in
discussions with applicants on the types
of evidence and studies technical expert
panel reviewers want to see.
Several organizations recommended
that the TPNIES process follow the
NTAP program and exempt home
dialysis devices classified as
‘‘breakthrough’’ by the FDA from the
SCI requirement for the two-year
TPNIES period. One association
asserted that requiring these devices to
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navigate approval processes in both the
FDA and CMS creates another
disincentive to parties entering the
kidney care arena.
Another commenter stated that
evaluation of home dialysis machines is
not the same as evaluation of
medications by the FDA where the
evidence of efficacy and safety can be
readily attributed to medication
exposure. The commenter noted that, in
evaluating home dialysis machines,
clinical outcomes cannot be so readily
attributed to the machine itself because
the effect of a home dialysis
prescription is a complex function of
three factors: The technical
specifications of the machine; the
dialysis prescription; and how patients
and care partners interact with the
machine. The commenter disagreed
with an exclusive focus on clinical
outcomes in evaluating TPNIES
applications and suggested an approach
that involves evaluation of whether the
home dialysis machine improves access
to home dialysis, the length of home
dialysis, and clinical outcomes.
Response: We note that the SCI
criteria were put into regulation with
the establishment of the TPNIES in the
CY 2020 ESRD PPS final rule. We did
not propose changes to § 413.236(b)(5)
beyond the technical change described
previously or to the SCI criteria in
§ 412.87(b)(1). We note that, as we
stated in the CY 2020 ESRD PPS final
rule (84 FR 60691), since renal dialysis
services are routinely furnished to
hospital inpatients and outpatients, we
believe the same SCI criteria should be
used to assess whether a new renal
dialysis equipment or supply warrants
additional payment under the ESRD
PPS. However, we appreciate the
information provided by the
commenters and will take the comments
regarding SCI criteria for the TPNIES
into consideration in future rulemaking.
Final Rule Action: After consideration
of the comments we received, we are
finalizing the changes to § 413.236(b)
introductory text, (b)(2) through (5), and
(c), as proposed, with the following
modification. As we stated previously,
we proposed to revise § 413.236(b)(4) to
replace ‘‘September 1’’ with ‘‘the
HCPCS Level II code application
deadline for biannual Coding Cycle 2 for
DMEPOS items and services as specified
in the HCPCS Level II coding guidance
on the CMS website.’’ However, we
inadvertently omitted the word ‘‘items’’
from the proposed regulation text. In
this final rule, we are adding the word
‘‘items’’ to § 413.236(b)(4) consistent
with our proposal.
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3. Expansion of the TPNIES for New and
Innovative Capital-Related Assets That
are Home Dialysis Machines When Used
in the Home for a Single Patient
a. Background
In response to the proposed
expansion of the TDAPA in the CY 2019
ESRD PPS proposed rule, we received
several comments regarding payment
under the ESRD PPS for certain new,
innovative equipment and supplies
used in the treatment of ESRD. For
example, as we described in the CY
2019 ESRD PPS final rule (83 FR 56972),
a device manufacturer and device
manufacturer association asked CMS to
establish a transitional add-on payment
adjustment for new FDA devices that
have received FDA marketing
authorization. They commented on the
lack of new devices that have received
FDA marketing authorization for use in
an ESRD facility, highlighting the need
to promote dialysis device innovation.
Other commenters, including a
professional association and a LDO
urged CMS and other relevant
policymakers to prioritize the
development of a clear pathway to add
new devices to the ESRD PPS bundled
payment (83 FR 56973). A home dialysis
patient group also expressed concern
regarding the absence of a pathway for
adding new devices to the ESRD PPS
bundled payment, stating that it left
investors and industry wary of investing
in the development of new devices for
patients. In response, we expressed
appreciation for the commenters’
thoughts regarding payment for new and
innovative devices, and stated that
because we did not include any
proposals regarding this issue in the CY
2019 ESRD PPS proposed rule, we
considered these suggestions to be
beyond the scope of that rule.
However, in response to this
feedback, in the CY 2020 ESRD PPS
proposed rule (84 FR 38354 through
38355), we agreed that additional
payment for certain renal dialysis
equipment and supplies may be
warranted under specific circumstances.
We proposed to provide the TPNIES for
certain new and innovative renal
dialysis equipment and supplies
furnished by ESRD facilities, but
excluded from eligibility capital-related
assets, which are defined in the
Provider Reimbursement Manual
(chapter 1, section 104.1) as assets that
a provider has an economic interest in
through ownership (regardless of the
manner in which they were acquired).
The Provider Reimbursement Manual is
available on the CMS website at https://
www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Paper-
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Based-Manuals-Items/CMS021929.
Examples of capital-related assets for
ESRD facilities are dialysis machines
and water purification systems.
As we explained in the CY 2020 ESRD
PPS proposed rule (84 FR 38354), we
did not believe capital-related assets
should be eligible for additional
payment through the TPNIES because
the cost of these items is captured in
cost reports, they depreciate over time,
and they are generally used for multiple
patients. In addition, we noted that
since the costs of these items are
reported in the aggregate, there is
considerable complexity in establishing
a cost on a per treatment basis. For these
reasons, we therefore believed capitalrelated assets should be excluded from
eligibility for the TPNIES at that time,
and we proposed an exclusion to the
eligibility criteria in § 413.236(b)(6).
However, we noted that CMS uses
capital-related asset cost data from cost
reports in regression analyses to refine
the ESRD PPS so that the cost of any
new capital-related assets is accounted
for in the ESRD PPS payment.
In response to the proposed exclusion
of capital-related assets, we received
comments from a device manufacturers’
association, which stated that since
most medical equipment is purchased
as a capital-related asset, the TPNIES
effectively would exclude the
innovative equipment identified in the
title of the adjustment. The association
asserted that meaningful clinical
improvements and patient experience
improvements are arguably more likely
to come from innovation outside singleuse supplies. The association
maintained that expanding the TPNIES
to include medical equipment,
regardless of how it is purchased by the
provider, would stimulate greater
investment in a broader array of new
technologies for ESRD patients.
In response, we stated in the CY 2020
ESRD PPS final rule (84 FR 60688) that
we recognize that accounting for renal
dialysis service equipment can vary
depending on the individual ESRD
facility’s business model. For example,
when the owner of the capital-related
asset retains title, then the renal dialysis
service equipment is a depreciable asset
and depreciation expense could be
itemized. When there is no ownership
of the renal dialysis service equipment,
then the item is recorded as an
operating expense.
In addition, in response to comments
regarding capital leases, we noted that
regulations at § 413.130(b)(1) specify
that leases and rentals are includable in
capital-related costs if they relate to the
use of assets that would be depreciable
if the provider owned them outright. We
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71415
stated that in the future, we will be
closely examining the treatment of
capital-related assets under Medicare,
including our regulations at § 412.302
regarding capital costs in inpatient
hospitals and § 413.130, as they relate to
accounting for capital-related assets,
including capital leases and the newly
implemented guidance for finance lease
arrangements, to determine if similar
policies would be appropriate under the
ESRD PPS.
b. Additional Payment for New and
Innovative Capital-related Assets That
are Home Dialysis Machines When Used
in the Home for a Single Patient
Following publication of the CY 2020
ESRD PPS final rule, in which we
finalized the TPNIES policy, we
continued to study the issue of payment
for capital-related assets under the
ESRD PPS, taking into account
information from a wide variety of
stakeholders and recent developments
and initiatives regarding kidney care.
For example, we received additional
comments and information from
dialysis equipment and supply
manufacturers, and a Technical Expert
Panel (TEP) meeting held in December
2019, regarding the need for additional
payment for capital-related assets under
the ESRD PPS.
We also took into account the
President’s Executive order, signed on
July 10, 2019, aimed at transforming
kidney care in America. The Executive
order discussed many new initiatives,
including the launch of a public
awareness campaign to prevent patients
from going into kidney failure and
proposals for the Secretary to support
research regarding preventing, treating,
and slowing progression of kidney
disease and encouraging the
development of breakthrough
technologies to provide patients
suffering from kidney disease with
better options for care than those that
are currently available. Currently, most
dialysis is furnished at ESRD facilities.
In-center dialysis can be timeconsuming and burdensome for
patients. In addition, the current system
prioritizes payment to in-center dialysis
and the goal of the agency is to
incentivize in-home dialysis. A key
focus of the Executive order is the effort
to encourage in-home dialysis.
The Executive order is available at:
https://www.whitehouse.gov/
presidential-actions/executive-orderadvancing-american-kidney-health/.
In conjunction with the Executive
order, HHS laid out three goals for
improving kidney health (see https://
www.hhs.gov/about/news/2019/07/10/
hhs-launches-president-trump-
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advancing-american-kidney-healthinitiative.html):
• Reducing the number of Americans
developing ESRD by 25 percent by 2030.
• Having 80 percent of new ESRD
patients in 2025 either receiving dialysis
at home or receiving a transplant; and
• Doubling the number of kidneys
available for transplant by 2030.
In addition, in connection with the
President’s Executive order, on July 10,
2019, CMS issued a proposed rule (84
FR 34478) to implement a new
mandatory payment model, known as
the ESRD Treatment Choices (ETC)
Model, which would provide new
incentives to encourage the provision of
dialysis in the home. The ETC Model,
which CMS finalized in a final rule
published in the Federal Register on
September 29, 2020 (85 FR 61114), is a
mandatory payment model, focused on
encouraging greater use of home dialysis
and kidney transplants for ESRD
beneficiaries among ESRD facilities and
Managing Clinicians located in selected
geographic areas.
Lastly, as we noted in the CY 2021
ESRD PPS proposed rule, ESRD patients
who receive in-center dialysis are
particularly vulnerable during a PHE
and other disasters, and greater use of
home dialysis modalities may expose
these patients to less risk. The U.S. is
responding to an outbreak of respiratory
disease caused by a novel (new)
coronavirus that was first detected in
China and which has now been detected
in more than 215 countries
internationally, and all 50 states and the
District of Columbia. The virus has been
named ‘‘severe acute respiratory
syndrome coronavirus 2’’ (SARS–CoV–
2) and the disease it causes has been
named ‘‘coronavirus disease 2019’’
(‘COVID–19’).
On January 30, 2020, the International
Health Regulations Emergency
Committee of the World Health
Organization (WHO) declared the
outbreak a ‘‘Public Health Emergency of
international concern.’’ On January 31,
2020, the Secretary determined that a
PHE exists for the U.S. to aid the
nation’s healthcare community in
responding to COVID–19 and on April
21, 2020, the Secretary renewed,
effective April 26, 2020, the
determination that a PHE exists. On
March 11, 2020, the WHO publicly
declared COVID–19 a pandemic. On
March 13, 2020, the President of the
U.S. declared the COVID–19 pandemic
a national emergency.
As we discussed in the CY 2021 ESRD
PPS proposed rule, the experience of
multiple countries across the globe has
demonstrated that older patients and
patients with multiple comorbidities
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and underlying health conditions are
patients who are more susceptible to the
virus and have a higher risk of
morbidity than younger patients
without underlying health conditions.
Per the CDC, the risk factors for COVID–
19 include older adults and people of
any age who have serious underlying
medical conditions, such as diabetes
and chronic kidney disease undergoing
dialysis. Medicare’s ESRD population
aligns with the profile of patients who
are more susceptible to COVID–19.
Therefore, it is important to reduce the
risk of infection and this can be done
through isolating patients from in-center
exposure by encouraging home dialysis.
We also noted that home dialysis
would mitigate the risks associated with
dialysis for these patients if the
pandemic lasts longer than expected or
is refractory in some way.
(1) Expansion of the TPNIES to Certain
New and Innovative Capital-Related
Assets That are Home Dialysis Machines
When Used in the Home for a Single
Patient
In response to the President’s
Executive order, the various HHS home
dialysis initiatives, and the particular
benefits of home dialysis for ESRD
beneficiaries during PHEs like the
current COVID–19 pandemic, which we
discussed in the previous section, and
in consideration of the feedback we
have received from stakeholders, we
stated in the CY 2021 ESRD PPS
proposed rule that we agree that
additional payment through the TPNIES
for certain capital-related assets may be
warranted under specific circumstances
outlined in the proposed rule. We noted
that in the CY 2020 ESRD PPS final rule
(84 FR 60607), we specifically excluded
capital-related assets from the TPNIES.
In commenting on the CY 2020 ESRD
PPS proposed rule, most stakeholders
expressed concern that the TPNIES
would exclude capital-related assets. In
our response to commenters, we
acknowledged that significant
innovation and technology
improvement is occurring with dialysis
machines and peritoneal dialysis (PD)
cyclers, as well as innovation in the
efficiency and effectiveness of water
systems. However, at that time we did
not have enough information regarding
current usage of the various financial
and leasing arrangements, such as those
involving capital leases for depreciable
assets versus operating leases recorded
as operating expenses. In addition, we
noted that we would need to assess
methodological issues regarding
depreciation to determine whether
TPNIES eligibility for these items would
be appropriate.
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We stated in the CY 2020 ESRD PPS
final rule that we needed to further
study the specifics of the various
business arrangements for equipment
related to renal dialysis services. This
would include items that are: (1)
Purchased in their entirety and owned
as capital-related assets; (2) assets that
are acquired through a capital lease
arrangement; (3) equipment obtained
through a finance lease and recorded as
an asset per the Financial Accounting
Standards Board (FASB) guidance on
leases (Topic 842) effective for fiscal
years beginning after December 15,
2018; 5 or (4) equipment obtained
through an operating lease and recorded
as an operating expense. In addition to
the variety of business arrangements, we
noted, there are unknown issues relating
to ownership of the item and who
retains title, which may affect the
equipment’s maintenance expenses for
capital-related assets.
Further, we noted the issue of single
use versus multiple use for capitalrelated assets used for renal dialysis
services. For example, some capitalrelated assets used in-center and in the
home setting, such as skilled nursing
facilities (SNFs) and nursing facilities,
may be used by multiple patients in a
day, and by multiple patients over their
useful lifetime. Specifically, equipment
classified as capital-related assets may
be refurbished and used by another
patient. For example, capital-related
assets used by multiple patients in a day
could be Hoyer lifts to transfer patients
and wheelchair scales. In the CY 2021
ESRD PPS proposed rule, we did not
propose to include capital-related assets
with multi-patient usage as being
eligible for the TPNIES because we
aimed to support the President’s
Executive order and HHS goals of
promoting home dialysis, which
involves a single machine for patient
use. In addition, as we discussed earlier
in this section, it is more complicated to
develop a per treatment payment
amount for those items. However, we
sought comments on this aspect of our
proposal, and stated our intention to
gather additional information about how
ESRD facilities obtain their capitalrelated assets that have multi-patient
usage in future meetings with the TEP.
We stated in the CY 2021 ESRD PPS
proposed rule that as we further studied
this issue, we determined that one
business arrangement, that is, where the
capital-related assets are purchased in
their entirety and owned as capitalrelated assets, could be considered for
5 https://www.fasb.org/jsp/FASB/Document_C/
DocumentPage?cid=1176167
901010&acceptedDisclaimer=true.
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TPNIES eligibility. We noted that we
continued to analyze other business
arrangements, but we understood this
arrangement is more straightforward
due to ownership being clear, retained
at the end of the TPNIES period, and on
the facility’s balance sheet. CMS’ intent
would be to pay for assets that are
owned, whether purchased or attained
through a capital lease. The entity who
holds the title to the asset is the legal
owner. At the end of the TPNIES period,
the entity retains ownership of the asset.
We stated we would not pay the TPNIES
for equipment that is leased, as the
ESRD facility has no ownership rights.
We stated that we believe this is an
appropriate initial step to support home
dialysis.
In support of the HHS goals and
initiatives to increase home dialysis
following the President’s Executive
order, we proposed to provide the
TPNIES for eligible new and innovative
capital-related assets that are home
dialysis machines when used in the
home. We would limit the payment for
new and innovative dialysis machines
to those used for home dialysis in order
to target the additional payment through
the TPNIES to equipment that supports
the various home dialysis initiatives
currently underway, as discussed
previously in the CY 2021 ESRD PPS
proposed rule and this section of this
final rule. As more ESRD patients and
their nephrologists and other clinicians
opt for home dialysis modalities, we
would seek to support ESRD facility use
and beneficiary access to the latest
technological improvements to HD and
PD home dialysis machines. As we
explained in prior ESRD PPS rules
establishing the TDAPA and TPNIES,
ESRD facilities face unique challenges
in incorporating new renal dialysis
drugs, biological products, equipment
and supplies into their businesses and
these add-on payment adjustments are
intended to support ESRD facilities’ use
of new technologies during the uptake
period for these new products.
To codify our proposals for expanding
the TPNIES to include capital-related
assets that are home dialysis machines
when used in the home for a single
patient, we proposed further revisions
to § 413.236, in addition to the revisions
finalized earlier in section II.B.2 of this
final rule.
Specifically, we proposed to revise
the heading at § 413.236(a) and add
paragraphs (a)(1) and (2) to distinguish
this paragraph as both the ‘‘basis and
definitions.’’ We proposed to define
‘‘capital-related asset’’ at § 413.236(a)(2)
as an asset that an ESRD facility has an
economic interest in through ownership
(regardless of the manner in which it
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was acquired) and is subject to
depreciation. Equipment obtained by
the ESRD facility through operating
leases are not considered capital-related
assets. This proposed definition was
based on the definition of ‘‘depreciable
assets’’ in the Provider Reimbursement
Manual (chapter 1, section 104.1). The
Provider Reimbursement Manual is
available on the CMS website at https://
www.cms.gov/Regulations-andGuidance/Guidance/Manuals/PaperBased-Manuals-Items/CMS021929.
We proposed to define ‘‘home dialysis
machines’’ at § 413.236(a)(2) as
hemodialysis machines and peritoneal
dialysis cyclers in their entirety,
meaning that one new part of a machine
does not make the entire capital-related
asset new, that receive FDA marketing
authorization for home use and when
used in the home for a single patient.
FDA provides a separate marketing
authorization for equipment intended
for home use, and our proposal was
focused on supporting efforts to increase
home dialysis.
We proposed to define ‘‘particular
calendar year’’ at § 413.236(a)(2) as the
year in which the payment adjustment
specified in paragraph (d) of § 413.236
would take effect. We also proposed to
include definitions for the terms
‘‘depreciation,’’ ‘‘straight-line
depreciation method,’’ and ‘‘useful life,’’
which are discussed in section
II.B.3.b.(2) of this final rule.
We proposed to revise § 413.236(b)(6)
to provide an exception to the general
exclusion for capital-related assets from
eligibility for the TPNIES for capitalrelated assets that are home dialysis
machines when used in the home for a
single patient and that meet the other
eligibility criteria in § 413.236(b). We
also proposed to remove ‘‘that an ESRD
facility has an economic interest in
through ownership (regardless of the
manner in which it was acquired)’’ in
§ 413.236(b)(6) since we proposed a
separate definition for ‘‘capital-related
asset’’ at § 413.236(a)(2).
Under the proposal, we continued to
exclude other capital-related assets from
the TPNIES that are not home dialysis
machines when used in the home
because those items would not be
advancing HHS’s goal of increasing
home dialysis. Examples of capitalrelated assets that would continue to be
excluded from TPNIES are water
purification systems and dialysis
machines when they are used in-center.
We stated that we continue to believe
we should not provide additional
payment for these capital-related assets
because the cost of these items are
captured in cost reports and reported in
the aggregate, depreciate over time, are
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generally used for multiple patients and,
most importantly, it would not support
the goal of increasing use of home
dialysis. However, capital-related assets
that are home dialysis machines when
used in the home are intended for use
by a single patient and can be reported
on a per treatment basis on the ESRD
facility’s claim. These characteristics
provide for a simple methodology for
aligning the use of the asset with the per
treatment TPNIES payment.
As we stated previously in this
section, we did not propose to expand
the TPNIES eligibility to in-center
dialysis machines or home dialysis
machines when they are used in-center.
Currently, our focus is promoting the
increase in home dialysis rather than incenter dialysis. In addition, in-center
dialysis machines are used by multiple
patients each day and would require
additional analysis, along with 72X
claims and cost report modifications, in
order to provide payment. For this same
reason, we did not propose to provide
the TPNIES for home dialysis machines
when they are used in SNFs and nursing
facilities that are used by multiple
patients each day.
We stated in the CY 2021 ESRD PPS
proposed rule that we believe the SCI
criteria required under § 413.236(b)(5),
with our proposed revisions, and the
process used to evaluate SCI currently
applicable to TPNIES equipment and
supplies are also appropriate for
identifying new and innovative capitalrelated assets that are home dialysis
machines that are worthy of temporary
additional payment under the ESRD
PPS. This approach would provide
consistent criteria and evaluation for all
equipment and supplies that are
potentially eligible for the TPNIES. In
addition, we noted that we want to
ensure we do not pay the TPNIES for
new home dialysis machines that are
substantially similar to existing
machines and not truly innovative.
We proposed to utilize the
determination process we established in
the CY 2020 ESRD PPS final rule for the
TPNIES and those requirements we
proposed to revise in section II.B.2 of
the CY 2021 ESRD PPS proposed rule.
That is, pursuant to § 413.236(c),
interested parties would submit all
information necessary for determining
that the home dialysis machine meets
the TPNIES eligibility criteria listed in
§ 413.236(b). This would include FDA
marketing authorization information,
the HCPCS application information, and
studies submitted as part of these two
standardized processes, an approximate
date of commercial availability, and any
information necessary for SCI criteria
evaluation. For example, clinical trials,
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peer reviewed journal articles, study
results, meta-analyses, systematic
literature reviews, and any other
appropriate information sources can be
considered. We noted, for purposes of
determining whether the home dialysis
machine is new under § 413.236(b)(2),
we would look at the date the machine
is granted marketing authorization by
FDA for home use.
We stated that, using our current
process at § 413.236(c), we would
provide a description of the new home
dialysis machine and pertinent facts in
the ESRD PPS proposed rule so the
public may comment on them and then
publish the results in this ESRD PPS
final rule. We would consider whether
the new home dialysis machine meets
the eligibility criteria specified in the
proposed revisions to § 413.236(b) and
announce the results in the Federal
Register as part of our annual updates
and changes to the ESRD PPS. Per
§ 413.236(c), we would only consider,
for additional payment using the
TPNIES for a particular calendar year,
an application for a capital-related asset
that is a home dialysis machine we
receive by February 1 prior to the
particular calendar year. If the
application is not received by February
1, the application would be denied and
the applicant would need to reapply
within 3 years beginning on the date of
FDA marketing authorization in order to
be considered for the TPNIES, in
accordance with the proposed revisions
to § 413.236(b)(2). We noted, applicants
are expected to submit information on
the price of their home dialysis machine
as part of the TPNIES application. While
we recognize this information is
proprietary, CMS requests this
information along with the equipment
or supply’s projected utilization.
For example, under our proposed
revisions to § 413.236, in order for a
particular home dialysis machine to be
eligible for the TPNIES under the ESRD
PPS beginning in CY 2022, CMS must
receive a complete application meeting
our requirements no later than February
1, 2021. FDA marketing authorization
and submission of the HCPCS Level II
code application for Coding Cycle 2 for
DMEPOS items and services must occur
as specified in the HCPCS Level II
coding guidance on the CMS website.
We would include a discussion of the
new capital-related asset that is a home
dialysis machine in the CY 2022 ESRD
PPS proposed rule and the CMS final
determination would be announced in
the CY 2022 ESRD PPS final rule. If the
home dialysis machine qualifies for the
TPNIES, the payment adjustment would
begin January 1, 2022 with a
miscellaneous code and the designated
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HCPCS code would be effective April 1,
2022.
In accordance with § 413.236(c), the
CMS TPNIES final determinations for
CY 2021 are presented in section II.C of
this final rule.
The comments and our responses to
the comments on our proposed
expansion of the TPNIES to include
certain home dialysis machines are set
forth below.
Comment: Most commenters generally
supported expanding the eligibility for
TPNIES to include capital-related assets
that are home dialysis machines and
provided suggestions on ways to
improve the proposal. However,
MedPAC and LDOs did not support the
proposal. MedPAC and other
commenters stated that, instead of
paying the TPNIES for new home
dialysis machines, CMS should address
the clinical and nonclinical factors
known to affect home dialysis use. They
stated that CMS’s proposal to expand
the TPNIES as proposed would
undermine the integrity of the ESRD
PPS bundled payment and limit the
competitive forces that generate price
reductions. They stated that if CMS
proceeds with the proposal, eligible
equipment should be innovative and
payment should not be duplicative.
They urged CMS to take more time and
engage the industry to develop a
comprehensive policy and indicated
there were more meaningful ways to
support the Executive order. One LDO
commented that access to home dialysis
machines is not currently a roadblock to
home therapy, and proposed add-on
payments to purchase home machines
will not address any of the real barriers
to home dialysis or further the goals of
the Executive order. Another LDO
expressed concerns about the proposed
exclusion of dialysis machines used incenter and urged CMS to expand the
capital-related assets policy before it is
finalized.
However, several device
manufacturers and a home dialysis
patient organization urged CMS to not
make patients wait over a year to have
access to the newest innovative home
dialysis machines. Instead, they
proposed that CMS, in the final rule,
allow a new application submission
period to consider applicants under the
capital-related home dialysis machines
pathway for eligibility for payment
beginning April 1, 2021, and provide for
a 30-day comment period. They believe
proceeding in such a way would satisfy
the Administrative Procedure Act
requirements for notice and comment
and put CMS on a faster pathway to
success in meeting the rapidly growing
demand from patients for home dialysis,
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given the COVID–19 pandemic, by
providing them with new options to
perform treatments safely and easily in
their homes. The patient organization
noted that patients need choices and,
currently, if a patient fails to thrive on
a home dialysis machine, often the
patient has no choice but to return to incenter dialysis. The patient organization
stated that new home dialysis machines
in the pipeline will be critical to
achieving the Executive order goal of
moving dialysis patients home. Another
commenter urged CMS to act boldly and
without delay.
Response: In order to support the
goals of the Executive order, we believe
that providing the TPNIES for new and
innovative home dialysis machines is a
good start because it will increase home
dialysis by leading to technological
change in those machines, which will
make a difference in patient-related
outcomes and long-term adherence to
home dialysis. For example, beneficiary
feedback reveals that one of the most
significant drawbacks to home dialysis
is fear of self-cannulation; despite
training, this remains a significant
drawback. A new and innovative home
dialysis machine that is able to
cannulate the dialysis recipient would
substantially improve the treatment of
ESRD beneficiaries and be a huge
advancement toward increasing home
dialysis.
With regard to the suggestion that we
issue the final rule with a comment
period in order to accept new
applications for capital-related home
dialysis machines for payment
eligibility beginning April 1, 2021, we
note that our process of evaluating
substantial clinical improvement is
lengthy. An IFC published in November
2020, and accepting applications for
capital-related assets that are home
dialysis machines used in the home by
February 1, 2021, with a payment
eligibility date of April 1, 2021 would
not provide adequate time for review of
SCI. We note that a commenter
indicated there at least 3 home dialysis
machines currently under development.
Providing eligibility for home dialysis
machines earlier than our proposed
effective date would give an unfair
advantage to the current applicant that
has already received FDA marketing
authorization for home use. Had the
other companies known about an earlier
effective date, they may have altered
their testing protocols and marketing
plans. We thank MedPAC and the LDOs
for their comments and share their
concern about maintaining the integrity
of the ESRD PPS bundled payment. We
have tried to strike a balance between
supporting the uptake of new and
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innovative home dialysis machines that
demonstrate substantial clinical
improvement, while maintaining the
integrity of the ESRD PPS bundled
payment. As discussed later in this
section, as part of our final
methodology, we are offsetting the
TPNIES payment for home dialysis
machines used in the home by $9.32,
the amount currently included in the
base rate for the dialysis machine.
Regarding the expansion of capitalrelated assets to include in-center
dialysis machines, at this time we are
striving to support the Executive order
for payment incentives for greater use of
home dialysis.
Comment: Several commenters,
including both LDOs and small dialysis
organizations, asked CMS to affirm in
the final rule that the TPNIES will
attach to the device and not to the initial
patient utilizing the device. They
acknowledged that CMS seeks to
develop a policy for home dialysis
machines that are used by a single
patient, however, they pointed out that
it is the current standard of care and
practice that such home dialysis
machines are repurposed during their
lifetimes to serve successive patients
who have the exclusive use of the
machine while it is in the patient’s
custody. They asked CMS to affirm in
the final rule that a facility may
continue to claim the TPNIES for that
specific device until the facility reaches
the maximum allowable TPNIES
amount pursuant to the adopted
methodology.
The organization of LDOs also
recommended that CMS modify the
policy to ensure that ESRD facilities are
held harmless for missed treatments.
The commenter stated that the proposed
methodology ties TPNIES to the pertreatment claim for a patient. If a patient
misses a treatment, whether due to
personal choice, hospitalization, travel,
or otherwise, the facility will lose a
portion of the TPNIES payment. They
suggested that CMS consider an
alternate methodology that would allow
providers to continue to claim these
TPNIES payments for missed
treatments. For example, they suggested
that CMS could allow each facility to
continue to claim the TPNIES payment
on an ongoing basis until the facility
reaches the maximum allowable
TPNIES amount pursuant to the adopted
methodology.
Response: The TPNIES is paid based
on the HCPCS code and as such is
attached to the device, when the HCPCS
code is billed. In addition, we are aware
that patients may, for various reasons,
no longer require the home dialysis
machine, or may become unable to do
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home dialysis, and that, when a patient
no longer uses the home dialysis
machine, the machine may be
refurbished and given to another home
patient. With regard to the suggestion
that facilities bill Medicare for the
machine even though it wasn’t used
because the treatment was not
furnished, it is not appropriate for
payment purposes since payment is
only made for services furnished and
when the device is used. Such an
approach would not comport with the
False Claims Act. We note that the
calculated TPNIES amount based on the
invoice, is not a guarantee for a
maximum allowable reimbursement.
Payment is tied to the dialysis treatment
provided. If the machine is purchased
and not used in a treatment, the TPNIES
is not paid. The TPNIES is a payment
adjustment to the ESRD PPS base rate
and is dependent on the ESRD facility
providing the dialysis treatment.
Comment: One commenter stated that
although the phrase ‘‘in the home for a
single patient’’ is clear, the phrase
causes confusion about whether CMS is
encouraging on-site dialysis in a SNF.
The commenter noted that in the ESRD
Treatment Choices payment model
proposal, CMS included condition code
80 (home dialysis furnished in a SNF or
nursing facility) in its definition of
home dialysis, suggesting that CMS
recognizes that dialysis in a SNF ought
to be classified as home dialysis—on par
with home dialysis in a private
residence. However, the commenter
stated that CMS’s proposal seems to take
the position that the TPNIES expansion
will not apply to on-site dialysis in the
SNF, apparently because a single
machine there may be used by multiple
patients. The commenter recommended
that, if the concern is that a single
machine may be used by multiple
patients, resulting in excess payment to
the ESRD facility, then CMS could
reduce the TPNIES amount by a factor
commensurate with the average number
of treated patients per machine. The
commenter stated that it is in the
interest of CMS and patients alike to
promote on-site dialysis in the SNF and
recommended using the TPNIES
expansion to do so.
Response: It is our longstanding
policy 6 7 under the ESRD PPS (and the
composite rate system that preceded it)
that a skilled nursing facility (SNF) or
a nursing facility (NF) can be considered
a patient’s home for dialysis. As a result,
6 https://www.cms.gov/Medicare/Provider-
Enrollment-and-Certification/
SurveyCertificationGenInfo/Downloads/QSO18-24ESRD.pdf.
7 https://ecfr.io/Title-42/Section-494.100.
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ESRD facilities may furnish home
dialysis to individual patients who are
residing in these facilities. Therefore, for
purposes of the TPNIES, our
longstanding policy holds. That is,
ESRD facilities may furnish home
dialysis to patients residing in SNFs and
NFs, and we would provide the TPNIES
for home dialysis machines when they
are used in SNFs and NFs and are used
by a single patient. Per the 1981
Committee on United States Senate
Finance Report,8 home dialysis
machines were intended for single
patient use. While we have provided
additional flexibilities 9 10 during the
current PHE for ESRD facilities to
furnish in-center dialysis to groups of
ESRD patients residing in SNFs or NFs,
we would not provide the TPNIES for
the use of home dialysis machines for
multiple patients.
Comment: We received comments
from stakeholders across the ESRD
industry asking that CMS consider other
factors that are critical to successful
home dialysis as we assess innovative
home dialysis machines for TPNIES
eligibility. For example, one commenter
stated that some of these machines may
require patients to have internet and
broadband services so that data can
easily transfer from the patient’s home
to the ESRD facility managing the home
dialysis. The commenter stated that in
rural areas particularly, access to
internet and broadband services may be
challenging and patients in rural areas
in many ways could most benefit from
new access to innovative home dialysis
machines, which could help them avoid
frequent extended travel times to and
from ESRD facilities to receive in-center
treatment.
Another commenter recommended
expansion of the TPNIES to include
water and sewer systems, explaining
that innovation in the efficiency and
effectiveness of water systems would
both improve patient quality of care, as
well as reduce costs for facilities and
reduce the amount of water that ESRD
facilities currently waste, helping to
preserve the nation’s water supply.
One organization expressed
appreciation that CMS is refining
TPNIES and considering ways to
include some capital-related assets in
the TPNIES policy, but stated the final
rule should recognize the option for
other capital-related assets to qualify for
the TPNIES potentially in the future.
The organization asked that CMS gather
8 https://www.finance.senate.gov/imo/media/doc/
SPrt97-9.pdf.
9 https://www.cms.gov/files/document/qso-20-19esrd-revised.pdf.
10 https://www.cms.gov/files/document/covid-19esrd-facilities.pdf.
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additional information about home
dialysis machines that may be eligible
for the TPNIES, as well as other types
of capital-related assets, and construct a
policy that supports the TPNIES for
more than one narrow type of product.
The organization suggested that we seek
additional information about how ESRD
facilities obtain their capital-related
assets that have multi-patient usage
through a request for information, as
well as convening a technical expert
panel(s).
An LDO and LDO organization stated
that the TPNIES policy should be
focused on transition payment for new
equipment that represents SCI, and not
skewed by site of service. They stated
that to combine the requirement for SCI
with an in-home only requirement
would likely discourage investment in
new technology, undercutting the entire
TPNIES policy. They also agreed, stating
that the ESRD program’s fundamental
purpose is to service all patients. The
LDO urged CMS not to establish a
policy that benefits only those ESRD
patients who are clinically suited for
and have the social support structure
necessary to elect home dialysis. Rather,
CMS should adopt a comprehensive
TPNIES capital-related expenses policy
that supports technological advances
across all treatment modalities and
provides adequate and sustained
payment upon a TPNIES’s expiration.
They encouraged CMS to establish a
working group or a TEP to inform the
development of a broader TPNIES
eligibility to include in-center capitalrelated assets.
We received many comments from
patient groups, device manufacturers,
dialysis organizations, health plans and
a pharmacy regarding the requirement
that the home dialysis machine must be
owned by the ESRD facility and not
leased equipment. One commenter
stated that financial incentives for
acquiring breakthrough dialysis
innovations should not be limited only
to the facilities that have the financial
reserves to outright purchase this
equipment, that is, the larger dialysis
providers in the marketplace. They
stated that smaller and medium-size
ESRD facilities may lack the capital to
be able to purchase the latest home
dialysis technologies, and thus may
prefer to rely on operating leases to
obtain it.
A pharmacy stated that smaller and
medium-size facilities and their patients
must not be disadvantaged compared to
larger facilities with regard to financial
incentives to propel use of the latest,
clinically optimal home dialysis
equipment. The pharmacy commented
that facilities might choose to obtain the
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new home dialysis devices via operating
leases because technical support
services are available under that
arrangement, which benefits both the
facility and the patient. In addition,
operating leases can provide clinics the
ability to more quickly scale and
increase the volume of available new
devices, as more patients choose home
therapies. They believe these business
arrangements complement the
accelerated trend toward home dialysis,
and therefore should be supported
under the TPNIES policy. Another
commenter urged CMS to consider
business arrangements other than
outright purchase of home dialysis
machines and equipment, stating that
many facilities maintain subscriptions
with manufacturers or lease equipment,
and the commenter believes that these
arrangements should be accounted for
under TPNIES.
Response: We thank the commenters
for their suggestions. We will take these
suggestions under consideration for
future rulemaking. We believe it is
appropriate to implement a narrow
capital-related asset eligibility under the
TPNIES at this time to advance the goals
of the Executive order. We believe we
will gain valuable information through
implementation of the TPNIES for home
dialysis machines that are owned in
their entirety by the ESRD facility and
used for a single patient. We are
continuing to analyze and consider how
to account for depreciation for multipatient use machines and other capitalrelated assets, such as water and sewer
systems. We will also consider the
commenters’ suggestion regarding a TEP
or RFI to get information from ESRD
facilities about the machines they use
and how they acquire them.
When there is no ownership of the
renal dialysis service equipment, then
the item is recorded as an operating
expense. Equipment obtained by the
ESRD facility through operating leases
are not considered capital-related assets.
The proposed definition of capitalrelated assets is based on the definition
of ‘‘depreciable assets’’ in the Provider
Reimbursement Manual (chapter 1,
section 104.1). The Provider
Reimbursement Manual is available on
the CMS website at https://
www.cms.gov/Regulations-andGuidance/Guidance/Manuals/PaperBased-Manuals-Items/CMS021929. We
did not propose to make an add-on
payment adjustment for operating
expenses, but appreciate the suggestion
and will consider it in future
rulemaking.
We appreciate the suggestions that we
consider other factors than SCI for
TPNIES eligibility and allow the
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TPNIES for in-center treatments. While
we considered other factors than SCI for
TPNIES eligibility, our focus on the
beneficiary and clinical improvement
was a primary factor. As we stated
previously in the background section of
this final rule, at this point we believe
it is important we use the same criteria
used under the NTAP so there are
consistent standards for manufacturers
and CMS. At this time, our focus is on
supporting the goals of the Executive
order to increase home dialysis as
opposed to in-center dialysis.
Comment: A health plan expressed
appreciation for CMS’s efforts to
encourage innovation through new
technology payments, and especially
supported the proposed addition of inhome dialysis equipment to the TPNIES
program, as there has been very little
innovation in this arena in the past
decade. However, the health plan
expressed concern about the financial
barriers to ESRD facilities adopting new
technology. As an example, the
commenter stated that the Tablo®
Hemodialysis System described in
section II.C of this final rule can cost
approximately $40,000 which is twice
the cost of alternative home dialysis
systems. The health plan explained that,
although there may be benefits to the
new Tablo® system, the cost is
financially prohibitive to many small
ESRD facilities. Even if the system (or
components of the system) are approved
for the new technology add-on payment
adjustment, CMS will only pay for 65
percent of the cost, leaving the
remainder to be covered by the dialysis
provider. They stated that this
arrangement will be cost-prohibitive for
most small and rural dialysis providers
and will discourage the use of new
technology. The health plan is also
concerned that providing new
technology add-on payment adjustments
will discourage other companies from
developing similar, less expensive
alternatives until the add-on period has
ended. They believe it is imperative for
CMS to encourage both competition and
innovation.
Response: The intent of the TPNIES is
to support ESRD facilities in the uptake
of new and innovative equipment and
supplies under the ESRD PPS that
provide substantial clinical
improvements to patients, which will
facilitate beneficiary access to those
renal dialysis equipment and supplies.
Additionally, consistent with CMS’s
longstanding goals, our goal with the
TPNIES policy is to support better care
at lower costs. We expect ESRD
facilities to be judicious in the selection
of new machines, balancing the cost of
the machine with the promised clinical
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improvement the machine would
provide. We also expect increased
competition for market share through
both lower acquisition costs and
TPNIES dollars will enhance access to
machines providing clinical
improvement for ESRD patients. We
disagree that improvements would not
occur when the TPNIES is being paid
for a particular home dialysis machine.
We anticipate that manufacturers will
continue to develop equipment that can
compete for market share. While we do
not control what manufacturers charge
ESRD facilities, as new machines in the
development pipeline come to market,
there is likely to be significant
competition among manufacturers
which should lead to lower prices as the
manufacturers compete for the home
dialysis market.
Comment: Another commenter
strongly encouraged CMS to include the
perspectives of current home dialysis
patients in its evaluation of new home
dialysis machines. The commenter
stated that CMS staff, nephrologists,
allied health care professionals, and
epidemiologists cannot collectively
evaluate whether machines are truly
innovative and truly life-changing if
patient perspectives are not solicited.
The commenter stated that, while
patients are often invited to submit
letters during a public comment period
following a proposed rule at the behest
of manufacturers, these letters often
involve formulaic content, not personal
perspectives. The commenter asserted
that most patients are unaware of
rulemaking and do not submit
comments. The commenter advised
CMS to convene a TEP that includes
patients to evaluate each application
and encouraged town hall forums for
active patient input.
Response: We appreciate the
commenter’s input regarding patient
perspective. The TPNIES payment was
modeled after the IPPS NTAP system,
which process includes a public
meeting. We did not have a public
meeting as part of the TPNIES this first
year, but a public meeting for future
TPNIES applications could draw the
patient participation and perspective
the commenter suggests and we will
consider adding a patient representative
to the workgroup that reviews TPNIES
applications in future rulemaking.
Final Rule Action: After consideration
of public comments, we are finalizing
the revision to § 413.236(b)(6) to provide
an exception to the general exclusion for
capital-related assets from eligibility for
the TPNIES for capital-related assets
that are home dialysis machines when
used in the home for a single patient
and that meet the other eligibility
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criteria in § 413.236(b), as proposed. We
are also finalizing the revision to the
heading at § 413.236(a) and the addition
of the paragraphs (a)(1) and (2) to
distinguish this paragraph as both the
‘‘basis and definitions.’’ We are
finalizing the definitions for ‘‘capitalrelated asset,’’ ‘‘depreciable assets,’’
‘‘particular calendar year,’’
‘‘depreciation,’’ ‘‘straight-line
depreciation method,’’ and ‘‘useful life,’’
which are discussed in section
II.B.3.b.(2) of this final rule, as
proposed. With regard to the definition
of ‘‘home dialysis machines,’’ we are
revising the proposed definition to
include parentheses to make the
sentence more readable in the preamble
and the regulation text.
We are also finalizing the removal of
‘‘that an ESRD facility has an economic
interest in through ownership
(regardless of the manner in which it
was acquired)’’ in § 413.236(b)(6), as
proposed, since we are finalizing a
separate definition for ‘‘capital-related
asset’’ at § 413.236(a)(2) as discussed
below.
(2) Pricing of New and Innovative
Capital-Related Assets That are Home
Dialysis Machines When Used in the
Home
As we explained in the CY 2020 ESRD
PPS final rule (84 FR 60692), we are not
aware of pricing compendia currently
available to price renal dialysis
equipment and supplies for the TPNIES.
We also noted that, unlike new renal
dialysis drugs and biological products
eligible for the TDAPA, ASP and WAC
pricing do not exist for renal dialysis
equipment and supplies, including
capital-related assets that are home
dialysis machines.
In addition, as we explained in the CY
2020 ESRD PPS final rule (84 FR 60692),
ESRD facility charges are gross values;
that is, charges before the application of
allowances and discounts deductions.
We believe the TPNIES payment
amount should reflect the discounts,
rebates and other allowances the ESRD
facility (or its parent company) receives.
These terms are defined in the Provider
Reimbursement Manual (chapter 8).11 If
the TPNIES payment amount does not
reflect discounts, rebates and other
allowances, the price would likely
exceed the facility’s cost for the item
and result in higher co-insurance
obligations for beneficiaries.
For this reason, in § 413.236(e), we
established an invoice-based approach
11 Medicare Provider Reimbursement Manual
(chapter 8). Available at: https://www.cms.gov/
Regulations-and-Guidance/Guidance/Transmittals/
Downloads/R450PR1.pdf.
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for MACs to use on behalf of CMS to
price new and innovative renal dialysis
equipment and supplies that meet the
eligibility criteria for the TPNIES. We
require the MACs to establish a price,
using verifiable information from the
following sources of information, if
available: (1) The invoice amount,
facility charges for the item, discounts,
allowances, and rebates; (2) the price
established for the item by other MACs
and the sources of information used to
establish that price; (3) payment
amounts determined by other payers
and the information used to establish
those payment amounts; and (4) charges
and payment amounts required for other
equipment and supplies that may be
comparable or otherwise relevant. As
discussed in the CY 2020 ESRD PPS
final rule (84 FR 60692 through 60693),
in order to maintain consistency with
the IPPS NTAP payment policy and to
mitigate the Medicare expenditures
incurred as a result of the TPNIES, we
finalized a policy at § 413.236(d) to base
the TPNIES payment on 65 percent of
the MAC-determined price.
As we explained in the CY 2021 ESRD
PPS proposed rule (85 FR 42148
through 42149), we believe that the
invoice-based approach established for
the TPNIES also should be applied to
capital-related assets that are home
dialysis machines, which are the focus
of the TPNIES expansion. However,
capital-related assets that are home
dialysis machines when used in the
home for a single patient are depreciable
assets as defined in the Provider
Reimbursement Manual (chapter 1,
section 104), which defines depreciation
as ‘‘that amount which represents a
portion of the depreciable asset’s cost or
other basis which is allocable to a
period of operation.’’ The Provider
Reimbursement Manual provides the
American Institute of Certified Public
Accountant’s definition of depreciation
as a process of cost allocation:
‘‘Depreciation accounting is a system of
accounting which aims to distribute the
cost or other basic value of tangible
capital assets, less salvage (if any), over
the estimated useful life of the unit
(which may be a group of assets) in a
systematic and rational manner. It is a
process of allocation, not of valuation.
Depreciation for the year is the portion
of the total charge under such a system
that is allocated to the year.’’
Because capital-related assets that are
home dialysis machines when used in
the home for a single patient are
depreciable assets, we proposed to
apply a 5-year straight-line depreciation
method to determine the basis of the
TPNIES for these items. The Provider
Reimbursement Manual (chapter 1,
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section 116.1) discusses the straight-line
depreciation method as a method where
the annual allowance is determined by
dividing the cost of the capital-related
asset by the years of useful life. Section
104.17 of the Provider Reimbursement
Manual discusses that the useful life of
a capital-related asset is its expected
useful life to the provider, not
necessarily the inherent useful or
physical life. Further, the manual
provides that under the Medicare
program, only the American Hospital
Association (AHA) guidelines may be
used in selecting a proper useful life for
computing depreciation.
Using the Provider Reimbursement
Manual definitions as the basis, we
proposed to define the following terms
at § 413.236(a)(2): ‘‘depreciation’’ as the
amount that represents a portion of the
capital-related asset’s cost and that is
allocable to a period of operation;
‘‘straight-line depreciation method’’ as a
method in accounting in which the
annual allowance is determined by
dividing the cost of the capital-related
asset by the years of useful life; and
‘‘useful life’’ as the estimated useful life
of a capital-related asset is its expected
useful life to the ESRD facility, not
necessarily the inherent useful or
physical life.
In keeping with the Medicare policy,
we proposed to rely on the AHA
guidelines to determine the useful life of
a capital-related asset that is a home
dialysis machine. That is, the useful life
of a home dialysis machine is 5 years.
Since we proposed a methodology using
the Provider Reimbursement Manual’s
guidance, we believe these terms are
appropriate to codify for purposes of
calculating the price of a home dialysis
machine that is a capital-related asset.
That is, under § 413.236(e), MACs, on
behalf of CMS, would establish prices,
using verifiable information as
described above, for new and innovative
capital-related assets that are home
dialysis machines when used in the
home for a single patient that meet the
eligibility criteria specified in
§ 413.236(b). This price would be the
only element used to determine the total
cost basis for applying the straight-line
depreciation method. For example, we
would exclude financing, sales tax,
freight, installation and testing, excise
taxes, legal or accounting fees, and
maintenance. This specific price
element would act as the proxy for the
all-encompassing cost basis in other
accounting methodologies. Using the
straight-line depreciation method, we
would divide the MAC-determined
price by the useful life of the capitalrelated asset that is a home dialysis
machine when used in the home for a
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single patient. The resulting number is
the annual allowance.
We considered other depreciation
methods, such as units of production
and accelerated depreciation methods
such as double declining balance and
sum-of-the-years-digits, but concluded
that these methods would be more
complex to implement and that the
simpler method would be preferable for
the calculation of an add-on payment
adjustment. In addition, we stated in the
CY 2021 ESRD PPS proposed rule that
since we are not reimbursing the cost of
the equipment, nor are we revising the
ESRD PPS at the end of the two-year
add-on payment period, based on the
information gathered, we believe this
policy is appropriate for encouraging
and supporting the uptake of new and
innovative renal dialysis equipment and
supplies.
In order to determine the basis of
payment for capital-related assets that
are home dialysis machines when used
in the home for a single patient, we
proposed certain additional steps that
MACs would take after determining the
price to develop the TPNIES per
treatment payment amount. That is, we
proposed to add paragraph (f) to
§ 413.236 to establish the pricing for the
TPNIES for capital-related assets that
are home dialysis machines when used
in the home for a single patient that
meet the eligibility criteria in
§ 413.236(b). We proposed in
§ 413.236(f)(1) that, using the price
determined under § 413.236(e), the
MACs would follow a 2-step
methodology for calculating a preadjusted per treatment amount.
Under the first step, the MACs would
determine the annual allowance that
represents the amount of the MACdetermined price that is allocable to 1
year. To calculate the annual allowance,
we proposed that the MACs would use
the straight-line depreciation method by
dividing the MAC-determined price by
the useful life of the home dialysis
machine. In accordance with the
straight-line depreciation method, the
MAC would divide the MACdetermined price by 5 (the useful life for
dialysis machines established by the
AHA is 5 years).
Under the second step, the MACs
would calculate a pre-adjusted per
treatment amount by dividing the
annual allowance by the expected
number of treatments to yield a preadjusted per treatment amount. That is,
the MACs would establish a preadjusted per treatment amount by
dividing the annual allowance by the
number of treatments expected to be
furnished in a year. For home dialysis
machines that are expected to be used
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3 times per week, the annual number of
treatments is 156 (3 treatments/week ×
52 weeks = 156 treatments/year). We
noted, for purposes of calculating this
TPNIES add-on payment adjustment,
MACs do not determine the number of
expected treatments. This information
will be provided by CMS through the
Change Request.
(a) Alternative To Offset the PreAdjusted Per Treatment Amount
In the CY 2011 ESRD PPS final rule
(75 FR 49075), we stated that when we
computed the ESRD PPS base rate, we
used the composite rate payments made
under Part B in 2007 for dialysis in
computing the ESRD PPS base rate.
These are identified in Table 19 of the
CY 2011 ESRD PPS final rule (75 FR
49075) as ‘‘composite rate services.’’
Sections 1881(b)(14)(A)(i) and
1881(b)(14)(B) of the Act specify the
renal dialysis services that must be
included in the ESRD PPS bundled
payment, which includes items and
services that were part of the composite
rate for renal dialysis services as of
December 31, 2010. As we indicated in
the CY 2011 ESRD PPS proposed rule
(74 FR 49928), the case-mix adjusted
composite payment system represents a
limited PPS for a bundle of outpatient
renal dialysis services that includes
maintenance dialysis treatments and all
associated services including
historically defined dialysis-related
drugs, laboratory tests, equipment,
supplies and staff time (74 FR 49928).
In the CY 2011 ESRD PPS final rule (75
FR 49062), we noted that total
composite rate costs in the per treatment
calculation included costs incurred for
training expenses, as well as all home
dialysis costs.
In addition, as we discussed in the CY
2021 ESRD PPS proposed rule (85 FR
42150 through 42151), these composite
rate payments, and consequently the
ESRD PPS base rate, include an amount
associated with the costs of capitalrelated assets that are home dialysis
machines. As we discussed in the CY
2021 ESRD PPS proposed rule, we
believe that capital-related assets are
distinguishable from drugs and
biological products and supplies, which
are single-use or disposable items,
whereas ESRD facilities can continually
use a home dialysis machine past its
expected useful life and for multiple
patients (consecutively). Therefore, we
stated that an offset of the proposed
TPNIES pre-adjusted per treatment
amount may be warranted so that the
TPNIES would cover the estimated
marginal costs of new and innovative
home dialysis machines. That is, ESRD
facilities using the new and innovative
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home dialysis machine would receive a
per treatment payment to cover some of
the cost of the new machine per
treatment minus a per treatment
payment amount that we estimate to be
included in the ESRD PPS base rate for
current home dialysis machines that
they already own.
To account for the costs already paid
through the ESRD PPS base rate for
current home dialysis machines that
ESRD facilities already own, we
considered an alternative to our
proposal that would include an
additional step to calculating the
TPNIES. That is, we would apply an
offset to the pre-adjusted per treatment
amount. We noted in the CY 2021 ESRD
PPS proposed rule that if we were to
adopt an offset in the final rule, we
would add language to the proposed
§ 413.236(f) specifying the methodology
used to compute the offset and its
place—the final step—in the
computation of the TPNIES for new and
innovative home dialysis machines that
meet the eligibility criteria.
(b) Methodology for Estimating Home
Machine and Equipment Cost Per Home
Treatment
In order to establish the value of the
offset, which would be an estimate of an
average home dialysis machine and
equipment cost per HD-equivalent home
dialysis treatment to use as the offset
amount, we proposed the following
methodology. First, we would estimate
annualized dialysis machine and
equipment cost and treatment counts
from cost reports for each ESRD facility
for 2018. Next, we would compute an
HD-equivalent home dialysis treatment
percentage for each ESRD facility by
dividing the annualized HD-equivalent
home treatment counts by the
annualized HD-equivalent treatment
counts across all modalities. Then we
would apply the home dialysis
treatment percentage to the annualized
dialysis machine and equipment cost to
derive an estimated home dialysis
machine and equipment cost for each
ESRD facility. Next, we would aggregate
the home dialysis machine and
equipment costs and the HD-equivalent
home treatment counts to derive an
average home dialysis machine and
equipment cost per home dialysis
treatment across all ESRD facilities.
Finally, we would inflate the 2018
average home dialysis machine and
equipment cost per home treatment to
2021 using the ESRDB market basket
update less productivity for CY 2019,
CY 2020, and CY 2021, and scale the
costs to ESRD PPS payments using the
ratio of total cost per treatment for CY
2021, which is obtained by scaling the
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CY 2018 cost per treatment to CY 2021
using the ESRDB market basket update
less productivity for CY 2019, CY 2020,
and CY 2021, to the total ESRD PPS
payment per treatment projected for CY
2021.
We would obtain annualized dialysis
machine and equipment cost and
treatment counts from freestanding and
hospital-based ESRD cost reports. For
independent/freestanding ESRD
facilities, we would use renal facility
cost reports (CMS form 265–11). We
would obtain dialysis machine and
equipment cost 12 from Worksheet B,
Column 4, and sum up Lines 8.01
through 17.02. We would obtain dialysis
treatment counts by modality from
Worksheet D, Column 1, Lines 1
through 10. Since home continuous
ambulatory peritoneal dialysis (CAPD)
and continuous cycling peritoneal
dialysis (CCPD) treatment counts are
reported in patient weeks, we would
multiply them by 3 to get HD-equivalent
counts. Finally, we would aggregate all
home dialysis treatment counts to
obtain each ESRD facility’s HDequivalent home dialysis treatment
counts and we would aggregate the
treatment counts to obtain each
freestanding ESRD facility’s HDequivalent dialysis treatment counts for
all modalities.
For hospital-based ESRD facilities, we
would use hospital cost reports (CMS
form 2552–10). We would obtain
dialysis machine and equipment cost
from Worksheet I–2, Column 2, and
then sum up Lines 2 through 11. We
would derive dialysis treatment counts
by modality from Worksheet I–4,
Column 1, Lines 1 through 10. Home
Continuous Ambulatory Peritoneal
Dialysis and Continuous Cyclic
Peritoneal Dialysis treatment counts are
reported in patient weeks, so we would
multiply them by 3 to get HD-equivalent
counts. We would aggregate all home
treatment counts to obtain each
hospital-based ESRD facility’s HDequivalent home dialysis treatment
counts. Then we would aggregate all
treatment counts to obtain each
hospital-based ESRD facility’s HDequivalent dialysis treatment counts for
all modalities.
We stated in the CY 2021 ESRD PPS
proposed rule that using this
methodology for both freestanding and
hospital-based ESRD facilities would
12 Here dialysis machine and equipment cost
includes capital-related costs of moveable
equipment, rented and/or purchased, and
maintenance on the dialysis machine and any
support equipment. This also includes the
equipment and associated maintenance and repair
and installation costs necessary to render the water
acceptable for use in dialysis.
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71423
result in an offset of $9.23. We noted
that if we were to adopt this approach,
the MAC would apply this additional
step in calculating the pre-adjusted per
treatment amount. That is, the MAC
would offset the pre-adjusted per
treatment amount by deducting $9.23 to
account for the costs already paid
through the ESRD PPS base rate for
current home dialysis machines that
ESRD facilities already own. We stated
that we believe this methodology would
provide an approximation of the cost of
the home dialysis machine in the base
rate. Further, we noted that we believe
deducting this amount from the
calculated pre-adjusted per treatment
amount would be reasonable because
the beneficiary would not be using two
home dialysis machines at the same
time and at the end of the 2 years, the
ESRD facility would retain ownership of
the asset, specifically, the home dialysis
machine.
We solicited comments on this
alternative approach to apply an offset
to the proposed pre-adjusted per
treatment amount and specifically
solicited comments on the methodology
we would use to compute the value of
the offset.
Finally, consistent with the policies
finalized last year in § 413.236(d) for the
TPNIES, we proposed to revise
§ 413.236(d) to reflect that we would
pay 65 percent of the pre-adjusted per
treatment amount for capital-related
assets that are home dialysis machines
when used in the home for a single
patient. That is, as discussed in the CY
2020 ESRD PPS final rule (84 FR 60692
through 60693), we finalized a policy to
base the TPNIES payment on 65 percent
of the MAC-determined price in order to
maintain consistency with the IPPS
NTAP payment policy and to mitigate
the Medicare expenditures incurred as a
result of the TPNIES. Therefore, we
proposed to pay 65 percent of the preadjusted per treatment amount for these
machines.
For example, for a home dialysis
machine that has a MAC-determined
price of $25,000 and a 5-year useful life,
using the proposed straight-line
depreciation method, the annual
allowance would equate to $5,000 per
year. At 156 treatments per year, the
pre-adjusted per treatment amount is
$32.05 ($5,000/156) and 65 percent of
that amount equals a TPNIES per
treatment add-on payment amount of
$20.83 ($32.05 × .65). We noted that,
currently, the useful life of 5 years and
the expected number of treatments of
156 is fixed since these variables have
been established by CMS. That is, as we
discussed previously in this section
with regard to the use of the AHA
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guidance that dialysis machines have a
5-year useful life. With regard to the
expected number of treatments, this is
based on the current payment policy of
3 treatments per week. Under the
alternative proposal, we would reduce
the pre-adjusted per treatment add-on
payment amount ($32.05) by $9.23 to
offset the amount for a dialysis machine
included in the base rate ($32.05¥$9.23
= $22.82). Then 65 percent of that
amount would equal a TPNIES per
treatment add-on payment amount of
$14.83 ($22.82 × .65).
We explained in the CY 2021 ESRD
PPS proposed rule that in the future, if
an innovative home dialysis machine is
designed to require fewer treatments per
week relative to existing machines,
MACs, using the same methodology
could account for fewer treatments in
the denominator in the calculation of
the pre-adjusted per treatment amount.
This change to the denominator would
allow the total TPNIES amount paid at
the end of the year to be equivalent to
the annual allowance and we would
then proceed with the calculation to
achieve the targeted 65 percent of that
annual allowance.
For a PD cycler that is used 7 times
per week, the annual allowance for
TPNIES would remain at $5,000 per
year. A daily modality, or 7 treatments
per week, equals 364 treatments per
year (7 treatments per week × 52 weeks
= 364 treatments per year). The annual
allowance (numerator) would be
divided by the number of treatments
(denominator). At 364 treatments per
year, the pre-adjusted per treatment
amount would be $13.74 ($5,000/364
treatments = $13.74); and 65 percent of
that amount would yield a TPNIES per
treatment add-on payment of $8.93.
Under the alternative proposal, we
would reduce the pre-adjusted per
treatment add-on payment amount
($13.74) by an offset to reflect the
amount for a dialysis machine included
in the base rate. We would apply the
HD-equivalency calculation, that is used
to convert PD treatments for payment
purposes, to the offset since the per
treatment amount in this example is a
daily modality. Therefore, the offset
would be $3.96 ($9.23*(3/7) = $27.69/7
= $3.96). Then the pre-adjusted per
treatment add-on payment amount
would be $9.51 ($13.47¥$3.96 = $9.51).
Then 65 percent of that amount would
equal a TPNIES per treatment add-on
payment amount of $6.18 ($9.51 × .65 =
$6.18).
The methodology is the same. The
two variables, regardless of modality,
are: (1) The cost of the machine used to
calculate annual allowance (2) the
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number of treatments the machine is
expected to deliver per year.
We invited public comment on using
the proposed and alternative method for
determining the pricing of capitalrelated assets that are home dialysis
machines when used in the home for a
single patient and that meet the
eligibility criteria in § 413.236(b),
including the revisions discussed in
section II.B.3.b.(1) of this final rule.
Consistent with the TPNIES policy
and in accordance with § 413.236(d)(1),
we proposed that we would apply the
TPNIES for these home dialysis
machines for 2-calendar years from the
effective date of the change request,
which would coincide with the effective
date of a future CY ESRD PPS final rule.
In the change request we would specify
that the add-on payment adjustment
would be applicable to home dialysis
treatments and provide the billing
guidance on how to report the
miscellaneous code for the eligible item
on the claim until a permanent HCPCS
is available.
As we stated in the CY 2021 ESRD
PPS proposed rule, we believe the
duration of the application of the
TPNIES for all equipment and supplies
determined eligible for this payment
adjustment should be consistent, and
that 2 years would be a sufficient
timeframe for ESRD facilities to set up
or adjust business practices so that there
is seamless access to the new and
innovative home dialysis machines. In
addition, we noted that in light of the
current COVID–19 pandemic,
stakeholders are increasingly aware of
the importance of having home dialysis
readily available and in place to prevent
ESRD patients from being exposed to
asymptomatic or pre-symptomatic
infections that contribute to COVID–19
transmission by having to utilize incenter dialysis.
We further stated that we believe that
providing the TPNIES for 2 years for
these machines would address the
stakeholders’ concerns regarding
additional payment to account for
higher cost of more new and innovative
home dialysis machines that they
believe may not be adequately captured
by the dollars allocated in the ESRD PPS
base rate. That is, we believe that the
TPNIES would help remove barriers to
market penetration and foster
competition with other dialysis
machines that are already on the market.
In the CY 2021 ESRD PPS proposed
rule, we noted that this proposal would
increase Medicare expenditures, which
would result in increases to ESRD
beneficiary co-insurance, since we have
not previously provided a payment
adjustment for any capital-related assets
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in the past. However, to support HHS’s
goals and initiatives to increase home
dialysis and the President’s Executive
order of July 10, 2019, we stated that we
believe that the proposed expansion of
the TPNIES to capital-related assets that
are home dialysis machines when used
in the home for a single patient would
be appropriate to support ESRD facility
uptake in furnishing new and
innovative renal dialysis equipment to
ESRD patients.
We noted that the intent of the
proposed TPNIES for new and
innovative capital-related assets that are
home dialysis machines when used in
the home would be to provide a
transition period to support ESRD
facility use of these machines when they
are new and innovative to the market.
We stated that, at this time, we do not
believe that it would be appropriate to
add dollars to the ESRD PPS base rate
for new and innovative home dialysis
machines because, as noted previously,
the ESRD PPS base rate includes the
cost of equipment and supplies used to
furnish a dialysis treatment.
While we would monitor renal
dialysis service utilization trends during
the TPNIES payment period, we
proposed that these capital-related
assets that are home dialysis machines
when used in the home would not be
eligible outlier services as provided in
§ 413.237. As assets, capital-related
home dialysis machines are distinct
from operating expenses such as the
disposable supplies and leased
equipment with no conveyed ownership
rights. These expenses are generally
accounted for on a per patient basis and
therefore, when used in excess of the
average constitute outlier use, which
makes them eligible for outlier
payments.
Therefore, we proposed revisions at
§ 413.236(d)(2) to reflect that following
payment of the TPNIES for new and
innovative capital-related assets that are
home dialysis machines when used in
the home for a single patient, the ESRD
PPS base rate will not be modified and
the equipment would not be an eligible
outlier service as provided in § 413.237.
In addition, we proposed revisions at
§ 413.237(a)(1)(v) to exclude capitalrelated assets that are home dialysis
machines when used in the home for a
single patient from outlier eligibility
after the TPNIES period ends. We also
proposed minor editorial changes to
paragraph (a)(1)(i) to remove the
semicolon at the end of the sentence
and add a period in its place; and in
paragraph (a)(1)(iv) to remove ‘‘; and’’
and add a period in its place.
With regard to the TPNIES
application, we would post any final
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changes to both the timing of the
various eligibility criteria and the
content of the TPNIES application to the
TPNIES website, along with information
about all renal dialysis equipment and
supplies that CMS has determined are
eligible for the TPNIES, consistent with
the policies we finalize in the CY 2021
ESRD PPS final rule. The TPNIES
website is available at: https://
www.cms.gov/medicare/esrd-pps/esrdpps-transitional-add-paymentadjustment-new-and-innovativeequipment-and-supplies-tpnies.
The comments we received and our
responses to the comments on our
proposed and alternative pricing
methodology are set forth below:
Comment: A group of organizations,
representing the kidney and medical
technology communities recommended
that CMS extend the TPNIES period
from 2 years to at least 3 years. They
stated that 2 years is an inadequate
amount of time after taking into account
the scale of resources and time
necessary to build a responsible support
and distribution infrastructure
nationwide. This is especially true for
companies in their earlier stages, for
example, small manufacturers that tend
to lack the type of distribution and
support infrastructure that their larger,
more established counterparts may
feature. Furthermore, staffing
constraints could mean the technology
would take too long to come to market,
causing the ESRD facility to be unable
to get the TPNIES for 2 years.
Accordingly, the commenter stated that
a 2-year TPNIES period creates a level
of risk that would discourage smaller
start-up companies from pursuing the
development of new and innovative
equipment and supplies. These
commenters stated that extending the
TPNIES period would help level the
playing field between small innovators
and large, global manufacturers with an
existing support and distribution
footprint. They pointed out that the new
technology add-on payment that applies
under the hospital inpatient setting
allows for technologies to qualify for the
add-on payment up to three years to
account for the lag time in data
collection to be reflected in updated
MS–DRGs. Given that it takes
significantly longer for devices,
particularly home dialysis machines, to
achieve significant adoption, they stated
that CMS should align with the hospital
inpatient policy and allow for an
additional year of TPNIES.
Many commenters urged CMS to
reconsider the proposed policy to limit
the TPNIES to only 2 years and not
adjust the base rate when truly
innovative renal equipment and
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supplies are added to the ESRD PPS
bundled payment. They noted that,
experience with the TDAPA for
calcimimetics demonstrates that having
a three-year transition period is
important for data collection purposes,
giving CMS adequate time to review
claims and determine whether the base
rate should be adjusted. Commenters
reported that small, independent and
low-volume ESRD facilities continue to
experience low to negative Medicare
margins and that, while TDAPA and
TPNIES can provide helpful transitional
add-on payment adjustments for limited
periods of time, they do not account for
incorporating innovative renal drugs,
equipment and supplies into highquality clinical care over the long term.
Commenters suggested that CMS could
increase the base rate by the difference
between the cost of the TPNIES-eligible
device and the amount to dollars
already in the base rate for similar
devices and that this methodology
would recognize the dollars already in
the base rate, but still establish a fair,
yet competitive, playing field allowing
for long-term stability.
Other commenters pointed out that if
a new home dialysis machine is eligible
for the TPNIES in 2022 and 2023, only
a machine that is used continuously
between January 2022 and December
2023 will be reimbursed at an amount
equivalent to 26 percent of the MACdetermined price. In contrast, a machine
that is used continuously between
January 2023 and December 2023 will
be reimbursed at an amount equivalent
to only 13 percent of the MACdetermined price. The commenter
encouraged CMS to consider the
following adaptation: If a home dialysis
machine is eligible for the TPNIES in
2022 and 2023, then an ESRD facility
may collect TPNIES payments for two
years after the first use of the machine
among all patients in the facility. In
other words, an ESRD facility that
collects its first TPNIES payment for a
home dialysis machine in October 2022
will be eligible for continued payments
through September 2024. Nevertheless,
that ESRD facility must collect its first
TPNIES payment no later than
December 2023. The commenter stated
that this adaptation would allow all
ESRD facilities to have an opportunity
to collect 26 percent of the MACdetermined price.
Response: We believe the commenter
is requesting that we pay the TPNIES for
3 years, similar to the length of time we
paid the TDAPA for calcimimetics, and
that like calcimimetics we then adjust
the base rate to account for the cost of
such products. Since we are not
adjusting the base rate for the
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equipment and supplies eligible for the
TPNIES, the collection of data for a 3year period of time is not necessary. We
believe the payment of the TPNIES for
2 years is adequate time for ESRD
facilities to incorporate new products
into their business model. With regard
to the commenters’ concern with the
duration of the TPNIES and when it
would begin for ESRD facilities that are
unable to obtain and report the
equipment or supply on the claim
beginning January 1, we understand the
commenters’ concern and will consider
refinements to the TPNIES to address
this issue in future rulemaking. We
continue to believe that 2 years is
adequate since the purpose of TPNIES is
to support facility uptake of these items
and that this policy strikes an
appropriate balance between supporting
ESRD facilities and limiting the
financial burden that increased
payments place on beneficiaries and
Medicare expenditures. In addition, we
note that this is the first year of
implementing the TPNIES for capital
related assets that are home dialysis
machines and we intend to monitor the
use and payments for the TPNIES to
assess whether new and innovative
machines are adopted by the ESRD
facilities.
With regard to small manufacturers
that may take longer to have their
equipment or supply come to market,
we note that the purpose of the TPNIES
is to facilitate ESRD facility uptake of
the new and innovative equipment and
supplies. Unlike the IPPS NTAP that
will end in an adjustment to the MS–
DRG, there will be no change in the
ESRD PPS base rate when TPNIES ends,
therefore, the data collection needs are
not the same. We believe providing 2
years of an add-on payment adjustment
for supplies and equipment is sufficient
time for market uptake if the
manufacturers prepare in advance of the
TPNIES application. Doing so will allow
ESRD facilities to align their business
plan to obtain 2 full years of TPNIES
payments.
Comment: A commenter expressed
concern that home dialysis machines
were being defined as in their entirety,
meaning that one new part of a machine
does not make the entire capital-related
asset new. The commenter explained
that PD patients often have issues
related to handling and storage of PD
solution and if an innovator develops a
machine that generates PD solution that
interfaces with an existing cycler, the
machine could not be considered for
TPNIES eligibility. The commenter
recommended that CMS finalize a
TPNIES expansion that will offer a clear
pathway to approval of machines that
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produce on-demand PD solution. The
commenter also questioned the
disqualification of water purification
systems, but recognized that the
application of such systems to the home
setting is unclear.
Response: The commenter is correct
that a piece of equipment that is used
along with a PD cycler or HD machine
would not meet our definition of a home
dialysis machine, however, such
equipment could be considered for the
TPNIES as renal dialysis equipment
(which was finalized in the CY 2020
ESRD PPS final rule (84 FR 60691
through 60692) and implemented
January 1, 2020). We note that the
exclusion of other capital-related assets,
such as water purification systems,
applies to the systems used in ESRD
facilities for in-center dialysis and
benefits all in-center patients. Our
payment methodology for capitalrelated assets that are home dialysis
machines addresses individual patient
use in the home and is not geared to
assets that benefit all patients.
Comment: A group of organizations
representing the kidney and medical
technology communities requested that
CMS instruct MACs to provide public,
timely, and consistent payment
determinations. They recommended
that CMS exclude the language in the
regulation that gives MACs flexibility to
determine the pricing of any TPNIES
supply, equipment or capital-related
asset that meets the TPNIES eligibility
criteria based on charges and payment
amounts for other equipment and
supplies that may be comparable or
otherwise relevant. They stated that the
regulatory language undermines CMS
approvals for applicants of the TPNIES
as, by definition, approved products
have achieved SCI over existing
products. They also recommended that
CMS more clearly define the payment
parameters and instruct the MACs to
publish a database online that provides
a discrete TPNIES payment amount no
later than March 31 of the first year of
TPNIES eligibility.
MedPAC supported the proposal to
base the TPNIES amount on the price
established by the MACs (using
information from invoices and other
relevant sources of information) but
only for the first two calendar quarters
after CMS begins applying the TPNIES.
Thereafter, they recommended that CMS
set the price of new equipment and
supplies using a method based on
pricing data collected directly from each
manufacturer, similar to how the agency
establishes the ASP for Part B drugs.
They explained that the ASP for a Part
B drug reflects the average price realized
by the manufacturer for its sales broadly
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across different types of purchasers, for
patients with different types of
insurance coverage, and based on the
manufacturer’s sales to all purchasers
(with certain exceptions) net of
manufacturer rebates, discounts, and
price concessions. They stated that an
approach similar to how CMS collects
ASP data would increase the
consistency of pricing data and should
lead to more accurate payment rates for
items paid under the TPNIES. They
further recommended that CMS link
payment of the TPNIES to a requirement
that equipment and supply
manufacturers submit ASP-like data to
the agency, similar to the TDAPA
policy.
Response: We continue to believe that
the payment amounts for other
equipment and supplies that may be
comparable or otherwise relevant, as
described at § 413.236(e)(1)(iv) of this
final rule, as an important consideration
for the MACs to determine the price of
any TPNIES supply, equipment or
capital-related asset that meets the
TPNIES eligibility criteria. While we
recognize that TPNIES items will have
demonstrated SCI over existing items,
we seek to avoid Medicare paying 65
percent of an excessively inflated price,
for example, a dialysis machine that is
3 times the cost of current machines.
Since the manufacturer will determine
the price to be paid by the provider, the
MACs’ consideration of charges and
payment for comparable equipment and
supplies serves as a guard rail for the
use of invoice pricing. With regard to
the suggestion that we instruct the
MACs to publish an online database
with TPNIES payment amounts, we are
working with MACs on mechanisms for
pricing transparency. We will consider
the suggestion for future rulemaking.
With regard to the suggestion for an
ASP-like reporting system, we think the
idea has merit and will take it into
consideration for future rulemaking.
Comment: An organization of LDOs
stated they are supportive of CMS fixing
the expected number of treatments at
156 for the purpose of calculating the
TPNIES value, however, they expressed
significant concerns about any policy
changes that would undermine the
ability of treating physicians to
prescribe the frequency of dialysis that
is clinically appropriate for their
patients. They suggested that CMS may
be interested in capping the TPNIES
payment for a device. They proposed
that CMS adopt a modification to the
methodology that would respect both
the TPNIES cap and the importance of
physician prescribing with regard to
frequency of dialysis. For example, CMS
could cap total TPNIES payments for a
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specific device at the maximum
allowable TPNIES payment pursuant to
the adopted methodology, even if that
amount is achieved prior to the end of
the 2-year TPNIES period.
Response: The purpose of the 156
treatments is to compute a per treatment
amount. An ESRD patient’s nephrologist
may order additional reasonable and
necessary dialysis treatments beyond 3
per week. When a MAC has determined
that the additional treatments are
reasonable and necessary, we would pay
the TPNIES on each covered treatment
that is furnished. At this time, we do not
believe it is necessary to adopt the
commenter’s suggested modification to
the proposed methodology that takes
into account both the TPNIES cap and
the prescribed frequency of dialysis;
however, we will monitor use of the
TPNIES and consider if such a policy is
necessary for future rulemaking.
Comment: A group of organizations,
representing the kidney and medical
technology communities recommended
that we establish a formal appeals
process for the manufacturers whose
applications for the TPNIES are denied.
They expressed concern that, without
an opportunity to review CMS’ initial
determination, situations may arise in
which new technologies fail to obtain a
favorable TPNIES determination due to
technical errors or insufficient
information necessary in the initial
TPNIES application. They asserted that
a formal appeals process would ensure
that TPNIES applicants would have an
opportunity to seek additional,
independent review as necessary. They
noted that the standard process for
seeking review of Medicare Part A/B
claims under 42 CFR part 405, subpart
I, may not apply, and encouraged CMS
to allow for administrative appeals of
TPNIES determinations to be conducted
within the Office of Medicare Hearings
and Appeals (that is, a hearing before
the Departmental Appeals Board).
Response: We did not propose a
formal appeals process for the
manufacturers whose applications for
TPNIES are denied for CY 2021 and
therefore we are not adopting the
suggestion. However, we thank the
commenters for this suggestion and will
consider it for future rulemaking. We
note that applicants may reapply for the
TPNIES if their application is denied as
long as they reapply within 3 years of
the date of FDA marketing authorization
or approval.
Comment: A commenter expressed
confusion about the discussion in the
proposed rule on treatment frequency
insofar as it is determinative of TPNIES
payment. The commenter stated that,
while the discussion is easier to
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contemplate for PD, as most patients
undergo treatment 6 or 7 days per week,
it does not make sense for HD. The
commenter noted that HD prescriptions
can be written for as few as 2 days or
as many as 7 days per week, and there
is no concept of an ‘‘ordinary’’ treatment
frequency for a HD machine, whether it
is used in a facility or at home. The
commenter recommended that CMS
simply issue a TPNIES payment on a
monthly basis according to whether the
ESRD facility claim includes a condition
code that indicates that a qualifying
home dialysis machine has been used.
Response: We disagree with the
commenter’s assertion that there is no
ordinary treatment frequency for HD
machines. In-center HD machines are
designed to be used 3 times per week to
achieve adequate dialysis. Our intention
of providing examples in the CY 2021
ESRD PPS proposed rule using various
annual treatments was to clarify that the
methodology for calculating the TPNIES
per treatment payment can also be used
if a new home dialysis machine was
designed to achieve adequate dialysis in
fewer treatments per week. We note
that, when questioned specifically about
frequency, a home dialysis machine
manufacturer confirmed that adequate
dialysis can be achieved in 3 treatments
per week, however, the treatments may
take longer to administer.
Comment: An LDO recommended that
we set the useful life for home dialysis
machines at 7 years rather than the 5
years we proposed. The organization
noted that standard accounting practice
is to depreciate dialysis equipment, for
the center or the home, over a period of
at least 7 years.
Response: Medicare policies 13 hold
providers to strict AHA guidelines with
respect to the useful life. Under AHA
guidelines, useful life for dialysis
machines is 5 years. ESRD facilities are
allowed to use more or less than the
AHA guidelines for business financial
reporting but they must use the AHA
guidelines for Medicare.
Comment: MedPAC did not support
expanding the TPNIES to include home
dialysis equipment, but stated that, if
CMS finalizes its proposal, it should
remove the portion of payment
attributable to home dialysis machines
from the base rate for those cases
receiving the TPNIES because paying for
new home dialysis machines under the
TPNIES for two years is duplicative of
payment for items with a similar
purpose or use that are already paid
under the ESRD PPS base rate. MedPAC
13 https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Paper-BasedManuals-Items/CMS021929.
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stated that it supported the proposal if
CMS subtracted the amount for capitalrelated machines already included in
the ESRD PPS base rate for those cases
receiving the TPNIES.
While some commenters expressed
support for the offset, an organization of
renal professionals, providers and
manufacturers, an organization of LDOs,
and an individual objected to offsetting
the TPNIES with the cost of the home
dialysis machine already included in
the base rate, stating that the purpose of
a transitional add-on payment is to
incentivize the adoption of innovative
products. These commenters stated that
the purpose of the TPNIES is not to
reimburse providers dollar for dollar for
their costs. In their view, the
government assumes the risk of making
an additional payment during the
TPNIES period with the presumed
reward of beneficiaries experiencing
clinical improvement, as claimed by the
applicant. Following the end of the
TPNIES period, the providers assume
that risk. The commenters asserted that
this is true of the inpatient and
outpatient hospital payment systems, as
well as the TPNIES. They stated, given
that the proposed TPNIES amount is
only a portion of the cost providers
incur when using the device, further
reducing the TPNIES amount with the
offset would only further reduce the
likelihood of adoption of the machine.
Response: We agree with MedPAC
that the TPNIES payment is duplicative
of payment for items with a similar
purpose or use that are already paid
under the ESRD PPS base rate. For this
reason, we are finalizing an offset to the
TPNIES payment, which we discussed
in the CY 2021 ESRD PPS rule, to reflect
the value of the dialysis machine
included in the ESRD PPS base rate.
We disagree with the commenters
who stated that applying an offset to
reflect the amount for a dialysis
machine in the base rate would reduce
the likelihood the new machine will be
purchased by ESRD facilities. We
believe that ESRD facilities will need to
buy additional dialysis machines to
support the goals of the Executive order
and the ETC model and that the TPNIES
payment will help support ESRD facility
uptake of new home dialysis machines.
Final Rule Action: After careful
consideration of the comments we
received, we are finalizing our proposed
pricing methodology for capital-related
assets that are home dialysis machines
when used in the home for a single
patient and the proposed changes to
§ 413.236(f) requiring MACs to calculate
the annual allowance and the preadjusted per treatment amount with
revisions.
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Since we are finalizing an offset to the
TPNIES payment to reflect the value of
a dialysis machine in the ESRD PPS
base rate, we revised the proposed
changes to § 413.236(f) to reflect the
additional step of calculating a per
treatment amount for use in calculating
the pre-adjusted per treatment amount.
We also revised paragraph (f) to reflect
that the pre-adjusted per treatment
amount is reduced by an estimated
average per treatment offset amount to
account for the costs already paid
through the ESRD PPS base rate.
In the CY 2021 ESRD PPS proposed
rule, we stated our intention to further
amend § 413.236(f) if we finalized the
offset. Since we are finalizing the offset,
we are adding the data sources and
methodological steps for computing the
offset in paragraph (f). In the proposed
rule the $9.23 offset was based on the
proposed CY 2021 ESRDB market basket
less the multifactor productivity
adjustment. For this final rule, we have
recomputed the offset to reflect the final
CY 2021 payment rate update factor (1.6
percent). The final offset for CY 2021 is
$9.32. We will continue to update the
offset amount on an annual basis so that
it is consistent with how the ESRD PPS
base rate is updated.
We are also finalizing the revision to
§ 413.236(d) to reflect that we would
pay 65 percent of the pre-adjusted per
treatment amount minus the offset for
capital-related assets that are home
dialysis machines when used in the
home for a single patient.
4. CY 2021 ESRD PPS Update
a. CY 2021 ESRD Bundled (ESRDB)
Market Basket Update, Productivity
Adjustment, and Labor-Related Share
In accordance with section
1881(b)(14)(F)(i) of the Act, as added by
section 153(b) of MIPPA and amended
by section 3401(h) of the Affordable
Care Act, beginning in 2012, the ESRD
PPS payment amounts are required to be
annually increased by an ESRD market
basket increase factor and reduced by
the productivity adjustment described
in section 1886(b)(3)(B)(xi)(II) of the
Act. The application of the productivity
adjustment may result in the increase
factor being less than 0.0 for a year and
may result in payment rates for a year
being less than the payment rates for the
preceding year. The statute also
provides that the market basket increase
factor should reflect the changes over
time in the prices of an appropriate mix
of goods and services used to furnish
renal dialysis services.
As required under section
1881(b)(14)(F)(i) of the Act, CMS
developed an all-inclusive ESRD
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Bundled (ESRDB) input price index (75
FR 49151 through 49162). In the CY
2015 ESRD PPS final rule we rebased
and revised the ESRDB input price
index to reflect a 2012 base year (79 FR
66129 through 66136). Subsequently, in
the CY 2019 ESRD PPS final rule, we
finalized a rebased ESRDB input price
index to reflect a 2016 base year (83 FR
56951 through 56962).
Although ‘‘market basket’’ technically
describes the mix of goods and services
used for ESRD treatment, this term is
also commonly used to denote the input
price index (that is, cost categories, their
respective weights, and price proxies
combined) derived from a market
basket. Accordingly, the term ‘‘ESRDB
market basket,’’ as used in this
document, refers to the ESRDB input
price index.
We proposed to use the CY 2016based ESRDB market basket as finalized
and described in the CY 2019 ESRD PPS
final rule (83 FR 56951 through 56962)
to compute the CY 2021 ESRDB market
basket increase factor based on the best
available data. Consistent with
historical practice, we proposed to
estimate the ESRDB market basket
update based on IHS Global Inc.’s
(IGI’s), forecast using the most recently
available data. IGI is a nationally
recognized economic and financial
forecasting firm that contracts with CMS
to forecast the components of the market
baskets. Using this methodology and
IGI’s first quarter 2020 forecast of the CY
2016-based ESRDB market basket (with
historical data through the fourth
quarter of 2019), the proposed CY 2021
ESRDB market basket increase factor
was 2.2 percent.
Under section 1881(b)(14)(F)(i) of the
Act, for CY 2012 and each subsequent
year, the ESRD market basket percentage
increase factor shall be reduced by the
productivity adjustment described in
section 1886(b)(3)(B)(xi)(II) of the Act.
The growth in multifactor productivity
(MFP) is derived by subtracting the
contribution of labor and capital input
growth from output growth. We
finalized the detailed methodology for
deriving the MFP projection in the CY
2012 ESRD PPS final rule (76 FR 40503
through 40504). The most up-to-date
MFP projection methodology is
available on the CMS website at https://
www.cms.gov/Research-Statistics-Dataand-Systems/Statistics-Trends-andReports/MedicareProgramRatesStats/
Downloads/MFPMethodology.pdf. Using
this methodology and IGI’s first quarter
2020 forecast, the proposed MFP
adjustment for CY 2021 (the 10-year
moving average of MFP for the period
ending CY 2021) was projected to be 0.4
percent.
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As a result of these provisions, the
proposed CY 2021 ESRD market basket
adjusted for MFP was 1.8 percent. The
proposed market basket increase is
calculated by starting with the proposed
CY 2021 ESRDB market basket
percentage increase factor of 2.2 percent
and reducing it by the proposed MFP
adjustment (the 10-year moving average
of MFP for the period ending CY 2021)
of 0.4 percentage point. We also
proposed that if more recent data
become available after the publication of
this proposed rule and before the
publication of the final rule (for
example, a more recent estimate of the
market basket update or MFP), we
would use such data, if appropriate, to
determine the final CY 2021 market
basket update and/or MFP adjustment
(85 FR 42152).
The comments and our responses to
the comments on the proposed ESRD
market basket update and MFP
adjustment for CY 2021 are set forth
below.
Comment: Several commenters stated
that with new drugs being added to the
ESRD PPS bundled payment, it is more
important than ever to use the most
appropriate price proxies for
determining the base rate and update
each year. The commenters urged the
adoption of a better price proxy for nonESAs that are not over-the-counter
(OTC) vitamins and recommended that
CMS use the BLS Series ID: WPS063
Series Title: PPI Commodity Data for
Chemicals and Allied Products-Drugs
and Pharmaceuticals, seasonally
adjusted. One commenter stated that the
timing of addressing the price proxy
used for non-ESA drugs in the ESRD
market basket is relevant since new
drugs in the pipeline could be added to
the ESRD PPS bundled payment during
the next few years because of the
TDAPA provisions.
Response: We appreciate the
commenters’ suggestion that we use the
most appropriate price proxy for nonESA drugs in the ESRD market basket.
We did not propose changes to the price
proxies in the ESRD market basket for
CY 2021, so we will not be adopting
such changes in this final rule.
However, as described in the CY 2019
ESRD PPS final rule (83 FR 56960
through 56961), we believe the PPI for
Vitamins, Nutrients, and Hematinic
Preparation (VNHP) is the most
appropriate price proxy for non-ESA
drugs and analysis of the ASP data for
Non-ESA drugs in the bundle suggests
the trends in the PPI VNHP trends are
reasonable. We appreciate the
commenters’ concern for the potential
shifts in the mix of drugs within the
ESRD PPS bundled payment amount as
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a result of the TDAPA provisions. We
will continue to monitor the impact that
these changes have on the relative cost
share weights and the mix of non-ESA
drugs included in the bundled payment
in the ESRDB market basket.
Comment: One commenter expressed
support for the annual update to the
ESRD PPS base rate for CY 2021 and
recognized that CMS does not have the
authority to eliminate the productivity
adjustment, but wanted to highlight
their continued concern about the
overall negative Medicare margins. The
commenter stated that the experience of
ESRD facilities disputes the idea that
productivity in ESRD facilities can be
improved year over year at the rate of
economy-wide productivity.
Response: Section 1881(b)(14)(F)(i) of
the Act requires the application of the
MFP adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act to the
ESRD PPS market basket update for
2012 and subsequent years. We will
continue to monitor the impact of the
payment updates, including the effects
of the MFP adjustment, on ESRD
provider margins as well as beneficiary
access to care as reported by MedPAC.
However, any changes to the
productivity adjustment would require a
change to current law.
In the March 2020 Report to Congress,
MedPAC found most indicators of
payment adequacy to be positive, and
recommend that for 2021, the ESRD PPS
base rate should be updated by the
amount determined under current law.
Final Rule Action: Consistent with
our historical practice and our proposal,
we are estimating the market basket
increase and the MFP adjustment based
on IGI’s forecast using the most recent
available data. Based on IGI’s third
quarter 2020 forecast with historical
data through the second quarter of 2020,
the 2016-based ESRDB market basket
percentage increase for CY 2021 is 1.9
percent. We note that the first quarter
2020 forecast used for the proposed
market basket update was developed
prior to the economic impacts of the
COVID–19 pandemic. This lower update
(1.9 percent) for CY 2021 relative to the
CY 2021 ESRD PPS proposed rule (2.2
percent) is primarily driven by slower
anticipated compensation growth for
both health-related and other
occupations as labor markets are
expected to be significantly impacted
during the recession that started in
February 2020 and throughout the
anticipated recovery.
Based on the more recent data
available for this CY 2021 ESRD PPS
final rule, the current estimate of the 10year moving average growth of MFP for
CY 2021 is projected to be 0.3 percent.
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This MFP estimate is based on the most
recent macroeconomic outlook from IGI
at the time of rulemaking (released
September 2020) in order to reflect more
current historical economic data. IGI
produces monthly macroeconomic
forecasts, which include projections of
all of the economic series used to derive
MFP. In contrast, IGI only produces
forecasts of the more detailed price
proxies used in the 2016-based ESRDB
market basket on a quarterly basis.
Therefore, IGI’s third quarter 2020
forecast is the most recent forecast of the
2016-based ESRD market basket
percentage increase factor.
We note that it has typically been our
practice to base the projection of the
market basket price proxies and MFP in
the final rule on the third quarter IGI
forecast. For this CY 2021 ESRD PPS
final rule, we are using the IGI
September macroeconomic forecast for
MFP because it is a more recent forecast,
and it is important to use more recent
data during this period when economic
trends, particularly employment and
labor productivity, are notably uncertain
because of the COVID–19 pandemic.
However, we also note that the 10-year
moving average of MFP based on the
third quarter 2020 forecast is also 0.3
percent.
Therefore, the final CY 2021 ESRD
PPS payment rate update is 1.6 percent.
That is, the CY 2021 ESRD market
basket percentage increase factor of 1.9
percent less the 0.3 percentage point
MFP adjustment (the 10-year moving
average of MFP for the period ending
CY 2021).
For the CY 2021 ESRD payment
update, we proposed to continue using
a labor-related share of 52.3 percent for
the ESRD PPS payment, which was
finalized in the CY 2019 ESRD PPS final
rule (83 FR 56963). We did not receive
any public comments on this proposal
and therefore, we are finalizing the
continued use of a 52.3 percent laborrelated share for CY 2021.
b. The CY 2021 ESRD PPS Wage Indices
khammond on DSKJM1Z7X2PROD with RULES2
(1) Background
Section 1881(b)(14)(D)(iv)(II) of the
Act provides that the ESRD PPS may
include a geographic wage index
payment adjustment, such as the index
referred to in section 1881(b)(12)(D) of
the Act, as the Secretary determines to
be appropriate. In the CY 2011 ESRD
PPS final rule (75 FR 49200), we
finalized an adjustment for wages at
§ 413.231. Specifically, CMS adjusts the
labor-related portion of the base rate to
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account for geographic differences in
the area wage levels using an
appropriate wage index, which reflects
the relative level of hospital wages and
wage-related costs in the geographic
area in which the ESRD facility is
located. We use the Office of
Management and Budget’s (OMB’s)
core-based statistical area (CBSA)-based
geographic area designations to define
urban and rural areas and their
corresponding wage index values (75 FR
49117). OMB publishes bulletins
regarding CBSA changes, including
changes to CBSA numbers and titles.
The bulletins are available online at
https://www.whitehouse.gov/omb/
information-for-agencies/bulletins/.
For CY 2021, we updated the wage
indices to account for updated wage
levels in areas in which ESRD facilities
are located using our existing
methodology. We used the most recent
pre-floor, pre-reclassified hospital wage
data collected annually under the
inpatient PPS. The ESRD PPS wage
index values are calculated without
regard to geographic reclassifications
authorized under sections 1886(d)(8)
and (d)(10) of the Act and utilize prefloor hospital data that are unadjusted
for occupational mix. For CY 2021, the
updated wage data are for hospital cost
reporting periods beginning on or after
October 1, 2016 and before October 1,
2017 (FY 2017 cost report data).
We have also adopted methodologies
for calculating wage index values for
ESRD facilities that are located in urban
and rural areas where there is no
hospital data. For a full discussion, see
CY 2011 and CY 2012 ESRD PPS final
rules at 75 FR 49116 through 49117 and
76 FR 70239 through 70241,
respectively. For urban areas with no
hospital data, we compute the average
wage index value of all urban areas
within the state to serve as a reasonable
proxy for the wage index of that urban
CBSA, that is, we use that value as the
wage index. For rural areas with no
hospital data, we compute the wage
index using the average wage index
values from all contiguous CBSAs to
represent a reasonable proxy for that
rural area. We apply the statewide urban
average based on the average of all
urban areas within the state to
Hinesville-Fort Stewart, Georgia (78 FR
72173), and we apply the wage index for
Guam to American Samoa and the
Northern Mariana Islands (78 FR
72172). In the CY 2021 ESRD PPS
proposed rule (85 FR 42152), we noted
that for the CY 2020 ESRD PPS final
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71429
rule, we did not apply the statewide
urban average to Carson City, Nevada as
we did in the CY 2020 ESRD PPS
proposed rule (84 FR 38359) because
hospital data was available to compute
the wage index.
A wage index floor value (0.5000) is
applied under the ESRD PPS as a
substitute wage index for areas with
very low wage index values. Currently,
all areas with wage index values that
fall below the floor are located in Puerto
Rico. However, the wage index floor
value is applicable for any area that may
fall below the floor. A description of the
history of the wage index floor under
the ESRD PPS can be found in the CY
2019 ESRD PPS final rule (83 FR 56964
through 56967).
An ESRD facility’s wage index is
applied to the labor-related share of the
ESRD PPS base rate. In the CY 2019
ESRD PPS final rule (83 FR 56963), we
finalized a labor-related share of 52.3
percent, which is based on the 2016based ESRDB market basket. Thus, for
CY 2021, the labor-related share to
which a facility’s wage index would be
applied is 52.3 percent.
For CY 2021, in addition to updating
the ESRD PPS wage index to use more
recent hospital wage data, we also
proposed to adopt newer OMB
delineations and a transition policy in a
budget-neutral manner as discussed in
the CY 2021 ESRD PPS proposed rule
and sections II.B.4.b.(2) and II.B.4.b.(3),
respectively, of this final rule.
(2) Implementation of 2018 OMB Labor
Market Delineations
As discussed previously in the CY
2021 ESRD PPS proposed rule and this
final rule, the wage index used for the
ESRD PPS is calculated using the most
recent pre-floor, pre-reclassified
hospital wage data collected annually
under the inpatient PPS and is assigned
to an ESRD facility on the basis of the
labor market area in which the ESRD
facility is geographically located. ESRD
facility labor market areas are delineated
based on the CBSAs established by the
OMB. In accordance with our
established methodology, we have
historically adopted through rulemaking
CBSA changes that are published in the
latest OMB bulletin. Generally, OMB
issues major revisions to statistical areas
every 10 years, based on the results of
the decennial census. However, OMB
occasionally issues minor updates and
revisions to statistical areas in the years
between the decennial censuses.
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Federal Register / Vol. 85, No. 217 / Monday, November 9, 2020 / Rules and Regulations
In the CY 2015 ESRD PPS final rule
(79 FR 66137 through 66142), we
finalized changes to the ESRD PPS wage
index based on the newest OMB
delineations, as described in OMB
Bulletin No. 13–01 14 issued on
February 28, 2013. We implemented
these changes with a 2-year transition
period (79 FR 66142). OMB Bulletin No.
13–01 established revised delineations
for U.S. Metropolitan Statistical Areas,
Micropolitan Statistical Areas, and
Combined Statistical Areas based on the
2010 Census. OMB Bulletin No. 13–01
also provided guidance on the use of the
delineations of these statistical areas
using standards published on June 28,
2010 in the Federal Register (75 FR
37246 through 37252).
On July 15, 2015, OMB issued OMB
Bulletin No. 15–01,15 which updated
and superseded OMB Bulletin No. 13–
01 issued on February 28, 2013. The
attachment to OMB Bulletin No. 15–01
provided detailed information on the
update to statistical areas since February
28, 2013. These updates were based on
the application of the 2010 Standards
for Delineating Metropolitan and
Micropolitan Statistical Areas to the
U.S. Census Bureau population
estimates for July 1, 2012 and July 1,
2013.
On August 15, 2017, OMB issued
OMB Bulletin No. 17–01,16 which
updated and superseded OMB Bulletin
No. 15–01 issued on July 15, 2015. The
attachment to OMB Bulletin No. 17–01
provided detailed information on the
update to statistical areas since July 15,
2015. These updates were based on the
application of the 2010 Standards for
Delineating Metropolitan and
Micropolitan Statistical Areas to the
U.S. Census Bureau population
estimates for July 1, 2014 and July 1,
2015. In OMB Bulletin No. 17–01, OMB
announced a new urban CBSA, Twin
Falls, Idaho (CBSA 46300).
On April 10, 2018, OMB issued OMB
Bulletin No. 18–03 17 which updated
and superseded OMB Bulletin No. 17–
01 issued on August 15, 2017. The
attachment to OMB Bulletin No. 18–03
provided detailed information on the
update to statistical areas since August
15, 2017. On September 14, 2018, OMB
issued OMB Bulletin No. 18–04,18
which updated and superseded OMB
Bulletin No. 18–03 issued on April 10,
2018. OMB Bulletin Numbers 18–03 and
18–04 established revised delineations
for Metropolitan Statistical Areas,
Micropolitan Statistical Areas, and
Combined Statistical Areas, and
provided guidance on the use of the
delineations of these statistical areas.
These updates were based on the
application of the 2010 Standards for
Delineating Metropolitan and
Micropolitan Statistical Areas to the
U.S. Census Bureau population
estimates for July 1, 2015 and July 1,
2016.
As we discussed in the CY 2021 ESRD
PPS proposed rule (85 FR 42153), while
OMB Bulletin No. 18–04 is not based on
new census data, there were some
material changes to the CBSA-based
geographic area designations based on
the 2018 OMB delineations. For
example, some new CBSAs and urban
counties would become rural, rural
counties would become urban, and
existing CBSAs would be split apart. We
explained that we believe that the 2018
OMB delineations accurately reflect the
local economies and wage levels of the
areas where ESRD facilities are located.
We also explained that we believe it is
important for the ESRD PPS to use the
most recent OMB delineations
practicable in order to maintain a more
accurate and up-to-date payment system
that reflects the reality of population
shifts and labor market conditions. We
further believe that using the newer
OMB delineations would increase the
integrity of the ESRD PPS wage index
system by creating a more accurate
representation of geographic variations
in wage levels.
Therefore, we proposed to adopt the
newer OMB delineations established in
OMB Bulletin No. 18–04 effective for
CY 2021 under the ESRD PPS. We also
proposed a wage index transition
applicable to all ESRD facilities that
experience negative impacts due to the
proposed implementation of the 2018
OMB delineations. This transition
policy is discussed in section II.B.4.b.(3)
of the CY 2021 ESRD PPS proposed rule
and section II.B.4.b.(3) of this final rule.
In the CY 2021 ESRD PPS proposed
rule (85 FR 42153), we noted that, on
March 6, 2020, OMB issued OMB
Bulletin 20–01 (available at https://
www.whitehouse.gov/wp-content/
uploads/2020/03/Bulletin-20-01.pdf).
While the March 6, 2020 OMB Bulletin
20–01 was not issued in time for
development of the proposed rule, we
were able to review the updates it
provides and have determined that they
were minor. We stated that while we do
not believe the minor updates included
in OMB Bulletin 20–01 would impact
our CY 2021 updates to the CBSA-based
labor market area delineations, if
appropriate, we would propose any
updates from this Bulletin in the CY
2022 ESRD PPS proposed rule.
As we stated in the CY 2021 ESRD
PPS proposed rule (85 FR 42153), to
implement the newer OMB delineations
established in OMB Bulletin No. 18–04
under the ESRD PPS beginning in CY
2021, it is necessary to identify the new
labor market area delineation for each
affected county and ESRD facility in the
U.S. We discuss these changes in more
detail in the following sections.
(a) Urban Counties That Would Become
Rural Under the 2018 OMB Delineations
In the CY 2021 ESRD PPS proposed
rule (85 FR 42153 through 42155), we
proposed to implement the 2018 OMB
labor market area delineations (based
upon the 2010 Decennial Census data)
beginning in CY 2021. Our analysis of
the 2018 OMB delineations showed that
a total of 34 counties (and county
equivalents) that are currently
considered part of an urban CBSA
would be considered located in a rural
area, beginning in CY 2021. In the CY
2021 ESRD PPS proposed rule (85 FR
42154), we listed the 34 urban counties
as set forth in Table 1, which would be
rural if we finalized our proposal to
adopt the 2018 OMB delineations
beginning in CY 2021.
TABLE 1—CY 2021 PROPOSED URBAN TO RURAL CBSA CROSSWALK
khammond on DSKJM1Z7X2PROD with RULES2
FIPS county
code
01127
12045
13007
County/county equivalent
State
WALKER ..........................
GULF ................................
BAKER .............................
AL .....................................
FL .....................................
GA ....................................
14 https://www.whitehouse.gov/sites/
whitehouse.gov/files/omb/bulletins/2013/b1301.pdf.
15 https://www.whitehouse.gov/sites/
whitehouse.gov/files/omb/bulletins/2015/15-01.pdf.
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16:50 Nov 06, 2020
Jkt 253001
Current CBSA
13820
37460
10500
16 https://www.whitehouse.gov/sites/
whitehouse.gov/files/omb/bulletins/2017/b-1701.pdf.
PO 00000
Frm 00034
Fmt 4701
Sfmt 4700
CBSA title
Birmingham-Hoover, AL.
Panama City, FL.
Albany, GA.
17 https://www.whitehouse.gov/wp-content/
uploads/2018/04/OMB-BULLETIN-NO.-18-03Final.pdf.
18 https://www.whitehouse.gov/wp-content/
uploads/2018/09/Bulletin-18-04.pdf.
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71431
TABLE 1—CY 2021 PROPOSED URBAN TO RURAL CBSA CROSSWALK—Continued
FIPS county
code
13235
15005
17039
17053
18143
18179
19149
20095
21223
22119
26015
26159
27143
28009
29119
30037
31081
38085
40079
45087
46033
47081
48007
48221
48351
48425
51029
51033
51063
53013
53051
County/county equivalent
State
PULASKI ..........................
KALAWAO ........................
DE WITT ...........................
FORD ...............................
SCOTT .............................
WELLS .............................
PLYMOUTH ......................
KINGMAN .........................
TRIMBLE ..........................
WEBSTER ........................
BARRY .............................
VAN BUREN .....................
SIBLEY .............................
BENTON ...........................
MC DONALD ....................
GOLDEN VALLEY ............
HAMILTON .......................
SIOUX ..............................
LE FLORE ........................
UNION ..............................
CUSTER ...........................
HICKMAN .........................
ARANSAS ........................
HOOD ...............................
NEWTON ..........................
SOMERVELL ....................
BUCKINGHAM .................
CAROLINE .......................
FLOYD ..............................
COLUMBIA .......................
PEND OREILLE ...............
GA ....................................
HI ......................................
IL .......................................
IL .......................................
IN ......................................
IN ......................................
IA ......................................
KS .....................................
KY .....................................
LA .....................................
MI ......................................
MI ......................................
MN ....................................
MS ....................................
MO ....................................
MT ....................................
NE .....................................
ND ....................................
OK ....................................
SC .....................................
SD .....................................
TN .....................................
TX .....................................
TX .....................................
TX .....................................
TX .....................................
VA .....................................
VA .....................................
VA .....................................
WA ....................................
WA ....................................
We proposed that the wage data for all
ESRD facilities located in the counties
listed above would be considered rural,
beginning in CY 2021, when calculating
their respective state’s rural wage index.
We stated in the CY 2021 ESRD PPS
proposed rule (85 FR 42155) that we
recognize that rural areas typically have
lower area wage index values than
urban areas, and ESRD facilities located
in these counties may experience a
negative impact in their payment under
the ESRD PPS due to the proposed
adoption of the 2018 OMB delineations.
Current CBSA
47580
27980
14010
16580
31140
23060
43580
48620
31140
43340
24340
28020
33460
32820
22220
13740
24260
13900
22900
43900
39660
34980
18580
23104
13140
23104
16820
40060
13980
47460
44060
CBSA title
Warner Robins, GA.
Kahului-Wailuku-Lahaina, HI.
Bloomington, IL.
Champaign-Urbana, IL.
Louisville/Jefferson County, KY-IN.
Fort Wayne, IN.
Sioux City, IA-NE-SD.
Wichita, KS.
Louisville/Jefferson County, KY-IN.
Shreveport-Bossier City, LA.
Grand Rapids-Wyoming, MI.
Kalamazoo-Portage, MI.
Minneapolis-St. Paul-Bloomington, MN-WI.
Memphis, TN-MS-AR.
Fayetteville-Springdale-Rogers, AR-MO.
Billings, MT.
Grand Island, NE.
Bismarck, ND.
Fort Smith, AR-OK.
Spartanburg, SC.
Rapid City, SD.
Nashville-Davidson—Murfreesboro—Franklin, TN.
Corpus Christi, TX.
Fort Worth-Arlington, TX.
Beaumont-Port Arthur, TX.
Fort Worth-Arlington, TX.
Charlottesville, VA.
Richmond, VA.
Blacksburg-Christiansburg-Radford, VA.
Walla Walla, WA.
Spokane-Spokane Valley, WA.
A discussion of the proposed wage
index transition policy is available in
section II.B.4.b.(3) of the CY 2021 ESRD
PPS proposed rule and section
II.B.4.b.(3) of this final rule.
(b) Rural Counties That Would Become
Urban Under the 2018 OMB
Delineations
In the CY 2021 ESRD PPS proposed
rule (85 FR 42155 through 42157), we
proposed to implement the 2018 OMB
labor market area delineations (based
upon the 2010 Decennial Census data)
beginning in CY 2021. Our analysis of
the 2018 OMB delineations showed that
a total of 47 counties (and county
equivalents) that are currently
considered located in rural areas would
be considered located in urban CBSAs,
beginning in CY 2021. In the CY 2021
ESRD PPS proposed rule (85 FR 42156),
we listed the 47 rural counties that
would be urban, as set forth in Table 2,
if we finalized our proposal to adopt the
2018 OMB delineations beginning in CY
2021.
TABLE 2—CY 2021 PROPOSED RURAL TO URBAN CBSA CROSSWALK
khammond on DSKJM1Z7X2PROD with RULES2
FIPS county
code
01063
01129
05047
12075
13259
13263
16077
17057
17087
18047
18121
18171
19015
19099
20061
21043
VerDate Sep<11>2014
Proposed
CBSA
County/county equivalent
State name
GREENE ..........................
WASHINGTON .................
FRANKLIN ........................
LEVY ................................
STEWART ........................
TALBOT ............................
POWER ............................
FULTON ...........................
JOHNSON ........................
FRANKLIN ........................
PARKE .............................
WARREN ..........................
BOONE .............................
JASPER ............................
GEARY .............................
CARTER ...........................
AL .....................................
AL .....................................
AR .....................................
FL .....................................
GA ....................................
GA ....................................
ID ......................................
IL .......................................
IL .......................................
IN ......................................
IN ......................................
IN ......................................
IA ......................................
IA ......................................
KS .....................................
KY .....................................
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Fmt 4701
46220
33660
22900
23540
17980
17980
38540
37900
16060
17140
45460
29200
11180
19780
31740
26580
Sfmt 4700
Proposed CBSA title
Tuscaloosa, AL.
Mobile, AL.
Fort Smith, AR-OK.
Gainesville, FL.
Columbus, GA-AL.
Columbus, GA-AL.
Pocatello, ID.
Peoria, IL.
Carbondale-Marion, IL.
Cincinnati, OH-KY-IN.
Terre Haute, IN.
Lafayette-West Lafayette, IN.
Ames, IA.
Des Moines-West Des Moines, IA.
Manhattan, KS.
Huntington-Ashland, WV-KY-OH.
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TABLE 2—CY 2021 PROPOSED RURAL TO URBAN CBSA CROSSWALK—Continued
FIPS county
code
22007
22067
25011
26067
26155
27075
28031
28051
28131
29053
29089
30095
37007
37029
37077
37085
39123
45027
47053
47161
48203
48431
51097
51113
51175
51620
54035
54065
55069
72001
72083
Proposed
CBSA
County/county equivalent
State name
ASSUMPTION ..................
MOREHOUSE ..................
FRANKLIN ........................
IONIA ................................
SHIAWASSEE ..................
LAKE ................................
COVINGTON ....................
HOLMES ..........................
STONE .............................
COOPER ..........................
HOWARD .........................
STILLWATER ...................
ANSON .............................
CAMDEN ..........................
GRANVILLE .....................
HARNETT .........................
OTTAWA ..........................
CLARENDON ...................
GIBSON ............................
STEWART ........................
HARRISON .......................
STERLING ........................
KING AND QUEEN ..........
MADISON .........................
SOUTHAMPTON ..............
FRANKLIN CITY ...............
JACKSON .........................
MORGAN .........................
LINCOLN ..........................
ADJUNTAS .......................
LAS MARIAS ....................
LA .....................................
LA .....................................
MA ....................................
MI ......................................
MI ......................................
MN ....................................
MS ....................................
MS ....................................
MS ....................................
MO ....................................
MO ....................................
MT ....................................
NC ....................................
NC ....................................
NC ....................................
NC ....................................
OH ....................................
SC .....................................
TN .....................................
TN .....................................
TX .....................................
TX .....................................
VA .....................................
VA .....................................
VA .....................................
VA .....................................
WV ....................................
WV ....................................
WI .....................................
PR .....................................
PR .....................................
We proposed that when calculating
the area wage index, beginning with CY
2021, the wage data for ESRD facilities
located in these counties would be
included in their new respective urban
CBSAs. We stated in the CY 2021 ESRD
PPS proposed rule (85 FR 42157) that
typically, ESRD facilities located in an
urban area receive a higher wage index
value than or equal wage index value to
ESRD facilities located in their state’s
rural area. A discussion of the proposed
wage index transition policy is available
in section II.B.4.b.(3) of the CY 2021
Proposed CBSA title
12940
33740
44140
24340
29620
20260
25620
27140
25060
17860
17860
13740
16740
47260
20500
22180
45780
44940
27180
17300
30980
41660
40060
47894
47260
47260
16620
25180
48140
38660
32420
Baton Rouge, LA.
Monroe, LA.
Springfield, MA.
Grand Rapids-Kentwood, MI.
Lansing-East Lansing, MI.
Duluth, MN-WI.
Hattiesburg, MS.
Jackson, MS.
Gulfport-Biloxi, MS.
Columbia, MO.
Columbia, MO.
Billings, MT.
Charlotte-Concord-Gastonia, NC-SC.
Virginia Beach-Norfolk-Newport News, VA-NC.
Durham-Chapel Hill, NC.
Fayetteville, NC.
Toledo, OH.
Sumter, SC.
Jackson, TN.
Clarksville, TN-KY.
Longview, TX.
San Angelo, TX.
Richmond, VA.
Washington-Arlington-Alexandria, DC-VA-MD-WV
Virginia Beach-Norfolk-Newport News, VA-NC.
Virginia Beach-Norfolk-Newport News, VA-NC.
Charleston, WV.
Hagerstown-Martinsburg, MD-WV.
Wausau-Weston, WI.
Ponce, PR.
Mayagu¨ez, PR.
ESRD PPS proposed rule and section
II.B.4.b.(3) of this final rule.
(c) Urban Counties That Would Move to
a Different Urban CBSA Under the 2018
OMB Delineations
In the CY 2021 ESRD PPS proposed
rule (85 FR 42157 through 42158), we
stated that in certain cases, adopting the
2018 OMB delineations would involve a
change only in CBSA name and/or
number, while the CBSA continues to
encompass the same constituent
counties. For example, we noted that
CBSA 19380 (Dayton, OH) would
experience both a change to its number
and its name, and become CBSA 19430
(Dayton-Kettering, OH), while all of its
three constituent counties would remain
the same. We also stated that in other
cases, only the name of the CBSA would
be modified, and none of the currently
assigned counties would be reassigned
to a different urban CBSA. In the CY
2021 ESRD PPS proposed rule (85 FR
42158), we listed the CBSAs where
there would be a change either in CBSA
name or CBSA number, as set forth in
Table 3, if we finalized our proposal to
adopt the 2018 OMB delineations
beginning in CY 2021.
TABLE 3—CY 2021 PROPOSED CHANGE IN CBSA NAME AND/OR NUMBER CROSSWALK
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Current
CBSA code
10540
11500
12060
12420
13460
13980
14740
15380
19430
24340
24860
25060
25540
25940
VerDate Sep<11>2014
Proposed
CBSA code
Current CBSA title
Albany, OR ....................................................................
Anniston-Oxford-Jacksonville, AL .................................
Atlanta-Sandy Springs-Roswell, GA .............................
Austin-Round Rock, TX .................................................
Bend-Redmond, OR ......................................................
Blacksburg-Christiansburg-Radford, VA .......................
Bremerton-Silverdale, WA .............................................
Buffalo-Cheektowaga-Niagara Falls, NY ......................
Dayton-Kettering, OH ....................................................
Grand Rapids-Wyoming, MI ..........................................
Greenville-Anderson-Mauldin, SC .................................
Gulfport-Biloxi-Pascagoula, MS ....................................
Hartford-West Hartford-East Hartford, CT ....................
Hilton Head Island-Bluffton-Beaufort, SC .....................
16:50 Nov 06, 2020
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Frm 00036
Fmt 4701
10540
11500
12060
12420
13460
13980
14740
15380
19380
24340
24860
25060
25540
25940
Sfmt 4700
Proposed CBSA title
Albany-Lebanon, OR.
Anniston-Oxford, AL.
Atlanta-Sandy Springs-Alpharetta, GA.
Austin-Round Rock-Georgetown, TX.
Bend, OR.
Blacksburg-Christiansburg, VA.
Bremerton-Silverdale-Port Orchard, WA.
Buffalo-Cheektowaga, NY.
Dayton, OH.
Grand Rapids-Kentwood, MI.
Greenville-Anderson, SC.
Gulfport-Biloxi, MS.
Hartford-East Hartford-Middletown, CT.
Hilton Head Island-Bluffton, SC.
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Federal Register / Vol. 85, No. 217 / Monday, November 9, 2020 / Rules and Regulations
71433
TABLE 3—CY 2021 PROPOSED CHANGE IN CBSA NAME AND/OR NUMBER CROSSWALK—Continued
Current
CBSA code
28700
31860
33340
34940
35660
36084
36500
38060
39150
23224
44420
44700
45940
46700
47300
48140
48424
Proposed
CBSA code
Current CBSA title
Kingsport-Bristol-Bristol, TN-VA ....................................
Mankato-North Mankato, MN ........................................
Milwaukee-Waukesha-West Allis, WI ............................
Naples-Immokalee-Marco Island, FL ............................
Niles-Benton Harbor, MI ................................................
Oakland-Hayward-Berkeley, CA ...................................
Olympia-Tumwater, WA ................................................
Phoenix-Mesa-Scottsdale, AZ .......................................
Prescott Valley-Prescott, AZ .........................................
Frederick-Gaithersburg-Rockville, MD ..........................
Staunton-Waynesboro, VA ............................................
Stockton-Lodi, CA .........................................................
Trenton, NJ ....................................................................
Vallejo-Fairfield, CA .......................................................
Visalia-Porterville, CA ....................................................
Wausau, WI ...................................................................
West Palm Beach-Boca Raton-Delray Beach, FL ........
28700
31860
33340
34940
35660
36084
36500
38060
39140
43524
44420
44700
45940
46700
47300
48140
48424
Proposed CBSA title
Kingsport-Bristol, TN-VA.
Mankato, MN.
Milwaukee-Waukesha, WI.
Naples-Marco Island, FL.
Niles, MI.
Oakland-Berkeley-Livermore, CA.
Olympia-Lacey-Tumwater, WA.
Phoenix-Mesa-Chandler, AZ.
Prescott, AZ.
Silver Spring-Frederick-Rockville, MD.
Staunton, VA.
Stockton, CA.
Trenton-Princeton, NJ.
Vallejo, CA.
Visalia, CA.
Wausau-Weston, WI.
West Palm Beach-Boca Raton-Boynton Beach, FL.
delineations, counties would shift
between existing and new CBSAs,
changing the constituent makeup of the
CBSAs. We considered these types of
changes, where CBSAs are split into
multiple new CBSAs or a CBSA loses
one or more counties to another urban
CBSAs, to be significant modifications.
In the CY 2021 ESRD PPS proposed
rule (85 FR 42160), we listed the urban
In the CY 2021 ESRD PPS proposed
rule (85 FR 42159), we explained that
ESRD facilities located in an urban area
that, due to the 2018 OMB delineations,
involves a change only in the CBSA
name or number would not experience
a consequential change in their wage
index value.
However, we also stated that in other
cases, if we adopted the 2018 OMB
counties that would move from one
urban CBSA to another a newly
proposed or modified CBSA, as set forth
in Table 4, if we finalized our proposal
to adopt the 2018 OMB delineations
beginning in CY 2021.
TABLE 4—CY 2021 PROPOSED URBAN TO A DIFFERENT URBAN CBSA CROSSWALK
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FIPS county
code
County/county equivalent
State
17031
COOK ..............................
IL ..........
16974
17043
DU PAGE ........................
IL ..........
16974
17063
GRUNDY .........................
IL ..........
16974
17093
KENDALL ........................
IL ..........
16974
17111
MC HENRY .....................
IL ..........
16974
17197
WILL ................................
IL ..........
16974
34023
MIDDLESEX ....................
NJ ........
35614
34025
MONMOUTH ...................
NJ ........
35614
34029
OCEAN ............................
NJ ........
35614
34035
SOMERSET ....................
NJ ........
35084
36027
DUTCHESS .....................
NY ........
20524
36071
ORANGE .........................
NY ........
35614
36079
PUTNAM .........................
NY ........
20524
47057
54043
GRAINGER .....................
LINCOLN .........................
TN ........
WV .......
28940
26580
72055
72059
72111
72153
GUANICA ........................
GUAYANILLA ..................
PENUELAS .....................
YAUCO ............................
PR
PR
PR
PR
38660
38660
38660
38660
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16:50 Nov 06, 2020
Jkt 253001
Current CBSA
........
........
........
........
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Frm 00037
Fmt 4701
Current CBSA name
Proposed
CBSA code
Chicago-Naperville-Arlington Heights, IL.
Chicago-Naperville-Arlington Heights, IL.
Chicago-Naperville-Arlington Heights, IL.
Chicago-Naperville-Arlington Heights, IL.
Chicago-Naperville-Arlington Heights, IL.
Chicago-Naperville-Arlington Heights, IL.
New York-Jersey CityWhite Plains, NY-NJ.
New York-Jersey CityWhite Plains, NY-NJ.
New York-Jersey CityWhite Plains, NY-NJ.
Newark, NJ-PA ................
Dutchess County-Putnam
County, NY.
New York-Jersey CityWhite Plains, NY-NJ.
Dutchess County-Putnam
County, NY.
Knoxville, TN ...................
Huntington-Ashland, WVKY-OH.
Ponce, PR .......................
Ponce, PR .......................
Ponce, PR .......................
Ponce, PR .......................
Sfmt 4700
E:\FR\FM\09NOR2.SGM
16984
16984
16984
20994
16984
Proposed CBSA name
Chicago-NapervilleEvanston, IL.
Chicago-NapervilleEvanston, IL.
Chicago-NapervilleEvanston, IL.
Elgin, IL.
34100
16620
Chicago-NapervilleEvanston, IL.
Chicago-NapervilleEvanston, IL.
New Brunswick-Lakewood, NJ.
New Brunswick-Lakewood, NJ.
New Brunswick-Lakewood, NJ.
New Brunswick-Lakewood, NJ.
Poughkeepsie-NewburghMiddletown, NY.
Poughkeepsie-NewburghMiddletown, NY.
New York-Jersey CityWhite Plains, NY-NJ.
Morristown, TN.
Charleston, WV.
49500
49500
49500
49500
Yauco,
Yauco,
Yauco,
Yauco,
16984
35154
35154
35154
35154
39100
39100
35614
09NOR2
PR.
PR.
PR.
PR.
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We stated in the CY 2021 ESRD PPS
proposed rule (85 FR 42160), that if
ESRD facilities located in these counties
move from one CBSA to another under
the 2018 OMB delineations, there may
be impacts, both negative and positive,
to their specific wage index values. A
discussion of the proposed wage index
transition policy is available in
II.B.4.b.(3) of the CY 2021 ESRD PPS
proposed rule and section II.B.4.b.(3) of
this final rule.
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(d) Changes to the Statewide Rural Wage
Index
In the CY 2021 ESRD PPS proposed
rule (85 FR 42160), we stated that ESRD
facilities currently located in a rural
area may remain rural under the 2018
OMB delineations but experience a
change in their rural wage index value
due to the movement of constituent
counties. If ESRD facilities located in
these counties move from one CBSA to
another under the 2018 OMB
delineations, there may be impacts, both
negative and positive, upon their
specific wage index values. A
discussion of the proposed wage index
transition policy is available in section
II.B.4.b.(3) of the CY 2021 ESRD PPS
proposed rule and section II.B.4.b.(3) of
this final rule.
We explained that we believe these
revisions to the CBSA-based labor
market area delineations as established
in OMB Bulletin 18–04 would ensure
that the ESRD PPS area wage level
adjustment most appropriately accounts
for and reflects the relative wage levels
in the geographic area of the ESRD
facility. Therefore, we proposed to
adopt the 2018 OMB delineations under
the ESRD PPS, effective January 1, 2021
and invited public comment on this
proposal.
(3) Transition for ESRD Facilities
Negatively Impacted
In the CY 2021 ESRD PPS proposed
rule (85 FR 42160 through 42161), we
stated that in the past we provided for
transition periods when adopting
changes that have significant payment
implications, particularly large negative
impacts, in order to mitigate the
potential impacts of proposed policies
on ESRD facilities. For example, we
have proposed and finalized budgetneutral transition policies to help
mitigate negative impacts on ESRD
facilities following the adoption of the
OMB delineations as described in the
February 28, 2013 OMB Bulletin No.
13–01 (79 FR 66142). Specifically, as
part of the CY 2015 ESRD PPS
rulemaking, we implemented a 2-year
transition blended wage index for all
ESRD facilities. ESRD facilities received
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Jkt 253001
50 percent of their CY 2015 wage index
value based on the OMB delineations
for CY 2014 and 50 percent of their CY
2015 wage index value based on the
newer OMB delineations. This resulted
in an average of the two values. Then,
in CY 2016, an ESRD facility’s wage
index value was based 100 percent on
the newer OMB delineations.
As we stated in the CY 2021 ESRD
PPS proposed rule (85 FR 42161), we
considered having no transition period
and fully implementing the 2018 OMB
delineations beginning in CY 2021,
which would mean that all ESRD
facilities would have payments based on
updated hospital wage data and the
2018 OMB delineations starting on
January 1, 2021. However, because the
overall amount of ESRD PPS payments
would increase slightly due to the 2018
OMB delineations, the wage index
budget neutrality factor would be
higher. This higher factor would reduce
the ESRD PPS per treatment base rate
for all ESRD facilities paid under the
ESRD PPS, despite the fact that the
majority of ESRD facilities would be
unaffected by the 2018 OMB
delineations. Thus, we explained that
we believe it would be appropriate to
provide for a transition period to
mitigate the resulting short-term
instability of a lower ESRD PPS base
rate as well as consequential negative
impacts to ESRD facilities that
experience reduced payments. For
example, ESRD facilities currently
located in CBSA 35614 (New YorkJersey City-White Plains, NY-NJ) that
would be located in new CBSA 35154
(New Brunswick-Lakewood, NJ) under
the proposed changes to the OMB
delineations would experience a nearly
17 percent decrease in the wage index
as a result of the proposed change.
Therefore, under the authority of
section 1881(b)(14)(D)(iv)(II) of the Act
and consistent with past practice, we
proposed a transition policy to help
mitigate any significant, negative
impacts that ESRD facilities may
experience due to our proposal to adopt
the 2018 OMB delineations under the
ESRD PPS. Specifically, as a transition
for CY 2021, we proposed to apply a 5
percent cap on any decrease in an ESRD
facility’s wage index from the ESRD
facility’s wage index from the prior
calendar year. This transition would
allow the effects of our proposed
adoption of the 2018 OMB delineations
to be phased in over 2 years, where the
estimated reduction in an ESRD
facility’s wage index would be capped
at 5 percent in CY 2021, and no cap
would be applied to the reduction in the
wage index for the second year, CY
2022. We explained that we believe a 5
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Fmt 4701
Sfmt 4700
percent cap on the overall decrease in
an ESRD facility’s wage index value,
regardless of the circumstance causing
the decline, would be an appropriate
transition for CY 2021 as it would
provide predictability in payment levels
from CY 2020 to the upcoming CY 2021
and additional transparency because it
is administratively simpler than our
prior 2-year 50/50 blended wage index
approach. We further explained that we
believe 5 percent is a reasonable level
for the cap because it would effectively
mitigate any significant decreases in an
ESRD facility’s wage index for CY 2021.
We solicited comment on the proposal
to apply a 5 percent cap on any decrease
in an ESRD facility’s wage index for CY
2021 from the ESRD facility’s wage
index from the prior calendar year, CY
2020.
(4) Budget Neutrality Adjustments for
Changes to the ESRD PPS Wage Index
In the CY 2021 ESRD PPS proposed
rule (85 FR 42161), we stated that
consistent with the historical wage
index budget-neutrality adjustment
policy finalized in the CY 2012 ESRD
PPS final rule (76 FR 70241 through
70242) under the authority of section
1881(b)(14)(D)(iv)(II) of the Act, we
proposed that the proposed adoption of
the 2018 OMB delineations and the
proposed transition policy would not
result in any change of estimated
aggregate ESRD PPS payments by
applying a budget neutrality factor to
the ESRD PPS base rate. We noted
budget neutrality was also applied to
the adoption of newer OMB
delineations and transition policy in the
CY 2015 ESRD PPS final rule (79 FR
66128 through 66129). Our methodology
for calculating this budget neutrality
factor is discussed in section II.B.4.d.(2)
of the CY 2021 ESRD PPS proposed rule
and section II.B.4.d.(2) of this final rule.
The comments and our responses to
the comments on our proposed adoption
of the 2018 OMB delineations are set
forth below.
Comment: Several commenters
supported the adoption of the 2018
OMB delineations under the ESRD PPS,
effective January 1, 2021.
Response: We appreciate the
comments supporting the adoption of
the 2018 OMB delineations.
Comment: A national non-profit
dialysis organization expressed concern
that its analysis of the proposal
indicates that it will have multiple
facilities negatively impacted by the
adoption of the 2018 OMB delineations,
which is worsened by the current
COVID–19 pandemic.
Response: We appreciate the detailed
concerns described by the commenter
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Federal Register / Vol. 85, No. 217 / Monday, November 9, 2020 / Rules and Regulations
regarding the impact that the 2018 OMB
delineations would have on its specific
facilities. While we understand the
commenter’s concern regarding the
potential financial impact, we believe
that implementing the 2018 OMB
delineations will result in a more
accurate representation of labor market
areas nationally and in ESRD facility
wage index values being more
representative of the actual costs of
labor in a given area. We believe that the
OMB standards for delineating
Metropolitan and Micropolitan
Statistical Areas are appropriate for
determining area wage differences and
that the values computed under the
revised delineations will result in more
appropriate payments to ESRD facilities
by more accurately accounting for and
reflecting the differences in area wage
levels.
We recognize that using the updated
OMB delineations will mean there are
areas that will experience a decrease in
their wage index. As such, it is our
longstanding policy to provide a
temporary transition to mitigate
negative impacts from the adoption of
new policies or procedures. In the CY
2021 ESRD PPS proposed rule, we
proposed a 2-year transition in order to
mitigate the resulting short-term
instability and negative impacts on
certain ESRD facilities and to provide
time for facilities to adjust to their new
labor market delineations. We continue
to believe that the 1-year 5-percent cap
transitional policy provides an adequate
safeguard against any significant
payment reductions, allows for
sufficient time for facilities to make
operational changes for future CYs, and
provides a reasonable balance between
mitigating some short-term instability in
ESRD PPS payments and improving the
accuracy of the payment adjustment for
differences in area wage levels.
We also recognize the impact that the
COVID–19 PHE is having on all health
care providers, which is why we have
issued waivers and flexibilities 19 20 to
ease burden and allow providers to
respond effectively during the COVID–
19 PHE.
Comment: Several commenters
supported the use of a transition policy
to mitigate the impact of changes to the
wage index values and the proposed
transition methodology. Some of these
commenters, including MedPAC,
suggested alternatives to the
methodology. MedPAC suggested that
the 5 percent cap limit should apply to
19 https://www.cms.gov/files/document/qso-2019-esrd-revised.pdf.
20 https://www.cms.gov/files/document/covid-19esrd-facilities.pdf.
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Jkt 253001
both increases and decreases in the
wage index so that no ESRD facility
would have its wage index value
increase or decrease by more than 5
percent for CY 2021.
A patient organization acknowledged
the reasoning of CMS proposing a less
administratively complex methodology
of managing the transition given the
relatively small proportion of ESRD
facilities that will be affected. The
commenter noted that if the total change
in payment is 10 percent or less for all
facilities, a methodology that caps the
decrease in a facility’s wage index at 5
percent in the first year makes sense.
However, the commenter expressed
concern that at least one facility will see
a 17 percent decrease in the wage index,
which would defer the burden of the
transition to the second year. The
commenter noted that while providing
an extra year for the facility to adjust to
the change is helpful, for ESRD facilities
that see a drop in wage index payments
in the second year and that are located
in states without staffing requirements,
the negative implications for hiring and
retention of staff will be significant. The
commenter indicated that it would
prefer for CMS to apply the 50/50
blended wage index to manage the
transition, but could support the 5
percent cap approach if staff time saved
by using a less complex methodology is
redirected to addressing higher priority
issues, such as securing staff assistance
for home dialysis patients or developing
a flexible approach to interpretation of
the SCI criteria for the TPNIES.
Finally, a national non-profit dialysis
organization recommended that CMS
provide an extended transition period,
beyond the proposed 5 percent limit for
2021, for at least 3 years.
Response: We appreciate the
comments supporting the proposed
transition methodology. Further, we
appreciate MedPAC’s suggestion that
the 5 percent cap should also be applied
to increases in the wage index.
However, as we discussed in the CY
2021 ESRD PPS proposed rule (85 FR
42161), the purpose of the proposed
transition policy, as well as those we
have implemented in the past, is to help
mitigate the significant negative impacts
of certain wage index changes, not to
curtail the positive impacts of such
changes, and thus we do not believe it
would be appropriate to apply the 5
percent cap on wage index increases as
well. To the extent that an ESRD
facility’s wage index would increase
under the 2018 OMB delineations, this
means that the ESRD facility is currently
being paid less than their reported wage
data suggests is appropriate. We believe
the transition policy, as proposed,
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Fmt 4701
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71435
would help ensure these ESRD facilities
do not receive a wage index adjustment
that is lower than appropriate and that
payments are as accurate as possible.
With regard to recommendation that
we apply the 50/50 blended wage index
to manage the transition since some
facilities will see a wage index decrease
greater than 10 percent, we believe that
this approach would not be appropriate
for the proportion of ESRD facilities that
will be impacted. The use of a 50/50
blended wage index transition would
affect all ESRD facilities. We believe it
would be more appropriate to allow
ESRD facilities that would experience
an increase in their wage index value to
receive the full benefit of their increased
wage index value, which is intended to
reflect accurately the higher labor costs
in that area. The utilization of a cap on
negative impacts restricts the transition
to only those with negative impacts and
allows ESRD facilities who would
experience positive impacts to receive
the full amount of their wage index
increase. As such, we believe a 5
percent cap on the overall decrease in
an ESRD facility’s wage index value is
an appropriate transition as it would
effectively mitigate any significant
decreases in an ESRD facility’s wage
index for CY 2021. With regard to the
comment suggesting staff time be used
to address higher priority issues, we
believe that the comment was referring
to CMS staff. We appreciate the
commenter’s recommendation for
polices that impact home dialysis and
innovation.
With regard to the suggestion that we
extend the transition period, beyond the
proposed 5 percent limit for CY 2021,
for at least 3 years, we believe this
would undermine the goal of the wage
index policy, which is to improve the
accuracy of payments under the ESRD
PPS. Extending the transition period
and applying a cap would serve to
further delay improving the accuracy of
the ESRD PPS by continuing to pay
certain ESRD facilities more than their
wage data suggest is appropriate.
Therefore, while we believe that a
transition policy is necessary to help
mitigate some initial significant negative
impacts from the revised OMB
delineations, we also believe this
mitigation must be balanced against the
importance of ensuring accurate
payments.
The general comments received on
the CY 2021 ESRD PPS wage index and
our responses to the comments are set
forth below.
Comment: Two health insurance
organizations in Puerto Rico commented
on the wage index for Puerto Rico. One
health insurance organization in Puerto
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Federal Register / Vol. 85, No. 217 / Monday, November 9, 2020 / Rules and Regulations
Rico expressed appreciation for the
wage index floor of 0.5000 and
explained that it represents an
important acknowledgment of the many
complexities associated with providing
dialysis in Puerto Rico. The commenter
noted that in the post-hurricane
environment particularly, infrastructure
challenges lead to high costs of dialysis
care. The commenter strongly
encouraged CMS to continue to look
closely at the wage index as it relates to
Puerto Rico.
One of the health insurance
organizations asserted that a wage index
floor of 0.70 would result in rates that
more accurately reflect actual cost per
treatment based on costs after multiple
natural disasters and the disruptions in
2020 due to COVID–19. The commenter
expressed concern that the financial
viability of dialysis providers in Puerto
Rico is under stress and that it is in the
interest of beneficiaries, the Medicare
program, and the fragile healthcare
infrastructure in Puerto Rico to have
available multiple competing dialysis
services providers. The commenter
stated that the average in-center HD
costs for independent facilities in Puerto
Rico is $232.25 per treatment using
CMS data from 2017. The commenter
asserted that this number is significantly
higher than the average FFS payment
rate for Puerto Rico and significantly
lower than the rates contracted by
Medicare Advantage companies for the
same service. The commenter noted that
in-center HD represents the majority of
the treatments for Puerto Rico ESRD
patients. The commenter suggested that
CMS consider basing the ESRD wage
index on a new survey of ESRD
outpatient facility wage costs as a means
for wage index reform.
Both health insurance organizations
referred to the wage index policy
changes included in the FY 2020 IPPS/
LTCH PPS final rule (84 FR 42326
through 42332). Specifically, the
commenters urged that the FFS ESRD
PPS wage index system for Puerto Rico
should use the recently adjusted
inpatient facility (Part A) wage index
values to reverse the wage index
‘‘downward spiral’’ consistently across
all Medicare payment systems. Finally,
they recommended that CMS assure that
the corresponding adjustment in
Medicare Advantage benchmarks for
ESRD is made to reflect any adjustments
in ESRD PPS payments.
Response: We did not propose
specific policies relating to the wage
index floor. We thank the commenters
for sharing their concerns regarding
Puerto Rico’s wage index and their
suggestions for wage index reform,
along with the recommendation of a
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16:50 Nov 06, 2020
Jkt 253001
wage index for Puerto Rico of 0.70 and
their concern regarding the Medicare
Advantage benchmarks for ESRD. We
will take these thoughtful suggestions
into consideration when considering
future rulemaking.
Final Rule Action: After considering
the comments received, for the reasons
set forth in this final rule and in the CY
2021 ESRD PPS proposed rule, we are
finalizing our proposal to adopt the
newer OMB delineations contained in
OMB Bulletin 18–04 as proposed. We
are also finalizing our proposal to apply
a 5 percent cap on any decrease in an
ESRD facility’s wage index for CY 2021
from the ESRD facility’s wage index
from the prior calendar year (CY 2020)
as proposed. We did not receive
comments on our proposal regarding
wage index budget neutrality, therefore
we are finalizing the application of a
budget neutrality factor to the ESRD PPS
base rate to ensure that the adoption of
the 2018 OMB delineations and the
transition policy will not result in any
change of estimated aggregate ESRD PPS
payments.
We are finalizing the CY 2021 ESRD
PPS wage indices based on the latest
hospital wage data as proposed. For CY
2021, the labor-related share to which a
facility’s wage index is applied is 52.3
percent.
The final CY 2021 ESRD PPS wage
index is set forth in Addendum A and
is available on the CMS website at
https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
ESRDpayment/End-Stage-RenalDisease-ESRD-Payment-Regulationsand-Notices.html. Addendum A
provides a crosswalk between the CY
2020 wage index for an ESRD facility
using the current OMB delineations in
effect in CY 2020, the CY 2021 wage
index using the current OMB
delineations in effect in CY 2020, and
the CY 2021 wage index using the final
2018 OMB delineations. Addendum B
provides an ESRD facility-level impact
analysis. Addendum B includes the
final transition wage index values that
will be in effect in CY 2021. Addendum
B is available on the CMS website at
https://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/
ESRDpayment/End-Stage-RenalDisease-ESRD-Payment-Regulationsand-Notices.html.
c. CY 2021 Update to the Outlier Policy
Section 1881(b)(14)(D)(ii) of the Act
requires that the ESRD PPS include a
payment adjustment for high cost
outliers due to unusual variations in the
type or amount of medically necessary
care, including variability in the amount
of ESAs necessary for anemia
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management. Some examples of the
patient conditions that may be reflective
of higher facility costs when furnishing
dialysis care would be frailty, obesity,
and comorbidities, such as secondary
hyperparathyroidism. The ESRD PPS
recognizes high cost patients, and we
have codified the outlier policy and our
methodology for calculating outlier
payments at § 413.237. The policy
provides that the following ESRD outlier
items and services are included in the
ESRD PPS bundle: (1) Renal dialysis
drugs and biological products that were
or would have been, prior to January 1,
2011, separately billable under
Medicare Part B; (2) Renal dialysis
laboratory tests that were or would have
been, prior to January 1, 2011,
separately billable under Medicare Part
B; (3) Renal dialysis medical/surgical
supplies, including syringes, used to
administer renal dialysis drugs and
biological products that were or would
have been, prior to January 1, 2011,
separately billable under Medicare Part
B; (4) Renal dialysis drugs and
biological products that were or would
have been, prior to January 1, 2011,
covered under Medicare Part D,
including renal dialysis oral-only drugs
effective January 1, 2025; and (5) Renal
dialysis equipment and supplies that
receive the transitional add-on payment
adjustment as specified in § 413.236
after the payment period has ended.
In the CY 2011 ESRD PPS final rule
(75 FR 49142), we stated that for
purposes of determining whether an
ESRD facility would be eligible for an
outlier payment, it would be necessary
for the facility to identify the actual
ESRD outlier services furnished to the
patient by line item (that is, date of
service) on the monthly claim. Renal
dialysis drugs, laboratory tests, and
medical/surgical supplies that are
recognized as outlier services were
originally specified in Attachment 3 of
Change Request 7064, Transmittal 2033
issued August 20, 2010, rescinded and
replaced by Transmittal 2094, dated
November 17, 2010. Transmittal 2094
identified additional drugs and
laboratory tests that may also be eligible
for ESRD outlier payment. Transmittal
2094 was rescinded and replaced by
Transmittal 2134, dated January 14,
2011, which included one technical
correction.
Furthermore, we use administrative
issuances and guidance to continually
update the renal dialysis service items
available for outlier payment via our
quarterly update CMS Change Requests,
when applicable. We use this separate
guidance to identify renal dialysis
service drugs that were or would have
been covered under Medicare Part D for
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outlier eligibility purposes and in order
to provide unit prices for calculating
imputed outlier services. In addition,
we identify through our monitoring
efforts items and services that are either
incorrectly being identified as eligible
outlier services or any new items and
services that may require an update to
the list of renal dialysis items and
services that qualify as outlier services,
which are made through administrative
issuances.
Under § 413.237, an ESRD facility is
eligible for an outlier payment if its
actual or imputed Medicare allowable
payment (MAP) amount per treatment
for ESRD outlier services exceeds a
threshold. The MAP amount represents
the average incurred amount per
treatment for services that were or
would have been considered separately
billable services prior to January 1,
2011. The threshold is equal to the
ESRD facility’s predicted ESRD outlier
services MAP amount per treatment
(which is case-mix adjusted and
described in the following paragraphs)
plus the fixed-dollar loss (FDL) amount.
In accordance with § 413.237(c),
facilities are paid 80 percent of the per
treatment amount by which the imputed
MAP amount for outlier services (that is,
the actual incurred amount) exceeds
this threshold. ESRD facilities are
eligible to receive outlier payments for
treating both adult and pediatric
dialysis patients.
In the CY 2011 ESRD PPS final rule
and at § 413.220(b)(4), using 2007 data,
we established the outlier percentage,
which is used to reduce the per
treatment base rate to account for the
proportion of the estimated total
payments under the ESRD PPS that are
outlier payments, at 1.0 percent of total
payments (75 FR 49142 through 49143).
We also established the FDL amounts
that are added to the predicted outlier
services MAP amounts. The outlier
services MAP amounts and FDL
amounts are different for adult and
pediatric patients due to differences in
the utilization of separately billable
services among adult and pediatric
patients (75 FR 49140). As we explained
in the CY 2011 ESRD PPS final rule (75
FR 49138 through 49139), the predicted
outlier services MAP amounts for a
patient are determined by multiplying
the adjusted average outlier services
MAP amount by the product of the
patient-specific case-mix adjusters
applicable using the outlier services
payment multipliers developed from the
regression analysis used to compute the
payment adjustments.
In the CY 2020 ESRD PPS final rule
(84 FR 60705), we stated that based on
the CY 2018 claims data, outlier
payments represented approximately
0.5 percent of total payments. We also
noted that, beginning in CY 2020, the
total expenditure amount includes addon payment adjustments made for
calcimimetics under the TDAPA policy.
We projected that for each dialysis
treatment furnished, the average amount
attributed to the TDAPA would be
$21.03 (84 FR 60704).
For CY 2021, we proposed that the
outlier services MAP amounts and FDL
amounts would be derived from claims
data from CY 2019. As we stated in the
CY 2021 ESRD PPS proposed rule (85
FR 42162), because we believe that any
adjustments made to the MAP amounts
under the ESRD PPS should be based
upon the most recent data year available
in order to best predict any future
outlier payments, we proposed that the
outlier thresholds for CY 2021 would be
based on utilization of renal dialysis
items and services furnished under the
ESRD PPS in CY 2019. We noted that,
for CY 2020, the total expenditure
amount includes add-on payment
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adjustments made for calcimimetics
under the TDAPA policy (calculated to
be $14.87 per treatment). However, as
discussed in section II.B.1 of this final
rule, for CY 2021 we modified the ESRD
PPS base rate by adding $9.93 to
account for calcimimetics in the ESRD
PPS bundled payment and will no
longer pay for these drugs using the
TDAPA. In addition, we are finalizing
that beginning January 1, 2021,
calcimimetics will be eligible outlier
services.
As discussed in section II.B.4.c.(2) of
this final rule, CY 2019 claims data
show outlier payments represented
approximately 0.5 percent of total
payments. As we stated in the CY 2021
ESRD PPS proposed rule, we recognize
that the utilization of ESAs and other
outlier services have continued to
decline under the ESRD PPS, and that
we have lowered the MAP amounts and
FDL amounts every year under the
ESRD PPS. We stated that, for CY 2021,
the adult predicted outlier services MAP
amounts and FDL amounts have
increased as a result of our
incorporation of oral and injectable
calcimimetics into the outlier policy.
(1) CY 2021 Update to the Outlier
Services MAP Amounts and FDL
Amounts
For this final rule, the outlier services
MAP amounts and FDL amounts were
updated using 2019 claims data. The
impact of this update is shown in Table
5, which compares the outlier services
MAP amounts and FDL amounts used
for the outlier policy in CY 2020 with
the updated estimates for this final rule.
The estimates for the CY 2021 outlier
policy, which are included in Column II
of Table 5, were inflation adjusted to
reflect projected 2021 prices for outlier
services.
TABLE 5—OUTLIER POLICY: IMPACT OF USING UPDATED DATA TO DEFINE THE OUTLIER POLICY
Column I
final outlier policy for CY 2020
(based on 2018 data, price inflated to 2020) *
Age < 18
Average outlier services MAP amount per treatment .....................................
Column II
final outlier policy for CY 2021
(based on 2019 data, price inflated to 2021)
Age >= 18
Age < 18
Age >= 18
$30.95
$37.33
$30.33
$53.08
1.0655
0.98
$32.32
0.9781
0.98
$35.78
1.0390
0.98
$30.88
0.9789
0.98
$50.92
$41.04
11.35%
$48.33
10.38%
$44.78
8.80%
$122.49
5.15%
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Adjustments
Standardization for outlier services .................................................................
MIPPA reduction ..............................................................................................
Adjusted average outlier services MAP amount .............................................
FDL amount that is added to the predicted MAP to determine the outlier
threshold .......................................................................................................
Patient-months qualifying for outlier payment .................................................
Note: Column I was obtained from Column II of Table 2 from the CY 2020 ESRD PPS final rule (84 FR 60705).
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As demonstrated in Table 5, the
estimated FDL amount per treatment
that determines the CY 2021 outlier
threshold amount for adults (Column II;
$122.49) is higher than that used for the
CY 2020 outlier policy (Column I;
$48.33). The higher threshold is
accompanied by an increase in the
adjusted average MAP for outlier
services from $35.78 to $50.92. For
pediatric patients, there is an increase in
the FDL amount from $41.04 to $44.78
and a decrease in the adjusted average
MAP for outlier services, from $32.32 to
$30.88.
As we stated previously, the predicted
outlier services MAP amounts and FDL
amounts have increased as a result of
the incorporation of oral and injectable
calcimimetics into the outlier policy.
Approximately 30 percent of ESRD
beneficiaries receive calcimimetics and
a subset of these beneficiaries tend to
have the highest ESRD PPS
expenditures, which trigger outlier
payments under the ESRD PPS. Since
the highest per-beneficiary ESRD PPS
expenditures will increase due to
calcimimetics being eligible ESRD
outlier services, the outlier FDL will
increase to ensure that total outlier
payments project to 1 percent of total
Medicare ESRD PPS expenditures.
We estimate that the percentage of
patient months qualifying for outlier
payments in CY 2021 will be
5.15percent for adult patients and 8.80
percent for pediatric patients, based on
the 2019 claims data. The outlier MAP
and FDL amounts continue to be lower
for pediatric patients than adults due to
the continued lower use of outlier
services (primarily reflecting lower use
of calcimimetics, ESAs and other
injectable drugs).
(2) Outlier Percentage
In the CY 2011 ESRD PPS final rule
(75 FR 49081) and under
§ 413.220(b)(4), we reduced the per
treatment base rate by 1 percent to
account for the proportion of the
estimated total payments under the
ESRD PPS that are outlier payments as
described in § 413.237. Based on the
2019 claims, outlier payments
represented approximately 0.5 percent
of total payments, which is below the 1
percent target due to declines in the use
of outlier services. Recalibration of the
thresholds using 2019 data is expected
to result in aggregate outlier payments
close to the 1 percent target in CY 2021.
We believe the update to the outlier
MAP and FDL amounts for CY 2021 will
increase payments for ESRD
beneficiaries requiring higher resource
utilization and move us closer to
meeting our 1 percent outlier policy
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because we are using more current data
for computing the MAP and FDL, which
is more in line with current outlier
services utilization rates. The inclusion
of calcimimetics as ESRD outlier
services in CY 2021 will fundamentally
change the per-treatment distribution of
outlier services relative to previous CYs.
In 2019 claims, roughly 33 percent of
ESRD beneficiaries and 28 percent of
dialysis treatments are associated with
calcimimetics and those that often have
significantly higher utilization of ESRD
outlier services relative to beneficiaries
who do not receive calcimimetics. The
MAP and FDL increases account for this
change. We note that recalibration of the
FDL amounts in this final rule will
result in no change in payments to
ESRD facilities for beneficiaries with
renal dialysis services that are not
eligible for outlier payments.
The comments and our responses to
the comments on our proposed updates
to the outlier policy are set forth below.
Comment: Although we did not
propose changes to the outlier target
percentage or methodology for
computing the MAP or FDL amounts,
we received many comments from
MedPAC, national dialysis associations,
large dialysis organizations, non-profit
dialysis associations, a patient advocacy
organization, and an academy of
nutrition and dietetics expressing
concern that the outlier policy has not
been effective. Most of the commenters
opposed the proposed changes to the
MAP and FDL along with suggestions
that ranged in complexity for the
policy’s reform, which are described in
detail below. We also received data from
the commenters’ analysis that studied
the impact of outlier payments once
calcimimetics become ESRD outlier
services.
All commenters noted that since the
beginning of the ESRD PPS, the outlier
pool has not paid out the full amount
withheld each year. MedPAC noted that
every year the outlier threshold has
been reduced and yet still turns out to
have been set too high. MedPAC stated
that this phenomenon suggests a
declining trend in the use of outliereligible services (that is, drugs and
laboratory services that were separately
billable under the prior payment
system) for ESRD beneficiaries with
very high estimated spending on those
services. MedPAC asserted that CMS’
strategy of updating the base year of
data used to calculate the outlier
threshold to bring the outlier payments
closer to the targeted 1 percent, has not
been effective.
Many commenters recommended that
CMS adjust the outlier percentage to
more accurately represent the
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percentage of total payments that have
been historically paid under the outlier
policy. For example, commenters
suggested that CMS reduce the outlier
pool withheld to less than 1 percent,
indicating that they believe this
approach to be consistent with the
intent of Congress since a minimum
percentage was not set in the legislation.
One non-profit dialysis organization
recommended removing the outlier
provision from the bundled payment
system but recognized that the provision
is required by statute and suggested that
the percentage be decreased from 1
percent to 0.5 percent. A few other
commenters agreed with reducing the
percentage to 0.5 and recommended that
CMS finalize this change for CY 2021.
An LDO recommended that CMS
establish a mechanism to return unpaid
amounts withheld from ESRD facilities
as part of the target percentage when it
does not achieve the 1 percent outlier
policy in a given year. An academy of
nutrition and dietetics made a similar
comment and stated when these dollars
are paid back to ESRD facilities they
would be invested in patient care.
A national dialysis association stated
that CMS is correctly adding resources
to the ESRD PPS bundled payment to
help continued patient access to
calcimimetics after the end of the
TDAPA period, but this correct policy
decision creates adverse, unintended
consequences for the outlier pool that
must be mitigated in the final rule.
Several commenters opposed the
proposal to increase the adult FDL and
MAP outlier amounts accounting for the
calcimimetics. Some commenters,
including MedPAC, stated that this
action could further exacerbate the
longstanding issue of the outlier pool
being underpaid. MedPAC identified
two problems that are additive; meaning
the outlier payments may be too low
because (1) the outlier threshold
calculation does not account for the
trend of decreasing spending for
services previously eligible for an
outlier payment; and (2) in making
calcimimetics eligible for outlier
payments in CY 2021, the outlier
threshold calculation does not account
for the likelihood that calcimimetic use
will be lower after payment for
calcimimetics is added to the ESRD PPS
bundled payment. MedPAC indicated
that the fact that CMS is proposing to
increase the outlier threshold by 126
percent in 2021, rather than decrease
the threshold as the agency has done in
every other year, corroborates the
reliance on high calcimimetic use for
receiving an outlier payment in 2021.
MedPAC further stated that, if
calcimimetic use decreases between
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2019 (when the products were paid
using the TDAPA) and 2021 (when the
products will be paid as part of the
ESRD PPS base rate), the outlier
threshold will be set too high and
outlier payments will be lower than the
1 percent of total 2021 payments.
Several commenters urged CMS to
lower the thresholds proposed for 2021.
The commenters expressed concern that
increases to the outlier threshold would
cause a shift in the cases qualifying for
an outlier payment. They stated that the
increases to the thresholds would limit
most outlier payments to those patients
who use IV calcimimetics, largely
excluding outlier payments for the care
of patients using other relatively highcost items and services that otherwise
would be eligible for outliers absent
adoption of the proposed substantial
increases to the outlier thresholds.
Many commenters referred to a study
performed by the Moran Company
which was submitted in a comment
letter from a national dialysis
organization. The study demonstrated
that as a result of the proposed policy
changes to increase the outlier
thresholds, 76.3 percent of the outlier
pool will be dedicated solely to patients
that utilize calcimimetics, leaving few
resources for other high-cost patients.
Several commenters expressed
concern that the dynamic shift of the
allocation of outlier payments seen in
the Moran Company’s analyses for
calcimimetics would continue to
happen in the future when new
therapies become ESRD outlier services.
One commenter explained that any new
product that qualifies for the outlier
policy and has a significant cost
associated with it will lead to higher
threshold amounts. Several commenters
referred to MedPAC’s public comment
for the CY 2020 ESRD PPS rulemaking,
in which MedPAC recommended that
CMS exclude payments during a
TDAPA—or TPNIES—period from
outlier pool calculations given that CMS
policy makes a drug or equipment or
supply ineligible for outlier payments
during the add-on period. The
commenters described this as a policy
misalignment that causes outlier
payments to be less than the outlier
target percentage.
Two commenters suggested
comprehensive refinement of the outlier
policy methodology. MedPAC
recommended that CMS consider an
approach that reflects the trend in
separately billable spending over time.
MedPAC noted that other CMS payment
systems use trend information when
establishing similar payment policies.
For example, in establishing county
benchmark rates, MedPAC stated that
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the Medicare Advantage program uses a
prediction method that accounts for
utilization trends for specific services
combined with the most recent available
prices. MedPAC asserted that such an
approach could produce a more reliable
outlier threshold estimate and may
result in the outlier payment amounts
that, on average, are closer to the target.
Several commenters recommended
that CMS explore reserving a portion of
the outlier pool to be in proportion to
the share of new ESRD outlier services,
in this case calcimimetics, compared to
the current spending on all other ESRD
outlier services in the ESRD PPS. Under
this type of policy, CMS could establish
a MAP and fixed-loss amount for each
sub-pool. The total value of the outlier
pool could remain at 1 percent (or less
as noted above) of the ESRD PPS. CMS
could recalculate the size of the subpool based on the most recently
available claims data. Over time, CMS
could evaluate whether additional
functional categories (in addition to
bone and mineral metabolism) would
merit the creation of additional subpools. One national kidney dialysis
organization explained that in addition
to allowing the outlier pool to address
higher-costs patients outside of the
calcimimetic costs, the distributed
nature of the sub-pools would decrease
the risk of dollars being removed from
the payment system unintentionally.
A national dialysis association
provided a simulation of the calculation
of outlier payments performed by the
Moran Company testing two sub-pools
of the outlier withhold: One for patients
using calcimimetics and another for
other, high cost patients who do not use
calcimimetics. The Moran Company
found that use of sub-pools would
improve the distribution of outlier
payments for all high cost patients, but
indicated that it is not likely to
eliminate all leakage from the ESRD PPS
due to the outlier pool. The commenter
stated that this finding underscores the
need to reduce the withhold amount to
0.5 percent and correct the
misalignment between CMS’s policies
that withhold dollars during an add-on
payment period when the treatment is
not eligible for outlier payments. The
commenter urged CMS to include its
recommended approach to bifurcate the
outlier policy in the CY 2021 ESRD PPS
final rule. The commenter suggested
that CMS could publish an interim final
rule with comment period, if needed, to
ensure that the public can comment on
these proposals prior to
implementation. However, the
commenter emphasized that these
policies should take effect for CY 2021
to ensure that the outlier pool continues
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to support high cost patients under the
ESRD PPS.
Many commenters expressed interest
in working with CMS to refine the
outlier policy methodology to make sure
that it addresses the needs of all types
of high costs patients. The commenters
suggested that a larger discussion of a
solution to the outlier pool being
dominated by a single product is
warranted, perhaps through a TEP or in
another forum.
Response: We appreciate all of the
thoughtful suggestions provided by
commenters. We acknowledge that,
even with annually adjusting the MAP
and FDL to reflect the most recent
utilization and costs of ESRD PPS
eligible outlier services, total outlier
payments have not yet reached the 1
percent target. However, it is also true
that use of eligible ESRD outlier services
declined each year. That is, ESRD
facilities incurred lower costs than
anticipated, and those savings accrued
to facilities more than offsetting the
extent to which the consequent outlier
payments fell short of the 1.0 percent
target.
We appreciate the comments
suggesting solutions for refining the
outlier policy methodology, for
example, reducing the outlier
percentage pool withhold to less than 1
percent or establishing a mechanism
that pays back ESRD facilities those
allocated outlier amounts that did not
pay out in the year projected. We also
appreciate the comments suggesting
more complex solutions, such as the
approach provided by MedPAC, that
uses trend information for establishing
thresholds or the approach from other
commenters that bifurcates the outlier
pool into sub-pools. We did not propose
any changes to the outlier policy
methodology in the CY 2021 ESRD PPS
proposed rule. Our proposal was limited
to updating the outlier services MAP
amounts and FDL amounts to reflect the
utilization of outlier services reported
on 2019 claims. Therefore, we are not
finalizing these significant
methodological changes the commenters
suggested.
However, we recognize that the
incorporation of calcimimetics into the
ESRD PPS bundled payment system,
and of which effective January 1, 2021
are ESRD PPS eligible outlier services,
brings with them a unique dynamic. As
the commenters have indicated, these
products are expensive and these high
costs have been loaded into the
projections for the outlier payments. We
also agree with the commenters that as
new therapies become eligible ESRD
outlier services, they too will bring
significant costs that could further
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complicate the allocation of outlier
payments to beneficiaries that may not
be using the particular new therapy. As
we noted in the previous paragraph, we
do not believe it is appropriate to
finalize significant methodological
changes, such as bifurcating the outlier
pool into sub-pools, without performing
detailed analyses to inform us on the
implications of the changes. Similarly,
we do not agree with the suggestion that
CMS publish an interim final rule with
comment period to finalize complex
changes to the outlier policy
methodology so that they can take effect
in CY 2021; doing so would be
premature since we would not have
carefully studied and considered the
potential consequences.
We appreciate the commenters’
expressed interest in working with CMS
to refine the outlier policy methodology
to make sure that it addresses the needs
of all types of high costs patients. While
commenters suggested a TEP or another
forum to develop a solution to the
outlier pool being dominated by a single
product, we had already indicated in
the CY 2020 ESRD PPS final rule (84 FR
60607) that a TEP would address the
outlier policy as part of the efforts to
refine the ESRD PPS. Following
publication of the CY 2020 ESRD PPS
final rule, a TEP was held in December
2019. The outlier policy was on the
agenda and our data contractor
discussed: The current approach to
outlier payments, stakeholder concerns
regarding the current outlier payment,
an alternative methodology to achieve
the 1 percent outlier target, and
feedback on the proposed approach.
Under the alternative approach
discussed at the TEP, the underlying
basis of the alternative methodology is
to relax the assumption of constant
utilization of eligible outlier services
over time, which allows for the
modeling of the MAP amounts as they
change over time. It also allows for the
use of data from a greater number of
years to inform trends. Details regarding
the session dedicated to the outlier
policy are available on the CMS website:
https://www.cms.gov/files/document/
end-stage-renal-disease-prospectivepayment-system-technical-expert-panelsummary-report-december.pdf.
We believe that the information
gathered at the TEP and the thoughtful
suggestions provided in the public
comments submitted in response to the
CY 2021 ESRD PPS proposed rule can
be taken into consideration in the future
as we explore ways to refine the outlier
policy methodology.
Final Rule Action: After considering
the public comments, we are finalizing
the updated outlier thresholds for CY
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2021 displayed in Column II of Table 5
of this final rule and based on CY 2019
data.
d. Final Impacts to the CY 2021 ESRD
PPS Base Rate
(1) ESRD PPS Base Rate
In the CY 2011 ESRD PPS final rule
(75 FR 49071 through 49083), we
established the methodology for
calculating the ESRD PPS per-treatment
base rate, that is, ESRD PPS base rate,
and the determination of the pertreatment payment amount, which are
codified at §§ 413.220 and 413.230. The
CY 2011 ESRD PPS final rule also
provides a detailed discussion of the
methodology used to calculate the ESRD
PPS base rate and the computation of
factors used to adjust the ESRD PPS
base rate for projected outlier payments
and budget neutrality in accordance
with sections 1881(b)(14)(D)(ii) and
1881(b)(14)(A)(ii) of the Act,
respectively. Specifically, the ESRD PPS
base rate was developed from CY 2007
claims (that is, the lowest per patient
utilization year as required by section
1881(b)(14)(A)(ii) of the Act), updated to
CY 2011, and represented the average
per treatment MAP for composite rate
and separately billable services. In
accordance with section 1881(b)(14)(D)
of the Act and our regulation at
§ 413.230, the per-treatment payment
amount is the sum of the ESRD PPS base
rate, adjusted for the patient specific
case-mix adjustments, applicable
facility adjustments, geographic
differences in area wage levels using an
area wage index, any applicable outlier
payment and training adjustment addon, the TDAPA, and the TPNIES.
(2) Annual Payment Rate Update for CY
2021
We are finalizing an ESRD PPS base
rate for CY 2021 of $253.13. This update
reflects several factors, described in
more detail as follows:
• Wage Index Budget-Neutrality
Adjustment Factor: We compute a wage
index budget-neutrality adjustment
factor that is applied to the ESRD PPS
base rate. For CY 2021, we are not
proposing any changes to the
methodology used to calculate this
factor, which is described in detail in
the CY 2014 ESRD PPS final rule (78 FR
72174). We computed the proposed CY
2021 wage index budget-neutrality
adjustment factor using treatment
counts from the 2019 claims and
facility-specific CY 2020 payment rates
to estimate the total dollar amount that
each ESRD facility would have received
in CY 2020. The total of these payments
became the target amount of
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expenditures for all ESRD facilities for
CY 2021. Next, we computed the
estimated dollar amount that would
have been paid for the same ESRD
facilities using the ESRD PPS wage
index for CY 2021. As discussed in
section II.B.4.b of this final rule, the
final ESRD PPS wage index for CY 2021
includes an update to the most recent
hospital wage data, the adoption of the
2018 OMB delineations, and a 5 percent
cap on wage index decreases applied for
CY 2021. The total of these payments
becomes the new CY 2021 amount of
wage-adjusted expenditures for all
ESRD facilities. The wage index budgetneutrality factor is calculated as the
target amount divided by the new CY
2021 amount. When we multiplied the
wage index budget-neutrality factor by
the applicable CY 2021 estimated
payments, aggregate payments to ESRD
facilities would remain budget neutral
when compared to the target amount of
expenditures. That is, the wage index
budget-neutrality adjustment factor
ensures that wage index adjustments do
not increase or decrease aggregate
Medicare payments with respect to
changes in wage index updates. The
final CY 2021 wage index budgetneutrality adjustment factor is .999485.
This application would yield a CY 2021
ESRD PPS base rate of $239.21, ($239.33
× .999485 = $239.21), prior to the
addition to the ESRD PPS base rate to
include calcimimetics and the
application of the final market basket
increase.
• Addition to the ESRD PPS Base
Rate to Include Calcimimetics: As
discussed in section II.B.1 of this final
rule, for CY 2021 we are modifying the
ESRD PPS base rate by adding $9.93 to
account for calcimimetics in the ESRD
PPS bundled payment. This application
would yield a CY 2021 ESRD PPS base
rate of $249.14 ($239.21 + $9.93 =
$249.14), prior to the application of the
final market basket increase.
• Market Basket Increase: Section
1881(b)(14)(F)(i)(I) of the Act provides
that, beginning in 2012, the ESRD PPS
payment amounts are required to be
annually increased by the ESRD market
basket percentage increase factor. The
latest projection of the ESRDB market
basket percentage increase factor for CY
2021 is 1.9 percent. In CY 2021, this
amount must be reduced by the
productivity adjustment described in
section 1886(b)(3)(B)(xi)(II) of the Act,
as required by section
1881(b)(14)(F)(i)(II) of the Act. As
discussed previously, the final MFP
adjustment for CY 2021 is 0.3
percentage point, thus yielding an
update to the base rate of 1.6 percent for
CY 2021. Therefore, the final CY 2021
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ESRD PPS base rate is $253.13 ($249.14
× 1.016 = $253.13).
In summary, we are finalizing a CY
2021 ESRD PPS base rate of $253.13.
This amount reflects a CY 2021 wage
index budget-neutrality adjustment
factor of .999485, an addition of $9.93
to the ESRD PPS base rate to include
calcimimetics, and the CY 2021 ESRD
PPS payment update of 1.6 percent.
The comments and our responses to
the comments on our updates to the CY
2021 ESRD PPS base rate are set forth
below.
Comment: Commenters were
supportive of the updates to the ESRD
PPS base rate for CY 2021.
Response: We appreciate the
comments in support of the updates.
Comment: An academy of nutrition
and dietetics urged CMS to consider
access to care in rural areas when
setting the rates under the ESRD PPS.
The commenter referred to MedPAC’s
March 2020 Report to Congress,21 and
noted MedPAC’s concern about the gap
in the Medicare margin between rural
and urban facilities. The commenter
believes that the proposal to cap any
decrease in an ESRD facility’s wage
index is one way to address these access
to care concerns, including access to
registered dietitian nutritionists (RDNs).
The commenter explained that RDNs
perform many roles in ESRD facilities
aimed at improving outcomes and
promoting therapy adherence, including
dialysis treatments, dietary
recommendations, and medication
regimes. The commenter expressed
concern that there are significant
challenges to the hiring and retention of
RDNs in rural area ESRD facilities,
therefore rates for the rural facilities
require an adequate margin to support
recruitment and retention of qualified
RDNs to address the needs of this
nutritionally high-risk population.
Response: We appreciate the
commenter’s recommendation for CMS
to consider access to care in rural areas
when setting the rates under the ESRD
PPS, specifically with regard to hiring
and retaining specialized staff that
provide quality care to ESRD
beneficiaries. As we stated in the CY
2020 ESRD PPS final rule (84 FR 60701),
the annual update factor is intended to
account for the overall increase in cost
of care at the national level. The patient
case-mix payment adjustments and the
facility level adjustments, such as the
rural adjustment and low-volume
payment adjustment account for
differences in both patient and facility
characteristics. These payment
21 https://www.medpac.gov/docs/default-source/
reports/mar20_medpac_ch6_sec.pdf?sfvrsn=0.
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adjustments are provided to address the
variation of costs of a particular facility
relative to the national standard. The CY
2016 ESRD PPS final rule discusses the
methodology for calculating the patient
and facility-level adjustments (80 FR
68972 through 69004). In addition, the
ESRD PPS base rate is adjusted for any
applicable outlier payment, training
add-on payment, the TDAPA, and the
TPNIES to arrive at the per treatment
payment amount.
For these reasons, we believe that the
CY 2021 ESRD PPS base rate is
appropriate despite the challenges some
ESRD facilities experience. We also
continue to believe that the payment
adjustments, such as the rural
adjustment and the low volume
payment adjustment help mitigate the
challenges faced by those facilities that
are eligible for the adjustments.
Final Rule Action: We are finalizing a
CY 2021 ESRD PPS base rate of $253.13.
5. Changes to the Low-Volume Payment
Adjustment
a. Background
As required by section
1881(b)(14)(D)(iii) of the Act, the ESRD
PPS includes a payment adjustment that
reflects the extent to which costs
incurred by low-volume facilities in
furnishing renal dialysis services exceed
the costs incurred by other facilities in
furnishing such services. We have
established a LVPA factor of 23.9
percent for ESRD facilities that meet the
definition of a low-volume facility.
Under § 413.232(b), a low-volume
facility is an ESRD facility that, based
on the submitted documentation—(1)
Furnished less than 4,000 treatments in
each of the 3 cost reporting years (based
on as-filed or final settled 12consecutive month cost reports,
whichever is most recent) preceding the
payment year; and (2) Has not opened,
closed, or received a new provider
number due to a change in ownership
in the 3 cost reporting years (based on
as-filed or final settled 12-consecutive
month cost reports, whichever is most
recent) preceding the payment year.
Under § 413.232(c), for purposes of
determining the number of treatments
furnished by the ESRD facility, the
number of treatments considered
furnished by the ESRD facility equals
the aggregate number of treatments
furnished by the ESRD facility and the
number of treatments furnished by other
ESRD facilities that are both under
common ownership with, and 5 road
miles or less from, the ESRD facility in
question.
For purposes of determining
eligibility for the LVPA, ‘‘treatments’’
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mean total HD-equivalent treatments
(Medicare and non-Medicare as well as
ESRD and non-ESRD). For PD patients,
1 week of PD is considered equivalent
to 3 HD treatments. As noted
previously, we base eligibility on the 3
years preceding the payment year and
those years are based on cost reporting
periods. Specifically, under
§ 413.232(g), the ESRD facility’s cost
reports for the periods ending in the 3
years preceding the payment year must
report costs for 12-consecutive months
(76 FR 70237).
In order to receive the LVPA under
the ESRD PPS, an ESRD facility must
submit a written attestation statement to
its MAC confirming that it meets all of
the requirements specified in § 413.232
and qualifies as a low-volume ESRD
facility. The attestation is required
because: (1) ESRD facility’s cost
reporting periods vary and may not be
based on the calendar year; and (2) the
cost reports are due 5 months after the
close of the cost reporting period (that
is, there is a lag in the cost reporting
submission). Thus, the MACs may not
have the cost report for the third year to
determine eligibility and would need to
rely on the attestation for that year until
the cost report is available. Section
413.232(e) imposes a yearly November 1
deadline for attestation submissions,
with a few exceptions where the
deadline is December 31. The November
1 timeframe provides 60 days for a MAC
to verify that an ESRD facility meets the
LVPA eligibility criteria (76 FR 70236).
As stated in the Medicare Benefit
Policy Manual, (Pub. L. 100–02),
(chapter 11, section 60.B.1),22 once the
attested ESRD facility’s cost report is
submitted to the MAC, the MAC verifies
the as-filed cost report for the third
eligibility year and finds that the ESRD
facility met the eligibility criteria, the
ESRD facility would then receive the
LVPA payment for all the Medicareeligible treatments in the payment year.
However, if the attested ESRD facility’s
cost report for the third eligibility year
exceeds the total dialysis treatment
threshold, then the MAC recoups by
reprocessing claims paid during the
payment year in which the ESRD
facility incorrectly received the LVPA.
Recoupment also occurs if any cost
reports used for eligibility are
subsequently found to have not met the
low-volume criteria, for example,
reopening or appeals.
Further information regarding the
administration of the LVPA is provided
22 https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Downloads/
bp102c11.pdf.
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in the Medicare Benefit Policy Manual,
chapter 11, section 60.B.1.23
b. Revisions to the LVPA Requirements
and Regulations
As we discussed in the CY 2019 ESRD
PPS final rule (83 FR 56949) and the CY
2021 ESRD PPS proposed rule (85 FR
42165), we have heard from
stakeholders that low-volume facilities
rely on the LVPA and loss of the
adjustment could result in beneficiary
access issues. Specifically, stakeholders
expressed concern that the eligibility
criteria in the LVPA regulations are very
explicit and leave little room for
flexibility in certain circumstances.
As discussed in the CY 2021 ESRD
PPS proposed rule (85 FR 42165),
according to the Centers for Disease
Control and Prevention (CDC), the risk
factors for COVID–19 include older
adults and people of any age who have
serious underlying medical conditions,
such as diabetes and chronic kidney
disease undergoing dialysis. Medicare’s
ESRD population aligns with the profile
of patients who are more susceptible to
COVID–19. As a result, ESRD facilities
are working together to keep the risk of
spreading COVID–19 down as much as
possible by shifting patients among the
ESRD facilities in the same area. In
some cases, this shifting of patients has
caused some low-volume ESRD
facilities to temporarily dialyze patients
that they otherwise would not have
dialyzed if there had not been a PHE. In
addition, since cases of acute kidney
injury (AKI) have increased in certain
areas of the country due to COVID–19,
there is also an increase in the number
of patients discharged that need
outpatient dialysis for some period of
time while their kidneys regain normal
function. We expressed concern that
these increases in dialysis treatments
due to the COVID–19 PHE in CY 2020
may put certain low-volume facilities
over the LVPA’s treatment threshold
causing the loss of, or the inability to
qualify for, the 23.9 percent per
treatment payment adjustment for
payment years 2021, 2022, and 2023.
We noted that in CY 2020, 338 ESRD
facilities receive the LVPA. We also
noted that in a typical year, we estimate
that between 50–60 facilities lose their
LVPA status. That is, there are between
50–60 ESRD facilities that typically lose
their LVPA status because their patient
population grew for reasons other than
the COVID–19 PHE.
In light of the unique circumstance
due to the COVID–19 PHE, we proposed
23 https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Downloads/
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to hold ESRD facilities harmless if an
increase in their treatment counts in
2020 is COVID–19-related such that the
increase would prevent them from
qualifying for the LVPA. We proposed
that the ESRD facility would attest that
the increase in treatments, meaning total
HD-equivalent treatments (for ESRD and
AKI), was temporary and related to the
redistribution of patients in response to
the COVID–19 PHE. When this occurs,
instead of using total dialysis treatments
furnished in cost reporting periods
ending in 2020, CMS would rely on the
facility’s attestation that the increase in
total dialysis treatments was due to the
PHE for the COVID–19 pandemic. We
proposed that for purposes of
determining LVPA eligibility for
payment years 2021, 2022, and 2023, we
would only consider total dialysis
treatments furnished for 6 months of a
facility’s cost-reporting period ending in
2020, and that an ESRD facility would
decide which 6 months to use
(consecutive or non-consecutive) for
purposes of reporting total treatments.
That is, ESRD facilities would attest
that, while it furnished 4,000 or more
treatments in its cost-reporting period
ending in 2020, the number of
treatments exceeding the allowed
threshold to otherwise qualify for the
LVPA was due to temporary patient
shifting as a result of the COVID–19
PHE, and that their total dialysis
treatments for any 6 months of that
period is less than 2,000. MACs would
annualize the total dialysis treatments
for those 6 months by multiplying by 2.
ESRD facilities would be expected to
provide supporting documentation to
the MACs upon request.
We proposed to revise § 413.232(g) by
adding paragraph (g)(4) to reflect that,
for purposes of determining LVPA
eligibility for payment years 2021, 2022,
and 2023, an ESRD facility’s attestation
must indicate that the ESRD facility
meets all the LVPA criteria except that,
for a facility that does not otherwise
meet the number-of-treatments criterion
(that is, less than 4,000 in a year)
because of the COVID–19 PHE, the
facility furnished less than 2,000
treatments in any 6 months during its
cost-reporting period ending in 2020
due to temporary patient shifting as a
result of the COVID–19 PHE. We also
proposed that the MAC would rely on
the facility’s attestation and would
annualize the total dialysis treatments
for the 6 months by multiplying those
collective 6 month treatments by 2.
In addition, since CMS changed cost
reporting deadlines due to the COVID–
19 PHE, we believe the extraordinary
circumstances of the COVID–19
pandemic justify an exception to the
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November 1, 2020 attestation deadline.
Therefore, for payment year 2021, we
proposed to allow more time for ESRD
facilities to submit attestations by
extending the deadline to December 31,
2020. We would reflect this change in
§ 413.232(e) by reformatting the section
to reflect already established exceptions
to the November 1 attestation deadline
in paragraphs (e)(1) through (3), and to
include in new paragraph (e)(4) that, for
payment year 2021, the attestation must
be provided by December 31, 2020.
We proposed a technical change at
§ 413.232(b) to remove the heading
‘‘Definition of low-volume facility’’ to
be consistent with the current CFR
requirements.24
We also proposed a technical change
at § 413.232(e) and (g). We proposed to
add ‘‘MAC’’ in § 413.232(e) to establish
the acronym for Medicare
Administrative Contractor. We proposed
to replace ‘‘Medicare Administrative
Contractor (MAC)’’ with ‘‘MAC’’ in
§ 413.232(g) since the acronym would
now be established in § 413.232(e).
c. Clarification for MAC LVPA
Determinations
As we discussed in the CY 2021 ESRD
PPS proposed rule (85 FR 42166), in
order to receive the LVPA, an ESRD
facility must meet the requirements of
§ 413.232, including submitting
attestations to the MACs indicating its
eligibility for the adjustment. In its
attestation for the third eligibility year,
which is the cost-reporting year
immediately preceding the payment
year, a facility attests that it will be
eligible for the adjustment; this
attestation typically occurs prior to the
MAC having the facility’s cost report for
the third eligibility year, in which case
the MAC relies on the facility’s
attestation to determine if the facility
qualifies for the LVPA. When an ESRD
facility qualifies for the adjustment, the
LVPA would be applied to all the
Medicare-eligible treatments for the
entire payment year. If the MAC
subsequently determines, however, that
the ESRD facility failed to qualify for the
LVPA, and the facility had already
begun to receive the adjustment to
which the MAC has determined it is not
entitled, the MAC would reprocess the
claims to remove and recoup the lowvolume payments.
We understand that in some
instances, MACs may be discontinuing
LVPA payments to a facility in the
payment year for which the facility is
eligible for the adjustment. However,
24 Document Drafting Handbook, chapter 2,
section 2.10, page 2–18: https://www.archives.gov/
files/federal-register/write/handbook/ddh.pdf.
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the established policy is such that, if an
ESRD facility meets the LVPA eligibility
criteria in § 413.232, it is entitled to the
payment adjustment for the entire
payment year. Because there may be
some inconsistent application of this
policy, we are taking this opportunity to
make this aspect of the LVPA policy
clear in the regulation text.
We proposed to revise § 413.232 by
adding paragraph (h) to specify that, if
an ESRD facility provides an attestation
in accordance with § 413.232(e) for the
third eligibility year, the MAC verifies
the as-filed cost report. If the MAC
determines an ESRD facility meets the
definition of a low-volume facility, CMS
adjusts the low-volume facility’s base
rate for the entire payment year.
However, if the MAC determines an
ESRD facility does not meet the
definition of a low-volume facility, the
MAC reprocesses claims and recoups
low volume adjustments paid during the
payment year.
The comments and our responses to
the comments on our LVPA proposals
are set forth below.
Comment: Several commenters
expressed support for the proposal to
hold harmless ESRD facilities that
would otherwise qualify for the LVPA
but for a temporary increase in dialysis
treatments due to the PHE for the
COVID–19 pandemic. Two of the
commenters indicated that holding
these ESRD facilities harmless will
better ensure ESRD patients’ access to
life-sustaining dialysis.
Response: We appreciate the support
of the commenters as we strive to ensure
access to care during this
unprecedented time.
Comment: One commenter expressed
concern that the intent of the proposal
would not be met as the length of the
PHE for COVID–19 remains uncertain.
Response: We thank the commenter
for its support for the proposed LVPA
modifications while appreciating this
concern. While the end of the PHE for
COVID–19 remains uncertain, we
believe that the modification adequately
address the current and foreseen impact
of COVID–19 on low volume ESRD
facilities. We will consider the COVID–
19 PHE during rulemaking in the future,
if warranted.
Comment: One commenter expressed
confusion over the proposed
methodology, indicating that LVPA
attestation data can be pulled from any
six-month period in the preceding three
years. The commenter expressed
concern that facilities who would have
exceeded the threshold, even in the
absence of COVID–19, can ‘mask’ their
disqualification.
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Response: We acknowledge the
commenter’s confusion over the
proposal. For purposes of determining
LVPA eligibility for payment years
2021, 2022, and 2023, the facility would
attest that its total dialysis treatments
for those 6 months of their costreporting period ending in 2020 are less
than 2,000 and that, although the total
number of treatments furnished
throughout the entire year otherwise
exceeded the LVPA threshold of 4,000,
the excess treatments are a direct result
of patient shifting from the COVID–19
PHE. ESRD facilities would select 6
months (consecutive or nonconsecutive) of total dialysis treatments
furnished for purposes of the LVPA
determination and, if eligible, will
receive the benefit for the entire
payment year. If the ESRD facility
would have not qualified for the LVPA
in the absence of COVID–19, the facility
cannot attest that the COVID–19 PHE
caused its excess treatments. The policy
is intended to directly address the
burden placed on ESRD facilities in
2020 due to the COVID–19 PHE. Future
rulemaking will address the PHE’s
impact on the LVPA, if the impact
continues into following years.
Comment: We received comments
that suggested we adopt a methodology
including a combination of the rural and
LVPA adjusters to create a tiered LVPA,
targeting facilities providing less than
4,000 treatments per year, and
expanding the adjuster to include a
second tier that includes facilities
providing less than 6,000 treatments per
year.
Response: We appreciate commenters’
suggestions for an alternative
methodology and will take their
suggestions into consideration for future
rulemaking.
Final Rule Action: After consideration
of public comments, for CY 2021, we are
finalizing the revisions to the LVPA, as
proposed. We are finalizing the revision
to § 413.232(g) by adding paragraph
(g)(4) to codify the process. We are also
finalizing the proposal to reformat
§ 413.232(e) to reflect already
established exceptions to the November
1 attestation deadline in paragraphs
(e)(1) through (3), and to include in new
paragraph (e)(4) that, for payment year
2021, the attestation must be provided
by December 31, 2020. We are finalizing
a technical change at § 413.232(b) to
remove the heading ‘‘Definition of lowvolume facility.’’ We are also finalizing
technical changes at § 413.232(e) and
(g), whereby ‘‘MAC’’ would be added in
§ 413.232(e) to establish the acronym for
Medicare Administrative Contractor and
‘‘MAC’’ would replace ‘‘Medicare
Administrative Contractor (MAC)’’ in
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§ 413.232(g). Lastly, we are finalizing
the revision of § 413.232 by adding
paragraph (h) to specify that, if an ESRD
facility provides an attestation in
accordance with § 413.232(e) for the
third eligibility year, the MAC verifies
the as-filed cost report.
C. Transitional Add-On Payment
Adjustment for New and Innovative
Equipment and Supplies for CY 2021
Payment
1. Background
In the CY 2020 ESRD PPS final rule,
we finalized the establishment of a
transitional add-on payment adjustment
for new and innovative equipment and
supplies (TPNIES) to support ESRD
facilities in the uptake of certain new
and innovative renal dialysis equipment
and supplies under the ESRD PPS.
Under our current regulation at
§ 413.236(b), we will provide the
TPNIES to an ESRD facility for
furnishing a covered equipment or
supply only if the item: (1) Has been
designated by CMS as a renal dialysis
service under § 413.171, (2) is new,
meaning it is granted marketing
authorization by FDA on or after
January 1, 2020, (3) is commercially
available by January 1 of the particular
calendar year, meaning the year in
which the payment adjustment would
take effect; (4) has a Healthcare
Common Procedure Coding System
(HCPCS) application submitted in
accordance with the official Level II
HCPCS coding procedures by September
1 of the particular calendar year; (5) is
innovative, meaning it meets the criteria
specified in § 412.87(b)(1) of this
chapter and related guidance; and (6) is
not a capital-related asset that an ESRD
facility has an economic interest in
through ownership (regardless of the
manner in which it was acquired).
Specifically, the equipment or supply
must represent an advance that
substantially improves, relative to renal
dialysis services previously available,
the diagnosis or treatment of Medicare
beneficiaries.
Under the first criterion, as reflected
in the CY 2020 ESRD PPS final rule,
renal dialysis equipment and supplies
will be considered ‘‘new’’ if FDA grants
them marketing authorization on or after
January 1, 2020. By including FDA
marketing authorizations on or after
January 1, 2020, we intended to support
ESRD facility use and beneficiary access
to the latest technological improvements
to renal dialysis equipment and
supplies. We note that in section II.B.2.b
of this final rule, we are refining the
newness criterion (year in which the
product was granted FDA marketing
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authorization) and establish that an
equipment or supply is considered
‘‘new’’ within 3 years beginning on the
date of FDA marketing authorization for
that equipment or supply. For capitalrelated assets that are dialysis machines
when used in the home setting for a
single patient, the 3 years would begin
from the date of FDA marketing
authorization for home use. We note
that the changes to the newness criteria
and the other changes discussed in
section II.B.2.b are effective beginning
January 1, 2021, that is, applicable for
the TPNIES applications received in
2021.
As we stated in the CY 2021 ESRD
PPS proposed rule (85 FR 42166), we
believed the IPPS SCI criteria and the
process used to evaluate SCI under the
IPPS could be used for identifying new
and innovative equipment and supplies
worthy of additional payment under the
ESRD PPS. We noted that under the
IPPS, CMS has been assessing new
technologies for many years to assure
that the additional new technology addon payments to hospitals are made only
for truly innovative and transformative
products, and we stated that CMS is
proposing to adopt the IPPS SCI criteria
under the ESRD PPS for the same
reason. We explained that we wanted to
ensure that the add-on payment
adjustments made under the ESRD PPS
are limited to new equipment and
supplies that are truly innovative. In
addition, since renal dialysis services
are routinely furnished to hospital
inpatients and outpatients, we stated
that we believed the same SCI criteria
should be used to assess whether a new
renal dialysis equipment or supply
warrants additional payment under
Medicare.
We finalized the adoption of IPPS’s
SCI criteria specified in § 412.87(b)(1),
including modifications finalized in
future IPPS final rules, to determine
when a new and innovative renal
dialysis equipment or supply is eligible
for the TPNIES under the ESRD PPS.
That is, we would adopt IPPS’s SCI
criteria in § 412.87(b)(1) and any
supporting policy around these criteria
as discussed in IPPS preamble language.
We stated that we believed that by
incorporating the IPPS SCI criteria for
new and innovative renal dialysis
equipment under the ESRD PPS, we
would be consistent with IPPS and
innovators would have standard criteria
to meet for both settings. We also
proposed to establish a process modeled
after IPPS’s process of determining if a
new medical service or technology
meets the SCI criteria specified in
§ 412.87. That is, we proposed that CMS
would use a similar process to
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determine whether the renal dialysis
equipment or supply meets the
eligibility criteria proposed in newly
added § 413.236(b). Similar to how we
evaluate whether a new renal dialysis
drug or biological product is eligible for
the TDAPA, as discussed in the CY 2016
ESRD PPS final rule (80 FR 69019), we
would need to determine whether the
renal dialysis equipment and supply
meets our eligibility criteria for the
TPNIES.
Specifically, under § 413.236(b)(5) we
evaluate SCI for purposes of the TPNIES
under the ESRD PPS based on the IPPS
SCI criteria (see § 412.87(b)(1)). We note
that in the CY 2021 ESRD PPS proposed
rule as well as section II.B.2.a of this
final rule, we provide a detailed
discussion of the SCI criteria. In
addition, in section II.B.2.b of this final
rule we are revising § 413.236(b)(5) to
remove ‘‘and related guidance’’ to
reflect that all related SCI guidance has
now been incorporated into
§ 412.87(b)(1).
As we discussed in the CY 2021 ESRD
PPS proposed rule and in section
II.B.2.a of this final rule, we established
in § 413.236(c) a process for our
announcement of TPNIES
determinations and a deadline for
consideration of new renal dialysis
equipment or supply applications under
the ESRD PPS. CMS will consider
whether a new renal dialysis equipment
or supply meets the eligibility criteria
specified in § 413.236(b). Then, after
consideration of public comments we
will announce the results in the Federal
Register as part of our annual ESRD PPS
final rule. We noted we would only
consider a complete application
received by February 1 prior to the
particular calendar year. FDA marketing
authorization for the equipment or
supply must occur by September 1 prior
to the particular calendar year. We note
in section II.B.2.b of this final rule, we
are revising § 413.236(c) to replace
‘‘September 1’’ with ‘‘the HCPCS Level
II code application deadline for Coding
Cycle 2 for DMEPOS items and services
as specified in the HCPCS Level II
coding guidance on the CMS website’’
to reflect that FDA marketing
authorization for the new and
innovative equipment or supply must
accompany the HCPCS application prior
to the particular calendar year in order
for the item to qualify for the TPNIES in
the next calendar year.
2. Applications for TPNIES Payment for
CY 2021
We received two applications for the
TPNIES for CY 2021. A discussion of
these applications is presented below.
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a. Theranova 400 Dialyzer and
Theranova 500 Dialyzer
(1) Baxter Healthcare Corporation
(Baxter) Application
Baxter submitted an application for
the Theranova 400 Dialyzer/Theranova
500 Dialyzer. The 400 and 500 denote
differences in surface area. The
applicant stated that Theranova
represents an SCI over currently
available HD therapies for the treatment
of renal failure. The applicant stated
that Theranova is a new class of hollowfiber, single-use dialyzer intended to
treat renal failure by HD. The applicant
stated that it features an innovative 3layer membrane structure that offers a
higher permeability than high-flux
dialyzers, with improved removal of
large proteins up to 45 kilodaltons (kDa)
while selectively maintaining essential
proteins such as albumin.25 26 27 The
applicant stated that Theranova has the
potential to transform in-center HD by
allowing Medicare beneficiaries with
renal failure to benefit from expanded
hemodialysis (HDx). HDx is defined as
a process of blood purification that
includes the clearance of small uremic
toxins through large middle molecule
(LMM) (categorized as uremic solute
whose molecular size is 25 kDa up to 60
kDa) toxins without the need for an
external infusion of replacement fluid.
For purposes of the application, HDx is
collectively referred to in the
application as ‘‘Theranova’’. The
applicant asserted that the Theranova
dialyzer integrates with existing HD
machines that an ESRD facility already
owns and that the Theranova dialyzer
replaces other dialyzers.
The applicant described the
Theranova membrane as unique and
stated it allows for the removal of an
expanded range of solutes, creating a
filtration profile closer to a natural
kidney. The applicant described the
membrane structure as being divided
into three distinct layers: A fingerlike
porous outer layer, a sponge-like
intermediate layer, and a very thin inner
layer (skin). By reducing the inner
diameter of the membrane, internal
filtration is increased, allowing for
enhanced clearance of LMMs through
25 Boschetti-de-Fierro, A., et al., ‘‘MCO
Membranes: Enhanced Selectivity in High-Flux
Cases,’’ www.nature.com/Scientific Reports,
[5:18448] DOI: 10.1038/srep18448.
26 Krause, B., et al., ‘‘Highly selective membranes
for Blood purification,’’ Gambro Dialysatoren
GmbH, Hechingen/Germany, Presentation abstract
March 26, 2015.
27 Zweigart, C., et al., ‘‘Medium cut-off
membranes—closer to the natural kidney removal
function,’’ Int. J Artif Organs, 2017, 40(7), pp. 328–
334. DOI: 10.5301/uijao.5000603.
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khammond on DSKJM1Z7X2PROD with RULES2
additional convective transport.28 The
Theranova dialyzer enables the efficient
removal of uremic toxins (up to 45
kDa).29 30 The applicant included an
adapted figure from a book titled,
‘‘Modelling and Control of Dialysis
Systems 31 to compare removal of toxins
by Theranova to the kidney and to other
dialysis therapies, such as low flux
dialyzers (LF), high flux dialyzers (HFD)
and hemodiafiltration (HDF). The
applicant’s adapted figure showed the
following: LF, HFD, HDF and HDx
remove urea (60 Daltons (Da)),
phosphate (96 Da), Parathyroid hormone
(9,500 Da); HFD, HDF and HDx remove
Beta 2 microglobulin (12 kDa), cystatin
C (13 kDa), Myoglobulin (17 kDa), and,
kappa free-light-chains (23 kDa); HDF
and HDx remove complement factor D
(24 kDa), Interleukin (IL)–6 (25 kDa),
alpha 1 microglobulin (33 kDa); and,
HDx removes Chitinase-3-like protein 1
(40 kDa), lambda free-light-chains (45
kDa) and albumin (67 kDa).
The applicant stated that compared
with low-flux HD, high-flux HD, and
HDF, the Theranova dialyzer filtration
profile is more similar to that of a
natural kidney, as shown in vitro 32 33
giving it expanded clearance of uremic
toxins.
The applicant asserted that the design
of the Theranova dialyzer allows for use
on any HD machine, made by any
manufacturer, by merely changing the
dialyzer. The applicant stated that the
membrane is compatible with standard
fluid quality and does not require any
additional fluid quality control measure.
Theranova received approval for
Investigational Device Exemption (IDE)
protocol from the FDA, on August 31,
2017, and then received approval for
coverage on September 13, 2017. The
Class II investigational device
exemption received the code
28 Lorenzin, A., et al., ‘‘Quantification of Internal
Filtration in Hollow Fiber Hemodialyzers with
Medium Cut-Off Membrane,’’ Blood Purif, 2018, 46,
pp. 196–204.
29 Boschetti-de-Fierro, A., et al., ‘‘MCO
Membranes: Enhanced Selectivity in High-Flux
Cases,’’ www.nature.com/Scientific Reports,
[5:18448] DOI: 10.1038/srep18448.
30 Boschetti-de-Fierro, A., et al., ‘‘MCO Dialyzers:
Enhanced Selectivity High-Flux,’’ Gambro
Dialysatoren GmbH, Research and Development,
Hechingen, Germany, Poster No. SAT–481 (Baxter).
31 Azar, A.T. and Canaud, B., ‘‘Chapter 8:
Hemodialysis System,’’ Modeling and Control of
Dialysis Systems, 2013, pp. 99–106, SCI 404 Berlin,
Springer-Verlag, Berlin, Heidelberg. ISBN: 978–
3642274572.
32 Krause, B., et al., ‘‘Highly selective membranes
for Blood purification,’’ Gambro Dialysatoren
GmbH, Hechingen/Germany, Presentation abstract
March 26, 2015.
33 Boschetti-de-Fierro, A., et al., ‘‘MCO
Membranes: Enhanced Selectivity in High-Flux
Cases,’’ www.nature.com/Scientific Reports,
[5:18448] DOI: 10.1038/srep18448.
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G170157.34 The FDA requested a 6month clinical study to validate efficacy
of large toxin removal and safety.
According to the applicant, safety is
defined in part by albumin loss. The
applicant stated that it is seeking
marketing authorization through the
FDA’s De Novo pathway and marketing
authorization this year for the May 2020
cycle. The applicant stated that it plans
to submit a HCPCS application to CMS
in June 2020.
The applicant noted that it has not
submitted an application for passthrough payments under the Medicare
Outpatient Prospective Payment System
(OPPS) or the NTAP program under the
Medicare IPPS for the Theranova 400
Dialyzer/Theranova 500 Dialyzer.
The applicant stated that it expects
Theranova to be commercially available
immediately after receiving marketing
authorization and will provide proof of
commercial availability.
With regard to demonstrating the
requirements for SCI, the applicant
asserted that Theranova represents an
SCI in outcomes for Medicare
beneficiaries over currently available
HD therapies treating renal failure. The
applicant noted that ESRD patients on
current HD therapies suffer
unsatisfactorily high mortality and
morbidity from cardiovascular disease
and infections.35
In addition, the applicant stated that
the HDx enabled by Theranova
effectively targets the removal of LMM
uremic toxins (25 kDa to 60 kDa), which
are linked to the development of
inflammation, cardiovascular disease,
and other comorbidities in dialysis
patients. The applicant stated that this
results in improved clinical outcomes,
relative to current dialyzers in four
clinical categories. First, a decreased
rate of subsequent therapeutic
interventions, including fewer
infections, reduced hospitalization
duration, and reduced medication
usage. Specifically, the applicant stated
that patients treated with HDx therapy
have decreased infections. A
prospective cross-over study found an
average of seven episodes of infection
for patients treated with HDx versus 18
for high flux HD (p = 0.003).36 The
34 Available on p. 49828 at: https://
www.federalregister.gov/documents/2017/10/27/
2017-23447/medicare-and-medicaid-programsquarterly-listing-of-program-issuances-july-throughseptember-2017.
35 United States Renal Data System. 2018 USRDS
annual data report: Epidemiology of kidney disease
in the United States. National Institutes of Health,
National Institute of Diabetes and Digestive and
Kidney Diseases, Bethesda, MD, 2018.
36 Cozzolino, C., et al., ‘‘Effects of a medium cutoff (Theranova) dialyzer on haemodialaysis
patients: A prospective, cross-over study,’’ Clinical
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71445
applicant also stated that patients
receiving HDx therapy with Theranova
had hospital stays averaging 4.4 days
versus 5.9 days for patients receiving
traditional HD (p = 0.0001) along with
lower hospitalization rates (71 percent
versus 77 percent (p = 0.69)).37 The U.S.
IDE Randomized Controlled Trial
(NCT032574 l 0) of 172 patients,
although not powered for all-cause
hospitalization events, showed a 49
percent decreased number of
hospitalization events in the Theranova
arm (18 events) as compared to the
control arm (37 events).38 With regard to
improved medication usage, the
applicant stated that patients receiving
HDx therapy had reduced medication
usage. The applicant cited three studies
that showed a significant decrease in
erythropoietin stimulating agents (ESA)
usage.39 40 41 One study also found a
substantial reduction in the need for
iron usage.42 43 Two studies saw an
improvement in EPO resistance index
(ERI) and one study showed a
statistically significant decrease in
phosphate binder (calcium carbonate)
usage.44 45
The second clinical improvement
category listed by the applicant is a
more rapid beneficial resolution of the
disease process treatment. The applicant
cited a 2019 publication which noted
that the average recovery time after
dialysis is reduced with HDx therapy,
with the median self-reported recovery
time at 120 minutes, 60 min., 60 min.,
and 105 min. at 3, 6, 9, and 12 months
compared to a baseline 240 min. (p <
0.01 for 6, 9, and 12-month ratings; N
= 110).46
The third category of improved
clinical outcomes listed by the applicant
Kidney Journal, 2019, pp. 1–8. Doi 10.1093/ckj/sfz
155.
37 Sanabria, R.M., et al. ‘‘Expanded Hemodialysis
and its effects on hospitalizations and medication
usage,’’ Submitted for publication.
38 Weiner, D.E., et al. 2019, ‘‘Efficacy and Safety
of Expanded Hemodialysis with the Theranova 400
Dialyzer: A Randomized Control Trial,’’ Abstract at
ASN meeting, FR–PO 488.
39 Gallo, M., ‘‘The Real-Life Study on Expanded
Hemodialysis (HDx): 9 Months Experience of a
Single Hemodialysis Unit,’’ Nephrology Dialysis
Transplantation, 34, Issue Supplement_1, June
2019, gfz106.FP539, https://doi.org/10.1093/ndt/
gfz106.FP539.
40 Sanabria, R.M., et al., Ibid.
41 Lim, J–H., et al., ‘‘Novel Medium Cut-Off
Dialyzer Improves Erythropoietin Stimulating
Agent Resistance in Maintenance Hemodialysis
Patients: A Randomized Controlled Trial,’’
Manuscript submitted for publication.
42 Sanabria, R.M., et al., Ibid.
43 Lim, J–H., et al., Ibid.
44 Sanabria, R.M., et al., Ibid.
45 Lim, J–H., et al. Ibid.
46 Bolton, S., et al., ‘‘Dialysis symptom burden
and recovery time in expanded hemodialysis,’’
Manuscript submitted.
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khammond on DSKJM1Z7X2PROD with RULES2
is reduced inflammation in patients
receiving HDx Therapy with Theranova.
The applicant referenced a 2018 review
article, which notes that chronic
inflammation in ESRD patients is
associated with the build-up of known
uremic toxins spanning the molecular
size spectrum from 12 kDa to 45 kDa
such as beta-2-microglobulin, soluble
tumor necrosis factor (TNF), Receptor 2,
IL–1, Prolactin, IL–18, IL–6, Hyaluronic
Acid, TNF–a, Soluble TNF Receptor 1,
Pentraxin–3, and Advanced Glycation
End-Products. The same article notes
the following: (1) LMM (25 kDa to 60
kDa) have been associated with
inflammation, cardiovascular events
and other dialysis-related comorbidities;
(2) current dialytic therapies, though
efficient in removing small solutes, have
limited capability in removing LMM; (3)
current dialyzer design, limited by
membrane permeability, does not
provide long-lasting, effective reduction
of the full spectrum of small molecular
uremic toxins (<500 Da), conventional
middle molecular uremic toxins (500 Da
to <25 kDa) and large middle molecular
uremic toxins (25 kDa to 60 kDa), even
when their usage is enhanced with
convective transport; and (4) a broad
spectrum of uremic toxins are not
effectively treated by conventional HD
nor HDF which is not readily utilized in
the U.S.47 The applicant asserted that
for the first time, HDx enabled by
Theranova results in the superior
removal of the aggregate of small,
conventional middle and large middle
molecular uremic toxins.48 The
applicant asserted that Theranova, in
effectively targeting the spectrum of
uremic toxins, that this spectrum
encompasses the totality of these
inflammation-modulating molecules.
The applicant also asserted that when
analyzing the full set of studies utilizing
Theranova dialyzers, the collective
evidence shows consistent improvement
in these inflammatory marker levels. Of
14 measurements of inflammation
across four studies,49 50 51 52 71 percent
47 Wolley, M., et al., ‘‘Exploring the Clinical
Relevance of Providing Increased Removal of Large
Middle Molecules,’’ Cli, J Am Soc Nephrol, 2018,
13, pp. 805–813.
48 Kirsch AH, Lyko R, Nilsson LG., et al.
Performance of hemodialysis with novel medium
cut-off dialyzers. Nephrol Dial Transplant 2017; 32:
165–172.
49 Belmouaz, M., et al., ‘‘Comparison of the
Removal of Uremic Toxins with Medium Cut-Off
and High Flux Dialyzers: A Randomized Clinical
Trial,’’ Nephrol Dial Transplant, 2020, 35, pp. 328–
335.
50 Kharbanda, K., et al., ‘‘A Randomised Study
Investigating the Effect of Medium Cut-Off
Haemodialysis on Markers of Vascular Health
Compared with On-Line Haemodiafiltration (MoDal
Study)’’. Poster presented at the American Society
of Nephrology, 2019.
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(10 of 14) showed statistically
significant improvement in the
inflammatory marker. For the remaining
29 percent of the measured
inflammatory markers, all showed
improvement in the inflammatory
profile but were not statistically
significant. In most of the situations
where statistically significant results
were not achieved, the applicant
asserted, the studies were
underpowered to demonstrate
statistically significant change of the
particular marker.
The applicant stated that studies have
demonstrated stable albumin levels,53 54
and a reduction of endothelial
dysfunction and Albumin and C–
Reactive Protein (CRP) levels.55 56 57 In
addition, the applicant specifically
described a single cohort study (N = 41)
showing a significant decrease in serum
levels for urea, b2m, kappa and lambda
free light chain at 3 months. At 3 and
6 months, there was a substantial
decrease in serum CRP levels. Also,
blood assay demonstrated a decline in
the production of IL–6.58 In a 40participant cross-over prospective
study, HDx with Theranova versus high
flux HD demonstrated both a higher
reduction ratio and a decrease in serum
levels for lambda free light chains.59 60 61
51 Cozzolino, M., ‘‘Effects of Mediun Cut-Off
(Theranova) Dialyzer on Hemodialysis Patients: A
Prospective Cross-Over Study [Abstract].’’ J Am Soc
Nephrol, 29. 2018, pp. 616–617.
52 Cantaluppi, V., et al., ‘‘Removal of Large
Middle Molecules on Expanded Hemodialysis
(HDx): A Multicentric Observantional Study of 6
Months Follow-Up,’’ J Am Soc Nephrol, 29, 2018,
Poster TH–PO 357.
53 Krishnasamy, R., et al., ‘‘Trial evaluating mid
cut-off value membrane clearance of albumin and
light chains in hemodialysis patients (REMOVAL–
HD): A safety and efficacy study,’’ 2018, ASN 2018
Kidney Week Abstract TH–P0353.
54 Bunch, A., et al., ‘‘Long-Term Effects of
Expanded Hemodialysis (HDx) on Clinical and
Laboratory Parameters in a Large Cohort of Dialysis
Patients,’’ 2018, ASN 2018 Kidney Week Abstract
FR–P0766.
55 Kharbanda, K., et al. 2019, Ibid.
56 Cantaluppi, V., et al., Ibid.
57 Cantaluppi, V., et al., ‘‘Removal of LargeMiddle Molecules, Inhibition of Neutrophil
Activation and Modulation of Inflammation-Related
Endothelial Dysfunction During Expanded
Hemodialysis (HDx),’’ June 2019, Nephrol Dial
Transplantation, 34, Issue Supplement_1.
gfz096.FO048, https://doi.org/10.1093/ndt/
gfz096.FO048.
58 Cantaluppi, V., et al., Ibid.
59 Belmouaz, M., et al., ‘‘Comparison of the
Removal of Uremic Toxins with Medium Cut-Off
and High Flux Dialyzers: A Randomized Clinical
Trial,’’ J Am Soc Nephrol, 2018, 29, Poster TH–
PO348.
60 Belmouaz M, et al., ‘‘Comparison of
hemodialysis with medium cut-off dialyzer and online hemodiafiltration on the removal of small and
middle-sized molecules,’’ Clin Nephrol. Jan 2018,
89 (2018)(1):50–56.
61 Belmouaz, M., et al., ‘‘Comparison of the
Removal of Uremic Toxins with Medium Cut-Off
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The applicant also noted that, in
addition to IL–6, a well-recognized
biological marker of inflammation, there
is also a broader spectrum of uremic
toxins associated with inflammation.
The applicant listed references for
elevated levels of IL–6 leading to the
following: Hepcidin production with
decreased iron availability; 62 increased
endothelial damage; 63 64 increased CRP
and decreased albumin production.65
The applicant attested that with the use
of Theranova, patients present clinically
with the opposite of each of the above
listed concerns, suggesting that chronic
inflammation mediated by IL–6 is
reduced by treatment with Theranova.
However, the applicant submitted a
reference that concluded that when
compared to HD using high flux
membrane, HD using a medium cut-off
(MCO) membrane may not be inferior in
albumin loss.66
An additional prospective cross-over
study (N=20) showed reduced levels of
IL–6 (6.4561.57 pg/m vs. 9.4862.15 pg/
ml) in patients treated with HDx.67 The
applicant included findings from their
U.S. IDE Study in the TPNIES
application. Although the IL–6 level
was not a primary endpoint of the US
IDE Study (NCT03257410), nor was the
study sufficiently powered to
statistically prove a change in IL–6
level, the analysis of the US IDE Study
(NCT032574 l 0), comparing Theranova
to HD with Elisio 17H, indicates a trend
for difference in the pre- to post-dialysis
change in plasma IL–6 level, favoring
Theranova (p=0.07 and p=0.08 at 4
weeks and 24 weeks, respectively). The
pre-dialysis level of IL–6 shows a
and High-Flux Dialyzers: A Randomized Clinical
Trial,’’ Nephrol Dial Transplant, 2020, 35, pp. 328–
335.
62 Caramelo, C., et al., ‘‘Anemia: Pathophysiology,
pathogenesis, treatment, incognitate,’’ Rev Esp
Cardiol., 2007, 60, pp. 848–60.
63 Kharbanda, K., et al., ‘‘A randomized study
investigating the effect of medium cut off
haemodialysis on markers of vascular health
compared with on-line hemodiafiltration (MoDal
Study),’’ 2019, Presented at the Scientific Congress
American Society of Nephrology, 2019.
64 Cozzolino, C., et al., ‘‘Effects of a medium cutoff (Theranova) dialyzer on haemodialaysis
patients: A prospective, cross-over study,’’ Clinical
Kidney Journal, 2019, pp. 1–8. Doi 10.1093/ckj/sfz
155.
65 Gillerot, G., et al. ‘‘Genetic and Clinical Factors
Influence the Baseline Permeability of the
Peritoneal Membrane,’’ Kidney Int. 2005, 67, pp.
2477–2487.
66 Jung, J.H., et al., ‘‘A 6-Month Study on the
Efficacy of Hemodialysis Therapy Using Dialyzers
with Mediun Cut-Off Membranes in Asian Patients
with End-Stage Renal Disease,’’ Nephrol Dial
Transplant, June 2019. 84, Issue Supplement,
gfz103.SP487, https://doi.org/10.1093/ndt/
gfz103.SP487.
67 Cozzolino, C., et al., 2019, Ibid.
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positive trend for Theranova (p=0.2).68
The applicant stated that the
accumulation of IL–6 and lambda free
light chains may contribute to the
chronic inflammation state of ESRD
patients, increasing the risk of chronic
vascular disease and bacterial
infections, respectively. The applicant
noted that the company is exploring
options to assess the impact of the
reduction of these solutes via HDx in
ongoing studies.
Finally, the last category of improved
clinical outcomes listed by the applicant
is enhanced quality of life across many
different measures, including, but not
limited to, decreased recovery time,
decreased restless leg syndrome, and
reduced pruritus. The applicant stated
that there was decreased symptom
burden, citing a study of patients who
switched to HDx with Theranova in a
multicenter 6-month observational
study (N=992), who had statistically
significant improvements in measures of
symptoms of kidney disease, effects of
kidney disease, and the burden of
kidney disease.69 The applicant also
stated that there was improved reported
mental health component and
statistically significant reduced Restless
Leg Syndrome diagnosis.70 71 72 73
Regarding improved physical
functioning and decreased pruritus, the
applicant submitted an article reporting
the results of a randomized control trial
(N=50), where Theranova resulted in
improved results for physical
functioning and physical role, and the
mean scores of mean pruritus
distribution and frequency of scratching
during sleep were significantly lower
with Theranova.74 In another study
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68 Weiner,
D.E., et al., 2019 ‘‘Efficacy and Safety
of Expanded Hemodialysis with the Theranova 400
Dialyzer: A Randomized Control Trial,’’ Abstract at
ASN meeting, FR–P.O. 488.
69 Alarcon, J.C., et al., ‘‘Real World Evidence on
the Impact of Expanded Hemodialysis (HDx)
Therapy on Patient Reported Outcomes (PROs):
COREXH Registry,’’ Manuscript submitted for
Publication.
70 Alarcon, J.C., Manuscript submitted for
publication, Ibid.
71 Gernone, G., et al., ‘‘Mid-term Evaluation of the
New Medium Cut-Off Filter (Theranova) on
Removal Efficiency and Quality of Life,’’
Nephrology Dialysis Transplantation, 2018, ERA
EDTA Scientific Congress Abstract, SP 489,
doi.10.1093/ndt/gfy104.
72 Florens, N and Juillard, L., ‘‘Expanded
haemodialysis: News from the field,’’ Nephrol Dial
Transplant, 2018, 33, pp. iii48–iii52.
73 Bunch, A., et al. ‘‘Long-Term Effects of
Expanded Hemodialysis (HDx) on Clinical and
Laboratory Parameters in a Large Cohort of Dialysis
Patients’’ ASN 2018 Kidney Week Abstract FR–
P0766.
74 Lim, J–H., et al. ‘‘Novel medium cut off dialyzer
improves erythropoietin stimulating agent
resistance in maintenance hemodialysis: A
randomized controlled trial,’’ Submitted for
publication.
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(single cohort, N=14), Theranova was
associated with statistically significant
improvement in the physical and
mental component quality of life
measures.75 The applicant also
submitted a case report of a HD patient
with pruritus who responded to the
initiation of HDx using a MCO dialysis
membrane.76
(2) CMS Analysis
(a) Summary of Submitted Evidence of
the Theranova Dialyzer by CMS
CMS evaluated the claims and
assertions made by Baxter with regard to
the articles submitted by them for the
Theranova Dialyzer.
Patients with ESRD requiring dialysis
are at high risk of mortality due to the
presence of uremic toxins.77 However,
identifying the putative uremic toxin (or
toxins) has proven challenging; the
European Uremic Toxin Work Group
previously identified at least 90
compounds that are retained in patients
undergoing dialysis.78 Current HD
technology relies on diffusion of toxins
across a semi-permeable membrane to
allow for the removal of small-sized
(<500 Da) water-soluble molecules.
While HD is generally able to remove
water-soluble small toxins (<500 Da),
HD has limited ability to clear protein
bound solutes, those that are
sequestered, or LMM solutes (>500
Da).79 80 81 The accumulation of uremic
toxins with higher molecular weight is
associated with immunodeficiency,
inflammation, protein-wasting, and
cardiovascular complications. For
instance, solutes such as Beta-2
microglobulin (11.8 kDa) 82 83 are
75 Gernone, G., et al., ‘‘Mid-term Evaluation of the
New Medium Cut-Off Filter (Theranova) on
Removal Efficiency and Quality of Life,’’
Nephrology Dialysis Transplantation, 2018, ERA
EDTA Scientific Congress Abstract, SP 489,
doi.10.1093/ndt/gfy104.
76 Penny, J., et al. ‘‘Pruritus: ls there a salty
truth?’’ Submitted for publication.
77 Boschetti-de-Fierro, A., et al., ‘‘MCO
Membranes: Enhanced Selectivity in High-Flux
Cases,’’ www.nature.com/Scientific Reports,
[5:18448] DOI: 10.1038/srep18448.
78 Vanholder R, et al., European Uremic Toxin
Work Group (EUTox). Review on uremic toxins:
Classification, concentration, and interindividual
variability. Kidney Int, 2003 May; 63 (5):1934–43.
79 Macı
´as N., et al., ‘‘Middle molecule elimination
in expanded haemodialysis: only convective
transport’’ Clin Kidney J., Dec. 2018, 15;12 (3), pp.
447–455.
80 Garcı
´a-Prieto, A., et al., ‘‘Evaluation of the
efficacy of a medium cut-off dialyser and
comparison with other high-flux dialysers in
conventional haemodialysis and online
haemodiafiltration.’’ Clin Kidney J., Oct. 2018,
11(5):742–746.
81 Dobre, M., et al., ‘‘Searching for Uremic
Toxins’’ Clinical Journal of American Society of
Nephrology. February 2013, 8 (2) 322–327.
82 Belmouaz, M., et al. ‘‘Comparison of the
Removal of Uremic Toxins with Medium Cut-Off
PO 00000
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Sfmt 4700
71447
associated with increased mortality.84
Protein-bound solutes such as indoxyl
sulfate and p-cresol sulfate also appear
to be poorly dialyzable and are
associated with the uremic syndrome
and cardiovascular disease.85
While dialysis can eliminate the
immediate risk of death from uremia, it
does not replace functioning kidneys.
Patients receiving adequate dialysis do
not completely recover from the uremic
syndrome, indicating that other uremic
toxins may not fully be cleared.86 87
Compared to the general population,
patients with ESRD who receive dialysis
are at an increased risk of death,
commonly suffer from uremic
symptoms such as itching, restless legs,
and malnutrition, and are at increased
infection risk. Conventional dialysis is
effective in removing small molecules,
but is less effective in removing larger
molecules, sequestered molecules, and
protein-bound toxins. Accumulation of
middle molecule and protein-bound
toxins may contribute to adverse
outcomes among patients receiving
dialysis 88 and may explain why even a
small amount of ‘‘residual’’ kidney
function is strongly associated with
increased survival 89 90 and higher
quality of life.91 92
and High-Flux Dialyzers: A Randomized Clinical
Trial,’’ J Am Soc Nephrol, 29, 2018, Poster TH–
PO348.
83 Belmouaz, M., et al., ‘‘Comparison of
hemodialysis with medium cut-off dialyzer and online hemodiafiltration on the removal of small and
middle-sized molecules,’’Clin Nephrol. Jan 2018, 89
(2018)(1):50–56.
84 Cordeiro, I., et al.’’ High-Flux versus HighRetention-Onset Membranes: In vivo Small and
Middle Molecules Kinetics in Convective Dialysis
Modalities,’’ Blood Purification, Jul 2019, 30:1–8.
85 Vanholder, R., et al., ‘‘Protein-bound uremic
solutes: The forgotten toxin,’’ Kidney International.
Feb 2001, 59 (78), S266–S270.
86 Tanaka H, Sirich TL, Plummer NS, Weaver DS,
Meyer TW. An Enlarged Profile of Uremic Solutes.
PLoS One. 2015; 10(8): e0135657.
87 Sirich, T.L, et al., ‘‘The Frequent Hemodialysis
Network Trial Group. Limited reduction in uremic
solute concentrations with increased dialysis
frequency and time in the Frequent Hemodialysis
Network Daily Trial.Kidney Int, May 2017, 91 (5):
1186–1192.doi:10,1016/j.kint.2016.11.002.Epub
2017 Jan 12.
88 Clark, W.R., et al. ‘‘Uremic Toxins and their
Relation to Dialysis Efficacy.’’ Blood Purif.,
2019,48(4), pp.299–314. Epub 2019 Sep 27.
89 Obi, Y., et al., ‘‘Residual Kidney Function
Decline and Mortality in Incident Hemodialysis
Patients,’’ J Am Soc Nephrol., Dec. 2016, 27(12), pp.
3758–3768. Epub 2016 May 11.
90 Wang, A.Y. and Lai, K.N. ‘‘The importance of
residual renal function in dialysis patients.’’ Kidney
Int., May, 2006, 69(10), pp. 1726–32.
91 Dobre, M., et al., ‘‘Searching for Uremic
Toxins’’ Clinical Journal of American Society of
Nephrology. February 2013, 8 (2) 322–327.
92 Bargman, J.M., et al., ‘‘CANUSA Peritoneal
Dialysis Study Group. Relative contribution of
residual renal function and peritoneal clearance to
adequacy of dialysis: A reanalysis of the CANUSA
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khammond on DSKJM1Z7X2PROD with RULES2
Innovations in dialysis care include
the development of technologies that
might remove potential toxins resistant
to clearance using current devices. One
technology called HDF removes larger
molecules by combining convection
with diffusion. Convection relies on
pressure gradients across the dialyzer
membrane, leading to more effective
removal of middle to large molecules
from the blood. Substantial fluid losses
with convection, must be replaced via
infusion of typically ultrapure water
and dialysis fluids.93 This newer
technology was later supplemented by
online HDF, which enables dialysis
providers with ultrapure water systems
to generate replacement fluid solution.
Although HDF has been associated with
improvements to survival in
retrospective, observational studies,94
randomized controlled trials have been
less consistent.95 96 97 98 Online HDF has
become more widely used in Europe,
but it not commonly used in the U.S.
due to costs associated with the need for
ultrapure water.99
Newer dialysis membranes aimed at
improved middle molecule clearance
are an active area of research.100 High
flux membranes with larger pore sizes
can remove larger molecules, including
inflammatory cytokines and
immunoglobulin light chains but at the
cost of albumin loss.101 This is
Study,’’ J Am Soc Nephrol., Oct. 2001, 12(10), pp.
2158–62.
93 Zweigart, C., et al., ‘‘Medium cut-off
membranes—closer to the natural kidney removal
function,’’ Int. J Artif Organs, 2017, 40(7), pp. 328–
334. DOI: 10.5301/uijao.5000603.
94 Garcı
´a-Prieto, A., et al., ‘‘Evaluation of the
efficacy of a medium cut-off dialyser and
comparison with other high-flux dialysers in
conventional haemodialysis and online
haemodiafiltration.’’ Clin Kidney J., Oct. 2018,
11(5):742–746.
95 Grooteman, M.P., et al.; ‘‘CONTRAST
Investigators. Effect of online hemodiafiltration on
all-cause mortality and cardiovascular outcomes,’’ J
Am Soc Nephrol., June 2012, 23(6), pp.1087–1096.
96 Maduell, F., et al., ‘‘ESHOL Study Group. Highefficiency postdilution online hemodiafiltration
reduces all-cause mortality in hemodialysis
patients’’ J Am Soc Nephrol., Feb 2013, 24(3), pp.
487–497. doi: 10.1681/ASN.2012080875. Epub 2013
Feb 14. Erratum in: J Am Soc Nephrol. 2014 May;
25(5):1130.
97 Morena, M., et al., ‘‘FRENCHIE Study
Investigators. Treatment tolerance and patientreported outcomes favor online hemodiafiltration
compared to high-flux hemodialysis in the elderly,’’
Kidney Int., June 2017, 91(6):1495–1509.
98 Ok, E., et al., ‘‘Online Haemodiafiltration
Study. Mortality and cardiovascular events in
online haemodiafiltration (OL–HDF) compared with
high-flux dialysis: Results from the Turkish OL–
HDF Study,’’ Nephrol Dial Transplant, Jan 2013,
28(1), pp. 192–202.
99 Zweigart, C., 2017. Ibid.
100 Zweigart, C., 2017. Ibid.
101 Krause, B., et al., ‘‘Highly selective membranes
for Blood purification,’’ Gambro Dialysatoren
GmbH, Hechingen/Germany, Presentation abstract
March 26, 2015.
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16:50 Nov 06, 2020
Jkt 253001
significant because low albumin levels
are associated with higher mortality
rates in patients with ESRD.102
In addition to potential risks
associated with efforts to remove larger
molecules during dialysis (such as the
loss of albumin and immunoglobulins),
benefits of improved middle molecule
clearance have not been demonstrated
in large, randomized-controlled trials. In
2002, a large multicenter randomized
controlled trial (HEMO) compared
patients receiving maintenance dialysis
via high-flux versus low-flux dialyzer
membranes. There was no difference in
the primary endpoint (death from all
causes) or in secondary endpoints
(hospitalizations for cardiac cause or
death, and hospitalizations for infection
or death) between the two groups. In
rhabdomyolysis, myoglobin clearance
has been demonstrated with large pore
dialyzers and HDF, but clinical benefit
remains largely unproven.103 Similarly,
HDF has historically garnered much
attention in sepsis due to its ability to
efficiently clear inflammatory cytokines
like IL–6, but numerous studies have
shown no mortality benefit in sepsis
with possible downsides in the form of
shortened filter life.104 No trials have
examined the potential benefit of
removing larger quantities of middle
molecules than is typically achieved
from high-flux membranes.
The clearance of protein-bound and
sequestered molecules remains a
technical challenge and may explain
why HDF and other technologies aimed
at improved middle-molecule clearance
have not significantly changed clinical
outcomes.105 Theoretically, intensive,
long-duration dialysis should improve
the clearance of these difficult to
remove substances.106 In practice, large,
randomized trials have not shown any
difference in the level of substances like
indoxyl sulfate and p-cresol
102 Zweigart, C., et al., ‘‘Medium cut-off
membranes—closer to the natural kidney removal
function,’’ Int. J Artif Organs, 2017, 40(7), pp. 328–
334. DOI: 10.5301/uijao.5000603.
103 Amyot, S.L, et al., ‘‘Myoglobin clearance and
removal during continuous venovenous
hemofiltration,’’ Intensive Care Medicine, 1999 (25),
PP. 1169–1172.
104 Friedrich J.O., et al., ‘‘Hemofiltration
compared to hemodialysis for acute kidney injury:
Systematic review and meta-analysis,’’ Critical
Care, Aug 6, 2012 (16): R146.
105 Vanholder, R., et al., ‘‘Protein-bound uremic
solutes: The forgotten toxin,’’ Kidney International.
Feb 2001, 59 (78), S266–S270.
106 Sirich, T.L, et al., ‘‘The Frequent Hemodialysis
Network Trial Group. Limited reduction in uremic
solute concentrations with increased dialysis
frequency and time in the Frequent Hemodialysis
Network Daily Trial.’’ Kidney Int, May 2017, 91 (5):
1186–1192.doi:10,1016/j.kint.2016.11.002. Epub
2017 Jan 12.
PO 00000
Frm 00052
Fmt 4701
Sfmt 4700
sulfate.107 108 Improving clearance of
these molecules could improve clinical
outcomes in patients without residual
renal function and would be a boon to
the dismal outcomes faced by patients
undergoing dialysis.
(b) Assessment of Substantial Similarity
to Currently Available Equipment or
Supplies
As discussed in the CY 2021 ESRD
PPS proposed rule (85 FR 42171), with
regard to the criterion as to whether
Theranova uses the same or a similar
mechanism of action to achieve a
therapeutic outcome, CMS believes that
this product slightly modifies existing
HD technology. A MCO membrane was
designed for use in HD (but not HFD or
HDF) modes. These modifications
include the removal of larger molecules
and increased convection compared to
existing HD. As to whether the new use
of the technology involves treatment of
the same or similar type of disease and
the same or similar patient population,
CMS noted that Theranova treats similar
patients, specifically, patients with
ESRD.
(c) Preliminary Assessment of SCI (see
§§ 413.236(b)(5) and 412.87(b)(1)) by
CMS
As discussed in the CY 2021 ESRD
PPS proposed rule (85 FR 42171), with
regard to the SCI criteria, we noted that
Theranova is a treatment modality and
does not offer the ability to diagnose a
medical condition as discussed in
§ 412.87(b)(1)(ii)(B). We noted that
Theranova does not offer a treatment
option for a patient population
unresponsive to, or ineligible for,
currently available treatments. The
patients who are eligible for this
treatment would also be eligible for HD,
HDF, or online HDF. CMS carefully
analyzed the evidence submitted as to
whether Theranova significantly
improves the treatment and clinical
outcomes of Medicare beneficiaries
relative to renal dialysis services
previously available as demonstrated by
the totality of the circumstances. Below,
we have summarized the clinical
evidence for claims of SCI, along with
the additional references submitted by
107 Kalim, S., et al., ‘‘Extended Duration
Nocturnal Hemodialysis and Changes in Plasma
Metabolite Profiles,’’ Clin J Am Soc Nephrol, Mar
7, 2018, 13(3), pp.436–444.
108 Sirich, T.L., et al., ‘‘The Frequent
Hemodialysis Network Trial Group. Limited
reduction in uremic solute concentrations with
increased dialysis frequency and time in the
Frequent Hemodialysis Network Daily Trial.’’
Kidney Int, May 2017, 91 (5): 1186–
1192.doi:10,1016/j.kint.2016.11.002.Epub 2017 Jan
12.
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the applicant following the publication
of the proposed rule.
There is significant literature on the
topic of MCO membranes and high
retention onset dialyzers. To evaluate
this specific technology, CMS
performed a literature search for
published articles using the Theranova
dialyzer and reviewed all articles
submitted by the applicant. They are
categorized according to an estimated
degree of peer review. Summaries are
also provided beneath each citation
with disclosures also noted. On the
studies with more clinically significant
measures, there is more annotation
added.
(d) Clinical Evidence for Claims of SCI
Below is a list of references for SCI
based on evidence beginning with the
highest form of evidence, peer-reviewed
journals. We summarize the studies
grouped by listings with the most
rigorous review to those with the least
rigorous review, specifically, those
published in Peer-Reviewed Journals,
then Review Articles and Editorials, to
Posters and Abstracts, including
submitted manuscripts, and ending with
Incomplete Manuscripts.
khammond on DSKJM1Z7X2PROD with RULES2
Published in Peer-Reviewed Journals
• Belmouaz M, et al.109 is a
retrospective analysis of 10 patients
treated with online HDF and then
switched to MCO dialysis over 1 year.
The authors evaluated three dialysis
sessions per patient and noted that there
were not significant differences between
the two methods in clearance of urea,
creatinine, b2-microglobulin, and
myoglobin. The authors received
funding support by Baxter.
• Belmouaz M, et al.110 is a cross-over
prospective study performed in France.
It included 40 patients randomly
assigned to receive either 3 months of
medium cut-off hemodialysis (MCO–
HD) followed by 3 months of high-flux
HD (HF–HD), or vice versa. The primary
endpoint was myoglobin reduction ratio
(RR) after 3 months of MCO–HD.
Secondary endpoints were the effect of
MCO–HD on other middle-weight toxins
and protein-bound toxins, and on
parameters of nutrition, inflammation,
anemia, and oxidative stress. Compared
109 Belmouaz M, Diolez J, Bauwens M, Duthe F,
Ecotiere L, Desport E, Bridoux F. Comparison of
hemodialysis with medium cut-off dialyzer and
online HDF on the removal of small and middlesized molecules. Clin Nephrol. 2018 Jan;89
(2018)(1):50–56.
110 Belmouaz M, Bauwens M, Hauet T, Bossard V,
Jamet P, Joly F,Chikhi E, Joffrion S, Gand E, Bridoux
F. Comparison of the removal of uremic toxins with
medium cut-off and high-flux dialysers: A
randomized clinical trial. Nephrol Dial Transplant.
2020:35:328–335.
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with HF–HD, MCO–HD provides higher
myoglobin and other middle molecules
RR and is associated with moderate
hypoalbuminemia. The authors noted
that the potential benefits of this
strategy on long-term clinical outcomes
deserve further evaluation. This study
was supported by Baxter.
• Boschetti-de-Fierro A, et al.111 is a
report on in vitro testing of four
prototypes for MCO membranes as
compared to high-flux, high cut-off
membranes, and a rat glomerular
membrane model. Sieving
characteristics were evaluated before
and after blood contact. Authors noted
that increasing pore sizes often results
in loss of albumin but controlling the
pore size diameter and variance results
in enhanced selection for middle sized
proteins. A protein layer also forms
along the synthetic membrane, further
restricting the loss of albumin. All
authors were employed by Gambro
Dialysatoren, which is part of Baxter
International Inc.
• Cordeiro ISF, et al.112 is a
prospective crossover trial of 16 patients
undergoing HF–HD and switched to
online hemodiafiltration (olHDF) and
high retention onset (HRO) HD for 4
weeks. Molarity concentrations were
lowered to greater extent in olHDF and
HRO–HD.
• Cozzolino M, et al.113 is an Italian
prospective, open-label, cross-over
study in 20 patients which compared
the Theranova 400 HDx membrane to
conventional HD, showing a nonsignificant trend of lower IL–1B and IL–
6 levels with HDx. Although infections
were statistically more likely in the HD
population, the definition of infection
was vague, and most of them appeared
to be with respiratory tract and fever of
unknown origin. Because culture
evidence was not required, the risk of
bias in the categorization of infection is
high (for example, upper respiratory
tract infections inappropriately treated
with antibiotics). The HDx had a nonsignificant trend towards fewer
hospitalizations. Potential risks from
HDx include an allergic reaction to
polysulphone and lower serum albumin
levels. The small sample size, single
111 Boschetti-de-Fierro A, Voigt M, Storr M,
Krause B. MCO Membranes: Enhanced Selectivity
in High-Flux Class. Sci. Rep. 5, 18448; doi: 10.1038/
srep18448 (2015).
112 Cordeiro ISF, Cordeiro L, Wagner CS, et al.
High-Flux versus High-Retention-Onset
Membranes: In vivo Small and Middle Molecules
Kinetics in Convective Dialysis Modalities. Blood
Purification. 2019 Jul 30:1–8.
113 Cozzolino M. Magagnoli L, Ciceri P, Conte F,
Galassi A. Effects of a medium cut-off (Theranova)
dialyser on haemodialysis patients: A prospective,
cross-over study. Clinical Kidney Journal, 2019,
1–8.
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71449
center disease, and short follow-up
mean that the results, while promising,
require substantial corroborating
evidence in the form of a multi-center,
blinded randomized controlled trial.
The study was supported by an
unrestricted grant from Baxter.
• Garcı´a-Prieto A, et al.114 is a
crossover study of 18 HD patients who
received online HDF for one week, then
conventional HD the second week, and
the use of a MCO membrane for the
third week. Authors collected RR and
albumin losses and noted that MCO
membranes were similar in efficacy as
olHDF. Both online and MCO methods
had greater reduction of middle
molecules. The study was conducted in
Spain and authors did not declare any
conflicts of interest.
• Gillerot G, et al.115 is a research
paper submitted by the applicant in
which the investigators tested the role of
IL–6 gene expression on 156 PD patients
and its putative role in inflammation.
They tested a homogeneous population
of 152 from Belgium and the North of
France. The investigators stated their
findings substantiate the critical role
played by IL–6 in the peritoneal
membrane and support the hypothesis
that underlying mechanisms (regulation
of IL-6 gene expression) could regulate
systemic and local inflammation in
association with comorbidity and
uremia. However, they noted that
confirmation of this hypothesis will
require well-designed, adequately
powered studies, in different
populations and different settings. This
study was focused on PD and the
Theranova membrane is used in HD, so
extrapolation of the IL–6 data to that
modality is questionable. These studies
were supported by Baxter Belgium.
• Lorenzin A, et al.116 is a performed
mathematical modeling, and through it,
the authors calculated that the HRO
membranes allowed for internal
filtration and high convective volumes.
• Lorenzin A, et al.117 is a paper in
which the authors used semi-empirical
114 Garcı
´a-Prieto A,Vega A, Linares T, Abad S,
Macı´as N, Aragoncillo I, Torres E, Herna´ndez A,
Barbieri D, Lun˜o J. Evaluation of the efficacy of a
medium cut-off dialyser and comparison with other
high-flux dialysers in conventional haemodialysis
and online haemodiafiltration. Clin Kidney J. 2018
Oct;11(5):742–746.
115 Gillerot G, Goffin E, Michel C, Evenepoel,P,
Van Biesen W, TIntillier M, Stenvinkel P,
Heimburger O, Lindholm B, Nordfors L, Robert A,
Devuyst O. Genetic and Clinical Factors Influence
the Baseline Permeability of the Peritoneal
Membrane. Kid Int. 2005; 76: 2477–2487.
116 Lorenzin A, Neri M, Clark WR, et al. Ronco
C (ed): Expanded Hemodialysis—Innovative
Clinical Approach in Dialysis. Contrib Nephrol.
Basel, Karger, 2017, vol 191, pp 127–141.
117 Lorenzin A, Neri M, Clark WR, Garzotto F,
Brendolan A, Nalesso F, Marchionna N, Zanella M,
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methods to estimate convective volumes
for Theranova 400 and Theranova 500
under standard 4-hour HD conditions.
Using their ‘‘most complex’’
mathematical model that incorporated
gradients and blood changes along the
dialyzer length, authors estimated
internal filtration rates of 300ml/min
and 400 ml/min for both hemodialyzers.
• Lorenzin A, et al.118 is an in vitro
test of Theranova 400 and 500 at zero
net ultrafiltration. Albumin macroaggregates were labeled with
Technetium-99m (99mTc) to assess
cross filtration through the length of the
filter. Using a gamma camera, local
cross filtration and internal filtration
were calculated. Authors noted that the
MCO membrane allowed for clearance
of medium-large molecular weight
solutes (∼11 KDa) and retention of more
albumin without requiring special
equipment. The authors had no
disclosures.
• Macı´as N, et al.119 is a prospective
study of 14 patients on maintenance
olHDF. Patients underwent a midweek
dialysis session with the Theranova-500
machine under their usual dialysis
conditions. Researchers measured the
presence of uremic toxins at various
molecular weights pre-dialysis, and
post-dialysis. Pressures at the inlet and
outlet of dialyzer compartments were
also measured to estimate direct
filtration and back filtration volumes.
Researchers used semi-empirical
methods to determine that diffusive
clearance was more prominent than
convective transport (which requires
higher volumes). No funding or
financial contribution was supplied.
Membranes, monitors, and laboratory
tests were those routinely used in the
dialysis unit.
• Reque J, et al.120 is a prospective
study of eight patients who either
underwent olHDF or underwent HDx
with Theranova 500 for 24 sessions.
After a 1-week washout with HF–HD, all
patients crossed over to the alternative
method. Laboratory values were
Sartori M, Fiore GB, Ronco C. Modeling of Internal
Filtration in Theranova Hemodialyzers. Contrib
Nephrol. 2017;191:127–141.
118 Lorenzin A, Neri M, Lupi A, Todesco M,
Santimaria M, Alghisi A, Brendolan A, Ronco C.
Quantification of Internal Filtration in Hollow Fiber
Hemodialyzers with Medium Cut-Off Membrane.
Blood Purif. 2018;46(3):196–204.
119 Macı
´as N, Vega A, Abad S, Aragoncillo I,
Garcı´a-Prieto AM, Santos A, Torres E, Lun˜o J.
Middle molecule elimination in expanded
haemodialysis: Only convective transport? Clin
Kidney J. 2018 Dec 15;12(3):447–455.
120 Reque J, Pe
´ rez Alba A, Panizo N, Sa´nchezCanel JJ, Pascual MJ, Pons Prades R. Is Expanded
Hemodialysis an Option to Online
Hemodiafiltration for Small- and Middle-Sized
Molecules Clearance? Blood Purif. 2019;47(1–
3):126–131.
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obtained before and after each session,
specifically of urea, creatinine,
phosphorous, beta2-microglobulin,
myoglobin, and prolactin. The urea and
beta2-microglobulin reduction ratios
were the same but HDx demonstrated
higher RR of myoglobin (60 percent
compared to 35 percent in HDF). The
authors had no disclosures.
Review Articles/Editorials
This is the second grouping in the list
of evidence for SCI from most
compelling to least compelling. We
summarize the studies the applicant
provided as follows:
• Caramelo C, et al.121 is an article
that reviews the clinical and
pathophysiological characteristics of
anemia in this context. Particular
emphasis has been placed on cellular
and molecular regulatory mechanisms,
and their implications for treatment.
The applicant referenced the review
article’s language on hepcidin, because
it is considered the homeostatic
regulator of iron in its intestinal
absorption, its recycling by
macrophages and its mobilization from
liver stores. Its transcription is markedly
induced in inflammatory processes,
especially by cytokines like IL–6.
• Florens N, et al.122 is a review
article included in Baxter’s application.
It summarizes feedback from the first
routine use of HDx therapy under reallife conditions in European facilities.
The authors reported no adverse event
after 5,191 HDx treatments, and opined
that patients suffering from itching,
restless legs syndrome, persistent
asthenia or malnourishment could
benefit from HDx therapy. While they
discussed the promising applications in
which HDx could be valuable (myeloma,
rhabdomyolysis or cardiovascular
diseases), the message is mitigated by
reminding why and how prudence
should be taken in the design of future
HDx studies, particularly with poor deaeration of the filter in automatic mode
and manual intervention required to
prime the membrane. Some patients
required more anti-coagulation using
the Theranova membrane. In addition,
patients were aware of the use of the
Theranova device because of lack of
logo removal. The authors noted that
although promising, the clinical
evidence is incomplete. Both authors
received a grant Investigator Initiated
research for the evaluation of HDx in
121 Caramelo C, Just S, Gil P. Anemia in Heart
Failure: Pathophysiology, Pathogenesis, Treatment
and Incognitae. Rev Esp Cardiol. 2007; 60(8): 848–
860.
122 Florens N, Juillard L. ‘‘Expanded
Haemodialysis: News from the Field,’’ Nephrol Dial
Transplant, 2018; 33: iii48–iii52.
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clinical practice and one performed
occasional lectures for Baxter.
• Wolley M, et al.123 is a clinical
review article that recognizes that
advances in dialysis technology do not
always improve patient outcomes, and it
reviews the clinical relevance regarding
the removal of LMMs, particularly those
involved in chronic inflammation,
atherosclerosis, structural heart disease,
and secondary immunodeficiency. The
authors noted that single-center safety
and efficacy studies have identified that
use of these membranes in maintenance
dialysis populations is associated with
limited loss of albumin and increased
clearance of large middle molecules.
When the review was published in
2018, the authors noted that larger,
robustly conducted, multicenter studies
were evaluating these findings. They
concluded that after completion of these
safety and efficacy studies, the
perceived clinical benefits of providing
clearance of LMMs must be assessed in
rigorously conducted, randomized
clinical studies. One of the authors
received research funding from Baxter
and participated on advisory boards and
speaker bureaus for Baxter.
• Zweigart C, et al.124 is an editorial
review submitted by the applicant on
MCOs, which was generally favorable
with regard to high quality and good
performance. All of the authors are
employees of the Gambro Dialysatoren
GmbH, Hechingen (Germany) or Gambro
Lundia AG. Gambro AB (including all
direct and indirect subsidiaries) is now
part of Baxter International Inc.
Posters and Abstracts
This is the third grouping in the list
of evidence for SCI from most
compelling to least compelling. We
summarize the poster sessions and
abstracts, including submitted
manuscripts which the applicant
provided as follows:
• Belmouaz M, et al.125 is a
randomized open label crossover study
in which 46 patients underwent MCO–
HD and HF–H). MCO–HD had higher
medium RRs of myoglobin and beta-2
microglobulin and increased albumin
123 Wolley M, Jardin M, Hutchinson, C.
‘‘Exploring the Clinical Relevance of Providing
Increased Removal of Large Middle Molecules,’’ Cli,
J Am Soc Nephrol 2018;13: 805–813.
124 Zweigart C, Boschetti-de-Fierro A, Hulko M,
Nilsson L–G, Beck W, Storr M, Krause B. Medium
Cut-Off Membranes—Closer to the Natural Kidney
Removal Function. Int j Artif Organs. 2017; 40(7);
328–334.
125 Belmouaz M, Bauwens M, Bouteau I, Thierry
A, Ecotiere L, Bridoux F. Comparison of the
Removal of Uremic Toxins with Medium Cut-Off
and High-Flux Dialyzers: A Randomized Clinical
Trial. TH–PO348, 2018.
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loss compared to HF–HD. The authors
received funding support by Baxter.
• Boschetti-de-Fierro A, et al.126 is a
poster in which the investigators
assessed the performance of the MCO
devices in simulated HD and HDF
treatments. The applicant’s submission
of the material presented in this poster
was incomplete regarding date and
location of the poster session. This
study was funded by Baxter.
• Kharbanda K, et al.127 is a
randomized study funded by Baxter
Healthcare and the National Institute for
Health Research which compared HDF
with HDx and suggested an improved
recovery time with HDx. The study
showed lower levels of endothelial cell
microvesicles in HDx. However, the
study did not have comparable baseline
recovery times (for example, 41 percent
with < 2 hours with HDx versus 35
percent with HDF) and the authors
performed a per-protocol rather than an
intention to treat analysis, exacerbating
bias in the study.
• Kirsch AH, et al.128 is a poster that
summarizes a two pilot randomized
controlled prospective open-label
crossover studies, in which 39 HD
patients underwent treatment with MCO
membranes, a HFD, and HDF. The
authors concluded that MCO–HD
removed middle molecules (free light
chain) more effectively than high-flux
and high-volume HDF. However, the
authors noted that there are several
limitations of the study. First, compared
to the control dialyzers used, the
experimental membranes used were
different, less tight membranes. Second,
the study design was confined to only
one single treatment with each dialyzer
for each patient and the study did not
examine the long term effects of such
membranes on serum levels of middle
molecules and albumin. The authors
conclude that future studies should
assess whether the performance of
MCO–HD improves clinical outcomes.
The study was conducted in Germany
and funded by Baxter, and the conflicts
of interest statement in the paper lists
126 Boschetti-de-Fierro A, Voigt M, Huiko M,
Krause B. MCO Dialyzers: Enhanced Selectivity in
High-Flux. Gambro Dialysatoren GmbH, Research
and Development, Hechingen, Germany, Poster No.
SAT–481 (Baxter).
127 Kharbanda K, Herring A, Wilkinson F,
Alexander Y, Mitra S. A Randomised Study
Investigating the Effect of Medium Cut-Off
Haemodialysis on Markers of Vascular Health
Compared with On-Line Haemodiafiltration (MoDal
Study). Manchester Metropolitan University. 2019
128 Kirsch AH, Lyko R, Nilsson LG., et al.
Performance of hemodialysis with novel medium
cut-off dialyzers. Nephrol Dial Transplant 2017; 32:
165–172.
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three of the ten authors as employees of
Baxter.
• Bunch, A, et al.129 is a multicenter
prospective study in prevalent HD
patients, older than 18 years old;
enrolled from September 1 to November
30, 2017, and converted to HDx using
Theranova 400. The investigators found
an initial small decrease in serum
albumin level, which stabilized and was
within the normal range per their
Bogata, Columbia laboratory references.
Although Table 1 and Table 2 were
cited in the abstract, both were missing.
Dialysis performance adequacy (Kt/V)
was achieved. No clinically significant
differences in laboratory values at 6
months with November 30 of 2017, and
converted to HDx using Theranova 400
(3 sessions per week, 4 hours per
session, same heparin dose). The lead
author has been listed as the medical
director of Renal Therapy Services,
owned by Baxter, in Bogota, Columbia.
• Cantaluppi V, et al.130 is a
multicentric observational study of 6
months follow-up. American Society of
Nephrology (ASN) Week, 2018,
Abstract, Thu-PO357. This multicenter
(Italy) study evaluated 41 HD patients
comparing standard HD molecular
levels versus HDx and found a
significant decrease in urea, beta-2microglobulin, and free light chains.
The study did not evaluate clinical
outcomes.
• Cantaluppi V, et al.131 is an abstract
submitted by the applicant reporting on
a study where 41 HD patients (age
67,6±13,4) in standard high flux HD
were shifted to HDx using Theranova
400 (1.7 m2, Baxter). Each patient was
studied at baseline HD (T0), 3 months
(T3) and 6 months (T6) after HDx, after
which they were evaluated the
following pre-dialysis parameters: Urea,
Creatinine, Phosphate, Beta2microglobulin, Myoglobin, Free Light
Chains, Hemoglobin, Albumin and CRP.
For in vitro studies, T0 and T6 plasma
were used to evaluate neutrophil
129 Bunch A., Nilsson L, Vesga J, Ardila F, Zuniga
E, Alarcon J. ‘‘Long-Term Effects of Expanded
Hemodialysis (HDx) on Clinical and Laboratory
Parameters in a Large Cohort of Dialysis Patients’’
ASN 2018 Kidney Week Abstract FR–P0766.
130 Cantaluppi V, Donati G, Lacquaniti A, Cosa F,
Gernone G, Marengo M, Teatii U Removal of largemiddle molecules on expanded hemodialysis
(HDx): A multicentric observational study of 6
months follow-up. ASN Week, 2018, Abstract, ThuPO357.
131 Cantaluppi V, Marengo M, Allessandro Q,
Berto M, Donati G, Antonio L, Cosa F, Gernone G,
Teatini U, Migliori M, Panichi V. Removal of LargeMiddle Molecules, Inhibition of Neutrophil
Activation and Modulation of Inflammation-Related
Endothelial Dysfunction During Expanded
Hemodialysis (HDx), Nephrol Dial Transplantation,
June 2019, 34, Issue Supplement_1. gfz096.FO048,
https://doi.org/10.1093/ndt/gfz096.FO048.
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activation (ROS generation, apoptosis,
adhesion) and endothelial dysfunction/
senescence. The investigators concluded
that HDx therapy provided high removal
of different LMMs, leading to a
significant reduction of molecules
involved in uremia-associated
inflammation and organ dysfunction (in
particular Free Light Chains kappa and
lambda). Long-term studies with a larger
sample size are needed to evaluate the
clinical impact of HDx.
• Cozzolino, M.132 is an abstract of a
pilot study with 20 prevalent HD
patients studied for six months in two
dialysis treatments: One MCO
(Theranova) dialyzer and one high-flux
dialyzer. The author claimed the pilot
study shows the Theranova dialyzer has
a good tolerance profile and reduces the
cumulative number of infections in HD
patients. The study was funded by an
unrestricted grant from Baxter.
• Gallo M.133 is a single cohort study
in Italy which compared HDx to
baseline HD treatments in 15 patients
and showed no difference in uremic
toxins, though there was a change in
ESA dose.
• Gernone G, et al.134 is a single
cohort study in Italy which investigated
14 patients using Theranova with
baseline HD and showed no statistical
change in outcomes, clearance, or
quality of life.
• Jung JH, et al.135 is a study that was
questionably designed since they chose
young, well-nourished patients at the
start of the study, which made it
difficult to analyze the comparison of
the two groups at various points in time.
This observational study of 42 Korean
patients comparing HD to HDx showed
no comparative difference between the
two groups in any markers.
• Krishnasamy R, and Hutchinson
C.136 is an abstract submitted by the
132 ‘‘Effects of Medium Cut-Off (Theranova)
Dialyzer on Hemodialysis Patients: A Prospective
Cross-Over Study [Abstract].’’ J Am Soc Nephrol,
29. 2018, pp. 616–617.
133 Gallo M. The Real-Life study on expanded
hemodialysis (HDx): 9 months experience of a single
hemodialysis unit. Nephrol Dial Transplantation
and Transplantation, June 2019, ERA EDTA
Abstract. FP539.
134 Gernone G, Montemurro M, Capurso D,
Colucci G., Dell’Anna D, Deltomaso F, LaRosa R, La
Volpe M, Partipilo F., Pepe V, Ripa E. Mid-term
evaluation of the new medium cut-off filter
(Theranova) on removal efficiency and quality of
life. Nephrology and Transplantation, Abstract.
SP489.
135 Jung JH, Song JH, Ahn S–H. A 6-month study
on the efficacy of hemodialysis therapy using
dialyzers with medium cut-off membranes in Asian
patients with end-stage renal disease. Nephrol Dial
Transplantation, June 2019, 84 Issues Supplement1, gfz103.SP487, https://doi.org/10.1093/ndt/
gfz103.SP487.
136 Krishnasamy R, and Hutchinson C. Trial
Evaluating Mid Cut-Off Value Membrane Clearance
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applicant from this single-arm, multicenter study with 92 Australian/New
Zealand patients. The study examined
the safety and efficacy and patientcentered outcomes of MCO dialyzer use
in chronic HD patients over 6 months.
The investigators concluded that there
was a small but acceptable reduction in
serum albumin in regular HD using the
MCO dialyzer. However, the figures
were not included in the abstract sent
by the applicant for review by CMS. The
investigator noted that future
randomized controlled trials should
assess the impact of the MCO dialyzer
on clinical and long-term patientcentered outcomes.
• Krause B, et al.137 is a description
of membrane manufacturing utilizing
hollow fiber technology.
• Weiner DE, et al.138 included two
items for this U.S. based study at a large
academic medical center. The first was
the ASN 2019 Scientific Congress
abstract and the second was a copy of
the poster session at the ASN annual
meeting in 2019. This open label
randomized controlled trial in 172
patients who underwent 24 weeks of
Theranova 400 MCO dialyzer compared
to a high flux dialyzer showed a
potential decrease in hospitalizations
with HDX, but the authors did not
produce statistical tests of significance.
While this was a randomized control
trial (RCT), covariates were not wellbalanced, including substantially more
patients with diabetes in the
conventional HD arm. The study
showed lower lambda free light chains
in HDX compared to high flux HD.
Albumin levels were maintained in
both. The presenters concluded that
larger studies of longer duration are
needed to assess if better larger
molecule clearance is associated with
improvements in clinical outcomes,
including vascular disease, quality of
life, and mortality. The authors received
commercial support from Baxter.
• Alarcon J, et al.139 describes a study
over 12 months in which 992 patients
of Albumin and Light Chains in Hemodialysis
Patients (REMOVAL–HD): A Safety and Efficacy
Study. Oct. 2018 ASN Scientific Congress Abstract
TH–PO363.
137 Krause B, Boschetti-de-Fierro A, Dutczak S,
Zweigart C. Highly Selective Membranes for Blood
Purification. Jahrestreffen der Fachgruppen
‘‘Fluidverfahrenstechnik’’ und ‘‘Membrantechnik’’
26 Mar 2015.
138 Weiner DE, Falzon L, Beck W, Xiao M, Tran
H, Bernardo AA. Efficacy and Safety of Expanded
Hemodialysis Enabled by a Medium Cut-Off
Membrane: A Randomized Control Trial. FR–PO
488, ASN 2019.
139 Alarcon J, Bunch A, Ardila F, Zuniga E, Vesga
J, Rivera A, Sanchez R, Sanabria M. Real world
evidence on the impact of expanded hemodialysis
(HDX) therapy on Patient Reported Outcomes
(PROs): CPREXH Registry (in submission).
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from 12 renal clinics were followed after
switching from high-flux HD to HDX.
The authors assessed many patient
quality of life outcomes using the short
form kidney disease quality of life
(KDQoL–SF36), dialysis symptom index
(DSI) and prevalence of restless leg
syndrome (RLS) and found modest
reductions in DSI severity scores,
increases in KDQoL–SF36 scores in
some domains (but unchanged in the
mental and physical domains), and
reduced prevalence of restless leg
syndrome. Notably, the authors did not
provide a control group. Also, the
authors performed a large number of
statistical tests without adjustment,
further increasing the risk of Type 1
error. The study was supported by Renal
Therapy Services-Columbia, owned by
Baxter. Five of the eight authors are
employees of Renal Therapy Services.
One author is a full-time employee of
Baxter and has a patent pending for RLS
medication.
• Ariza J, et al.140 is a manuscript that
was provided by the applicant. Cost
estimates were extrapolated using an
observational design, which suggested
lower hospital days (but not
hospitalizations) and lower medication
use in the HDX. However, the lack of
randomization makes this study
difficult to evaluate. Furthermore, the
authors did not show any difference in
costs between HDX and HD. The study
was funded by Baxter.
• Penny JD, et al.141 is a manuscript
in submission that was included by the
applicant. It is a single case-study of a
HD patient with pruritis and extreme
levels of tissue sodium. Both responded
to HDX therapy. The authors
acknowledged that further robust
clinical exploration is required.
• Sanabria RM, et al.142 is manuscript
provided by the applicant and has not
been published. The observational study
followed 81 patients receiving high-flux
HD for 1 year who subsequently
switched to HDX for 1 year. While there
was a significant reduction in number of
hospital days (but no change in
hospitalization rate) and medication
use, findings were limited by the lack of
a control group. The shortening of
hospital stays could be attributed to a
systematic change in admission practice
patterns, rather than HDX. Furthermore,
Kt/V was higher in the HDX group, but
the authors did not standardize dialysis
dosing, making it difficult to attribute
effects to HDX or to other causes of
increased dialysis adequacy.
Hemoglobin levels, albumin, hsCRP
were not statistically different in the
two arms. All investigators are
employees of RTS Ltd, Columbia, an
affiliate of Baxter Healthcare. The study
was supported by Renal Therapy
Services-Columbia, an independent
entity owned by Baxter International,
Inc.
140 Ariza J., Walton SM, Sanabria M, Vega J,
Suarez A, Rivera A. An Initial Evaluation of the
Potential Cost Impact and Cost Effectiveness of
Expanded Hemodialysis (in submission).
141 Penny JD, Salerno F, Akbari A, McIntyre, C.
‘‘Pruritis-Is There a Salty Truth?’’ (in submission).
The applicant included a manuscript in
submission.
142 Sanabria RM,Vesga JI, Ariza J, Sanchez R,
Suarez A, Bernardo A, Rivera A. Expanded
Hemodialysis and its effects on hospitalization and
medication usage: An exploratory study. (in
submission).
143 Bolton S, Gair S, Metthews M, Stewart L,
McCullagh N, A 1-year routine assessment of
patient-reported symptom burden after
implementing expanded hemodialysis, 2019. (in
process).
144 Lim J, Park Y, Yook J, Choi S, Jung H, Choi
J, Park S, Kim C, Kim Y, Cho J. Randomized
controlled trial of medium cut-off versus high-flux
dialyzers on quality-of-life outcomes in
maintenance hemodialysis patients. (in
submission).
145 Lim J–H, Yook J–M, Choi S–Y, Jung H–Y,
Choi, J–Y, Park S–H, Kim C–D, Kim Y–L, Cho H–
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Incomplete Manuscripts
This is the fourth and final grouping
in the list of evidence for SCI from most
compelling to least compelling. We
summarize the incomplete manuscripts
which the applicant provided as
follows:
• Bolton S, et al.143 is a manuscript
provided by the applicant and is
unfinished. It describes a crossover
study of patients previously treated with
high-flux HD and switched to
Theranova. Patient reported outcome
measures (PROMs) suggested decreased
self-reported dialysis recovery time and
symptom burden, especially at 6
months. However, regression to the
mean appeared common, and there was
no control group.
• Lim J, et al.144 is a manuscript
provided by the applicant, reporting a
randomized trial comparing MCO to
high-flux HD, with 50 patients
undergoing 12 weeks of treatment in
Korea. The study was small, and the
authors performed a large number of
statistical tests comparing quality-of-life
outcomes, with only a couple
statistically significant. Without
adjusting p-values for the number of
statistical test, the risk for Type 1 error
is large and not unexpected. A second
trial suggested lower medication doses,
but again results were statistically
significant only for a few of the
parameters of interest. The study is
small and requires replication at
additional centers to confirm results.
• Lim J–H, et al.145 is a manuscript
provided by the applicant, reporting a
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randomized trial comparing MCO to
high-flux HD, with 50 patients
undergoing 12 weeks of treatment in
Korea. Its purpose was to evaluate the
effects of ESA resistance of HD using a
MCO dialyzer. The number of registered
patients was small and the study
duration not long enough to assess
definite results. Also, the study was not
blinded to clinicians, which may have
affected the ESA and iron
supplementation prescriptions.
Additional studies need to be performed
to assess clinical outcomes.
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(e) CMS Comments on the Baxter
Application
In the CY 2021 ESRD PPS proposed
rule (85 FR 42175), CMS discussed the
specific concerns regarding the evidence
submitted for proof of eligibility via the
SCI criteria. While Theranova represents
a unique technology, CMS noted that
the current evidence supporting SCI is
lacking but that other evidence may be
forthcoming during the comment
period. CMS believes it’s too early to tell
if the patient-recorded outcomes, such
as fewer cardiovascular events, are
significant because of the small numbers
in the studies. Specifically, a study for
infection was cited with an N=20;
another had an N=10. Also, the
definition of the infection was vague.
Although hospitalization rates are
discussed in the articles, the cause of
the hospitalization was unknown.
Patient laboratory results should be
correlated with patient-reported results.
In the submitted articles, the studies are
all open-label and observational, with
tenuous findings; alternative approaches
could include larger studies focused on
the U.S. dialysis population’s patient
health outcomes with patients blinded
in these studies.
The background information provided
by the applicant and researched by the
group is conflicting. This may be due to
the variation in the location of the
studies, including Columbia, France,
Belgium, England, Ireland, Australia,
New Zealand, and Korea. CMS
suggested a meta-analysis be done,
along with the heterogeneity of dialysis
care in those countries as compared to
the care received by the Medicare
population in the U.S.
In the CY 2021 ESRD PPS proposed
rule (85 FR 42176), CMS stated that
while HDX appears to be a promising
technology, the current state of evidence
insufficiently demonstrates SCI in
Medicare patients undergoing dialysis,
H. Novel Medium Cut-Off Dialyzer Improves
Erythropoiesis Stimulating Agent Resistance in
Maintenance Hemodialysis Patients: A Randomized
Control Trial. (in submission).
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but that additional evidence may be
forthcoming in the comment period. In
general, the dialyzer appears to have
improved middle molecule clearance.
While observational studies show an
association between high levels of
middle molecules and poor outcomes,
these correlations do not prove
causation. For instance, a growing body
of evidence suggests that protein-bound
solutes such as indoxyl sulfate and pcresol sulfate could be responsible for
the uremic syndrome. Conventional HD,
HDF, and HDX do not effectively clear
protein-bound toxins.
In the CY 2021 ESRD PPS proposed
rule (85 FR 42176), CMS provided a
summary of the current body of
evidence:
• Theranova more effectively removes
middle molecules compared to
conventional dialysis with high-flux
membranes. These include molecules
that have varying degrees of plausible
toxicity (for example, beta 2
microglobulin to cytokines to
endothelial proteins). Because
nephrologists have not identified the
putative uremic toxin, it is not certain
that clearance of these toxins will lead
to improved clinical outcomes.
• Although small before and after
studies suggest potential clinical
benefits from MCO dialyzer membranes
compared with conventional HD via
high-flux membranes, such as reduced
infection, improved itching and restless
legs, and shorter recovery time from
dialysis, these studies are mostly
observational, small in nature, with a
high potential for bias. A large, multicenter trial would be necessary to prove
substantial benefit from HDX over
conventional HD.
• Several small studies suggest that
MCO dialyzer membranes are
comparable to HDF in removal of
middle molecules, but online HDF is
not generally available in the U.S.
Furthermore, online HDF has not
consistently shown to improve health
outcomes relative to conventional HD
with high-flux membranes.
• There may be increased removal of
albumin with MCO membranes
compared to conventional high-flux
dialysis, which could have negative
health consequences.
• A large randomized controlled
clinical trial did not demonstrate
clinical benefits from removing larger
solutes, including middle molecules,
but the study did not examine newer
technologies such as hemodiafiltration
which are more efficient in removing
those. This negative study provides
reason to be somewhat skeptical about
the benefits of HDX over HD.
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• Following the FDA-requested 6month clinical study to validate efficacy
of large toxin removal and safety, the
applicant stated that it anticipates FDA
marketing approval in May 2020.
However, we note that, per the
application, safety is defined in part by
albumin loss. At this time we do not
believe the clinical trials included safety
and efficacy studies for the large middle
molecules the applicant asserts to be the
cause of inflammation. Therefore, the
perceived clinical benefits of providing
clearance of those large middle
molecules were not assessed in
rigorously conducted, randomized
clinical studies.
As stated previously, at the time of
the CY 2021 ESRD PPS proposed rule
there was concern about the sufficiency
of the evidence available for Theranova
demonstrating a clear clinical benefit for
Medicare dialysis patients. However, we
noted that additional evidence could be
forthcoming in the comment period, and
invited public comment as to whether
Theranova meets the TPNIES SCI
criteria.
The collective comments and our
response are set forth below.
Comment: The applicant provided
information and a meta-analysis that
duplicated information provided in the
CY 2021 ESRD PPS proposed rule.
Several physician commenters provided
comments in support of the research.
The commenters’ disclosures in their
publications noted financial support
from the applicant. The commenters
stated that they believed that Theranova
meets the criteria set forth in TPNIES for
SCI over the existing standard of care.
The commenters urged CMS to
reconsider the data, and review such
data in its combined totality rather than
focusing on each study in isolation. The
commenters asserted that existing data
supported improved clinical outcomes
with the removal of large middle
molecules, including Interleukin-6,
YKL–40, Alpha-1 microglobulin, and
Lambda Free Light Chains (FLC), which
have been associated with
inflammation, cardiovascular events,
and other dialysis-related comorbidities.
A physician commenter stated that
changing over to Theranova-based HD
from conventional high-flux HD might
partially restore some of the benefits of
residual renal function to patients. The
commenter stated that these larger
molecules are removed poorly, if at all,
by conventional high-flux HD, resulting
in plasma levels that are many times
above the normal value. The commenter
stated that it is known that clinical
outcomes are improved in dialysis
patients with even small amounts of
residual renal function, and that there
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are multiple reasons for this, one likely
being the failure of current methods of
dialysis to remove large middle
molecules. The commenter also stated
that high plasma levels of these and
similar molecules have been associated
with increased mortality, inflammation
and cardiovascular disease.
Another physician commenter stated
that based on the clinical data presented
in the CY 2021 ESRD PPS proposed
rule, the commenter believed that
Theranova therapy represented a
substantial clinical improvement in
treatment for Medicare beneficiaries on
dialysis. The commenter studied the
impact of Theranova on endothelial
cells and noted that it had a positive
impact on the process of atherosclerosis
formation. The commenter also found
that the effects of Theranova on vascular
calcification in vitro was significantly
reduced after Theranova therapy,
compared to other high-flux dialyzers,
and that cell death was significantly
lower in the Theranova group.
A physician commenter asserted that
accumulated or increased levels of
Interleukin-6 may contribute to the
chronic inflammation state of ESRD
patients, thereby increasing the risk of
chronic vascular disease and bacterial
infections. Another physician
commenter stated that accumulated or
increased levels of Interleukin-6
increased the risk of protein energy
wasting, has been associated with
anemia in HD patients, and has been
identified as a principal driver of early
vascular aging with calcification. The
commenters asserted that YKL–40 has
been linked to atherosclerosis,
rheumatologic diseases, arterial
stiffness, stroke, mortality in type 2
diabetes, that it adds to vascular
inflammation risk prediction for allcause and cardiovascular mortality, and
is associated with cardiovascular events
in HD patients. The commenters also
noted that the removal of large middle
molecules like Alpha-1microglobulin,
may alleviate insomnia, pruritus,
irritability, restless leg syndrome,
anemia, and osteoarticular pain.
Further, the commenters noted that
removal of FLCs, which is associated
with non-traditional cardiovascular risk
factors, including markers of
inflammation, could reduce mortality
risk in persons with ESRD.
The commenters noted that current
dialytic therapies, due to current design
and limited by membrane permeability,
have limited capacity to remove the
expanded range of uremic toxins,
including the spectrum of large middle
molecules that Theranova, as
demonstrated by the collective evidence
to date, removes. The commenters
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therefore stated treatment with
Theranova results in substantial clinical
improvement over current HD therapies
treating renal failure.
Several physician commenters
asserted, in reliance on research cited as
part of the primary TPNIES application,
that important clinical data has been
accumulated internationally during the
past 5 years demonstrating that use of
the Theranova dialysis system results in
clinically meaningful improvement
outcomes, including patient quality of
life measures, such as reduced symptom
burden, decreased restless leg
syndrome, decreased itching, and
improved physical function. In
addition, the commenters noted more
rapid recovery after a dialysis session,
with preliminary data suggesting that
all-cause hospitalization length of stay
might be reduced with Theranova
versus conventional HD, and that the
need for ESA therapy might be reduced.
Another physician commenter stated
that the Theranova dialyzer offers the
improved spectrum of larger molecule
clearance associated with
hemodiafiltration, but only requires a
standard HD machine, and represents
the type of innovation and improvement
long lacking for Medicare beneficiaries
on HD and potentially meeting the
standard for substantial clinical
improvement under TPNIES.
One commenter, a nephrologist, noted
that they conducted a randomized
controlled trial of Theranova versus
high-flux dialyzer in maintenance HD
patients to investigate the effect of
Theranova on the removal of middle
molecules, utilizing a total of 50
patients randomized to either
Theranova or a high flux group, and
stated that the Theranova dialyzer
displayed better removal of kFLC and
lFLC compared with the high-flux
dialyzer. The commenter indicated that
the results were consistent with those of
other studies and asserted that taken
together, Theranova dialyzer showed a
greater removal of larger middle
molecules than high-flux dialyzer and
could decrease their blood
concentrations.
The study also evaluated improved
quality of life in those patients, and
noted that the Theranova group showed
better scores in physical functioning
and role physical domains in physical
component domain at 12 weeks. The
commenter stated that this suggested
that the Theranova dialyzer may
improve patient-reported outcomes,
particularly physical components and
uremic pruritus in HD patients.
The study also evaluated the effect of
improving ESA resistance, and the
commenter hypothesized that
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Theranova could improve the ESA
resistance because it has better removal
of large middle molecules than
hemodiafiltration. The commenter
stated that the changes might be
associated with a greater reduction in
TNF-a and lower serum TNF-a level in
Theranova compared to the high-flux
group, and that Theranova has potential
to reduce ESA dose with further study
possibly proving the cost-effectiveness
of Theranova for ESA use. The
commenter concluded that Theranova
achieved more improvement in ESA
resistance than the high-flux dialyzer,
removed more quantity of the
inflammatory cytokine such as TNF-a
than the high-flux dialyzer, potentially
influencing the iron metabolism.
The commenter stated that although
they did not yet have evidence that
Theranova could improve the survival
rate of HD patients, they noted that
ongoing multicenter trials might reveal
the effect of Theranova on the survival
of HD patients, and expressed hope that
before this, U.S. patients could have a
chance to use Theranova, which has
proven benefits without any serious side
effects.
Another physician commenter stated
that Theranova offers SCI because the
commenter is able to switch patients
progressively from hemodiafiltration to
HD. The commenter has also observed
clinical improvement in their patients,
especially the impact in recovery time
and nutrition, even those treated for a
long period by hemodiafiltration. The
commenter stated that evidence for
improved removal of large uremic
toxins, without the burden of external
fluid reinjection such as in
hemodiafiltration may occur
immediately without the burden of
extensive training for physicians and
staff.
Two commenters reiterated the CY
2021 ESRD PPS proposed rule’s
explanation that, compared to the
general population, patients with ESRD
who receive dialysis are at an increased
risk of death, commonly suffer from
uremic symptoms such as itching,
restless legs, and malnutrition, are at
increased infection risk, and dialyze
with standard high-flux dialyzers that
focus entirely on removing smaller
uremic toxins. The commenters stated
that the removal of large middle
molecules will address many of these
concerns and is associated with
decreased hospitalization length and the
number of hospitalizations, a reduced
need for certain medications, reduced
inflammation and infection, improved
recovery times, and improved quality of
life. The commenters urged CMS to
consider the totality of the evidence
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combined, rather than focusing on each
study in isolation, and stated their belief
that the clinical data supports
Theranova’s application and claims of
SCI.
Several beneficiary commenters
commended CMS’s efforts in promoting
dialysis innovation through the TPNIES
policy. We also received comments from
other stakeholders that commended
CMS on promoting dialysis innovation.
Those commenters and others,
including several physicians, stated that
approval of applications for the TPNIES
would improve treatment choices for
patients and address systemic barriers
that may limit access to Medicare
beneficiaries suffering with kidney
failure.
Physician commenters expressed
concern that CMS did not address the
COVID–19 pandemic, and strongly
support efforts to expand access to new
dialysis products, particularly during
the pandemic. The physician
commenters stated that COVID–19 may
provoke a ‘‘cytokine storm,’’ with
cytokines leading to complications, and
that Theranova may reduce the presence
of cytokines. The commenters noted
that, as a result, a clinical guideline in
Italy recommends Theranova in
managing COVID–19 positive patients
undergoing HD to reduce the severity of
a cytokine storm. One physician
commenter stated that since increased
persistent inflammation inhibits
immunity and affects responses to
infections, it is logical to aim for a
reduction of inflammatory drivers
during HD in a patient group at high
risk of adverse outcome during COVID–
19 infection. The commenters urged
CMS to consider this information in
light of the COVID–19 pandemic.
Another commenter stated that as we
learn more about COVID–19, there are
indications that Theranova may offer a
unique clinical benefit to COVID–19positive patients, and urged CMS to take
into account the challenging
environment and expand access to new
dialysis products, especially during the
pandemic.
Several physician commenters noted
that the Theranova system allows for
removal of large uremic toxins, without
spilling clinically important amounts of
albumin, because the membrane pores
vary less in size than many other
membranes, and because of relatively
high internal resistance, leading to
increased within-dialyzer convective
removal. One physician commented that
one of the major concerns with
Theranova is the risk of albumin loss
and the removal of essential proteins by
a more permeable membrane. The
commenter stated they compared
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laboratory data including serum
albumin, and as a result, laboratory data
such as hemoglobin, creatinine,
phosphate, and lipid, and dialysis
adequacy were not different at baseline
and 12 weeks between the two groups.
The commenter found that the serum
albumin concentration after 3 months of
using Theranova dialyzer decreased by
a mean of 0.13 ± 0.23 mg/dL from
baseline, and that the serum albumin
concentrations did not differ between
Theranova and high flux dialyzers. The
commenter concluded that the
Theranova dialyzer has a nonsignificant effect on the serum albumin
concentration over 12 weeks of
treatment. The commenter asserted that
their conclusion was supported by longterm studies. In their opinion, the
decrease in serum albumin is more
prominent in the early period of
Theranova dialyzer use. However, when
examined within the 1-year period, the
change is minor and without
significance. The commenter added that
regarding other adverse events in their
study, there were no serious adverse
events including cardiovascular events,
patient death, or a decline of blood
pressure that required dialyzer changes
throughout the 12 weeks.
One physician commenter claimed
that, in their experience, albumin levels
stay stable over many months with
Theranova. The commenter further
noted that during their trials, patients
tolerated Theranova very well, many
reported an improved quality of life,
and the commenter indicated no
knowledge of relevant side effects.
Several patient commenters expressed
varied sentiments regarding the TPNIES
policy. One commenter stated that home
dialysis permitted the commenter to
work until retirement. Another
commenter, self-identified as having
been on dialysis for nearly a decade,
encouraged support for dialysis
patients. Other commenters, both recent
dialysis patients and those with kidney
failure and other related illness,
expressed general support for
innovations, options and services to
support treatment. One commenter, a
decade’s long beneficiary, stated the
commenter had been diagnosed with
ESRD since early childhood, has had
numerous kidney transplants and has
been on home and in-center dialysis.
This commenter indicated that they
proactively sought out the best care,
machines and innovations the market
offered, since they felt most dialysis
patients are not offered such options as
they are not promoted or known. The
commenter stated that they supported
advancements to information,
technology and innovations to improve
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the care of dialysis beneficiaries, as in
their view the current system minimally
offered adequate care, which was not
enough, and which commenter stated
ESRD patients needed to offer them a
higher quality of life care. One
commenter, whose significant other is
on PD dialysis at home, asked for
continued support of new innovations
for the thousands of dialysis
beneficiaries who rely on dialysis to
live, and stated that the cycler machines
were old, refurbished multiple times
and that they had to replace machines
several due to noise or other issues.
An LDO commenter indicated that
they performed a systematic review of
published literature in preparation for a
potential meta-analysis on hospital
admissions and patient-reported
outcomes, including quality of life,
comparing patients dialyzed with
Theranova and high flux dialyzers. The
commenter stated that 45 relevant
publications were identified for
potential inclusion in the meta-analysis,
but 40 of those publications were
excluded due to the following reasons:
No availability in English or not
conducted in HD patients (n=5); Review
only/not original study data (n=12);
Study was performed in vitro, or no
clinical outcomes measured (n=11); and,
No data on hospitalization or patientreported outcomes (n=12).
The commenter further stated that out
of the remaining five publications, two
were disqualified because they
mentioned the outcomes of interest but
did not provide information on
comparator rates, with three
publications ultimately identified as
potentially eligible for inclusion in
commenter’s meta-analysis. The
commenter noted that, out of those
three, one showed null findings for
hospital data, one showed null findings
for patient reported outcomes, and the
final study showed imbalance in study
groups that was larger than the
difference after use of the dialyzer and
used inappropriate statistical analysis.
The commenter stated that its analysis
therefore found there were not enough
robustly conducted studies for a metaanalysis to be performed, and the few
that were available showed insignificant
results.
The commenter opined that the
potential impact of replacing the use of
high-flux membranes with Theranova to
increase removal of middle molecules
remains inconclusive and understudied, since to date, no strong
evidence supports a survival benefit
associated with increasing removal of
middle molecules. The commenter is
unaware of studies devoted to studying
the effects of different dialyzers for
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patients who are at particularly high
risk for derangements in albumin
synthesis. The commenter also added
that, similarly, the results of studies of
short duration may not adequately
capture long-term trends or reflect
changes in compensatory mechanisms,
nutritional state over time, or worsening
underlying health status. The
commenter stated that given the
insufficient clinical evidence to support
a finding of SCI and specific concerns
regarding the impact of Theranova’s
albumin-leaking properties, the
commenter supported CMS’s evaluation
in the CY 2021 ESRD PPS proposed rule
and strongly recommended that CMS
not provide a TPNIES payment for the
Theranova dialyzer.
Renal dieticians and an LDO
commenters expressed their concerns
about albumin loss in the dialysis
patients and the risk of infection, along
with it being a predictor of mortality
and hospitalizations and other
comorbidities. One commenter stated
that a low serum albumin level
complicates the fluid removal process as
it causes excess fluid to shift out of the
blood space, making treatment
ineffective at fluid and toxin removal.
Another commenter believed it was
important for the applicant to generate
and establish Theranova’s safety data
via well-controlled, randomized clinical
trials of adequate duration on albumin
loss in U.S. dialysis patients. The
dieticians also expressed concern over
the removal of other biological
materials, aside from uremic toxins,
such as electrolytes, insulin, sodium
and potassium.
Another commenter noted that a 2019
study, which concluded that an increase
of 0.25mg/dL/year in albumin decreased
all-cause mortality, and more
significantly a decline in albumin of 0.5
mg/dL/year or greater was associated
with a 55 percent higher risk of
mortality, did not provide sufficient
evidence in long-term consequences to
serum albumin levels to make a sound
decision of approval, as it was only
conducted for a short three-month span.
An organization of LDOs commented
that CMS correctly applied the TPNIES
SCI criteria in its analysis of the
Theranova Dialyzers. The commenter
noted that many of the studies
presented were of a small number of
patients, not conducted for an extended
period of time, were not representative
of the Medicare population in the U.S.,
and pointed out that given the
Theranova dialyzers are available in
Europe, they were surprised that there
were no long term studies with a larger
number of patients to offer insight into
the relative benefit compared with other
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devices. The commenter also had a
stated preference for seeing studies
conducted in the U.S. and among the
Medicare population to ensure that
products are compatible with our
systems of care and that devices are
tested in a relevant population that is
reflective of the diversity of America’s
Medicare beneficiaries who are reliant
upon dialysis. A physician commenter
agreed with the need for a randomized
controlled study done in the U.S., and
asserted that said study would need to
ensure the diversity of participants
arriving at an accurate representation of
the total under care.
Several dietician commenters noted
that patients in different countries had
dietary habits that clearly were not
reflective of the U.S., and there was no
accounting for differing diet habits,
which may be markedly different from
the U.S. ESRD patient population.
Additionally, dialysis practice differed
greatly from the U.S., and thus, data
gathered in small sample sizes from
substantially different patient
populations should not be extrapolated
to U.S. Medicare patients, as the data
from other countries possibly varied
greatly from this specific population.
One dietician commented that the
sample size of the research conducted
included a mere 50 individuals in 2017,
making it impossible to conclude the
benefit of Theranova outweighs the risks
that could incur from its use.
A dialysis company commenter stated
that products eligible for TPNIES should
first be evaluated through research,
demonstrating significant improvement
in quality of life, mortality, facilitation
of home therapy, or some other
measurable quality metric, and that
such studies should show a direct
benefit or an effect on a well-established
clinical parameter associated with
beneficial outcome. The commenter
stated that this scientifically-based
standard, when applied to Theranova,
made it inappropriate for the TPNIES
process.
An LDO commenter identified and
assessed three studies that were not
included in Theranova’s application or
the CY 2021 ESRD PPS proposed rule.
The commenter found the studies
lacking in a number of critical areas,
and thus not providing any additional
basis for approving Theranova.
A dialysis company commenter
recounted past experiences with other
dialysis membrane products, namely
high flux polysulphone dialysis
membranes in the 1990’s touted as an
improvement in dialysis with enhanced
clearance of beta-2-microglobulin. The
commenter stated that, while their use
was widely adopted and paid for by
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Sfmt 4700
Medicare through the composite rate,
when the HEMO study in 2002 finally
investigated the effect of this membrane
in an article published in the New
England Journal of Medicine, no benefit
was found. The commenter believed
that this experience did not need to be
duplicated with Theranova.
Response: We thank all of the
commenters for their informative
comments regarding the Baxter
application for TPNIES for the
Theranova Dialyzer. CMS evaluated the
application, accompanying articles,
meta-analysis and all the comments
submitted. CMS evaluated all the
criteria at § 413.236(b)(5) and
412.87(b)(1) to evaluate SCI for purposes
of the TPNIES. In doing so, we applied
the following eligibility criterion from
§ 412.87(b)(1)(i): ‘‘The totality of the
circumstances is considered when
making a determination that a new
[renal dialysis equipment or supply]
represents an advance that substantially
improves, relative to [renal dialysis
services] previously available, the
diagnosis or treatment of Medicare
beneficiaries.’’
CMS identified two major concerns
with the information presented to CMS:
(1) Studies and data presented were
either low powered, did not provide
statistical significance in their results,
and/or did not include a control
population; (2) Studies provided signals
that albumin might be filtered by the
product, resulting in low levels of
albumin for some patients. Albumin is
a critical protein that carries vitamins
and other proteins through the
bloodstream, as well as performing
other functions. While there are some
signals in the information provided by
the applicant that it may be possible for
some patients to have albumin levels
rebound over a certain period of time,
the data are considered nascent in
identifying the subpopulations whose
albumin levels may be able to respond
appropriately to the filtering.
Additionally, commenters, including a
major dialysis organization noted
similarities to a product that entered the
market in the 1990s where the clinical
data was nascent upon entry and that
ultimately clinicians considered the
product clinically similar to other
products on the market.
Further, CMS clinicians involved in
the review of the product were unable
to identify subpopulations for which
they believed the evidence
demonstrated a substantial clinical
improvement at this time. The
clinicians indicated that without
additional evidence they would
consider this product similar to other
products on the market and would need
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to closely monitor albumin levels of
their patients. In other words, they
would consider using this product in a
more observational manner rather than
adopting it based on any expected
outcomes. As previously noted, we did
not find the submitted evidence and
public comments sufficient in meeting
the ‘‘totality of the circumstances’’
regulatory criterion.
Although CMS did not find the
submitted evidence and public
comments sufficient in meeting the
‘‘totality of the circumstances’’ criterion
to qualify the Theranova Dialyzer for the
TPNIES adjustment for CY 2021, we
anticipate that the applicant may submit
additional evidence for the Theranova
Dialyzer in support of the claim of
substantial clinical improvement for CY
2022. We note that the applicant is
eligible to apply for the TPNIES
adjustment for the Theranova Dialyzer
for CY 2022 and CY 2023, and CMS
would review any new information
provided for the CY 2022 rulemaking
cycle. A product that is determined to
meet the criteria to receive the TPNIES
would receive the adjustment for 2calendar years.
b. Tablo® Cartridge for Exclusive Use
With the Tablo® Hemodialysis System
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(1) Outset Medical Application
For CY 2021, Outset Medical
submitted an application for the TPNIES
for the Tablo® Cartridge for exclusive
use with the Tablo® Hemodialysis
System. The applicant stated that the
Tablo® Cartridge is intended to
substantially improve the treatment of
Medicare beneficiaries with ESRD by
removing barriers to home dialysis.
The applicant noted that the Tablo®
Cartridge is necessary to operate the
Tablo® Hemodialysis System for use in
home. The cartridge is comprised of a
pre-strung blood tubing set and series of
sensor-receptors mounted to a userfriendly organizer, and together these
are referred to as the Cartridge. The
blood tubing set comprises a blood
pump tubing segment that interfaces
with a peristaltic (blood) pump
mounted on the inner front panel of the
Tablo® console and arterial and venous
lines that connect to the corresponding
lines on the patient. Additional
components to the cartridge include
consumable supplies: Bicarbonate and
acid concentrate jugs and straws, and an
adapter for disinfectant use.
The applicant stated that the blood
tubing set is primarily comprised of one
arterial line and one venous line and is
enhanced with a recirculating adaptor, a
bifurcated saline line, a pressure
transducer protector, a drip chamber
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with clot filter, and an arterial pressure
pod.
According to the applicant, in
addition to the blood lines, there is an
integrated saline line that enables
automatic priming as well as monitored
delivery of saline boluses during
treatment. There is also an infusion line
and two infusion ports (arterial and
venous) for manual delivery of
medicine, anticlotting agents, and blood
sampling.
In describing what the Tablo®
Cartridge does, the applicant stated that
it was designed with features to
seamlessly integrate with sensors on the
front panel of the console (for example,
air sensing, arterial and venous pressure
sensing) and to reduce touch points
during priming and blood return (for
example, recirculating adapter and
bifurcated saline line) to minimize
contamination. The blood pump draws
blood from the patient into the blood
tubing set and passes the blood through
a dialyzer before returning the treated
blood to the patient.
The applicant specifically stated that
the Tablo® Hemodialysis System
includes the Tablo® Cartridge. In its
entirety, it has been specifically
designed for patient-driven self-care
using an iterative human factors
process, with key design objectives
being to facilitate learning and to
minimize device training time.146
Human factors studies performed in a
laboratory setting have demonstrated
that patients can accurately learn and
manage the Tablo® Hemodialysis
System after a brief training
period.147 148 A recent prospective,
multicenter, open-label, crossover trial
comparing in-center and in-home HD
using Tablo® Hemodialysis System
further supported the clinical efficacy,
safety, and ease of use of the system.149
The applicant stated that the Tablo®
Hemodialysis System is the first and
only all-in-one technology and includes
a number of features that make it new
and different from current standard of
home dialysis care. These unique
146 Alvarez, Luis, et al. ‘‘Clinical Experience with
a New Hemodialysis System Designed for In-Center
Self-Care Hemodialysis.’’ Self-Care, vol. 8, no. 3,
2017, pp. 12–18. Self-Care vol. 8, no. 3, 2017,
pp.12–18.
147 Wilcox, Stephen B., et al. ‘‘Results of Human
Factors Testing in a Novel Hemodialysis System
Designed for Ease of Patient Use.’’ Hemodialysis
International, vol. 20, no. 4,16 May 2016, pp. 643–
649.doi:10.1111/hdi.12430.
148 Alvarez, Luis, et al. ‘‘Tablet-Based Training for
In-Center Self Dialysis—A Pilot Study.’’ Journal of
the American Society of Nephrology, vol. 27, no.
Abstract Edition, Nov. 2016, p. 895A.
149 Plumb, Troy et al. ‘‘Safety and efficacy of the
Tablo hemodialysis system for in-center and home
hemodialysis.’’ Hemodialysis International, Online,
2019, DOI:10.1111/hdi.12795.
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71457
features include (1) A single-use Tablo®
Cartridge with user-friendly pre-strung
blood, saline, and infusion tubing and
an integrated blood pressure monitor
that interfaces with the console to
enable automated features such as air
removal, priming, and blood return
which minimize use, user errors, save
time and streamline the user
experience; 150 (2) on demand water and
dialysate production using a standard
tap water source, eliminating the need
for time-consuming advance water
preparation, bagged dialysate or
dialysate batching; 151 (3) a consumercentric touchscreen interface that guides
users with step-by-step instructions
including non-technical language,
animation, and color-coded parts, to
enable easier training, faster set-up and
simpler management including clear
alarm explanations and resolution
instructions; 152 and (4) electronic data
capture and automatic wireless
transmission to eliminate the need for
manual record keeping by the patient,
care partner, or nurse.153
The applicant asserted, both in the
written application and at an in-person
meeting with CMS, that the
observational studies with the Tablo®
Hemodialysis System were able to
achieve CMS adequacy targeted on three
times per week dialysis at an average
treatment time of less than 4 hours.
Tablo® has demonstrated the ability to
treat to adequacy targets within the
Medicare standard reimbursement of
three treatments per week.
The applicant has not submitted an
application for pass-through payments
under the Medicare OPPS or the NTAP
program under the Medicare IPPS for
the Tablo® Hemodialysis System,
including the Tablo® Cartridge.
This application for TPNIES is only
for the Tablo® Cartridge and its
components for use in the home, which
the applicant stated that it intended to
begin marketing in March 2020
following FDA clearance of the Tablo®
Hemodialysis System for home use. On
March 31, 2020, Outset Medical
received FDA clearance to market the
device for use in the home, and CMS
received a copy of this letter.
The applicant submitted a Premarket
Notification 510(k) for clearance of
Tablo®. Previous 510(k) clearances for
150 Outset Medical, ‘‘Safety Reference Guide.’’
DOC–0004336 Rev 04, 2019.
151 Outset Medical, ‘‘Tablo Preconfigured System
White Paper.’’ DOC–0004252 Rev 01, 2019.
152 Alvarez, Luis, et al. ‘‘Tablet-Based Training for
In-Center Self Dialysis—A Pilot Study.’’ Journal of
the American Society of Nephrology, vol. 27, no.
Abstract Edition, Nov. 2016, p. 895A.
153 Outset Medical, ‘‘Tablo Information Security
Design White Paper.’’ DOC–0003639 Rev 03, 2019.
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the Tablo® Hemodialysis System and
Tablo® Cartridge were for hospital and
outpatient clinic use only. The
applicant could not use or market the
Tablo® Cartridge in the home setting
until the Tablo® Hemodialysis System
was granted marketing authorization by
the FDA (note: Tablo® Hemodialysis
System and cartridge was granted FDA
market authorization in November
2016). While the cartridge was
previously cleared through a separate
510k and was not necessary to include
in the submission for marketing
authorization for home use, the Tablo®
Hemodialysis System cannot be
operated without the Tablo® Cartridge.
According to the applicant, the cartridge
was included in the use instructions for
the home approval.
The applicant noted that the Tablo®
Cartridge is not currently available for
marketing in the home setting. As
explained above, the applicant intended
to begin marketing in the home setting
in March 2020, after the FDA cleared
the Tablo® Hemodialysis System for
marketing for home use. The applicant
expected the first shipments of the
Tablo® Cartridge for use in the home to
occur March 2020, however, the first
patient started training on June 1, 2020.
The applicant had an Investigational
Device Exemption (IDE) to study the
Tablo® Hemodialysis System’s safety
and efficacy for use in the home, which
had been completed as of the filing of
the TPNIES application. The applicant
stated that the IDE would be closed once
marketing authorization for the use of
the Tablo® Hemodialysis System in the
home was granted. The IDE study
reference number was G140098. The
Tablo® Cartridge was classified as a
Class II device.
The applicant stated that it submitted
a HCPCS application for the Tablo®
Cartridge in advance of the September 1,
2020 deadline.
The applicant identified and
described how the new and innovative
renal dialysis equipment or supply
meets the criteria for SCI over existing
renal dialysis services. The applicant
stated the Tablo® Cartridge is necessary
to operate the Tablo® Hemodialysis
System and therefore enables the system
to deliver the treatments that meet
CMS’s SCI criteria.
The applicant stated that the Tablo®
Hemodialysis System enables a
treatment option for a patient
population unresponsive to, or
ineligible or, currently available
treatments. As supporting background
material, the applicant noted that home
HD is a highly underutilized treatment
for ESRD patients. Currently 90 percent
of patients receive HD in a clinic. Fewer
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than 2 percent have HD treatment at
home. Contributing to this low
penetration rate is also a high dropout
rate with the incumbent home devices
of 25 percent and 35 percent at 12 and
24 months, respectively.154 The barriers
to home dialysis adoption and retention
have been well studied and include: (1)
Treatment burden for patients and care
partner fatigue; (2) technical challenges
operating HD machine; (3) space, home
modifications, and supplies
management; (4) patients not wanting
medical equipment in the home; and (5)
safety concerns.155 156 The applicant
asserted that Tablo® is the first new
home HD system in over 15 years,
designed to address many of the abovementioned barriers that currently result
in patients resigning themselves to incenter care and/or stopping home
modalities due to the associated burden
of self-managed therapy. Among other
things, the objective of this order is for
80 percent of ESRD patients starting
kidney replacement therapy (KRT) with
a transplant or home dialysis by
2025.157 The applicant stated that this
goal will require a multi-faceted
solution, inclusive of less burdensome
technology, to address the key barriers
to home dialysis.
The applicant stated that the Tablo®
Hemodialysis System has the potential
to significantly increase home dialysis.
The applicant conducted an IDE study
for the primary purpose of evaluating
the safety and efficacy of Tablo®
Hemodialysis System use in the home
setting. The applicant stated that the
results from the IDE study demonstrate
the following: (1) Patients will opt for
home dialysis if the Tablo®
Hemodialysis System is available; (2)
patients have confidence in the safety
and efficacy of the Tablo® Hemodialysis
System; (3) the unique features of the
Tablo® Cartridge as part of the Tablo®
Hemodialysis System simplify set-up
and use; and (4) the wireless
transmission of data feature is
reassuring to patients because it relieves
patients of the burden of recording and
154 Sehasi,
Rebecca et al. Factors Associated With
Discontinuation of Home Hemodialysis, American
Journal of Kidney Disease, Volume 67, Issue 4,
2016, Pages 629–637.
155 Seshasai, R.K., et al. The home hemodialysis
patient experience: A qualitative assessment of
modality use and discontinuation. Hemodialysis
International, 23: 139–150, 2019. doi:10.1111/
hdi.12713.
156 Chan, Christopher T. et al. Exploring Barriers
and Potential Solutions in Home Dialysis: An NKF–
KDOQI Conference Outcomes Report, Mar 2019,
American Journal of Kidney Diseases, Volume 73,
Issue 3, 363–371.
157 U.S. Department of Health and Human
Services, Office of the Assistant Secretary for
Planning and Evaluation, Advancing American
Kidney Health, July 10, 2019.
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fear that the patient may forget to
document some aspect of treatment. The
applicant claimed that the IDE study
results show that these key features will
facilitate growth and ongoing use of the
Tablo® Hemodialysis System in the
home setting.
During the course of the study, with
an average treatment time of 3.4 hours,
twenty-eight out of thirty patients
completed all phases of the trial and no
patient dropouts occurred during the inhome phase. There is only one other
mobile HD machine on the market. Its
IDE, based on six times per week
therapy at an average treatment duration
of 2.8 hours, showed a higher drop-out
rate (19 percent vs Tablo’s® 7 percent)
and lower adherence to treatment at
home (89 percent vs Tablo’s® 99
percent).158 159
The applicant asserted that the Tablo®
Hemodialysis System significantly
reduced training time for both patients
and their caregivers, improving training
completion and reducing patient
technique failure and care partner
burden. The applicant stated that the
cartridge element of the Tablo®
Hemodialysis System removes many of
the manual steps and minimizes both
set up time, and the need to make
difficult connections, which requires
training to avoid contamination. In
human factors testing submitted to the
FDA, the use of the cartridge resulted in
90 percent of the users being able to set
up Tablo® in under 10 minutes.160 The
applicant stated that the Tablo®
Hemodialysis System home IDE data
demonstrates that on average it takes 3.5
training sessions to learn the Tablo®
Hemodialysis System compared to 14.5
sessions on the device that is the current
standard of care for home HD.161 The
applicant asserted that reduced training
time increases likelihood of successful
completion, reduces patient technique
failure, and decreases caregiver burden.
The applicant noted the following: (1)
The graphical user interface guides
users through the treatment and
158 Kraus, M., et al., A comparison of center-based
vs. home-based daily hemodialysis for patients with
end-stage renal disease. Hemodialysis International,
11: 468–477 2007 doi:10.1111/j.1542–
4758.2007.00229.x.
159 Plumb, T.J., Alvarez, et al. Safety and efficacy
of the Tablo hemodialysis system for in-center and
home hemodialysis. Hemodialysis Internationa
2019l. doi:10.1111/hdi.12795.
160 Alvarez, Luis, et al. ‘‘Clinical Experience with
a New Hemodialysis System Designed for In-Center
Self-Care Hemodialysis.’’ Self-Care, vol. 8, no. 3,
2017, pp. 12–18. Self-Care vol. 8, no. 3, 2017,
pp.12–18
161 Chahal, Yaadveer, Decreased Time to
Independence with the Tablo Hemodialysis System:
A Subset Analysis of the Tablo Home Clinical Trial,
Abstract accepted for the National Kidney
Foundation Spring Clinical Meeting 2020.
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eliminates the need for memorization
and mental math; (2) sensors and
automation eliminate multiple manual
steps in treatment set-up; and (3)
contextual alarms instantly alert
patients to any issues with their
treatment and provide video and text
direction on how to resolve them. This
is in comparison to numerical alarm
codes with the incumbent device that
requires reference to the user manual or
memorization with no video guidance
available.
The applicant stated that the Tablo®
Hemodialysis System significantly
reduces set up and treatment time
reducing treatment burden, improving
retention at home, and reducing the
need for and involvement of a care
partner. The applicant noted that data
from Outset Medical’s Tablo®
Hemodialysis System home IDE trial
showed that a patient could set up the
Tablo® Hemodialysis System in 9.2
minutes.162 With the average number of
treatments of 3.6 per week for an
average duration of 3.4 hours,163 a
Tablo® Hemodialysis System user
treating 4 times per week can expect to
spend approximately 14 hours a week
preparing for and conducting
treatments, versus 40 hours a week on
the incumbent device for patients who
batch solutions.164 165 The applicant
stated that this significant reduction in
setup and treatment time is a result of
software and workflow improvements
incorporated in the Tablo®
Hemodialysis System and its cartridge,
many of which were driven by patient
feedback. Reducing overall treatment
burden improves modality retention at
home on behalf of the patient and limits
the care partner burden by reducing the
need for their active involvement in
treatment.
The applicant stated that the cartridge
portion of the Tablo® Hemodialysis
System is pre-strung and requires only
two connections to operate as compared
to other systems that require stringing,
hanging, snapping, and tapping
multiple lines. In the home IDE time set
up of dialysate concentrates, the Tablo®
162 Outset Medical subset analysis of Home IDE
Trial data on set up time for Tablo Cartridge and
concentrates.
163 Plumb, T.J., Alvarez, et al. Safety and efficacy
of the Tablo hemodialysis system for in-center and
home hemodialysis. Hemodialysis Internationa
2019l. doi:10.1111/hdi.12795.
164 NxStage Medical, Transitional Dialysis Care
Operational Guidance, June 2019, https://
www.nxstage.com/wpcontent/uploads/2019/06/
APM2548-Rev-B-TDC-Operational-Guidance.pdf.
165 Kraus, M., et al., A comparison of center-based
vs. home-based daily hemodialysis for patients with
end-stage renal disease. Hemodialysis International,
11: 468–477 2007 doi:10.1111/j.1542–
4758.2007.00229.x.
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Cartridge took less than 12 minutes on
average. With an average time of 8
minutes, an uninterrupted patient can
initiate therapy in as little as 20
minutes.166 This is a significant
improvement in the standard of care,
which can take approximately 45
minutes.167 The applicant asserted that
the Tablo® Hemodialysis System’s
automatic and integrated sensors and
automated degassing and priming also
make the machine easier to use and
quicker to set up and get to treatment.
The applicant stated that the Tablo®
Hemodialysis System is the only system
with a fully integrated water treatment
system that allows for real-time water
purification and dialysate produced on
demand with no need to batch solutions
or hang bags of dialysate. In addition,
the applicant noted that it requires only
a standard, grounded electrical outlet
and Environmental Protection Agency
quality tap water to operate, obviating
the need to store bags of dialysate in the
home, significantly reducing the
number of supplies patients need to
receive each month.
The applicant noted that the Tablo®
Hemodialysis System reduces patient/
care partner burden and technique
failure. Specifically, the applicant stated
that automation of processes such as
prime and rinse back reduces the overall
number of treatment related steps. In
addition, the applicant said that the
Tablo® Hemodialysis System’s easy to
use touchscreen interface walks users
through each step of setup, treatment,
and take down; the treatment
information displays data that patients
most wanted to see. The applicant
asserts that this automation and patientcentric design reduces technique failure
as evidence by results from the IDE
study, which demonstrated a significant
increase in treatment adherence and
high rate of study completion compared
to the current standard.
The applicant further stated that the
Tablo® Hemodialysis System eliminates
documentation burden and reduces
reporting errors, and that it is the only
HD system with 2-way wireless
transmission delivering HIPAA
compliant data to the healthcare
provider without any need for
additional equipment. This frees
patients from the need to manually
document treatment data by hand or on
a separate tablet and ensures higher data
accuracy.
The 28 patients who entered the home
phase of the Tablo® Hemodialysis
System home IDE answered weekly if
they needed help with treatment over
the prior seven days. The applicant
stated that by the end of the study, 216
of 224 possible responses were
obtained. The care partner burden rating
for prior in-home patients who were
previously dialyzing on the incumbent
device decreased from 3.1 to 2.4 on
Tablo®. Among prior in-home patients,
69 percent of patients reported needing
help from a trained individual with
their prior device with 46 percent of
respondents stating the help needed was
device related, 15 percent related to
cannulation alone, and 8 percent
reported other. By contrast, while on
Tablo®, only 38 percent of patients
reported needing help with treatment—
only 22 percent needed help related to
use of Tablo® while 16 percent needed
help related to cannulation. The
applicant asserted that this data
underscores a significant decrease in
patients needing assistance with
treatment at home.
The applicant stated that Tablo®
Hemodialysis System’s unique features
increase patient safety and satisfaction.
The applicant noted that Tablo®
Hemodialysis System’s integrated, 2way wireless connection provides
clinicians with the ability to monitor
patients in real time without any
separate equipment necessary. The
applicant asserted that the Tablo®
Hemodialysis System is the only HD
technology with this function, which
allows for early identification and
intervention by a patient’s healthcare
team as a key safety feature. At 34
inches tall, Tablo® Hemodialysis
System user interface matches the
height of a user while seated in a
standard dialysis chair allowing patients
to directly, and quickly engage with the
integrated touch screen to view progress
of the treatment, resolve alarms, and
adjust certain functions to tailor the
treatment to his or her needs. As an
example, a patient with limited mobility
can reach the interactive touch screen to
adjust the flow rate if they feel cramping
coming on. The IDE generated data that
demonstrated how the technology
enabled more rapid resolution of alarms.
During the home arm of the study,
patients were able to resolve alarms on
the Tablo® Hemodialysis System in 5
seconds.168 The applicant asserted that
rapid resolution of alarms and enhanced
communication improve safety by
facilitating rapid correction of any
treatment related events, limiting
166 Outset Medical subset analysis of Home IDE
Trial data on set up time for Tablo Cartridge and
concentrates.
167 Informal interviews with NxStage patients.
168 Wilcox, Stephen B. et al., Results of human
factors testing in a novel hemodialysis system
designed for ease of patient use, Hemodialysis
International 2016; 20:643–649.
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treatment interruptions and improving
communication between the patient and
provider.
Once approved for home use, the
applicant stated that the Tablo®
Hemodialysis System will provide a
simpler, easier to use system that is
likely to increase the number of people
who are able to receive and remain on
dialysis at home by addressing many of
the well-documented, key barriers to
home dialysis reported in peer-reviewed
literature.
In addressing the way in which the
Tablo® Hemodialysis System with its
cartridge significantly improves clinical
outcomes relative to the renal dialysis
services previously available, the
applicant focused on hospitalization
and quality of life. The applicant stated
that the Tablo® Hemodialysis System’s
2-way wireless connection allows for
real-time intervention to prevent
hospitalizations. The applicant stated
that during the Tablo® Hemodialysis
System home IDE, the patients using the
Tablo® Hemodialysis System had an all
cause admission rate of 426 per 1,000
patient years. In the general dialysis
population, the all cause admission rate
is 1688 per 1,000 patient years and for
patients who do PD, the hospitalization
rate is 1460 per 1,000 patient years,
highlighting that the Tablo®
Hemodialysis System may significantly
reduce hospitalizations and lower cost
of care.169 The applicant stated that
Tablo® Hemodialysis System’s
integrated, 2-way wireless connection
provides clinicians the ability to
monitor patients in real time without
any separate equipment necessary, and
is the only equipment with this
embedded functionality which allows
for earlier identification and
intervention by a patient’s healthcare
team and could prevent unnecessary
hospitalizations for dialysis related
events or missed treatments.
The applicant stated that the Tablo®
Hemodialysis System can effectively
deliver adequacy with 3–4 treatments
per week, potentially reducing Medicare
expenditures on additional dialysis
treatments per week. The applicant said
that among home HD patients, Medicare
payment for dialysis treatments was
highly variable across different regions
at 3.5 to 5.7 per week.170 In the IDE for
the Tablo® Hemodialysis System, the
169 United States Renal Data System. 2019 USRDS
annual data report: Epidemiology of kidney disease
in the United States. National Institutes of Health,
National Institute of Diabetes and Digestive and
Kidney Diseases, Bethesda, MD, 2019, Executive
Summary Reference Table G2.
170 Wilk, Adam S. et al., Persistent Variation in
Medicare Payment Authorization for Home
Hemodialysis Treatments Health services research
vol. 53,2 (2018): 649–670.
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applicant asserted that there was
effectively delivered adequacy with 4
treatments per week with an average
session length of 3.4 hours, resulting in
an average weekly treatment duration of
∼13.6 hours. An average weekly
standard Kt/V of 2.8 was achieved and
94 percent of patients achieved an
ultrafiltration rate within 10 percent of
the prescribed value.171 The applicant
noted that a previous study of Tablo®
Hemodialysis System used in the clinic
showed achievement of a spKt/V of 1.2
based on 3 treatments per week
including for patients over 90 kg. While
the frequency of how often patients
should receive dialysis is a clinical
decision that should be made between
the physician and the patient, the
Tablo® Hemodialysis System is the only
mobile HD system with clinical data
showing achievement of adequacy
standards and ultrafiltration endpoints
for 3 and 4 treatments per week
regardless of the size of the
patient.172 173 The applicant concluded
that in this way, the Tablo®
Hemodialysis System has the potential
to reduce Medicare expenditures on the
billing of additional dialysis treatments.
The applicant stated that Tablo®
Hemodialysis System’s ability to deliver
adequacy on fewer treatments per week
may also reduce vascular access
complications due to frequent
cannulation.174
The applicant submitted several
examples in four topics to demonstrate
how the Tablo® Hemodialysis System
improves the quality of life. The
applicant noted that patients value
having a high-quality daily life, ability
to live well, and feeling empowered to
control their outcomes over
mortality.175 The applicant asserted that
the use of the Tablo® Hemodialysis
System at home allows patients to have
171 Plumb, T.J., Alvarez, et al. Safety and efficacy
of the Tablo hemodialysis system for in-center and
home hemodialysis. Hemodialysis International,
2019. doi:10.1111/hdi.12795.
172 Alvarez, Luis et al. Urea Clearance Results in
Patients Dialyzed Thrice Weekly Using a Dialysate
Flow of 300 mL/min, clinical abstract, presented
March 2019, Annual Dialysis Conference, Dallas,
TX.
173 Alvarez, Luis and Chertow, Glenn, Real World
In-Center Urea Clearance Experience with a Novel
Hemodialysis System, clinical abstract, presented
March 2019, Annual Dialysis Conference, Dallas,
TX.
174 Agency for Healthcare Quality and Research,
End Stage Renal Disease in the Medicare
Population: Frequency and Duration of
Hemodialysis and Quality of Life Assessment, Draft
Technology Assessment, Agency for Healthcare
Quality and Research November 22, 2019.
175 Urquhart-Secord, Rachel et al Patient and
Caregiver Priorities for Outcomes in Hemodialysis:
An International Nominal Group Technique Study
American Journal of Kidney Diseases, Sept. 2016,
Volume 68, Issue 3, 444–454.
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an improved quality of life and control
over their outcomes.
The first topic of improved quality of
life focused on sleep and reduction in
fatigue. The applicant noted that kidney
patients participating in an international
research collaborative to identify
outcome measures most important to
them ranked fatigue/energy as their top
priority.176 The applicant reported that
patients in the IDE who were on home
HD with an incumbent device
experienced a 14 percent improvement
in waking up feeling rested while on the
Tablo® Hemodialysis System.
Additionally, 22 percent fewer patients
reported having trouble staying asleep,
and 15 percent fewer patients reported
waking up several times during the
night while on the Tablo® Hemodialysis
System.177 The applicant asserted that
this data shows that the Tablo®
Hemodialysis System is able to make a
clinically significant improvement in
the quality of life indicator most valued
by dialysis patients.
The second topic of improved quality
of life discussed by the applicant was
improvement in the patients’ experience
of hypotensive events. The applicant
submitted that investigators report that
a drop in blood pressure was also
ranked in the top 10 of symptoms rated
by patients that impact their quality of
life.178 The applicant reported that a
total of 12 (40.0 percent) and 8 (26.7
percent) subjects reported hypotensive
events during the Tablo® Hemodialysis
System treatments during the In-Center
and In-Home treatment periods,
respectively, compared to 27 (90.0
percent) subjects reporting hypotensive
events at baseline on another HD
machine. All patients who reported
hypotensive events while on dialysis in
the study had also reported hypotension
in their baseline history.179
The third topic of improved quality of
life was that fewer patients reported
feeling cold. The applicant reported that
a total of 15 (50.0 percent) subjects
during the in-center treatment period
and 12 (40.0 percent) subjects during
the In-Home treatment period reported
feeling cold while dialyzing on the
176 Ibid.
177 Plumb, T.J., Alvarez, L., Ross, D.L., Lee, J.J.,
Mulhern, J.G., Bell, J.L., Abra, G., Prichard, S.S.,
Chertow, G.M. and Aragon, M.A. (2019), Safety and
efficacy of the Tablo hemodialysis system for incenter and home hemodialysis. Hemodialysis
International. doi:10.1111/hdi.12795.
178 Urquhart-Secord, Rachel et al. Patient and
Caregiver Priorities for Outcomes in Hemodialysis:
An International Nominal Group Technique Study
American Journal of Kidney Diseases, Sept. 2016,
Volume 68, Issue 3, 444–454.
179 Outset Medical Data from Home IDE Trial, pg
33 of clinical report submitted to the Food and Drug
Administration, data table 43, 2019.
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Tablo® Hemodialysis System compared
to 28 (93.3 percent) subjects who
reported feeling cold at baseline while
dialyzing on another dialysis machine.
The applicant asserted that the Tablo®
Hemodialysis System’s design results in
tight control of dialysate temperature
and allows patients to easily and
accurately adjust temperature through
the graphical user interface.180
The fourth topic of improved quality
of life was patient preference for the
Tablo® Hemodialysis System. The
applicant stated that the Kidney Health
Initiative (KHI), a public private
partnership between the FDA and the
American Society of Nephrology, Renal
Replacement Therapy (RRT) Roadmap
prioritizes patient-centered innovation,
which includes dialysis equipment that
is more portable, removes barriers to
home dialysis and improves patients’
ease of use to increase opportunities for
self-care. The RRT, which was
developed in conjunction with patients,
also prioritizes patient centered
outcomes and technology that reduces
disruption in social and family life.181
The applicant reported that among prior
home HD users in the IDE trial, 85
percent reported they preferred the
Tablo® Hemodialysis System to their
current equipment.182 Patients also
rated Tablo® as easier to set-up, treat,
and take down. Ease of use ratings
comparing the patient’s prior device to
Tablo® were as follows: Set up—3.5 to
4.5, Treatment—3.3 to 4.6, Take Down—
3.8 to 4.6.183
In summary, the applicant submitted
that the Tablo® Hemodialysis System
has the potential to significantly expand
the number of patients who are able to
receive home HD and persist on the
therapy. The applicant stated that it is
an innovative HD system that removes
most of the device-related key barriers,
reduces dialysis-related symptoms, is
mobile and easy to use, and therefore
minimizes dialysis-related disruptions
in patients’ lives.
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180 Ibid.
181 Kidney Health Initiative, Technology
Roadmap for Innovative Approaches to Renal
Replacement Therapy, prepared by the Nexight
Group, October 2018, https://www.asnonline.org/g/
blast/files/KHI_RRT_Roadmap1.0_FINAL_102318_
web.pdf.
182 Chahal, Yaadveer, Patient Device Preference
for Home Hemodialysis: A Subset Analysis of the
Tablo Home IDE Trial, Abstract Accepted by the
National Kidney Foundation Spring Clinical
Meeting 2020.
183 Outset Medical Data from Home IDE Trial, pg
33 of clinical report submitted to the Food and Drug
Administration, data table 43, 2019.
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(2) CMS Analysis
(a) Summary of Current Technology
As discussed in the CY 2021 ESRD
PPS proposed rule (85 FR 42180),
patients with ESRD who are not able to
receive a kidney transplant must
undergo maintenance dialysis therapy.
Patients can receive dialysis 3–4 days a
week at an in-center HD facility, or they
can administer dialysis themselves at
home. Due to the reliance on outpatient
dialysis units, numbers of patients
utilizing home dialysis in the U.S. have
remained low. In 2017, only 10.8
percent of US dialysis patients received
home-based therapies.184 Patients and
caregivers cite concerns with selfcannulation, fears of needle disconnect
and complications.185 Home dialysis
use is lower than many other rich
countries.186
Most patients administering dialysis
at home use PD. However, home HD has
more recently re-emerged as an
alternative way for patients to dialyze at
home. Home HD may offer many of the
advantages observed with PD, such as
increased flexibility and quality-of-life
benefits. However, adoption of home
HD has been limited, with
approximately only 1 percent of ESRD
patients utilizing this modality.187
Observational studies do not indicate
significant differences in survival when
comparing home dialysis to in-center
dialysis.188 Yet, there are some potential
benefits to home-based dialysis. Prior
analyses have noted that home-based
dialysis affords greater patient
flexibility, improved quality of life,189
increased likelihood of employment,190
and improved cost.191 However,
184 United States Renal Data System (USRDS).
2019 Annual Data Report: Reference Tables. https://
www.usrds.org/reference.aspx. Last Access Date Feb
20, 2020.
185 Young BA, Chan C, Blagg C, Lockridge R,
Golper T, Finkelstein F, Shaffer R, Mehrotra R; ASN
Dialysis Advisory Group. How to overcome barriers
and establish a successful home HD program. Clin
J Am Soc Nephrol. 2012 Dec;7(12):2023–32. doi:
10.2215/CJN.07080712. Epub 2012 Oct 4.
186 Wilkie M. Home dialysis—an international
perspective. NDT Plus. 2011 Dec;4(Suppl 3):iii4–
iii6.
187 Mailloux LU, Blagg CR. Berns JS (ed.) Home
Hemodialysis. Uptodate. Nov 18, 2016.
188 Chiu YW, Jiwakanon S, Lukowsky L, Duong U,
Kalantar-Zadeh K, Mehrotra R. An update on the
comparisons of mortality outcomes of hemodialysis
and peritoneal dialysis patients. Semin Nephrol.
2011;31:152–158.
189 Rubin HR, Fink NE, Plantinga LC, Sadler JH,
Kliger AS, Powe NR. Patient ratings of dialysis care
with peritoneal dialysis vs hemodialysis. JAMA.
2004;291:697–703.
190 Muehrer RJ, Schatell D, Witten B, Gangnon R,
Becker BN, Hofmann RM. Factors affecting
employment at initiation of dialysis. Clin J Am Soc
Nephrol. 2011 Mar;6(3):489–96.
191 Berger A, Edelsberg J, Inglese GW,
Bhattacharyya SK, Oster G. Cost comparison of
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regarding cost comparisons, it is
important to note that many cost
analyses of home-based dialysis include
estimates from PD. The machines for HD
are costly and there may be higher rates
of infection from self-cannulation,
which could offset any savings. Since
such a small percentage of patients
receive home-based HD, it is
challenging to know actual cost without
pooling it with PD estimates.
Regardless, due to an Executive order
issued in 2019, economic incentives for
home dialysis (both peritoneal and
home HD) were increased with the goal
of expanding its use.192
(b) Description of New Technology
As discussed in the CY 2021 ESRD
PPS proposed rule (85 FR 42181), the
first personal HD system on the market
was called the Aksys personal HD
(Aksys Ph.D.) system. It created its own
ultrapure dialysate and was FDA
cleared in 2002. It later underwent
recall in 2006 due to marketing
inconsistencies with system design.193
Eventually, the manufacturer shut down
operations after difficulties in securing
financing.194 In addition to these issues,
it was a large machine that required
significant patient utility resources and
specialized maintenance.195 Around
this time, development of the Allient
dialysis system began, which utilizes a
sorbent column to regenerate dialysate
from tap water.196 It is still in
development for potential home based
therapy.
Several home dialysis machines are
currently available. Recently, the
NxStage® System One dialysis machine
was FDA approved for 510(k) premarket
status in August 2017.197 It has a
smaller profile than the Aksys machine
peritoneal dialysis versus hemodialysis in end-stage
renal disease. American Journal of Managed Care.
2009;15:509–518.
192 The White House. Executive order on
Advancing American Kidney Health. July 10, 2019.
https://www.whitehouse.gov/presidential-actions/
executive-order-advancing-american-kidney-health/
Last Access Date Feb 18, 2020.
193 Food and Drug Administration. Class 2 Device
Recall Aksys Ph.D. Personal Hemodialysis System.
Medical Devices Database. June 2006. https://
www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfres/
res.cfm?id=46686.
194 Modern Healthcare. Dialyais machine firm
Aksys shuts down. Feb 21, 2007. https://
www.modernhealthcare.com/article/20070221/
NEWS/70221010/dialysis-machine-firm-aksysshuts-down. Last Access Date Feb 18, 2020.
195 Mailloux LU, Blagg CR. Berns JS (ed.) Home
Hemodialysis. Uptodate. Nov 18, 2016.
196 Ash SR. The Allient dialysis system. Semin
Dial. 2004 Mar–Apr;17(2):164–6.
197 Food and Drug Administration. Traditional
Section 510(k) Premarket Notification Letter,
Number K171331. August 24, 2017. https://
www.accessdata.fda.gov/cdrh_docs/pdf17/
K171331.pdf.
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but requires 4 to 6 large bags of
ultrapure dialysate and comes with
home storage requirements. The
NxStage® PureFlow SL was
subsequently developed for use with the
NxStage® System One. It allows patients
to prepare dialysate from tap water with
a reduced need to store dialysate bags.
The NxStage® system advertises an
easier experience learning how to
administer home dialysis. Within this
arena, the Tablo® Hemodialysis System
has recently emerged and been
approved for use in hospitals and
outpatient settings. The Tablo®
Hemodialysis System is most
comparable to NxStage System One
combined with NxStage® PureFlow, in
that it may be easier to use than
conventional home dialysis machines
and can be used from a tap water
source. The applicant is currently
pursuing approval for use of cartridges
for the Tablo® Hemodialysis System in
the home setting. While this application
centers on reimbursement of the Tablo®
Cartridge, this cartridge is only
compatible with the Tablo®
Hemodialysis System. The cartridge is
made up of a rigid ‘‘Organizer’’ which
mounts the necessary tubing to allow for
greater ease in set-up. This selfcontained and single-use cartridge
houses both the arterial and venous
lines, an adaptor to connect the lines, a
saline line, and an infusion line. There
is also a pressure transducer protector,
venous drip chamber with clot filter,
and an arterial pressure pod. The
applicant noted that the cartridge
simplifies connection to the Tablo®
Hemodialysis System and reduces setup time. It would seem that this
cartridge would be most useful in the
home-setting, since hospital and clinic
settings would normally have trained
personnel to assist with set-up.
Although separate from the Tablo®
Cartridge, the Tablo® Hemodialysis
System also performs real-time water
purification on demand dialysate
production.
A significant challenge to increasing
the use of home dialysis includes burn
out (or technique failure) and return to
in-center HD. According to one recent
observational study, approximately 25
percent of patients who initiate home
HD return to in-center HD within the
first year.198 A good measure of a homebased system’s success would be in its
ability to allow patients to remain on
the therapy long-term. Failure to
198 Seshasai
RK, Mitra N, Chaknos CM, Li J,
Wirtalla C, Negoianu D, Glickman JD, Dember LM.
Factors Associated With Discontinuation of Home
Hemodialysis. Am J Kidney Dis. 2016
Apr;67(4):629–37.
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maintain home HD, and low use of
home HD, may be a result of anxiety and
unease that many patients have about
performing the treatment themselves (or
with the help of care takers).199 200 201
This includes fear of self-cannulation in
order to access the blood for dialysis
and a lack of self-efficacy in performing
the therapy. By simplifying the process
of setting up dialysis tubing, offered by
the Tablo® Hemodialysis System
cartridge, some patients may be able to
successfully perform home HD.
(c) Approvals
As discussed in the CY 2021 ESRD
PPS proposed rule (85 FR 42181), the
applicant has not previously submitted
applications for pass-through or add-on
payments. The applicant has received
510(k) marketing clearance for the
machine to be used in hospital and
outpatient clinic use only. As such, the
applicant is pursuing FDA marketing
authorization for use in the home setting
for February 2020. The Tablo®
Hemodialysis System cartridge received
FDA marketing approval in December,
2019 and the Tablo® Hemodialysis
System received FDA marketing
authorization for home setting in March
2020. The applicant noted that upon
approval, the company plans to ship
that same month. The technology had
an investigational device exemption for
use in the home and which closed after
granting of marketing authorization. It is
classified as a Class II device.
(d) Assessment of Substantial Similarity
to Currently Available Technology
As discussed in the CY 2021 ESRD
PPS proposed rule (85 FR 42182), the
NxStage® One is the only home-based
HD system that is FDA has approved at
this time. The Tablo® Hemodialysis
System differs from the NxStage® in that
dialysate is produced on demand
whereas the NxStage® requires that
patients batch dialysate or use pre-filled
concentrate with the PureFlow. The
Tablo® Hemodialysis System also
includes a cartridge (which is the
portion being evaluated for TPNIES)
designed to facilitate the connection of
tubing in the appropriate configuration.
This product treats similar patients,
199 Cafazzo JA, Leonard K, Easty AC, Rossos PG,
Chan CT. Patient-perceived barriers to the adoption
of Nocturnal Home Hemodialysis. Clin J Am Soc
Nephrol. 2009;4:784–789.
200 Suri RS, Larive B, Garg AX, et al. Burden on
caregivers as perceived by hemodialysis patients in
the frequent Hemodialysis network (FHN) trials.
Nephrol Dial Transplant. 2011;26:2316–2322.
201 Zhang AH, Bargman JM, Lok CE, et al. Dialysis
modality choices among chronic kidney disease
patients: Identifying the gaps to support patients on
home-based therapies. Int Urol Nephrol.
2010;42:759–764.
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notably patients with ESRD requiring
HD.
(e) Assessment of SCI (See
§§ 413.236(b)(5) and 412.87(b)(1))
As discussed in the CY 2021 ESRD
PPS proposed rule (85 FR 42182), the
Tablo® Hemodialysis System is a
treatment modality, not a diagnostic
tool. With regard to the question as to
whether this new renal dialysis
equipment offers a treatment option for
a patient population unresponsive to, or
ineligible for, currently available
treatments, we note that patients who
are eligible for this treatment would
currently be eligible for in-center HD,
home HD with currently available
treatments, and possibly PD.
(f) Clinical Evidence for Claims of SCI
As stated in the CY 2021 ESRD PPS
proposed rule (85 FR 42182 through
42183), the applicant included an
annotated bibliography in its
application. Many of the articles
describe the features of the HD system:
Straightforward and relatively efficient
set-up and training, presence of safety
features, water purification system, and
wireless communication. In terms of
clinical outcomes and improvements,
the referenced authors have presented
or published data on safety, clearance
and treatment times, hypotensive events
and cold symptoms, and patient
preference. As these are arguably more
important considerations, we are
focusing on the evidence with those
claims of clinical improvement or
patient reported outcomes.
Below is a list of references for SCI
based on evidence published from
several sources. We summarized the
studies grouped by listings with the
most rigorous review to those with the
least rigorous review, specifically, Trials
Published in Peer-Reviewed Journals,
then Posters and Abstracts, and ending
with Unpublished Data.
Trials Published in Peer-Reviewed
Journals
• Plumb TJ, et al.202 describes the IDE
study, which was a prospective,
multicenter, open-label crossover trial
evaluating in-center versus in-home use
of the Tablo® Hemodialysis System.
Thirty patients underwent a run-in
period, 8 weeks of in-center therapy (4
treatments a week), then a 4-week
transition period, and finally an 8-week
in-home treatment (4 times a week).
202 Plumb TJ, Alvarez L, Ross DL, Lee JJ, Mulhern
JG, Bell JL, Abra G, Prichard SS, Chertow GM,
Aragon MA. Safety and efficacy of the Tablo
hemodialysis system for in-center and home
hemodialysis. Hemodial Int. 2020 Jan;24(1):22–28.
doi: 10.1111/hdi.12795. Epub 2019 Nov 7.
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Authors evaluated efficacy in effective
removal of uremic toxins, as measured
by a weekly standard Kt/Vurea ≥2.1 and
a secondary endpoint of delivered
ultrafiltration within 10 percent of
prescribed. Twenty-eight out of 30
patients completed the study. One
patient died from cardiac arrest and the
authors felt it was unrelated to the
treatments. Another patient withdrew
prior to starting in-home HD. There
were primary outcomes, secondary
outcomes, adverse event rates, alarms
per treatment, and alarm response times
between the two groups. Patients
demonstrated high adherence rates of 96
percent, and 99 percent for the in-center
and in-home groups, respectively. There
is bias from the open-label study and
this is a small study conducted over a
short period of 12 weeks total, 4 weeks
of in-home dialysis. Long-term and
larger studies would be helpful to
capture any safety signals. Some authors
serve as Chief Medical Officer or
consultants for Outset Medical.
• Kraus M, et al.203 is a study
involving the comparator technology
known as NxStage® System, which is a
portable HD unit. This was a
prospective, open-label, crossover study
comparing in-center HD versus home
HD in 32 patients over 18 weeks total.
The primary endpoint was delivery of
90 percent prescribed fluid volume,
which was achieved in similar fashion
and >90 percent in both groups. There
were statistically significant differences
in adverse events, which favored the
home HD group. The applicant included
this study to demonstrate similar
evidence as well as compare time spent
in performing the home sessions.
Treatment durations were slightly
shorter than what was noted in the IDE
study above (mean 2.8 hours for
NxStage® versus mean 3.4 hours with
Tablo® Hemodialysis System). This
study was supported by NxStage®
Medical Inc.
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Posters/Abstracts
• Alvarez, Luis et al.204 is a
retrospective study, 29 patients
underwent HD with the Tablo®
Hemodialysis System at a lower flow
rate than what is used in conventional
in-center HD. Average treatment times
were slightly higher in the Tablo®
203 Kraus M, Burkart J, Hegeman R, Solomon R,
Coplon N, Moran J, A comparison of center-based
vs. home-based daily hemodialysis for patients with
end-stage renal disease. Hemodialysis International,
11: 468–477, (2007).
204 Alvarez L, Spry L. Mulhern J, Prichard S,
Shallall C, Chertow G, Aragon, M, Urea Clearance
Results in Patients Dialyzed Thrice Weekly Using
a Dialysate Flow of 300 mL/min, clinical abstract,
presented March 2019, Annual Dialysis Conference,
Dallas, TX.
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Hemodialysis System group compared
to those using non-Tablo® systems.
After patient weight stratification at 90
kg, authors felt that both groups
achieved similar weight changes
(extrapolated from pre and post
weights), as well as Kt/Vurea change.
This research was funded by Outset
Medical, Inc.
• Alvarez, Luis et al.205 utilized lower
flow rates of 300 ml/min, and evaluated
patients as they transitioned to in-center
but self-directed HD with Tablo®
Hemodialysis System. Patients
underwent 3 times a week treatment
and data was collected over a 3-month
period. Based on urea samples and
calculated Kt/Vurea, authors concluded
that this treatment resulted in adequate
clearance.
• Chahal, Yaadveer 206 is a study that
focused on the patient experience
through surveys and compared the
patient’s responses to prior in-home and
in-center experiences. As part of the IDE
study, 13 participants provided survey
responses to compare their experience
with the Tablo® Hemodialysis System to
their prior experience with in-home
dialysis. Of those 13 participants, 85.6
percent found this system easier to use.
While this is promising, the true test of
superiority in this realm would be rates
of discontinuation at 1 year. Issues of
self-cannulation and the burden of this
responsibility still remain with this
system. The primary study was
undertaken by Outset Medical.
Unpublished Data
• Outset Medical Data 207 is a limited
section, in which the applicant
submitted cold and hypotensive events
while on in-center or in-home HD. From
just raw numbers, there were lower
percentages of either sign/symptom
within the home dialysis group
compared to in-center.
(g) CMS Comments
As discussed in the CY 2021 ESRD
PPS proposed rule (85 FR 42183), only
the Tablo® Cartridge portion of the
Tablo® Hemodialysis System was
evaluated in this application, but it is
important to note that it can only be
used with the Tablo® Hemodialysis
205 Alvarez, Luis and Chertow, Glenn, Real World
In-Center Urea Clearance Experience with a Novel
Hemodialysis System, clinical abstract, presented
March 2019, Annual Dialysis Conference, Dallas,
TX.
206 Chahal, Yaadveer. Patient Device Preference
for Home Hemodialysis: A Subset Analysis of the
Tablo Home IDE Trial, Abstract Accepted by the
National Kidney Foundation Spring Clinical
Meeting 2020.
207 Outset Medical Data from Home IDE Trial,
page 33 of clinical report submitted to the FDA,
data Table 43, 2019.
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System. Although there are changes to
the Tablo® Hemodialysis System for
home use, the cartridge portion remains
unchanged from its original FDA
approval. Therefore, the cartridge itself
is not new. Also, it is unclear as to
whether the Tablo® Hemodialysis
System can be used in-center without
the cartridge. As such, much of the
evidence presented in this application is
really about the system itself, such as
ease of training, its various features, and
less about the incremental benefit of
using the cartridge. Additionally, the
system itself may have its own risks and
benefits which are not within the scope
of this application, and peripherally and
incompletely addressed with the
provided materials. For example, a
study should be conducted determining
the number of patients who were back
in the hospital for a dialysis-related
condition.
In the CY 2021 ESRD PPS proposed
rule (85 FR 42183), we stated that to
evaluate the cartridge, it would be
helpful to have studies on whether there
are any issues with the components of
the cartridge (that is, any dialyzer
reactions to tubing, any issues affecting
clearance). Since the primary intent of
the cartridge is to facilitate patient setup at home, the most useful evidence
would be in the form of larger studies
of patient-reported outcomes, quality of
life, analyses of patient/caregiver
burnout, and sustained adherence
(beyond 1 year) to the use of this homebased modality. If the applicant is
claiming to improve the patients’
quality of life, then it needs to be proven
for patient-specific outcomes and with a
risk-benefit analysis to the patient. In
some of the references cited, the patient
factors affecting home HD are selfcannulation, burdens to caregivers, and
concerns for complications, yet the
cartridge has not demonstrated
improvements in addressing these
issues.
We stated that the cartridge is a
promising concept to encourage home
HD but again, the evaluation of this
technology is complicated by the need
to also peripherally assess the system.
There does not appear to be a need for
this cartridge in the hospital or clinic
setting as trained personnel should be
able to assist with set-up. Within the
larger policy context of FDA approval
and the fact that TPNIES does not
currently cover capital-related assets,
we believe there are some irregularities
and misalignments in the current
application, and we are concerned that
the stand-alone cartridge cannot be
evaluated for meeting the criteria for
SCI.
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The Outset Medical application was
submitted only for the Tablo® Cartridge,
which can only be used with the Tablo®
Hemodialysis System. As background,
the Tablo® Hemodialysis System
originally received FDA marketing
authorization for hospital and
outpatient use on November 15, 2016.
Without any additional studies being
required, an FDA marketing
authorization was issued for just the
cartridge on December 19, 2019. An
application was submitted by Outset
Medical to the FDA for home use of
only the Tablo® Hemodialysis System,
not the cartridge. FDA marketing
authorization was issued for the Tablo®
Hemodialysis System on March 31,
2020. Therefore, with regard to the
application for TPNIES for the Tablo®
Cartridge, it does not meet the newness
requirement at § 413.236(b)(2), which
specifies that the item is granted FDA
marketing authorization on or after
January 1, 2020.
We invited public comment as to
whether the stand-alone cartridge of the
Tablo® Hemodialysis System meets the
SCI criteria for the TPNIES.
The collective comments and our
response to them are set forth below.
Comment: The applicant suggested
that because a HD system received
approval for home use, the system and
cartridge can be marketed in the same
home setting. Additionally, the
applicant stated, because the system and
cartridge must operate together, the SCI
should be linked. The applicant
disagrees with the idea of only the
cartridge being relevant.
Another commenter stated that
according to the TPNIES policy CMS
finalized for payment in CY 2021, the
equipment or supply being considered
for an add-on payment must represent
an advance that substantially improves,
relative to technologies previously
available, the diagnosis or treatment of
Medicare beneficiaries. The commenter
stated that the evidence submitted by
the applicant describes the features of
the Tablo® Hemodialysis System and
only the system. They noted that the
applicant does not offer support for its
assertion that the Tablo® Cartridge
substantially improves the diagnosis or
treatment of Medicare beneficiaries
relative to dialysis services previously
available. The commenter stated that
because the application offers no
clinical evidence on the cartridge itself,
the subject of the application, it does
not meet the eligibility requirements
and CMS should not approve the
TPNIES for this product for CY 2021.
A commenter noted that the studies
that were performed were only on the
Tablo® Hemodialysis System and not on
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the cartridge, which is the subject of the
TPNIES application.
Response: CMS is supportive of new
and innovative supplies and equipment
for renal dialysis services. However, the
Tablo® Cartridge does not meet the
newness eligibility criteria of
§ 413.236(b)(2). Since the publication of
the CY 2021 ESRD PPS proposed rule,
we have learned that the Tablo®
Cartridge and Tablo® Hemodialysis
System have two different dates for FDA
marketing authorizations. The FDA
marketing authorization was issued for
just the cartridge on December 19, 2019,
which pre-dates the eligibility date for
the TPNIES of January 1, 2020.
Therefore, the cartridge does not meet
the newness criterion.
In addition, CMS agrees with the
commenters that the application for the
cartridge only included studies
applicable to the Tablo® Hemodialysis
System as a whole and the cartridge by
itself does not show evidence of SCI.
Therefore, we are not approving the
Tablo® Cartridge for as eligible for the
TPNIES for CY 2021.
III. CY 2021 Payment for Renal Dialysis
Services Furnished to Individuals With
Acute Kidney Injury (AKI)
A. Background
The Trade Preferences Extension Act
of 2015 (TPEA) (Pub. L. 114–27) was
enacted on June 29, 2015, and amended
the Act to provide coverage and
payment for dialysis furnished by an
ESRD facility to an individual with
acute kidney injury (AKI). Specifically,
section 808(a) of the TPEA amended
section 1861(s)(2)(F) of the Act to
provide coverage for renal dialysis
services furnished on or after January 1,
2017, by a renal dialysis facility or a
provider of services paid under section
1881(b)(14) of the Act to an individual
with AKI. Section 808(b) of the TPEA
amended section 1834 of the Act by
adding a subsection (r) to provide
payment, beginning January 1, 2017, for
renal dialysis services furnished by
renal dialysis facilities or providers of
services paid under section 1881(b)(14)
of the Act to individuals with AKI at the
ESRD PPS base rate, as adjusted by any
applicable geographic adjustment
applied under section
1881(b)(14)(D)(iv)(II) of the Act and
adjusted (on a budget neutral basis for
payments under section 1834(r) of the
Act) by any other adjustment factor
under section 1881(b)(14)(D) of the Act
that the Secretary elects.
In the CY 2017 ESRD PPS final rule,
we finalized several coverage and
payment policies in order to implement
subsection (r) of section 1834 of the Act
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and the amendments to section
1881(s)(2)(F) of the Act, including the
payment rate for AKI dialysis (81 FR
77866 through 77872, and 77965). We
interpret section 1834(r)(1) of the Act as
requiring the amount of payment for
AKI dialysis services to be the base rate
for renal dialysis services determined
for a year under the ESRD PPS base rate
as set forth in § 413.220, updated by the
ESRD bundled market basket percentage
increase factor minus a productivity
adjustment as set forth in
§ 413.196(d)(1), adjusted for wages as set
forth in § 413.231, and adjusted by any
other amounts deemed appropriate by
the Secretary under § 413.373. We
codified this policy in § 413.372 (81 FR
77965).
B. Summary of the Proposed Provisions,
Public Comments, and Responses to
Comments on the CY 2021 Payment for
Renal Dialysis Services Furnished to
Individuals With AKI
The proposed rule, titled ‘‘Medicare
Program; End-Stage Renal Disease
Prospective Payment System, Payment
for Renal Dialysis Services Furnished to
Individuals with Acute Kidney Injury,
and End-Stage Renal Disease Quality
Incentive Program’’ (85 FR 42132
through 42208), hereinafter referred to
as the ‘‘CY 2021 ESRD PPS proposed
rule,’’ was published in the Federal
Register on July 13, 2020, with a
comment period that ended on
September 4, 2020. In that proposed
rule, we proposed to update the AKI
dialysis payment rate. We received 4
public comments on our proposal,
including comments from ESRD
facilities, national renal groups,
transplant organizations, and nurses.
We also received several comments
related to issues that we either did not
discuss in the proposed rule or that we
discussed for the purpose of background
or context, but for which we did not
propose changes. These include, for
example, AKI dialysis in the home,
modifications to claims and cost reports
to monitor AKI dialysis, and Conditions
of Coverage specific to AKI dialysis.
While we are not addressing those
comments in this final rule because they
are either out of scope of the proposed
rule or concern topics for which we did
not propose changes, we thank the
commenters for their input and will
consider the recommendations in future
rulemaking.
In this final rule, we provide a
summary of the proposed provisions, a
summary of the public comments
received and our responses to them, and
the policies we are finalizing for CY
2021 payment for renal dialysis services
furnished to individuals with AKI.
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C. Annual Payment Rate Update for CY
2021
1. CY 2021 AKI Dialysis Payment Rate
The payment rate for AKI dialysis is
the ESRD PPS base rate determined for
a year under section 1881(b)(14) of the
Act, which is the finalized ESRD PPS
base rate, including the applicable
annual market basket payment update,
geographic wage adjustments and any
other discretionary adjustments, for
such year. We note that ESRD facilities
have the ability to bill Medicare for nonrenal dialysis items and services and
receive separate payment in addition to
the payment rate for AKI dialysis.
As discussed in section II.B.4.d of the
CY 2021 ESRD PPS proposed rule and
section II.B.4.d of this final rule, the CY
2021 ESRD PPS base rate is $253.13,
which reflects the application of the CY
2021 wage index budget-neutrality
adjustment factor of .999485, a final
addition to the ESRD PPS base rate to
include calcimimetics, and the CY 2021
ESRDB market basket increase of 1.9
percent reduced by the multifactor
productivity adjustment of 0.3
percentage point, that is, 1.6 percent.
Accordingly, we are finalizing a CY
2021 per treatment payment rate of
$253.13 for renal dialysis services
furnished by ESRD facilities to
individuals with AKI. This payment rate
is further adjusted by the wage index as
discussed below.
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2. Geographic Adjustment Factor
Under section 1834(r)(1) of the Act
and § 413.372, the amount of payment
for AKI dialysis services is the base rate
for renal dialysis services determined
for a year under section 1881(b)(14) of
the Act (updated by the ESRD bundled
market basket increase that is reduced
by the multifactor productivity
adjustment), as adjusted by any
applicable geographic adjustment factor
applied under section
1881(b)(14)(D)(iv)(II) of the Act.
Accordingly, we apply the same wage
index under § 413.231 that is used
under the ESRD PPS and discussed in
section II.B.4.b of this final rule. The
AKI dialysis payment rate is adjusted by
the wage index for a particular ESRD
facility in the same way that the ESRD
PPS base rate is adjusted by the wage
index for that facility (81 FR 77868).
Specifically, we apply the wage index to
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the labor-related share of the ESRD PPS
base rate that we utilize for AKI dialysis
to compute the wage adjusted pertreatment AKI dialysis payment rate. As
stated previously, we are finalizing a CY
2021 AKI dialysis payment rate of
$253.13, adjusted by the ESRD facility’s
wage index.
The comments and our responses to
the comments on our AKI dialysis
payment proposal are set forth below.
Comment: Commenters were
supportive of the updates to the AKI
dialysis payment rate for CY 2021.
Response: We appreciate the
comments in support of the update.
Final Rule Action: We are finalizing
the AKI payment rate as proposed, that
is, the AKI payment rate is based on the
finalized ESRD PPS base rate.
Specifically, the final CY 2021 ESRD
PPS base rate is $253.13. Accordingly,
we are finalizing a CY 2021 payment
rate of $253.13 for renal dialysis
services furnished by ESRD facilities to
individuals with AKI.
IV. End-Stage Renal Disease Quality
Incentive Program (ESRD QIP)
A. Background
For a detailed discussion of the EndStage Renal Disease Quality Incentive
Program’s (ESRD QIP’s) background and
history, including a description of the
Program’s authorizing statute and the
policies that we have adopted in
previous final rules, we refer readers to
the following final rules:
• CY 2011 ESRD PPS final rule (75 FR
49030),
• CY 2012 ESRD PPS final rule (76 FR
628),
• CY 2012 ESRD PPS final rule (76 FR
70228),
• CY 2013 ESRD PPS final rule (77 FR
67450),
• CY 2014 ESRD PPS final rule (78 FR
72156),
• CY 2015 ESRD PPS final rule (79 FR
66120),
• CY 2016 ESRD PPS final rule (80 FR
68968),
• CY 2017 ESRD PPS final rule (81 FR
77834),
• CY 2018 ESRD PPS final rule (82 FR
50738),
• CY 2019 ESRD PPS final rule (83 FR
56922), and
• CY 2020 ESRD PPS final rule (84 FR
60713).
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We have also codified many of our
policies for the ESRD QIP at 42 CFR
413.177 and 413.178.
B. Summary of the Proposed Provisions,
Public Comments, Responses to
Comments, and Finalized Policies for
the ESRD QIP
The proposed rule, titled ‘‘Medicare
Program; End-Stage Renal Disease
Prospective Payment System, Payment
for Renal Dialysis Services Furnished to
Individuals with Acute Kidney Injury,
and End-Stage Renal Disease Quality
Incentive Program’’ (85 FR 42132
through 42208), referred to as the ‘‘CY
2021 ESRD PPS proposed rule,’’ was
published in the Federal Register on
July 13, 2020, with a comment period
that ended on September 4, 2020. In that
proposed rule, we proposed updates to
the ESRD QIP for PY 2023, and included
policies continuing for PY 2024. We
received a diverse range of public
comments on our proposals, including
comments from large dialysis
organizations, renal dialysis facilities,
national renal groups, nephrologists,
patient organizations, patients and care
partners, health care systems, nurses,
renal dietitians, and other stakeholders.
In this final rule, we provide a
summary of each proposed provision, a
summary of the public comments
received and our responses to them, and
the policies we are finalizing for the
ESRD QIP.
C. Updates to Requirements Beginning
With the PY 2023 ESRD QIP
1. PY 2023 ESRD QIP Measure Set
Under our current policy, we retain
all ESRD QIP measures from year to year
unless we propose through rulemaking
to remove them or otherwise provide
notification of immediate removal if a
measure raises potential safety issues
(77 FR 67475). Accordingly, the PY
2023 ESRD QIP measure set will include
the same 14 measures as the PY 2022
ESRD QIP measure set. These measures
are described in Table 6 of this final
rule. For the most recent information on
each measure’s technical specifications
for PY 2023, we refer readers to the CMS
ESRD Measures Manual for the 2021
Performance Period.208
208 https://www.cms.gov/files/document/esrdmeasures-manual-v60.pdf.
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TABLE 6—PY 2023 ESRD QIP MEASURE SET
National quality forum
(NQF) #
Measure title and description
0258 ................................................
In-Center Hemodialysis Consumer Assessment of Healthcare Providers and Systems (ICH CAHPS) Survey Administration, a clinical measure.
Measure assesses patients’ self-reported experience of care through percentage of patient responses to
multiple testing tools.
Standardized Readmission Ratio (SRR), a clinical measure.
Ratio of the number of observed unplanned 30-day hospital readmissions to the number of expected unplanned 30-day readmissions.
Standardized Transfusion Ratio (STrR), a reporting measure.
Ratio of the number of observed eligible red blood cell transfusion events occurring in patients dialyzing at
a facility to the number of eligible transfusions that would be expected.
(Kt/V) Dialysis Adequacy Comprehensive, a clinical measure.
A measure of dialysis adequacy where K is dialyzer clearance, t is dialysis time, and V is total body water
volume. Percentage of all patient months for patients whose delivered dose of dialysis (either hemodialysis or peritoneal dialysis) met the specified threshold during the reporting period.
Hemodialysis Vascular Access: Standardized Fistula Rate clinical measure.
Measures the use of an arteriovenous (AV) fistula as the sole means of vascular access as of the last
hemodialysis treatment session of the month.
Hemodialysis Vascular Access: Long-Term Catheter Rate clinical measure.
Measures the use of a catheter continuously for 3 months or longer as of the last hemodialysis treatment
session of the month.
Hypercalcemia, a clinical measure.
Proportion of patient-months with 3-month rolling average of total uncorrected serum or plasma calcium
greater than 10.2 mg/dL.
Standardized Hospitalization Ratio (SHR), a clinical measure.
Risk-adjusted SHR of the number of observed hospitalizations to the number of expected hospitalizations.
Clinical Depression Screening and Follow-Up, a reporting measure.
Facility reports in CROWNWeb one of six conditions for each qualifying patient treated during performance
period.
Ultrafiltration Rate (UFR), a reporting measure.*
Number of months for which a facility reports elements required for ultrafiltration rates for each qualifying
patient.
National Healthcare Safety Network (NHSN) Bloodstream Infection (BSI) in Hemodialysis Patients, a clinical measure.
The Standardized Infection Ratio (SIR) of BSIs will be calculated among patients receiving hemodialysis at
outpatient hemodialysis centers.
NHSN Dialysis Event reporting measure.
Number of months for which facility reports NHSN Dialysis Event data to the Centers for Disease Control
and Prevention (CDC).
Percentage of Prevalent Patients Waitlisted (PPPW), a clinical measure.
Percentage of patients at each dialysis facility who were on the kidney or kidney-pancreas transplant
waitlist averaged across patients prevalent on the last day of each month during the performance period.
Medication Reconciliation for Patients Receiving Care at Dialysis Facilities (MedRec), a reporting measure.
Percentage of patient-months for which medication reconciliation was performed and documented by an eligible professional.
2496 ................................................
Based on NQF #2979 .....................
N/A ..................................................
2977 ................................................
2978 ................................................
1454 ................................................
1463 ................................................
Based on NQF #0418 .....................
N/A ..................................................
Based on NQF #1460 .....................
N/A ..................................................
N/A ..................................................
2988 ................................................
Note: *After consideration of the comments, we are finalizing our proposal to update the scoring methodology used to calculate the
Ultrafiltration Rate reporting measure so that facilities are scored based on the number of eligible patient-months, instead of facility-months, and
refer readers to section IV.C.3 of this final rule for a discussion of this new scoring methodology.
We did not propose to adopt any new
measures for the PY 2023 ESRD QIP
measure set.
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2. Performance Standards for the PY
2023 ESRD QIP
Section 1881(h)(4)(A) of the Social
Security Act (the Act) requires the
Secretary to establish performance
standards with respect to the measures
selected for the ESRD QIP for a
performance period with respect to a
year. The performance standards must
include levels of achievement and
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improvement, as required by section
1881(h)(4)(B) of the Act, and must be
established prior to the beginning of the
performance period for the year
involved, as required by section
1881(h)(4)(C) of the Act. We refer
readers to the CY 2013 ESRD PPS final
rule (76 FR 70277) for a discussion of
the achievement and improvement
standards that we have established for
clinical measures used in the ESRD QIP.
We recently codified definitions for the
terms ‘‘achievement threshold,’’
‘‘benchmark,’’ ‘‘improvement
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threshold,’’ and ‘‘performance standard’’
in our regulations at § 413.178(a)(1), (3),
(7), and (12), respectively.
In the CY 2020 ESRD PPS final rule
(84 FR 60728), we set the performance
period for the PY 2023 ESRD QIP as CY
2021 and the baseline period as CY
2019. In the CY 2021 ESRD PPS
proposed rule (85 FR 42185 through
42186), we estimated the achievement
thresholds, 50th percentiles of the
national performance, and benchmarks
for the PY 2023 clinical measures in
Table 7 using data from 2018.
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TABLE 7—ESTIMATED PERFORMANCE STANDARDS FOR THE PY 2023 ESRD QIP CLINICAL MEASURES USING THE MOST
RECENTLY AVAILABLE DATA
Achievement threshold
(15th percentile of
national
performance) *
Measure
Vascular access type (VAT):
Standardized Fistula Rate ....................................................
Catheter Rate .......................................................................
Kt/V Comprehensive ....................................................................
Hypercalcemia .............................................................................
Standardized Readmission Ratio ................................................
Standardized Transfusion Ratio 209 .............................................
NHSN BSI ....................................................................................
Standardized Hospitalization Ratio ..............................................
PPPW ..........................................................................................
ICH CAHPS: Nephrologists’ Communication and Caring ...........
ICH CAHPS: Quality of Dialysis Center Care and Operations ...
ICH CAHPS: Providing Information to Patients ..........................
ICH CAHPS: Overall Rating of Nephrologists .............................
ICH CAHPS: Overall Rating of Dialysis Center Staff ..................
ICH CAHPS: Overall Rating of the Dialysis Facility ....................
53.72%
17.70%
93.56%
1.77%
1.268 (1.269)
1.675
1.365
1.248
8.12%
58.12%
54.16 (53.87%)
74.09%
49.33% (47.92%)
49.12% (48.59%)
53.98% (53.46%)
Median
(50th percentile of
national
performance) *
64.96%
10.50%
97.13%
0.58% (0.59%)
0.998
0.830
0.604
0.967 (0.976)
16.73%
67.89%
62.47%
80.48%
62.22% (60.59%)
63.04% (62.99%)
68.59%
Benchmark
(90th percentile of
national
performance) *
77.31%
4.32%
99.24%
0.00%
0.629 (0.641)
0.173
0
0.670 (0.677)
33.90%
78.52% (78.35%)
72.11%
87.14%
76.57% (75.16%)
77.49%
83.03%
Note: We stated in the CY 2021 ESRD QIP proposed rule that if the PY 2023 final numerical value is worse than the PY 2022 finalized value,
we will substitute the PY 2023 final numerical value for the PY 2022 finalized value. We also provided the PY 2023 finalized value as a reference
in parentheses for clinical measures whose PY 2023 estimated value is worse than the PY 2022 finalized value.
Data sources: VAT measures: 2018 CROWNWeb; SRR, SHR: 2018 Medicare claims; Kt/V: 2018 CROWNWeb; Hypercalcemia: 2018
CROWNWeb; NHSN: 2018 CDC; ICH CAHPS: CMS 2018; PPPW: 2018 CROWNWeb and 2018 OPTN.
We are now updating the achievement
thresholds, 50th percentiles of the
national performance, and benchmarks
for the PY 2023 clinical measures as
shown in Table 8, using the most
recently available data, which includes
CY 2019 data.
TABLE 8—FINALIZED PERFORMANCE STANDARDS FOR THE PY 2023 ESRD QIP CLINICAL MEASURES USING THE MOST
RECENTLY AVAILABLE DATA
Achievement threshold
(15th percentile of
national
performance)
Measure
Vascular access type (VAT):
Standardized Fistula Rate ....................................................
Catheter Rate .......................................................................
Kt/V Comprehensive ....................................................................
Hypercalcemia .............................................................................
Standardized Readmission Ratio ................................................
NHSN BSI ....................................................................................
Standardized Hospitalization Ratio ..............................................
PPPW ..........................................................................................
ICH CAHPS: Nephrologists’ Communication and Caring ...........
ICH CAHPS: Quality of Dialysis Center Care and Operations ...
ICH CAHPS: Providing Information to Patients ..........................
ICH CAHPS: Overall Rating of Nephrologists .............................
ICH CAHPS: Overall Rating of Dialysis Center Staff ..................
ICH CAHPS: Overall Rating of the Dialysis Facility ....................
Median
(50th percentile of
national
performance)
53.29%
18.35%
94.33%
1.54%
* 1.268
1.193
* 1.248
* 8.12%
58.20%
54.64%
74.49%
* 49.33%
50.02%
54.51%
64.36%
11.04%
97.61%
0.49%
* 0.998
0.516
* 0.967
* 16.73%
67.90%
63.08%
81.09%
* 62.22%
63.37%
69.04%
Benchmark
(90th percentile of
national
performance)
76.77%
4.69%
99.42%
* 0.00%
* 0.629
*0
* 0.670
* 33.90%
79.15%
72.66%
87.80%
* 76.57%
78.30%
83.72%
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Note: Values marked with an asterisk (*) are also the final performance standards for those measures for PY 2022. In accordance with our
longstanding policy, we are finalizing those numerical values for those measures for PY 2023 because they are higher standards than the PY
2023 numerical values for those measures.
Data sources: VAT measures: 2019 CROWNWeb; SRR, SHR: 2019 Medicare claims; Kt/V: 2019 CROWNWeb; Hypercalcemia: 2019
CROWNWeb; NHSN: 2019 CDC; ICH CAHPS: CMS 2019; PPPW: 2019 CROWNWeb and 2019 OPTN.
In addition, we have summarized in
Table 9 existing requirements for
successful reporting on reporting
measures in the PY 2023 ESRD QIP.
209 The STrR measure was included in our table
in the CY 2021 ESRD PPS proposed rule (84 FR
60728), however these thresholds do not apply
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because this is a reporting measure, as is more fully
addressed in response to comment below.
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TABLE 9—REQUIREMENTS FOR SUCCESSFUL REPORTING ON THE PY 2023 ESRD QIP REPORTING MEASURES
Measure
Reporting frequency
Ultrafiltration .........................
4 data elements are reported for every HD Kt/V session
during the week of the monthly Kt/V draw, and Kt/V
date is reported monthly.
MedRec ................................
Monthly ............................................................................
Clinical Depression Screening and Follow-Up.
1 of 6 conditions reported annually ................................
NHSN Dialysis Event ...........
Monthly data reported quarterly ......................................
STrR .....................................
..........................................................................................
We received a few comments on the
PY 2023 ESRD QIP measure set.
Comment: One commenter expressed
general agreement with CMS’s policy to
maintain current structural ESRD QIP
policies. The commenter also expressed
support for the proposed updates to the
performance standards applicable to PY
2023.
Response: We thank the commenter
for its support.
Comment: One commenter requested
clarification that the Standardized
Transfusion Ratio (STrR) measure will
be a reporting measure. The commenter
noted that the measure was listed in the
CY 2021 ESRD PPS proposed rule as a
reporting measure in the PY 2023
measure set but was included in the
Estimated Performance Standards for PY
2023 Clinical Measures table.
Response: We appreciate the
commenter bringing this issue to our
attention. We inadvertently included
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Data elements
•
•
•
•
•
In-Center Hemodialysis (ICHD) Kt/V Date.
Post-Dialysis Weight.
Pre-Dialysis Weight.
Delivered Minutes of BUN Hemodialysis.
Number of sessions of dialysis delivered by the dialysis unit to the patient in the reporting Month.
• Date of the medication reconciliation.
• Type of eligible professional who completed the
medication reconciliation:
Æ Physician,
Æ nurse,
Æ ARNP,
Æ PA,
Æ pharmacist, or
Æ pharmacy technician personnel.
• Name of eligible professional.
• Screening for clinical depression is documented as
being positive and a follow-up plan is documented.
• Screening for clinical depression documented as
positive, a follow-up plan is not documented, and the
facility possesses documentation that the patient is
not eligible.
• Screening for clinical depression documented as
positive, the facility possesses no documentation of a
follow-up plan, and no reason is given.
• Screening for clinical depression documented as
negative and no follow-up plan required.
• Screening for clinical depression not documented,
but the facility possesses documentation stating the
patient is not eligible.
• Clinical depression screening not documented, and
no reason is given.
Three types of dialysis events reported:
• IV antimicrobial start;
• positive blood culture; and
• pus, redness, or increased swelling at the vascular
access site.
At least 10 patient-years at risk during the performance
period.
clinical performance standards for the
STrR measure in Table 7 of the CY 2021
ESRD PPS proposed rule. In the CY
2020 ESRD PPS final rule (84 FR 60720
through 60723), we finalized that
beginning with the PY 2022 ESRD QIP,
we would convert the STrR clinical
measure to a reporting measure and
would score the measure based on the
performance standards listed in Table 6
of that final rule, which provided that
the applicable reporting performance
standard for the STrR reporting measure
is calculated annually and requires a
facility to have at least 10 eligible
patient-years at risk over the course of
the performance period (84 FR 60718).
The reporting requirements for the STrR
measure are also included in Table 9 of
this final rule.
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3. Update to the Scoring Methodology
for the Ultrafiltration Rate Reporting
Measure
In the CY 2017 ESRD PPS final rule,
we adopted the Ultrafiltration Rate
reporting measure under the authority
of section 1881(h)(2)(B)(ii) of the Act (81
FR 77912). The measure assesses the
number of months for which a facility
reports all data elements required to
calculate ultrafiltration rates (UFR) for
each qualifying patient. It is based upon
the NQF-endorsed Avoidance of
Utilization of High Ultrafiltration Rate
(>/= 13 ml/kg/hr) (NQF #2701), which
assesses the percentage of patientmonths for patients with a UFR greater
than or equal to 13 ml/kg/hr.
In the CY 2017 ESRD PPS final rule
(81 FR 77917), we also finalized a policy
to score the Ultrafiltration Rate
reporting measure using the following
equation, beginning in PY 2020 (81 FR
77917):
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In the CY 2021 ESRD PPS proposed
rule (85 FR 42186 through 42187), we
proposed to replace the current
Ultrafiltration Rate reporting measure
scoring equation with the following
equation, beginning with PY 2023:
We stated this proposed update
would modify the scoring methodology
for the Ultrafiltration Rate reporting
measure so that facilities would be
scored based on the number of eligible
patient-months, as opposed to facilitymonths. We explained that the facilitymonth scoring methodology requires
facilities to report every data element
necessary to calculate a UFR reporting
rate for 100 percent of its eligible
patients each month in order to receive
any credit for successfully reporting the
measure for that month. We stated that
the facility-month scoring approach
then counts the number of months in
the performance period that the facility
received credit for reporting over the
course of the performance period. For
example, under the facility-scoring
methodology, if a facility has 10 eligible
patients in January, the facility must
report all required UFR data elements
for each of those 10 patients in order to
receive any credit for January reporting.
We stated that if the facility only reports
the required UFR data elements for 9 of
those 10 patients, the facility receives a
zero for January. In the CY 2021 ESRD
PPS proposed rule, we stated that our
concern with this approach is that there
may be circumstances, such as when an
eligible patient is hospitalized, when
facilities cannot obtain UFR data for a
single patient, and as a consequence,
cannot receive any credit for the data it
did report that month (85 FR 42187).
When we finalized the Ultrafiltration
Rate reporting measure in the CY 2017
ESRD PPS final rule, stakeholders raised
their concern regarding this issue (81 FR
77914). At the time, we responded that
because we defined the population for
this reporting measure by assignment to
a facility for a full month, the facility is
still required to provide data even in
cases where a patient may spend part of
that month hospitalized since the data
elements are products of ongoing
dialysis treatment. We stated that since
we do not restrict facilities from
coordinating with hospitals to obtain
relevant data, we believed that such
coordination is appropriate. However,
our rationale for this was based on the
reporting requirements prescribed by a
facility-month definition. Furthermore,
we stated that coordinating with
hospitals to obtain relevant data
continues to be a stakeholder concern in
reporting UFR data. In the CY 2021
ESRD PPS proposed rule, we stated our
belief that the proposed patient-month
scoring methodology is more objective
because it scores facilities based on the
percentage of eligible patients across the
entire performance period for which
they report all UFR data elements (85
FR 42187). Thus, if a facility has 100
eligible patients in CY 2020 and reports
all data elements necessary to calculate
a UFR rate for 90 of them, we stated that
the facility will receive a rounded score
based on a 90 percent reporting rate. We
believe that this methodology will give
facilities more flexibility to receive
credit for UFR reporting throughout the
12-month performance period.
In the CY 2021 ESRD PPS proposed
rule, we stated that the Ultrafiltration
Rate reporting measure is intended to
guard against risks associated with high
ultrafiltration (that is, rapid fluid
removal) rates for adult dialysis patients
undergoing hemodialysis (HD), because
of indications that high ultrafiltration is
an independent predictor of mortality.
We stated that faster ultrafiltration may
lead to a number of health risks
resulting from large volumes of fluid
removed rapidly during each dialysis
session, with deleterious consequences
for the patient both in the short and
longer term. The outcome of this
reporting measure is the documentation
of the ultrafiltration measurements,
which ultimately contributes to the
quality of the patient’s ESRD treatment.
We stated that we believe that
calculating the measure rates using the
patient-month scoring methodology
better supports our goal of assessing
performance on whether the facility is
documenting UFR for its eligible
patients, which we believe will lead to
better patient-level outcomes (85 FR
42187).
We also stated our belief that this
change is consistent with our plan to reevaluate our reporting measures for
opportunities to more closely align them
with NQF measure specifications (see
84 FR 60724). We stated that we believe
that this proposed change would make
the Ultrafiltration Rate reporting
measure more consistent with the NQF
measure upon which it is based,
Avoidance of Utilization of High
Ultrafiltration Rate (>/= 13 ml/kg/hr)
(NQF #2701), which reports results
using a ‘‘patient-month’’ construction.
Although we stated that we recognize
that both the Anemia Management
reporting measure and the Serum
Phosphorus reporting measure are also
calculated using a facility-month
construction, we stated that we were not
proposing to change the scoring
methodology used for either of those
measures because both measures are
finalized for removal beginning with the
PY 2021 ESRD QIP (83 FR 56986
through 56989). We stated that the
proposed update to the UFR reporting
measure scoring methodology will make
the scoring methodology for that
measure consistent with the scoring
methodology we are using to calculate
the Medication Reconciliation (MedRec)
reporting measure (83 FR 57011). We
stated that we also believed that the
utilization of this patient-month scoring
methodology for both the MedRec and
the Ultrafiltration Rate reporting
measures better reflects our intent to
score facilities based on actions taken by
the facility that impact patient
experiences.
We sought comment on this proposal.
The comments on our proposal to
update the scoring methodology for the
Ultrafiltration Rate reporting measure
and our responses to those comments
are set forth below.
Comment: Several commenters
expressed support for the proposal to
change the Ultrafiltration Rate reporting
measure’s scoring methodology from
facility-months to patient-months.
Several commenters expressed
appreciation that the ‘‘patient-months’’
construction aligns with the NQF’s
Ultrafiltration Rate measure
specifications. A few commenters
expressed support for the proposed
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update to the Ultrafiltration Rate
reporting measure to use patient-months
because it would ensure the reliability
of measure score calculations and thus
enable CMS to better evaluate facility
performance. A few commenters
expressed support for the proposed
update to the Ultrafiltration Rate
reporting measure, believing that it
would help address difficulties with
measure requirements where all data on
all patients had to be included in order
to receive credit for reporting each
month. One commenter stated that the
proposed update would score facilities
based on actions that impact patient
care and appreciated the move away
from ‘‘all or nothing’’ requirements.
Response: We thank the commenters
for their support. We agree that the
proposed methodology is more
outcomes focused, and better supports
our goal of assessing performance on
whether the facility is documenting
UFR for its eligible patients, which we
believe will lead to better patient-level
outcomes. We also agree that the
proposed update will give facilities
more flexibility to receive credit for UFR
reporting throughout the 12-month
performance period.
Comment: One commenter expressed
support for the proposed update to the
Ultrafiltration Rate reporting measure,
but also stated that it would like to work
with CMS on developing an outcome
measure that better assesses quality of
care for ultrafiltration.
Response: We thank the commenter
for its support and continue to welcome
feedback on ways to improve measures
in the program.
Comment: A few commenters
expressed concern that the
Ultrafiltration Rate reporting measure
may penalize facilities that are unable to
comply with reporting requirements due
to circumstances beyond their control,
such as patient non-compliance due to
hospitalization or missed treatments.
Response: We thank the commenters
for their feedback. Under the current
facility-month scoring methodology, a
facility is required to report every data
element necessary to calculate a UFR
reporting rate for 100 percent of its
eligible patients each month in order to
receive any credit for successfully
reporting the measure for that month.
We believe the update to the
Ultrafiltration Rate reporting measure’s
scoring methodology addresses
situations in which facilities may
experience challenges collecting data
when patients are hospitalized or miss
treatments because it does not require
100 percent reporting for all patients.
We believe that the patient-months
construction gives facilities more
flexibility to receive credit for UFR
reporting throughout the performance
period because it scores a facility based
on the facility reporting all UFR data
elements for eligible patients across the
entire performance period, and does not
require reporting for all eligible patients
each month in order to receive the
maximum score on the measure.
Final Rule Action: After considering
the comments we received, we are
finalizing our proposal to update the
scoring methodology for the
Ultrafiltration Rate reporting measure as
proposed, beginning with PY 2023.
4. Eligibility Requirements for the PY
2023 ESRD QIP
Our current minimum eligibility
requirements for scoring the ESRD QIP
measures are described in Table 10. We
did not propose any changes to these
eligibility requirements for the PY 2023
ESRD QIP.
TABLE 10—ELIGIBILITY REQUIREMENTS FOR SCORING ON ESRD QIP MEASURES
Measure
Minimum data
requirements
CCN open date
Kt/V Comprehensive (Clinical) .......
VAT: Long-term Catheter Rate
(Clinical).
VAT: Standardized Fistula Rate
(Clinical).
Hypercalcemia (Clinical) ................
NHSN BSI (Clinical) .......................
11 qualifying patients ....................
11 qualifying patients ....................
N/A ................................................
N/A ................................................
11–25 qualifying patients.
11–25 qualifying patients.
11 qualifying patients ....................
N/A ................................................
11–25 qualifying patients.
11 qualifying patients ....................
11 qualifying patients ....................
11–25 qualifying patients.
11–25 qualifying patients.
NHSN Dialysis Event (Reporting) ..
SRR (Clinical) ................................
STrR (Reporting) ............................
SHR (Clinical) ................................
ICH CAHPS (Clinical) ....................
11 qualifying patients ....................
11 index discharges .....................
10 patient-years at risk .................
5 patient-years at risk ...................
Facilities with 30 or more surveyeligible patients during the calendar year preceding the performance period must submit
survey results. Facilities will not
receive a score if they do not
obtain a total of at least 30
completed surveys during the
performance period.
11 qualifying patients ....................
N/A ................................................
Before October 1 prior to the performance period that applies to
the program year.
N/A ................................................
N/A ................................................
N/A ................................................
N/A ................................................
Before October 1 prior to the performance period that applies to
the program year.
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Depression Screening and FollowUp (Reporting).
Ultrafiltration (Reporting) ................
11 qualifying patients ....................
MedRec (Reporting) .......................
11 qualifying patients ....................
PPPW (Clinical) .............................
11 qualifying patients ....................
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Small facility adjuster
Before April 1 of the performance
period that applies to the program year.
Before April 1 of the performance
period that applies to the program year.
Before October 1 prior to the performance period that applies to
the program year.
N/A ................................................
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11–25 qualifying patients.
11–41 index discharges.
10–21 patient-years at risk.
5–14 patient-years at risk.
N/A.
N/A.
N/A.
N/A.
11–25 qualifying patients.
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5. Clarification of the Timeline for
Facilities To Make Changes to Their
NHSN Bloodstream Infection (BSI)
Clinical Measure and NHSN Dialysis
Event Reporting Measure Data for
Purposes of the ESRD QIP
In the CY 2021 ESRD PPS proposed
rule (85 FR 42188), we stated that under
our current policy for the NHSN BSI
clinical measure and NHSN Dialysis
Event reporting measure, facilities are
required to submit monthly data on a
quarterly basis, and each quarter’s data
is due 3 months after the end of the
quarter (81 FR 77879 through 77881). As
an example, we stated that data
collected by facilities between January 1
and March 31, 2021 is due to NHSN by
June 30, 2021, data collected between
April 1 and June 30, 2021 is due to
NHSN by September 30, 2021, and data
collected between July 1 and September
30, 2021 is due to NHSN by December
31, 2021. We further noted that after
each quarterly data submission
deadline, the Centers for Disease
Control and Prevention (CDC) takes a
snapshot of the facility’s data for the
quarter and creates a permanent data
file. Each quarterly permanent data file
is aggregated together to create the
annual CMS ESRD QIP Final
Compliance File, which the CDC
transmits to CMS for purposes of
determining whether the facility has
met the reporting requirements for these
measures. We also noted that facilities
may make changes to their quarterly
NHSN data for purposes of the ESRD
QIP at any point up until the applicable
quarterly submission data deadline (85
FR 42188).
In the CY 2021 ESRD PPS proposed
rule (85 FR 42188), we stated that we
have become aware that the NHSN
system does not prevent facilities from
making changes to their data for
purposes of CDC surveillance after the
applicable ESRD QIP quarterly
submission deadline has passed. We
also clarified that any changes that a
facility makes to its data after the ESRD
QIP deadline that applies to those data
will not be included in the quarterly
permanent data file that the CDC
generates for purposes of creating the
annual CMS ESRD QIP Final
Compliance File. As we noted in the
proposed rule, each quarterly
permanent data file captures a snapshot
of the facility’s data as of the quarterly
submission deadline, and that file
cannot be updated for purposes of the
ESRD QIP because of operational and
timing issues.
We received a few comments on this
clarification.
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Comment: A few commenters
expressed support for the clarification of
the timeline for facilities to make
changes to NHSN Dialysis Event and the
NHSN BSI measure data. One
commenter expressed support for the
clarification, noting the importance of
providing accurate information about
bloodstream infections to patients and
caregivers.
Response: We thank the commenters
for their support.
6. Payment Reduction Scale for the PY
2023 ESRD QIP
Under our current policy, a facility
will not receive a payment reduction for
a payment year in connection with its
performance for the ESRD QIP if it
achieves a total performance score (TPS)
that is at or above the minimum TPS
(mTPS) that we establish for the
payment year. We have defined the
mTPS in our regulations at
§ 413.178(a)(8) as, with respect to a
payment year, the TPS that an ESRD
facility would receive if, during the
baseline period it performed at the 50th
percentile of national performance on
all clinical measures and the median of
national ESRD facility performance on
all reporting measures.
Our current policy, which is codified
at § 413.177 of our regulations, is also to
implement the payment reductions on a
sliding scale using ranges that reflect
payment reduction differentials of 0.5
percent for each 10 points that the
facility’s TPS falls below the minimum
TPS (76 FR 634 through 635).
In the CY 2021 ESRD PPS proposed
rule (85 FR 42189), for PY 2023 we
estimated based on available data that a
facility must meet or exceed a mTPS of
57 in order to avoid a payment
reduction. We noted that the mTPS
estimated in the CY 2021 ESRD PPS
proposed rule was based on data from
CY 2018 instead of the PY 2023 baseline
period (CY 2019) because CY 2019 data
were not yet available.
We refer readers to Table 8 of this
final rule for the PY 2023 finalized
performance standards for each clinical
measure. We stated in the CY 2021
ESRD PPS proposed rule that under our
current policy, a facility that achieves a
TPS below 57 would receive a payment
reduction based on the TPS ranges
indicated in Table 9 (85 FR 42189).
Table 11 of this final rule, is a
reproduction of Table 9 from the CY
2021 ESRD PPS proposed rule.
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TABLE 11—ESTIMATED PAYMENT REDUCTION SCALE FOR PY 2023
BASED ON THE MOST RECENTLY
AVAILABLE DATA
Total
performance score
100–57 ..................................
56–47 ....................................
46–37 ....................................
36–27 ....................................
26–0 ......................................
Reduction
(%)
0
0.5
1.0
1.5
2.0
We stated our intention to update the
mTPS for PY 2023, as well as the
payment reduction ranges for that
payment year, in the CY 2021 ESRD PPS
final rule.
We have now finalized the payment
reductions that will apply to the PY
2023 ESRD QIP using updated CY 2019
data. The mTPS for PY 2023 will be 57,
and the finalized payment reduction
scale is shown in Table 12.
TABLE 12—FINALIZED PAYMENT REDUCTION SCALE FOR PY 2023
BASED ON THE MOST RECENTLY
AVAILABLE DATA
Total
performance score
100–57 ..................................
56–47 ....................................
46–37 ....................................
36–27 ....................................
26–0 ......................................
Reduction
(%)
0
0.5
1.0
1.5
2.0
7. Reduction of the Number of Records
That a Facility Selected for NHSN
Validation Must Submit
In the CY 2021 ESRD PPS proposed
rule (85 FR 42189), we stated that one
of the critical elements of the ESRD
QIP’s success is ensuring that the data
submitted to calculate measure scores
and TPSs are accurate. The ESRD QIP
currently includes two validation
studies for this purpose: The
Consolidated Renal Operations in a
Web-Enabled Network (CROWNWeb)
data validation study (OMB Control
Number 0938–1289) and the NHSN
validation study (OMB Control Number
0938–1340). In the CY 2019 ESRD PPS
final rule, we adopted the CROWNWeb
data validation study as a permanent
feature of the Program (83 FR 57003).
Under that policy, we will continue
validating CROWNWeb data in PY 2023
and subsequent payment years, and we
will deduct 10 points from a facility’s
TPS if it is selected for validation but
does not submit the requested records.
We also adopted a methodology for
the PY 2022 NHSN validation study,
which targets facilities for NHSN
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validation by identifying facilities that
are at risk for under-reporting. For
additional information on this
methodology, we referred readers to the
CY 2018 ESRD PPS final rule (82 FR
50766 through 50767). In the CY 2020
ESRD PPS final rule, we finalized our
proposal to continue using this
methodology for the NHSN validation
study for PY 2023 and subsequent years
(84 FR 60727). In that rule, we
concluded that to achieve the most
reliable results for a payment year, we
would need to review approximately
6,072 charts submitted by 303 facilities,
and that this sample size would produce
results with a 95 percent confidence
level and a 1 percent margin of error.
Based on those results and to ensure
that dialysis event data reported to the
NHSN for purposes of the ESRD QIP are
accurate, we finalized our proposal to
continue use of this methodology in the
PY 2023 NHSN validation study and for
subsequent years.
Additionally, as we had previously
finalized for CROWNWeb validation, we
finalized our proposal to adopt NHSN
validation as a permanent feature of the
ESRD QIP with the methodology we
first finalized for PY 2022 and are
continuing for PY 2023 and subsequent
years. We stated that we continued to
believe that the purpose of our
validation programs is to ensure the
accuracy and completeness of data that
are scored under the ESRD QIP, and that
we believed that validating NHSN data
using this methodology achieves that
goal.
In the CY 2019 ESRD PPS final rule,
we finalized that a sample of 300
facilities will be selected for the NHSN
validation study each year, and that
each facility will be required to submit
20 patient records per quarter for each
of the first two quarters of the calendar
year (83 FR 57001), for a total of 40
records. In the CY 2021 ESRD PPS
proposed rule (85 FR 42189 through
42190), we proposed to change this
requirement and allow facilities selected
to participate in the NHSN validation
study to submit a total of 20 patient
records for the applicable calendar year.
We also proposed to allow facilities to
submit patient records from any two
quarters during the year, as long as all
of the records are from no more than
two quarters. For example, we stated
that a facility could choose to submit
two records from Q1 and 18 records
from Q4, or six records from Q2 and 14
records from Q3, but it could not submit
four records from Q1, eight records from
Q2, and eight records from Q3.
We stated that we had concluded this
revised approach would reduce facility
burden by decreasing the required
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number of patient records and allowing
more flexibility for facilities to choose
what records to submit, while
continuing to maintain a sample size
that is adequate for our validation
analysis. In reaching this conclusion, we
stated that we had been informed by the
CDC’s recommendations. We stated that
based on the sample estimation
analysis, the CDC recommended the
following factors to improve the
precision of estimation of accuracy of
dialysis events reported to NHSN: An
expected 80 percent of dialysis events
reporting accuracy from facilities and
setting the precision of the NHSN
validation study to a 95 percent
confidence level and 1 percent margin
of error, which would require a total of
6,072 chart reviews. Beginning with the
CY 2017 and CY 2018 NHSN dialysis
validation, we stated that we have
gradually increased the number of
facilities randomly selected for
validation, as well as the number of
charts for review, in order to achieve the
6,000 chart threshold necessary for an
accurate review. Initially, 35 facilities
were randomly selected and 10 charts
per facility were reviewed. For CY 2019,
150 facilities were randomly selected
and each facility submitted a total of 20
records, to achieve the total of 3,000
charts available for review. For CY 2020,
the goal was to increase from 150 to 300
facilities, where each facility would
submit a total of 20 records thereby
achieving the total of 6,000 charts
available for review, as we had
previously finalized (83 FR 57001).
Because a total of 20 records would
achieve the 6,000 chart threshold
necessary for an accurate review, we
stated that we had concluded that we
could reduce the sample size from 40
records to 20 records. We stated that we
believed a total of 20 medical records
across a 6-month validation study time
frame for a calendar year, rather than 20
records per quarter would provide a
sufficiently accurate sample size.
In the CY 2021 ESRD PPS proposed
rule, we stated our belief that the
reduction in patient records still
provides an adequate sample size for the
validation and reduces overall facility
burden (85 FR 42190). We also stated
that a recent estimation analysis
conducted by the CDC supports our
belief that a review of 20 charts per
facility across a specified validation
timeline that are acquired by randomly
selecting approximately 300 facilities
would continue to meet the medical
record selection criteria outlined in the
NHSN Dialysis Validation methodology.
We stated that this would meet the
CDC’s recommended sample estimate to
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achieve the 95 percent confidence level
precision and 1 percent margin of error,
while also reducing facility burden.
We sought comments on this
proposal.
The comments on our proposal to
reduce the number of records that a
facility selected for NHSN validation
must submit and our responses to those
comments are set forth below. We did
not propose any changes to the
CROWNWeb validation study
methodology.
Comment: Several commenters
expressed support for the proposal to
reduce the number of patient records
required for submission for the NHSN
validation study. Several commenters
noted that the proposed update will
reduce provider burden. A few
commenters noted that the proposed 20
patient records requirement is an
adequate sample size for validation.
Response: We thank the commenters
for their support.
Final Rule Action: After considering
public comments, we are finalizing our
proposal to update the records
submission requirements for the NHSN
data validation study as proposed,
beginning with PY 2023.
D. Updates for the PY 2024 ESRD QIP
1. Continuing Measures for the PY 2024
ESRD QIP
In the CY 2021 ESRD PPS proposed
rule (85 FR 42190), we stated that,
under our previously adopted policy,
the PY 2023 ESRD QIP measure set will
also be used for PY 2024. We did not
propose to adopt any new measures
beginning with the PY 2024 ESRD QIP.
2. Performance Period for the PY 2024
ESRD QIP
In the CY 2021 ESRD PPS proposed
rule (85 FR 42190), we stated our
continued belief that 12-month
performance and baseline periods
provide us sufficiently reliable quality
measure data for the ESRD QIP. In the
CY 2020 ESRD PPS final rule, we
finalized the performance and baseline
periods for the PY 2023 ESRD QIP (84
FR 60728). We also finalized our
proposal to adopt automatically a
performance and baseline period for
each year that is 1 year advanced from
those specified for the previous
payment year. Under this policy, CY
2022 will be the performance period
and CY 2020 will be the baseline period
for the PY 2024 ESRD QIP.
3. Performance Standards for the PY
2024 ESRD QIP
Section 1881(h)(4)(A) of the Act
requires the Secretary to establish
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performance standards with respect to
the measures selected for the ESRD QIP
for a performance period with respect to
a year. The performance standards must
include levels of achievement and
improvement, as required by section
1881(h)(4)(B) of the Act, and must be
established prior to the beginning of the
performance period for the year
involved, as required by section
1881(h)(4)(C) of the Act. We refer
readers to the CY 2012 ESRD PPS final
rule (76 FR 70277) for a discussion of
the achievement and improvement
standards that we have established for
clinical measures used in the ESRD QIP.
We recently codified definitions for the
terms ‘‘achievement threshold,’’
‘‘benchmark,’’ ‘‘improvement
threshold,’’ and ‘‘performance standard’’
in our regulations at § 413.178(a)(1), (3),
(7), and (12), respectively.
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a. Performance Standards for Clinical
Measures in the PY 2024 ESRD QIP
At this time, we do not have the
necessary data to assign numerical
values to the achievement thresholds,
benchmarks, and 50th percentiles of
national performance for the clinical
measures because we do not have CY
2020 data. In the CY 2021 ESRD PPS
proposed rule, we stated our intent to
publish these numerical values, using
CY 2020 data, in the CY 2022 ESRD PPS
final rule (85 FR 42190). However, we
acknowledge that CY 2020 data may be
impacted by the nationwide
Extraordinary Circumstances Exception
(ECE) we granted to facilities in
response to the COVID–19 PHE, which
excluded data from the first and second
quarter of CY 2020. We are considering
ways to address this and will provide
further guidance in the CY 2022 ESRD
PPS proposed rule.
b. Performance Standards for the
Reporting Measures in the PY 2024
ESRD QIP
In the CY 2019 ESRD PPS final rule,
we finalized the continued use of
existing performance standards for the
Screening for Clinical Depression and
Follow-Up reporting measure, the
Ultrafiltration Rate reporting measure,
the NHSN Dialysis Event reporting
measure, and the MedRec reporting
measure (83 FR 57010 through 57011).
In the CY 2021 ESRD PPS proposed rule
(85 FR 42190), we stated that we will
continue use of these performance
standards in PY 2024.
4. Scoring the PY 2024 ESRD QIP
a. Scoring Facility Performance on
Clinical Measures
In the CY 2014 ESRD PPS final rule,
we finalized policies for scoring
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performance on clinical measures based
on achievement and improvement (78
FR 72215 through 72216). In the CY
2019 ESRD PPS final rule, we finalized
a policy to continue use of this
methodology for future payment years
(83 FR 57011) and we codified these
scoring policies at § 413.178(e).
b. Scoring Facility Performance on
Reporting Measures
Our policy for scoring performance on
reporting measures is codified at
§ 413.178(e), and more information on
our scoring policy for reporting
measures can be found in the CY 2020
ESRD PPS final rule (84 FR 60728). We
previously finalized policies for scoring
performance on the NHSN Dialysis
Event reporting measure in the CY 2018
ESRD PPS final rule (82 FR 50780
through 50781), as well as policies for
scoring the Ultrafiltration Rate reporting
measure, MedRec reporting measure,
and Clinical Depression Screening and
Follow-up reporting measure in the CY
2019 ESRD PPS final rule (83 FR 57011).
We also previously finalized the scoring
policy for the STrR reporting measure in
the CY 2020 ESRD PPS final rule (84 FR
60721 through 60723). In section IV.C.3
of this final rule, we finalized our
proposal to use patient-months instead
of facility-months when scoring the
Ultrafiltration Rate reporting measure.
5. Weighting the Measure Domains and
the TPS for PY 2024
Under our current policy, we assign
the Patient & Family Engagement
Measure Domain a weight of 15 percent
of the TPS, the Care Coordination
Measure Domain a weight of 30 percent
of the TPS, the Clinical Care Measure
Domain a weight of 40 percent of the
TPS, and the Safety Measure domain a
weight of 15 percent of the TPS.
In the CY 2019 ESRD PPS final rule,
we finalized a policy to assign weights
to individual measures and a policy to
redistribute the weight of unscored
measures (83 FR 57011 through 57012).
In the CY 2020 ESRD PPS final rule, we
finalized a policy to use the measure
weights we finalized for PY 2022 for the
PY 2023 ESRD QIP and subsequent
payment years, and also to use the PY
2022 measure weight redistribution
policy for the PY 2023 ESRD QIP and
subsequent payment years (84 FR 60728
through 60729). We did not propose any
updates to these policies. Under our
current policy, a facility must be eligible
to be scored on at least one measure in
two of the four measures domains in
order to be eligible to receive a TPS (83
FR 57012).
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V. Collection of Information
Requirements
A. Legislative Requirement for
Solicitation of Comments
Under the Paperwork Reduction Act
of 1995, we are required to provide 60day notice in the Federal Register and
solicit public comment before a
collection of information requirement is
submitted to the Office of Management
and Budget (OMB) for review and
approval. We solicited comments in the
proposed rule, which published in the
Federal Register on July 13, 2020 (85 FR
42132 through 42208). For the purpose
of transparency, we are republishing the
discussion of the information collection
requirements. All of the requirements
discussed in this section are already
accounted for in OMB approved
information requests.
B. Additional Information Collection
Requirements
This final rule does not impose any
new information collection
requirements in the regulation text.
However, this final rule does make
reference to several associated
information collections that are not
discussed in the regulation text
contained in this document. The
following is a discussion of these
information collections.
1. ESRD QIP-Wage Estimates
To derive wages estimates, we used
data from the U.S. Bureau of Labor
Statistics’ May 2019 National
Occupational Employment and Wage
Estimates. In the CY 2016 ESRD PPS
final rule (80 FR 69069), we stated that
it was reasonable to assume that
Medical Records and Health
Information Technicians, who are
responsible for organizing and managing
health information data, are the
individuals tasked with submitting
measure data to CROWNWeb and
NHSN, as well as compiling and
submitting patient records for purpose
of the data validation studies, rather
than a Registered Nurse, whose duties
are centered on providing and
coordinating care for patients. We stated
that the median hourly wage of a
Medical Records and Health
Information Technician is $20.50 per
hour.210 We also stated that fringe
benefit and overhead are calculated at
100 percent. Therefore, using these
assumptions, we estimated an hourly
labor cost of $41.00 as the basis of the
wage estimates for all collections of
information calculations in the ESRD
210 https://www.bls.gov/oes/current/
oes292098.htm.
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QIP. We adjusted these employee hourly
wage estimates by a factor of 100
percent to reflect current HHS
department-wide guidance on
estimating the cost of fringe benefits and
overhead. We stated that these are
necessarily rough adjustments, both
because fringe benefits and overhead
costs vary significantly from employer
to employer and because methods of
estimating these costs vary widely from
study to study. Nonetheless, we stated
that there is no practical alternative and
we believe that these are reasonable
estimation methods.
We used this updated wage estimate,
along with updated facility and patient
counts to re-estimate the total
information collection burden in the
ESRD QIP for PY 2023 that we
discussed in the CY 2020 ESRD QIP
final rule (84 FR 60787 through 60788)
and to estimate the total information
collection burden in the ESRD QIP for
PY 2024. We provided the re-estimated
information collection burden
associated with the PY 2023 ESRD QIP
and the newly estimated information
collection burden associated with the
PY 2024 ESRD QIP in sections IV.D.2
and IV.D.3 of this final rule.
2. Estimated Burden Associated With
the Data Validation Requirements for PY
2023 and PY 2024
In the CY 2020 ESRD PPS final rule,
we finalized a policy to adopt the
CROWNWeb data validation
methodology that we previously
adopted for the PY 2016 ESRD QIP as
the methodology we would use to
validate CROWNWeb data for all
payment years, beginning with PY 2021
(83 FR 57001 through 57002). Under
this methodology, 300 facilities are
selected each year to submit 10 records
to CMS, and we reimburse these
facilities for the costs associated with
copying and mailing the requested
records. The burden associated with
these validation requirements is the
time and effort necessary to submit the
requested records to a CMS contractor.
In this final rule, we are updating these
estimates using a newly available wage
estimate of a Medical Records and
Health Information Technician. We
estimate that it will take each facility
approximately 2.5 hours to comply with
this requirement. If 300 facilities are
asked to submit records, we estimate
that the total combined annual burden
for these facilities will be 750 hours
(300 facilities × 2.5 hours). Since we
anticipate that Medical Records and
Health Information Technicians or
similar administrative staff will submit
these data, we estimate that the
aggregate cost of the CROWNWeb data
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validation each year will be
approximately $30,750 (750 hours ×
$41.00), or an annual total of
approximately $102.50 ($30,750/300
facilities) per facility in the sample. The
decrease in our burden estimate is due
to using the median hourly wage instead
of the mean hourly wage for Medical
Records and Health Information
Technicians or similar staff and is not
the result of any policies finalized in
this final rule. The burden associated
with these requirements is captured in
an information collection request (OMB
control number 0938–1289).
In section IV.C.7 of this final rule, we
finalized our proposal to reduce the
number of records that a facility
selected to participate in the NHSN data
validation study must submit to a CMS
contractor, beginning with PY 2023.
Under this finalized policy, a facility is
required to submit records for 20
patients across any two quarters of the
year, instead of 20 records for each of
the first two quarters of the year. The
burden associated with this policy is the
time and effort necessary to submit the
requested records to a CMS contractor.
Applying our policy to reduce the
number of records required from each
facility participating in the NHSN
validation study, we estimate that it
would take each facility approximately
5 hours to comply with this
requirement. If 300 facilities are asked
to submit records each year, we estimate
that the total combined annual burden
hours for these facilities per year would
be 1,500 hours (300 facilities × 5 hours).
Since we anticipate that Medical
Records and Health Information
Technicians or similar staff would
submit these data, using the newly
available wage estimate of a Medical
Records and Health Information
Technician, we estimate that the
aggregate cost of the NHSN data
validation each year would be
approximately $61,500 (1,500 hours ×
$41), or a total of approximately $205
($61,500/300 facilities) per facility in
the sample. The reduction in our burden
estimate is due to a reduction in the
number of medical records collected
and the utilization of the median hourly
wage instead of the mean hourly wage.
The burden associated with these
requirements is captured in an
information collection request (OMB
control number 0938–1340).
3. CROWNWeb Reporting Requirements
for PY 2023 and PY 2024
To determine the burden associated
with the CROWNWeb reporting
requirements, we look at the total
number of patients nationally, the
number of data elements per patient-
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year that the facility would be required
to submit to CROWNWeb for each
measure, the amount of time required
for data entry, the estimated wage plus
benefits applicable to the individuals
within facilities who are most likely to
be entering data into CROWNWeb, and
the number of facilities submitting data
to CROWNWeb. In the CY 2020 ESRD
PPS final rule, we estimated that the
burden associated CROWNWeb
reporting requirements for the PY 2023
ESRD QIP was approximately $211
million (84 FR 60651).
We did not propose any changes that
would affect the burden associated with
CROWNWeb reporting requirements for
PY 2023 or PY 2024. However, we have
re-calculated the burden estimate for PY
2023 using updated estimates of the
total number of dialysis facilities, the
total number of patients nationally, and
wages for Medical Records and Health
Information Technicians or similar staff
as well as a refined estimate of the
number of hours needed to complete
data entry for CROWNWeb reporting.
We note that the burden estimate for PY
2023 has been updated from the
estimates in the CY 2021 ESRD PPS
proposed rule due to updated
information about the total number of
facilities participating in the ESRD QIP
and the total number of patients. In the
CY 2020 ESRD PPS final rule, we
estimated that the amount of time
required to submit measure data to
CROWNWeb was 2.5 minutes per
element and used a rounded estimate of
0.042 hours in our calculations (84 FR
60788). In this final rule, we did not use
a rounded estimate of the time needed
to complete data entry for CROWNWeb
reporting. There are 229 data elements
for 532,931 patients across 7,610
facilities. At 2.5 minutes per element,
this yields approximately 668.21 hours
per facility. Therefore, the PY 2023
burden is 5,085,050 hours (668.21 hours
× 7,610 facilities). (Using the wage
estimate of a Medical Records and
Health Information Technician, we
estimate that the PY 2023 total burden
cost is approximately $208 million
(5,085,050 hours × $41). There is no net
incremental burden change from PY
2023 to PY 2024 because we are not
changing the reporting requirements for
PY 2024.
VI. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
We have examined the impacts of this
rule as required by Executive Order
12866 on Regulatory Planning and
Review, Executive Order 13563 on
Improving Regulation and Regulatory
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Review, the Regulatory Flexibility Act
(RFA) (Pub. L. 96–354), section 1102(b)
of the Social Security Act, section 202
of the Unfunded Mandates Reform Act
of 1995 (Pub. L. 104–4), Executive Order
13132 on Federalism, the Congressional
Review Act (5 U.S.C. 801 et seq.), and
Executive Order 13771 on Reducing
Regulation and Controlling Regulatory
Costs.
Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Section 3(f) of Executive Order
12866 defines a ‘‘significant regulatory
action’’ as an action that is likely to
result in a rule: (1) Having an annual
effect on the economy of $100 million
or more in any 1 year, or adversely and
materially affecting a sector of the
economy, productivity, competition,
jobs, the environment, public health or
safety, or state, local or tribal
governments or communities (also
referred to as ‘‘economically
significant’’); (2) creating a serious
inconsistency or otherwise interfering
with an action taken or planned by
another agency; (3) materially altering
the budgetary impacts of entitlement
grants, user fees, or loan programs or the
rights and obligations of recipients
thereof; or (4) raising novel legal or
policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in the Executive
order.
A regulatory impact analysis (RIA)
must be prepared for major rules with
economically significant effects ($100
million or more in any 1 year). This rule
has been designated by the Office of
Information and Regulatory Affairs as an
economically significant rule as
measured by the $100 million threshold,
and hence also been designated as a
major rule under the Congressional
Review Act. Accordingly, we have
prepared a RIA that to the best of our
ability presents the costs and benefits of
the rulemaking.
We solicited comments on the
regulatory impact analysis provided.
With regard to the ESRD PPS, we did
not receive any comments on the RIA.
2. Statement of Need
a. ESRD PPS
This rule finalizes a number of
routine updates and several policy
changes to the ESRD PPS for CY 2021.
The routine updates include the CY
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2021 wage index values, the wage index
budget-neutrality adjustment factor, and
outlier payment threshold amounts.
Failure to publish this final rule would
result in ESRD facilities not receiving
appropriate payments in CY 2021 for
renal dialysis services furnished to
ESRD beneficiaries.
b. AKI
This rule also finalizes routine
updates to the payment for renal
dialysis services furnished by ESRD
facilities to individuals with AKI.
Failure to publish this final rule would
result in ESRD facilities not receiving
appropriate payments in CY 2021 for
renal dialysis services furnished to
patients with AKI in accordance with
section 1834(r) of the Act.
c. ESRD QIP
This final rule finalizes updates to the
ESRD QIP beginning with PY 2023,
including a modification to the scoring
methodology for the Ultrafiltration Rate
reporting measure and an update to the
reporting requirements for facilities
selected for NHSN data validation. This
final rule also clarifies the review and
correction timeline for the NHSN BSI
clinical measure and NHSN Dialysis
Event reporting measure.
3. Overall Impact
a. ESRD PPS
We estimate that the final revisions to
the ESRD PPS will result in an increase
of approximately $250 million in
payments to ESRD facilities in CY 2021,
which includes the amount associated
with updates to the outlier thresholds,
payment rate update, updates to the
wage index, adoption of the 2018 OMB
delineations with a transition period,
and including calcimimetics in the
ESRD PPS base rate. These figures do
not reflect estimated increases or
decreases in expenditures based on our
expansion of eligibility for the TPNIES
to certain new and innovative home
dialysis machines when used in the
home for a single patient. The fiscal
impact of this policy cannot be
determined due to the uniqueness of
each new and innovative home dialysis
machine and its cost.
b. AKI
We estimate that the updates to the
AKI payment rate would result in an
increase of approximately $4 million in
payments to ESRD facilities in CY 2021.
c. ESRD QIP
For PY 2023, we have re-estimated the
costs associated with the information
collection requirements under the ESRD
QIP with updated estimates of the total
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71475
number of dialysis facilities, the total
number of patients nationally, wages for
Medical Records and Health
Information Technicians or similar staff,
and a refined estimate of the number of
hours needed to complete data entry for
CROWNWeb reporting. We note that the
estimated costs have been updated from
the estimates in the CY 2021 ESRD PPS
proposed rule due to updated
information about the total number of
facilities participating in the ESRD QIP
and the total number of patients. We
have made no changes to our
methodology for calculating the annual
burden associated with the information
collection requirements for the
CROWNWeb validation study and
CROWNWeb reporting. We updated the
annual burden associated with the
NHSN validation study to reflect our
new policy to reduce the total number
of records collected. The finalized
updates will reduce the collection of
information requirements associated
with the NHSN validation study by
$65,460 per year across the facilities
selected for validation that year.
We also finalized the payment
reduction scale using more recent data
for the measures in the ESRD QIP
measure set and applying our finalized
proposal to modify the scoring
methodology for the Ultrafiltration Rate
reporting measure beginning with the
PY 2023 ESRD QIP. We estimate
approximately $208 million in
information collection burden, which
includes the cost of complying with this
rule, and an additional $16 million in
estimated payment reductions across all
facilities for PY 2023.
For PY 2024, we estimate that the
finalized revisions to the ESRD QIP
would result in $208 million in
information collection burden, and $16
million in estimated payment
reductions across all facilities, for an
impact of $224 million as a result of the
policies we have previously finalized
and the policies we have finalized in
this final rule.
4. Regulatory Review Cost Estimation
If regulations impose administrative
costs on private entities, such as the
time needed to read and interpret this
final rule, we should estimate the cost
associated with regulatory review. Due
to the uncertainty involved with
accurately quantifying the number of
entities that will review the rule, we
assume that the total number of unique
commenters on the CY 2021 ESRD PPS
proposed rule will be the number of
reviewers of this final rule. We
acknowledge that this assumption may
understate or overstate the costs of
reviewing this rule. It is possible that
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not all commenters reviewed CY 2021
ESRD PPS proposed rule in detail, and
it is also possible that some reviewers
chose not to comment on the CY 2021
ESRD PPS proposed rule. For these
reasons we thought that the number of
past commenters would be a fair
estimate of the number of reviewers of
this rule.
We also recognize that different types
of entities are in many cases affected by
mutually exclusive sections of this final
rule, and therefore, for the purposes of
our estimate we assume that each
reviewer reads approximately 50
percent of the rule. We sought
comments on this assumption in the CY
2021 ESRD PPS proposed rule but did
not receive comments.
Using the wage information from the
Bureau of Labor Statistics (BLS) for
medical and health services managers
(Code 11–9111), we estimate that the
cost of reviewing this rule is $110.74 per
hour, including overhead and fringe
benefits https://www.bls.gov/oes/
current/oes_nat.htm. Assuming an
average reading speed, we estimate that
it would take approximately 6.25 hours
for the staff to review half of this final.
For each entity that reviews the rule, the
estimated cost is $692.13 (6.25 hours ×
$110.74). Therefore, we estimate that
the total cost of reviewing this
regulation rounds to $81,671. ($692.13 ×
118 reviewers).
B. Detailed Economic Analysis
1. CY 2021 End-Stage Renal Disease
Prospective Payment System
a. Effects on ESRD Facilities
To understand the impact of the
changes affecting payments to different
categories of ESRD facilities, it is
necessary to compare estimated
payments in CY 2020 to estimated
payments in CY 2021. To estimate the
impact among various types of ESRD
facilities, it is imperative that the
estimates of payments in CY 2020 and
CY 2021 contain similar inputs.
Therefore, we simulated payments only
for those ESRD facilities for which we
are able to calculate both current
payments and new payments.
For this final rule, we used CY 2019
data from the Part A and Part B
Common Working Files as of July 31,
2020, as a basis for Medicare dialysis
treatments and payments under the
ESRD PPS. We updated the 2019 claims
to 2020 and 2021 using various updates.
The updates to the ESRD PPS base rate
are described in section II.B.4.d of this
final rule. Table 13 shows the impact of
the estimated CY 2021 ESRD PPS
payments compared to estimated
payments to ESRD facilities in CY 2020.
TABLE 13—IMPACT OF FINALIZED CHANGES IN PAYMENT TO ESRD FACILITIES FOR CY 2021
Number of
facilities
(A)
Facility type
All Facilities ......................................................
Type:
Freestanding .............................................
Hospital based ..........................................
Ownership Type:
Large dialysis organization .......................
Regional chain ..........................................
Independent ..............................................
Hospital based 1 ........................................
Unknown ...................................................
Geographic Location: 2 3
Rural .........................................................
Urban ........................................................
Census Region:
East North Central ....................................
East South Central ...................................
Middle Atlantic ..........................................
Mountain ...................................................
New England ............................................
Pacific 4 .....................................................
Puerto Rico and Virgin Islands .................
South Atlantic ...........................................
West North Central ...................................
West South Central ..................................
Facility Size:
Less than 4,000 treatments ......................
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% .........................................
Number of
treatments
(in millions)
(B)
Effect of
2021
changes
in outlier
policy
(C)
%
Effect of
changes in
wage index
data
(D)
%
Effect of
CBSA
change &
5% cap policy
(E)
%
Effect of
bundling
calcimimetics
into base
rate
(F)
%
Effect of
change for
payment
rate
update
(G)
%
Effect of
total 2021
proposed
changes
(H)
%
7,659
45.3
0.4
0.0
0.0
¥0.1
1.6
2.0
7,270
389
43.5
1.8
0.4
0.9
0.0
0.1
0.0
0.1
0.0
¥2.9
1.6
1.6
2.0
¥0.2
5,890
956
509
302
2
35.3
5.8
2.9
1.4
0.0
0.4
0.3
0.5
0.9
1.5
0.0
¥0.1
0.3
0.1
0.0
0.0
¥0.1
0.3
0.2
¥0.1
0.9
¥3.7
¥2.6
¥2.6
1.3
1.6
1.6
1.6
1.6
1.6
2.9
¥1.9
0.0
0.2
4.4
1,292
6,367
6.5
38.8
0.4
0.4
0.1
0.0
¥1.2
0.2
0.1
¥0.1
1.6
1.6
1.0
2.1
1,223
606
852
423
203
922
52
1,758
514
1,106
6.0
3.3
5.4
2.4
1.4
6.5
0.3
10.8
2.3
6.7
0.5
0.4
0.5
0.3
0.4
0.4
0.3
0.5
0.6
0.4
0.1
0.0
0.5
¥0.5
¥0.7
¥0.1
0.1
0.0
¥0.4
0.0
¥0.1
0.0
0.2
¥0.1
¥0.1
0.1
¥0.1
0.0
¥0.1
0.0
0.5
¥0.8
¥0.7
1.0
0.2
0.6
1.1
¥0.6
0.5
¥0.4
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
2.6
1.1
2.1
2.4
1.4
2.5
2.9
1.4
2.2
1.6
1,377
2,999
3,261
22
2.2
12.8
30.2
0.1
0.5
0.5
0.4
0.5
0.0
0.0
0.0
0.1
0.0
¥0.1
0.0
¥0.1
0.5
0.0
¥0.2
¥3.4
1.6
1.6
1.6
1.6
2.7
2.1
1.9
¥1.3
7,551
37
16
55
45.0
0.3
0.0
0.0
0.4
0.4
0.4
0.3
0.0
0.2
¥0.3
0.0
0.0
¥0.1
0.0
¥0.1
¥0.1
¥0.5
3.1
3.8
1.6
1.6
1.6
1.6
1.9
1.6
4.9
5.6
1 Includes
hospital-based ESRD facilities not reported to have large dialysis organization or regional chain ownership.
counts for Urban/Rural uses 2021 CBSA delineation. Under 2020 and previous CBSA delineation, facility counts for urban and rural are 6,355 and 1,304
respectively. For payment percent change columns, appropriate definition of Urban/Rural is used.
3 The 1.2 percent drop in total payments among rural facilities (and increase in total payments among urban facilities) is mostly due facilities shifting from rural to
urban status under new CBSA delineation. Controlling for old-CBSA urban/rural status, the change in payment is close to 0 percent.
4 Includes ESRD facilities located in Guam, American Samoa, and the Northern Mariana Islands.
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2 Facility
Column A of the impact table
indicates the number of ESRD facilities
for each impact category and column B
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indicates the number of dialysis
treatments (in millions). The overall
effect of the final changes to the outlier
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payment policy described in section
II.B.4.c of this final rule is shown in
column C. For CY 2021, the impact on
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all ESRD facilities as a result of the
changes to the outlier payment policy
would be a 0.4 percent increase in
estimated payments. All ESRD facilities
are anticipated to experience a positive
effect in their estimated CY 2021
payments as a result of the final outlier
policy changes.
Column D shows the effect of the
annual update to the wage index, as
described in section II.B.4.b of this final
rule. That is, this column reflects the
update from the CY 2020 ESRD PPS
wage index using older OMB
delineations with a basis of the FY 2021
pre-floor, pre-reclassified IPPS hospital
wage index data in a budget neutral
manner. The total impact of this change
is 0.0 percent, however, there are
distributional effects of the change
among different categories of ESRD
facilities. The categories of types of
facilities in the impact table show
changes in estimated payments ranging
from a 0.7 percent decrease to a 0.5
percent increase due to the annual
update to the ESRD PPS wage index.
Column E shows the effect of
adopting the 2018 OMB delineations
and the transition policy as described in
sections II.B.4.b.(2) and II.B.4.b.(3),
respectively, of this final rule. That is,
the impact represented in this column
reflects the change from using the older
OMB delineations and basing the CY
2021 ESRD PPS wage index on the FY
2021 pre-floor, pre-reclassified IPPS
hospital wage index data to the 2018
OMB delineations and a 5 percent cap
on wage index decreases in CY 2021, in
a budget neutral manner. The total
impact of this change is 0.0 percent,
however, there are distributional effects
of the change among different categories
of ESRD facilities. The categories of
types of facilities in the impact table
show changes in estimated payments
ranging from a 1.2 percent decrease to
a 0.3 percent increase due to these
updates to the ESRD PPS wage index.
Column F shows the effect of the final
addition to the ESRD PPS base rate to
include calcimimetics as described in
section II.B.1 of this final rule. That is,
the impact represented in this column
reflects the change, under the ESRD
PPS, for payment to ESRD facilities for
furnishing calcimimetics. Beginning
January 1, 2018, ESRD facilities received
payment for calcimimetics under the
TDAPA policy in § 413.234(c). Under
our final policy, beginning January 1,
2021, we will modify the ESRD PPS
base rate by adding $9.93 to include
calcimimetics and no longer pay for
calcimimetics using the TDAPA. In
addition, calcimimetics would become
outlier eligible services under § 413.237.
The categories of types of facilities in
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the impact table show changes in
estimated payments ranging from a 3.7
percent decrease to a 3.8percent
increase due to these policy
modifications.
Column G shows the effect of the final
CY 2021 ESRD PPS payment rate update
as described in section II.B.4.a of this
final rule. The final ESRD PPS payment
rate update is 1.6 percent, which reflects
the ESRDB market basket percentage
increase factor for CY 2021 of 1.9
percent and the final MFP adjustment of
0.3 percentage point.
Column H reflects the overall impact,
that is, the effects of the final outlier
policy changes, the final updated wage
index and transition policy, the
payment rate update, and the addition
to the ESRD PPS base rate to include
calcimimetics. We expect that overall
ESRD facilities would experience a 2.0
percent increase in estimated payments
in CY 2021. The categories of types of
facilities in the impact table show
impacts ranging from a 1.9 percent
decrease to a 5.6 percent increase in
their CY 2021 estimated payments.
b. Effects on Other Providers
Under the ESRD PPS, Medicare pays
ESRD facilities a single bundled
payment for renal dialysis services,
which may have been separately paid to
other providers (for example,
laboratories, durable medical equipment
suppliers, and pharmacies) by Medicare
prior to the implementation of the ESRD
PPS. Therefore, in CY 2021, we estimate
that the final ESRD PPS would have
zero impact on these other providers.
c. Effects on the Medicare Program
We estimate that Medicare spending
(total Medicare program payments) for
ESRD facilities in CY 2021 would be
approximately $9.3 billion. This
estimate takes into account a projected
decrease in fee-for-service Medicare
dialysis beneficiary enrollment of 8.6
percent in CY 2021.
d. Effects on Medicare Beneficiaries
Under the ESRD PPS, beneficiaries are
responsible for paying 20 percent of the
ESRD PPS payment amount. As a result
of the projected 2.0 percent overall
increase in the final CY 2021 ESRD PPS
payment amounts, we estimate that
there would be an increase in
beneficiary co-insurance payments of
2.0percent in CY 2021, which translates
to approximately $60 million.
e. Alternatives Considered
(1) Inclusion of Calcimimetics Into the
ESRD PPS Bundled Payment
In section II.B.1 of this final rule, we
established that beginning January 1,
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2021, we will modify the ESRD PPS
base rate by adding $9.93 to include
calcimimetics and no longer pay for
calcimimetics using the TDAPA. In
addition, calcimimetics would become
ESRD outlier services eligible for outlier
payments under § 413.237. With regard
to the methodology utilized to calculate
the amount to be added the ESRD PPS
base rate, for the CY 2021 ESRD PPS
proposed rule, we considered using the
Medicare expenditures reflecting
payments made for the calcimimetics in
CYs 2018 and 2019, that is,
approximately $2.3 billion and dividing
by total treatments furnished in both
years to arrive at an amount of $27.08.
However, using the most recent
calendar quarter of ASP data available
to calculate the ASP-based values as the
proxy rate incorporates the lower priced
generic calcimimetics into the
calculation of the amount added for oral
calcimimetics. We believe it is
appropriate for the ESRD PPS base rate
to reflect generic drug manufacturer
ASP data since we believe that this
aligns with how ESRD facilities would
purchase and furnish the oral
calcimimetics in the future.
For the final rule, we considered
several alternative approaches: (1) Using
the most recent 12 months of claims
data, which would result in a base rate
increase of $11.85; (2) using only 2019
claims data, which would result in a
base rate increase of $11.10; and (3)
using both CYs 2018 and 2019 claims
data, which would result in a base rate
increase of $8.52. We believe a robust
data set should reflect both the slow
uptake of the injectable calcimimetic
and the ramping up of utilization of
generic oral calcimimetics. We view the
use of 18 months as a mid-point
between the proposal to use both CYs
2018 and 2019 and the most recent 12
months of claims data, as requested by
commenters. Accordingly, we have
concluded that using 18 months of
claims data resulting in an increase of
$9.93 to the base rate is the most
appropriate approach.
(2) Expansion of the TPNIES to CapitalRelated Assets That Are Home Dialysis
Machines When Used in the Home for
a Single Patient
In section II.B.3 of this final rule, we
expanded the TPNIES policy to allow
capital-related assets that are home
dialysis machines when used in the
home for a single patient to be eligible
for the add-on payment adjustment.
Then, consistent with the policies
finalized last year for other renal
dialysis equipment and supplies eligible
for the TPNIES, we would pay 65
percent of the pre-adjusted per
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treatment amount for a period of 2
years. With regard to the duration of
applying the TPNIES for capital-related
assets that are home dialysis machines
when used in the home for a single
patient, we considered paying the
TPNIES for 3 years. However, we
believe that the expansion is consistent
with the TDAPA and other Medicare
fee-for-service add-on payment
programs (for example, the IPPS NTAP),
and supports innovation for dialysis in
the home setting, the President’s
Executive order on Advancing
American Kidney Health, and current
HHS initiatives to support home
dialysis, while taking into account the
potential increase in ESRD PPS
expenditures.
(3) CY 2021 ESRD PPS Wage Index
In section II.B.4.b of this final rule, we
adopted the 2018 OMB delineations
with a transition policy. That is, we are
adopting the OMB delineations based
on the September 14, 2018 OMB
Bulletin No. 18–04 and, to mitigate any
potential negative impacts, we applied a
5 percent cap on any decrease in an
ESRD facility’s wage index from the
ESRD facility’s wage index from the
prior calendar year. This transition
would be phased in over 2 years, such
that the estimated reduction in an ESRD
facility’s wage index would be capped
at 5 percent in CY 2021 and no cap
would be applied to the reduction in the
wage index for the second year, CY
2022. With regard to the transition
policy, we considered doing a 2-year 50/
50 blended wage index approach
consistent with the adoption of OMB
delineations in the CY 2015 ESRD PPS
final rule (79 FR 66142). However, we
determined that the 5 percent cap on
any decrease policy would be an
appropriate transition for CY 2021 as it
provides predictability in payment
levels from CY 2020 to the upcoming
CY 2021 and additional transparency
because it is administratively simpler
than the 50/50 blended approach.
2. Final Payment for Renal Dialysis
Services Furnished to Individuals With
AKI
a. Effects on ESRD Facilities
To understand the impact of the
changes affecting payments to different
categories of ESRD facilities for renal
dialysis services furnished to
individuals with AKI, it is necessary to
compare estimated payments in CY
2020 to estimated payments in CY 2021.
To estimate the impact among various
types of ESRD facilities for renal
dialysis services furnished to
individuals with AKI, it is imperative
that the estimates of payments in CY
2020 and CY 2021 contain similar
inputs. Therefore, we simulated
payments only for those ESRD facilities
for which we are able to calculate both
current payments and new payments.
For this final rule, we used CY 2019
data from the Part A and Part B
Common Working Files as of July 31,
2020, as a basis for Medicare for renal
dialysis services furnished to
individuals with AKI. We updated the
2019 claims to 2020 and 2021 using
various updates. The updates to the AKI
payment amount are described in
section III.B of this final rule. Table 14
shows the impact of the estimated CY
2021 payments for renal dialysis
services furnished to individuals with
AKI compared to estimated payments
for renal dialysis services furnished to
individuals with AKI in CY 2020.
TABLE 14—IMPACT OF FINAL CHANGES IN PAYMENT FOR RENAL DIALYSIS SERVICES FURNISHED TO INDIVIDUALS WITH
AKI FOR CY 2021
Number of
facilities
(A)
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Facility type
All Facilities ..............................................
Type:
Freestanding .....................................
Hospital based ..................................
Ownership Type:
Large dialysis organization ...............
Regional chain ..................................
Independent ......................................
Hospital based 1 ................................
Unknown ...........................................
Geographic Location: 2
Rural .................................................
Urban ................................................
Census Region:
East North Central ............................
East South Central ...........................
Middle Atlantic ..................................
Mountain ...........................................
New England ....................................
Pacific 3 .............................................
Puerto Rico and Virgin Islands .........
South Atlantic ....................................
West North Central ...........................
West South Central ..........................
Facility Size:
Less than 4,000 treatments ..............
4,000 to 9,999 treatments ................
10,000 or more treatments ...............
Unknown ...........................................
Percentage of Pediatric Patients:
Less than 2% ....................................
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Number of
treatments
(in thousands)
(B)
Effect of all
wage index
changes
(C)
%
Effect of
bundling
calcimimetics
in the ESRD
PPS base rate
(D)
%
Effect of
changes in
payment rate
update
(E)
%
Effect of
total 2021
final changes
(F)
%
5,141
296.4
¥0.1
4.2
1.6
5.7
5,013
128
290.7
5.7
¥0.1
¥0.1
4.2
4.2
1.6
1.6
5.7
5.8
4,280
596
185
80
0
250.7
30.0
12.1
3.6
0.0
¥0.1
¥0.1
0.1
0.0
0.0
4.2
4.2
4.2
4.2
0.0
1.6
1.6
1.6
1.6
0.0
5.7
5.7
6.0
5.9
0.0
885
4,256
46.3
250.0
¥0.1
¥0.1
4.2
4.2
1.6
1.6
5.7
5.8
892
408
535
294
159
607
2
1,211
352
681
54.3
21.0
33.1
17.4
8.6
45.8
0.0
68.6
14.2
33.2
0.0
¥0.2
0.4
¥0.5
¥0.8
¥0.1
¥0.1
0.0
¥0.5
0.0
4.2
4.2
4.2
4.2
4.2
4.2
4.2
4.2
4.2
4.2
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
1.6
5.8
5.6
6.2
5.3
4.9
5.7
5.8
5.8
5.3
5.8
606
2,076
2,455
4
23.2
106.6
166.4
0.2
¥0.1
¥0.1
¥0.1
¥0.5
4.2
4.2
4.2
4.2
1.6
1.6
1.6
1.6
5.7
5.8
5.7
5.3
5,141
296.4
¥0.1
4.2
1.6
5.7
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Federal Register / Vol. 85, No. 217 / Monday, November 9, 2020 / Rules and Regulations
71479
TABLE 14—IMPACT OF FINAL CHANGES IN PAYMENT FOR RENAL DIALYSIS SERVICES FURNISHED TO INDIVIDUALS WITH
AKI FOR CY 2021—Continued
Number of
treatments
(in thousands)
(B)
Number of
facilities
(A)
Facility type
Between 2% and 19% ......................
Between 20% and 49% ....................
More than 50% .................................
0
0
0
Effect of all
wage index
changes
(C)
%
0.0
0.0
0.0
Effect of
bundling
calcimimetics
in the ESRD
PPS base rate
(D)
%
0.0
0.0
0.0
0.0
0.0
0.0
Effect of
changes in
payment rate
update
(E)
%
Effect of
total 2021
final changes
(F)
%
0.0
0.0
0.0
0.0
0.0
0.0
1 Includes
hospital-based ESRD facilities not reported to have large dialysis organization or regional chain ownership.
2 Facility counts for Urban/Rural uses 2021 CBSA delineation. Under 2020 and previous CBSA delineation, facility counts for urban and rural
are 4,246 and 895 respectively. For payment percent change columns, appropriate definition of Urban/Rural is used.
3Includes ESRD facilities located in Guam, American Samoa, and the Northern Mariana Islands.
Column A of the impact table
indicates the number of ESRD facilities
for each impact category and column B
indicates the number of AKI dialysis
treatments (in thousands).
Column C shows the effect of the final
CY 2021 wage indices.
Column D shows the effect of the
adjustment to the AKI dialysis payment
rate that reciprocates the modification to
the ESRD PPS base rate for CY 2021,
consistent with § 413.372. As discussed
in section II.B.1 of this final rule, we
modified the ESRD PPS base rate by
adding $9.93 to include calcimimetics.
Column E shows the effect of the final
CY 2021 ESRD PPS payment rate
update. The ESRD PPS payment rate
update is 1.6 percent, which reflects the
final ESRDB market basket percentage
increase factor for CY 2021 of 1.9
percent and the final MFP adjustment of
0.3 percentage point.
Column F reflects the overall impact,
that is, the effects of the updated wage
index, the final addition to the ESRD
PPS base rate, and the payment rate
update. We expect that overall ESRD
facilities would experience a 5.7 percent
increase in estimated payments in CY
2021. The categories of types of facilities
in the impact table show impacts
ranging from an increase of 0.0 percent
to 6.2 percent in their CY 2021
estimated payments.
khammond on DSKJM1Z7X2PROD with RULES2
b. Effects on Other Providers
Under section 1834(r) of the Act, as
added by section 808(b) of TPEA, we
updated the payment rate for renal
dialysis services furnished by ESRD
facilities to beneficiaries with AKI. The
only two Medicare providers and
suppliers authorized to provide these
outpatient renal dialysis services are
hospital outpatient departments and
ESRD facilities. The decision about
where the renal dialysis services are
furnished is made by the patient and his
or her physician. Therefore, this update
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will have zero impact on other Medicare
providers.
c. Effects on the Medicare Program
We estimate approximately $56
million would be paid to ESRD facilities
in CY 2021 as a result of AKI patients
receiving renal dialysis services in the
ESRD facility at the lower ESRD PPS
base rate versus receiving those services
only in the hospital outpatient setting
and paid under the outpatient
prospective payment system, where
services were required to be
administered prior to the TPEA.
d. Effects on Medicare Beneficiaries
Currently, beneficiaries have a 20
percent co-insurance obligation when
they receive AKI dialysis in the hospital
outpatient setting. When these services
are furnished in an ESRD facility, the
patients would continue to be
responsible for a 20 percent coinsurance. Because the AKI dialysis
payment rate paid to ESRD facilities is
lower than the outpatient hospital PPS’s
payment amount, we would expect
beneficiaries to pay less co-insurance
when AKI dialysis is furnished by ESRD
facilities.
e. Alternatives Considered
As we discussed in the CY 2017 ESRD
PPS proposed rule (81 FR 42870), we
considered adjusting the AKI payment
rate by including the ESRD PPS casemix adjustments, and other adjustments
at section 1881(b)(14)(D) of the Act, as
well as not paying separately for AKI
specific drugs and laboratory tests. We
ultimately determined that treatment for
AKI is substantially different from
treatment for ESRD and the case-mix
adjustments applied to ESRD patients
may not be applicable to AKI patients
and as such, including those policies
and adjustment would be inappropriate.
We continue to monitor utilization and
trends of items and services furnished to
individuals with AKI for purposes of
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refining the payment rate in the future.
This monitoring would assist us in
developing knowledgeable, data-driven
proposals.
3. ESRD QIP
a. Effects of the PY 2023 ESRD QIP on
ESRD Facilities
The ESRD QIP is intended to prevent
possible reductions in the quality of
ESRD dialysis facility services provided
to beneficiaries. The general
methodology that we are using to
determine a facility’s TPS is described
in our regulations at § 413.178(e).
Any reductions in the ESRD PPS
payments as a result of a facility’s
performance under the PY 2023 ESRD
QIP will apply to the ESRD PPS
payments made to the facility for
services furnished in CY 2023, as
codified in our regulations at § 413.177.
For the PY 2023 ESRD QIP, we
estimate that, of the 7,610 dialysis
facilities (including those not receiving
a TPS) enrolled in Medicare,
approximately 24.3 percent or 1,790 of
the facilities that have sufficient data to
calculate a TPS would receive a
payment reduction for PY 2023. After
finalizing our proposal to update the
scoring methodology for the
Ultrafiltration Rate reporting measure,
the total estimated payment reductions
for all the 1,790 facilities expected to
receive a payment reduction in PY 2023
would decrease from $18,247,083.76 to
approximately $15,770,179.33. We note
that the total estimated payment
reductions for PY 2023 have been
updated from the estimates in the CY
2021 ESRD PPS proposed rule due to
updated information about the total
number of facilities expected to receive
a payment reduction. Facilities that do
not receive a TPS do not receive a
payment reduction.
Table 15 shows the overall estimated
distribution of payment reductions
resulting from the PY 2023 ESRD QIP.
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71480
Federal Register / Vol. 85, No. 217 / Monday, November 9, 2020 / Rules and Regulations
TABLE 15—ESTIMATED DISTRIBUTION
OF PY 2023 ESRD QIP PAYMENT
REDUCTIONS
TABLE 15—ESTIMATED DISTRIBUTION achievement and improvement on
OF PY 2023 ESRD QIP PAYMENT several clinical measures we have
previously finalized and for which there
REDUCTIONS—Continued
Payment
reduction
(percent)
Payment
reduction
(percent)
0.0
0.5
1.0
1.5
.............
.............
.............
.............
Number of
facilities
5,590
1,329
372
64
Percent of
facilities *
75.75
18.01
5.04
0.87
Number of
facilities
2.0 .............
Percent of
facilities *
25
0.34
* 230 facilities not scored due to insufficient
data.
To estimate whether a facility would
receive a payment reduction for PY
2023, we scored each facility on
were available data from CROWNWeb
and Medicare claims. Payment
reduction estimates are calculated using
the most recent data available (specified
in Table 16) in accordance with the
policies finalized in this final rule.
Measures used for the simulation are
shown in Table 16. These estimates also
incorporate the finalized update to the
scoring methodology for the
Ultrafiltration Rate reporting measure.
TABLE 16—DATA USED TO ESTIMATE PY 2023 ESRD QIP PAYMENT REDUCTIONS
Period of time used to calculate achievement thresholds, 50th percentiles of the national performance,
benchmarks, and improvement thresholds
Measure
ICH CAHPS Survey .....................................................
SRR ..............................................................................
SHR ..............................................................................
PPPW ...........................................................................
Kt/V Dialysis Adequacy Comprehensive .....................
VAT:
Standardized Fistula Ratio ...................................
% Catheter ............................................................
Hypercalcemia .............................................................
For all measures except Standardized
Hospitalization Ratio (SHR) and
Standardized Readmission Ratio (SRR),
clinical measures with less than 11
patients for a facility were not included
in that facility’s TPS. For SHR and
STrR, facilities were required to have at
least 5 patient-years at risk and 11 index
discharges, respectively, in order to be
included in the facility’s TPS. Each
facility’s TPS was compared to an
estimated mTPS and an estimated
payment reduction table that were
consistent with the proposals outlined
in sections IV.C and IV.D of this final
rule. Facility reporting measure scores
Jan
Jan
Jan
Jan
Jan
2018–Dec
2018–Dec
2018–Dec
2018–Dec
2018–Dec
2018
2018
2018
2018
2018
....................................................
....................................................
....................................................
....................................................
....................................................
Jan 2018–Dec 2018 ....................................................
Jan 2018–Dec 2018 ....................................................
Jan 2018–Dec 2018 ....................................................
were estimated using available data
from CY 2019. Facilities were required
to have at least one measure in at least
two domains to receive a TPS.
To estimate the total payment
reductions in PY 2023 for each facility
resulting from this final rule, we
multiplied the total Medicare payments
to the facility during the 1-year period
between January 2019 and December
2019 by the facility’s estimated payment
reduction percentage expected under
the ESRD QIP, yielding a total payment
reduction amount for each facility.
Table 17 shows the estimated impact
of the finalized ESRD QIP payment
Performance period
Jan
Jan
Jan
Jan
Jan
2019–Dec
2019–Dec
2019–Dec
2019–Dec
2019–Dec
2019.
2019.
2019.
2019.
2019.
Jan 2019–Dec 2019.
Jan 2019–Dec 2019.
Jan 2019–Dec 2019.
reductions to all ESRD facilities for PY
2023. The table also details the
distribution of ESRD facilities by size
(both among facilities considered to be
small entities and by number of
treatments per facility), geography (both
rural and urban and by region), and
facility type (hospital based and
freestanding facilities). Given that the
performance period used for these
calculations differs from the
performance period we are using for the
PY 2023 ESRD QIP, the actual impact of
the PY 2023 ESRD QIP may vary
significantly from the values provided
here.
TABLE 17—ESTIMATED IMPACT OF QIP PAYMENT REDUCTIONS TO ESRD FACILITIES FOR PY 2023
Number of
treatments
2019
(in millions)
khammond on DSKJM1Z7X2PROD with RULES2
Number of
facilities
All Facilities ..........................................................................
Facility Type:
Freestanding .................................................................
Hospital-based ..............................................................
Ownership Type:
Large Dialysis ...............................................................
Regional Chain .............................................................
Independent ..................................................................
Hospital-based (non-chain) ...........................................
Unknown .......................................................................
Facility Size:
Large Entities ................................................................
Small Entities 1 ..............................................................
Unknown .......................................................................
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Number of
facilities
with QIP score
Number of
facilities
expected to
receive a
payment
reduction
Payment
reduction
(percent
change in
total ESRD
payments)
7,610
44.8
7,380
1,790
¥0.16
7,224
386
43.1
1.8
7,035
345
1,684
106
¥0.15
¥0.25
5,809
944
534
299
24
34.8
5.7
2.9
1.3
0.0
5,690
923
491
264
12
1,194
280
227
85
4
¥0.12
¥0.21
¥0.36
¥0.28
¥0.25
6,753
833
24
40.6
4.3
0.0
6,613
755
12
1,474
312
4
¥0.13
¥0.33
¥0.25
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71481
TABLE 17—ESTIMATED IMPACT OF QIP PAYMENT REDUCTIONS TO ESRD FACILITIES FOR PY 2023—Continued
Number of
treatments
2019
(in millions)
Number of
facilities
Rural Status:
(1) Yes ..........................................................................
(2) No ............................................................................
Census Region:
Northeast ......................................................................
Midwest .........................................................................
South .............................................................................
West ..............................................................................
U.S. Territories 2 ...........................................................
Census Division:
Unknown .......................................................................
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)
1,292
6,318
6.5
38.4
1,239
6,141
180
1,610
¥0.09
¥0.17
1,046
1,734
3,452
1,318
60
6.7
8.3
20.6
8.7
0.4
1,002
1,664
3,370
1,285
59
251
424
877
199
39
¥0.15
¥0.17
¥0.17
¥0.09
¥0.44
8
1,220
604
845
419
201
899
1,746
7,610
7,224
47
386
5,809
2,644
944
534
0.1
6.0
3.3
5.4
2.4
1.4
6.3
10.7
44.8
43.1
0.3
1.8
34.8
11.9
5.7
2.9
8
1,172
593
808
406
194
879
1,703
7,380
7,035
47
345
5,690
2,620
923
491
3
354
142
222
61
29
138
454
1,790
1,684
46
106
1,194
488
280
227
¥0.25
¥0.21
¥0.13
¥0.17
¥0.09
¥0.09
¥0.09
¥0.17
¥0.16
¥0.15
¥1.57
¥0.25
¥0.12
¥0.11
¥0.21
¥0.36
Entities include hospital-based and satellite facilities, and non-chain facilities based on DFC self-reported status.
American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and Virgin Islands.
2 Includes
b. Effects of the PY 2024 ESRD QIP on
ESRD Facilities
For the PY 2024 ESRD QIP, we
estimate that, of the 7,610 dialysis
facilities (including those not receiving
a TPS) enrolled in Medicare,
approximately 24.3 percent or 1,790 of
the facilities that have sufficient data to
calculate a TPS would receive a
payment reduction for PY 2024. The
total payment reductions for all the
1,790 facilities expected to receive a
payment reduction is approximately
$15,770,179.33. We note that the total
payment reductions for PY 2024 have
been updated from the estimates in the
CY 2021 ESRD PPS proposed rule due
to updated information about the total
number of facilities expected to receive
a payment reduction. Facilities that do
not receive a TPS do not receive a
payment reduction.
Table 18 shows the overall estimated
distribution of payment reductions
resulting from the PY 2024 ESRD QIP.
To estimate whether a facility would
receive a payment reduction in PY 2024,
we scored each facility on achievement
and improvement on several clinical
measures we have previously finalized
and for which there were available data
TABLE 18—ESTIMATED DISTRIBUTION from CROWNWeb and Medicare claims.
OF PY 2024 ESRD QIP PAYMENT Payment reduction estimates were
REDUCTIONS
calculated using the most recent data
available (specified in Table 18) in
Payment
Number of
Percent of
accordance with the policies finalized
reduction
facilities
facilities *
in this final rule. Measures used for the
(percent)
simulation are shown in Table 19.
0.0
0.5
1.0
1.5
2.0
.............
.............
.............
.............
.............
5,590
1,329
372
64
25
75.75
18.01
5.04
0.87
0.34
* Note: 230 facilities not scored due to insufficient data.
TABLE 19—DATA USED TO ESTIMATE PY 2024 ESRD QIP PAYMENT REDUCTIONS
Period of time used to calculate achievement thresholds, 50th percentiles of the national performance,
benchmarks, and improvement thresholds
khammond on DSKJM1Z7X2PROD with RULES2
Measure
ICH CAHPS Survey .........................................................
SRR ..................................................................................
SHR ..................................................................................
PPPW ...............................................................................
Kt/V Dialysis Adequacy Comprehensive ..........................
VAT:
Standardized Fistula Ratio ........................................
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Jan
Jan
Jan
Jan
Jan
2018–Dec
2018–Dec
2018–Dec
2018–Dec
2018–Dec
2018
2018
2018
2018
2018
........................................................
........................................................
........................................................
........................................................
........................................................
Jan 2018–Dec 2018 ........................................................
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E:\FR\FM\09NOR2.SGM
09NOR2
Performance period
Jan
Jan
Jan
Jan
Jan
2019–Dec
2019–Dec
2019–Dec
2019–Dec
2019–Dec
2019.
2019.
2019.
2019.
2019.
Jan 2019–Dec 2019
71482
Federal Register / Vol. 85, No. 217 / Monday, November 9, 2020 / Rules and Regulations
TABLE 19—DATA USED TO ESTIMATE PY 2024 ESRD QIP PAYMENT REDUCTIONS—Continued
Measure
Period of time used to calculate achievement thresholds, 50th percentiles of the national performance,
benchmarks, and improvement thresholds
% Catheter ................................................................
Hypercalcemia ..................................................................
Jan 2018–Dec 2018 ........................................................
Jan 2018–Dec 2018 ........................................................
For all measures except SHR, SRR,
and the STrR reporting measure,
measures with less than 11 patients for
a facility were not included in that
facility’s TPS. For SHR and SRR,
facilities were required to have at least
5 patient-years at risk and 11 index
discharges, respectively, in order to be
included in the facility’s TPS. For the
STrR reporting measure, facilities were
required to have at least 10 patient-years
at risk in order to be included in the
facility’s TPS. Each facility’s TPS was
compared to an estimated mTPS and an
estimated payment reduction table that
incorporates the policies outlined in
section IV.C and IV.D of this final rule.
Facility reporting measure scores were
estimated using available data from CY
2019. Facilities were required to have at
least one measure in at least two
domains to receive a TPS.
To estimate the total payment
reductions in PY 2024 for each facility
resulting from this final rule, we
multiplied the total Medicare payments
to the facility during the 1-year period
between January 2019 and December
2019 by the facility’s estimated payment
reduction percentage expected under
the ESRD QIP, yielding a total payment
reduction amount for each facility.
Table 20 shows the estimated impact
of the finalized ESRD QIP payment
Performance period
Jan 2019–Dec 2019.
Jan 2019–Dec 2019.
reductions to all ESRD facilities for PY
2024. The table details the distribution
of ESRD facilities by size (both among
facilities considered to be small entities
and by number of treatments per
facility), geography (both rural and
urban and by region), and facility type
(hospital based and freestanding
facilities). Given that the performance
period used for these calculations
differs from the performance period we
are finalizing to use for the PY 2024
ESRD QIP, the actual impact of the PY
2024 ESRD QIP may vary significantly
from the values provided here.
TABLE 20—ESTIMATED IMPACT OF QIP PAYMENT REDUCTIONS TO ESRD FACILITIES FOR PY 2024
Number of
treatments
2019
(in millions)
khammond on DSKJM1Z7X2PROD with RULES2
Number of
facilities
All Facilities ..........................................................................
Facility Type:
Freestanding .................................................................
Hospital-based ..............................................................
Ownership Type:
Large Dialysis ...............................................................
Regional Chain .............................................................
Independent ..................................................................
Hospital-based (non-chain) ...........................................
Unknown .......................................................................
Facility Size:
Large Entities ................................................................
Small Entities 1 ..............................................................
Unknown .......................................................................
Rural Status:
(1) Yes ..........................................................................
(2) No ............................................................................
Census Region:
Northeast ......................................................................
Midwest .........................................................................
South .............................................................................
West ..............................................................................
U.S. Territories 2 ...........................................................
Census Division:
Unknown .......................................................................
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 ..........................................
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Number of
facilities
with QIP score
Number of
facilities
expected to
receive a
payment
reduction
Payment
reduction
(percent
change in
total ESRD
payments)
7,610
44.8
7,380
1,790
¥0.16
7,224
386
43.1
1.8
7,035
345
1,684
106
¥0.15
¥0.25
5,809
944
534
299
24
34.8
5.7
2.9
1.3
0.0
5,690
923
491
264
12
1,194
280
227
85
4
¥0.12
¥0.21
¥0.36
¥0.28
¥0.25
6,753
833
24
40.6
4.3
0.0
6,613
755
12
1,474
312
4
¥0.13
¥0.33
¥0.25
1,292
6,318
6.5
38.4
1,239
6,141
180
1,610
¥0.09
¥0.17
1,046
1,734
3,452
1,318
60
6.7
8.3
20.6
8.7
0.4
1,002
1,664
3,370
1,285
59
251
424
877
199
39
¥0.15
¥0.17
¥0.17
¥0.09
¥0.44
8
1,220
604
845
419
201
899
1,746
514
1,102
52
0.1
6.0
3.3
5.4
2.4
1.4
6.3
10.7
2.3
6.7
0.3
8
1,172
593
808
406
194
879
1,703
492
1,074
51
3
354
142
222
61
29
138
454
70
281
36
¥0.25
¥0.21
¥0.13
¥0.17
¥0.09
¥0.09
¥0.09
¥0.17
¥0.09
¥0.17
¥0.48
1,315
2.6
1,195
265
¥0.18
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TABLE 20—ESTIMATED IMPACT OF QIP PAYMENT REDUCTIONS TO ESRD FACILITIES FOR PY 2024—Continued
Number of
treatments
2019
(in millions)
Number of
facilities
4,000–9,999 treatments ................................................
Over 10,000 treatments ................................................
Unknown .......................................................................
1 Small
2,803
3,246
246
Number of
facilities
with QIP score
12.2
29.7
0.3
Number of
facilities
expected to
receive a
payment
reduction
2,771
3,240
174
Payment
reduction
(percent
change in
total ESRD
payments)
¥0.12
¥0.18
¥0.16
530
961
34
Entities include hospital-based and satellite facilities, and non-chain facilities based on DFC self-reported status.
American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and Virgin Islands.
2 Includes
c. Effects on Other Providers
The ESRD QIP is applicable to
dialysis facilities. We are aware that
several of our measures impact other
providers. For example, with the
introduction of the SRR clinical
measure in PY 2017 and the SHR
clinical measure in PY 2020, we
anticipate that hospitals may experience
financial savings as dialysis facilities
work to reduce the number of
unplanned readmissions and
hospitalizations. We are exploring
various methods to assess the impact
these measures have on hospitals and
other facilities, such as through the
impacts of the Hospital Readmissions
Reduction Program and the HospitalAcquired Condition Reduction Program,
and we intend to continue examining
the interactions between our quality
programs to the greatest extent feasible.
d. Effects on the Medicare Program
For PY 2024, we estimate that the
ESRD QIP would contribute
approximately $15,770,179.33 in
Medicare savings. For comparison,
Table 21 shows the payment reductions
that we estimate will be applied by the
ESRD QIP from PY 2018 through PY
2024.
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TABLE 21—ESTIMATED PAYMENT REDUCTIONS PAYMENT YEARS 2018
THROUGH 2024
Payment year
Estimated payment
reductions
PY 2024 ....................
PY 2023 ....................
PY 2022 ....................
$15,770,179.33.
15,770,179.33.
18,247,083.76 (84 FR
60794).
32,196,724 (83 FR
57062).
31,581,441 (81 FR
77960).
15,470,309 (80 FR
69074).
11,576,214 (79 FR
66257).
PY 2021 ....................
PY 2020 ....................
PY 2019 ....................
PY 2018 ....................
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e. Effects on Medicare Beneficiaries
The ESRD QIP is applicable to
dialysis facilities. Since the Program’s
inception, there is evidence on
improved performance on ESRD QIP
measures. As we stated in the CY 2018
ESRD PPS final rule, one objective
measure we can examine to demonstrate
the improved quality of care over time
is the improvement of performance
standards (82 FR 50795). As the ESRD
QIP has refined its measure set and as
facilities have gained experience with
the measures included in the Program,
performance standards have generally
continued to rise. We view this as
evidence that facility performance (and
therefore the quality of care provided to
Medicare beneficiaries) is objectively
improving. We are in the process of
monitoring and evaluating trends in the
quality and cost of care for patients
under the ESRD QIP, incorporating both
existing measures and new measures as
they are implemented in the Program.
We will provide additional information
about the impact of the ESRD QIP on
beneficiaries as we learn more.
However, in future years we are
interested in examining these impacts
through the analysis of available data
from our existing measures.
f. Alternatives Considered
In section IV.C.7 of this final rule, we
finalized our policy that facilities
selected to participate in the NHSN data
validation study can submit a total of 20
records across two quarters. In the CY
2021 ESRD PPS proposed rule, we
stated that we considered retaining our
current reporting requirement, under
which facilities must submit 20 records
per quarter for each of the first two
quarters of the CY, for a total of 40
records (85 FR 42204). However, we
concluded that the reduction in patient
records provides an adequate sample
size for the validation. After considering
public comments, we finalized this
approach in this final rule because we
believe that it will lower administrative
costs and will reduce the burden on
facilities.
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C. Accounting Statement
As required by OMB Circular A–4
(available at https://
www.whitehouse.gov/sites/
whitehouse.gov/files/omb/circulars/A4/
a-4.pdf), in Table 22, we have prepared
an accounting statement showing the
classification of the transfers and costs
associated with the various provisions
of this final rule.
TABLE 22—ACCOUNTING STATEMENT:
CLASSIFICATION
OF
ESTIMATED
TRANSFERS
Category
Transfers
ESRD PPS and AKI (CY 2021)
Annualized Monetized
Transfers.
From Whom to Whom
Increased Beneficiary
Co-insurance Payments.
From Whom to Whom
$190 million.
Federal Government
to ESRD providers.
$60 million.
Beneficiaries to
ESRD providers.
ESRD QIP for PY 2023
Annualized Monetized
Transfers.
From Whom to Whom
¥$16 million.
Federal Government
to ESRD providers.
ESRD QIP for PY 2024
Annualized Monetized
Transfers.
From Whom to Whom
¥$16 million.
Federal Government
to ESRD providers.
In accordance with the provisions of
Executive Order 12866, this final rule
was reviewed by the Office of
Management and Budget.
D. Regulatory Flexibility Act Analysis
(RFA)
The Regulatory Flexibility Act
requires agencies to analyze options for
regulatory relief of small entities, if a
rule has a significant impact on a
substantial number of small entities. For
purposes of the RFA, small entities
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include small businesses, nonprofit
organizations, and small governmental
jurisdictions. Approximately 11 percent
of ESRD dialysis facilities are
considered small entities according to
the Small Business Administration’s
(SBA) size standards, which classifies
small businesses as those dialysis
facilities having total revenues of less
than $41.5 million in any 1 year.
Individuals and states are not included
in the definitions of a small entity. For
more information on SBA’s size
standards, see the Small Business
Administration’s website at https://
www.sba.gov/content/small-businesssize-standards (Kidney Dialysis Centers
are listed as 621492 with a size standard
of $41.5 million).
We do not believe ESRD facilities are
operated by small government entities
such as counties or towns with
populations of 50,000 or less, and
therefore, they are not enumerated or
included in this estimated RFA analysis.
Individuals and states are not included
in the definition of a small entity.
For purposes of the RFA, we estimate
that approximately 11 percent of ESRD
facilities are small entities as that term
is used in the RFA (which includes
small businesses, nonprofit
organizations, and small governmental
jurisdictions). This amount is based on
the number of ESRD facilities shown in
the ownership category in Table 13.
Using the definitions in this ownership
category, we consider 509 facilities that
are independent and 302 facilities that
are shown as hospital-based to be small
entities. The ESRD facilities that are
owned and operated by Large Dialysis
Organizations (LDOs) and regional
chains would have total revenues of
more than $41.5 million in any year
when the total revenues for all locations
are combined for each business
(individual LDO or regional chain), and
are not, therefore, included as small
entities.
For the ESRD PPS updates finalized
in this rule, a hospital-based ESRD
facility (as defined by type of
ownership, not by type of dialysis
facility) is estimated to receive a 0.2
percent increase in payments for CY
2021. An independent facility (as
defined by ownership type) is estimated
to receive no update in payments for CY
2021.
For AKI dialysis, we are unable to
estimate whether patients would go to
ESRD facilities, however, we have
estimated there is a potential for $56
million in payment for AKI dialysis
treatments that could potentially be
furnished in ESRD facilities.
For the ESRD QIP, we estimate that of
the 1,790 ESRD facilities expected to
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receive a payment reduction as a result
of their performance on the PY 2024
ESRD QIP, 267 are ESRD small entity
facilities. We present these findings in
Table 18 (‘‘Estimated Distribution of PY
2024 ESRD QIP Payment Reductions’’)
and Table 20 (‘‘Estimated Impact of QIP
Payment Reductions to ESRD Facilities
for PY 2024’’). We note that these
estimates have been updated from the
CY 2021 ESRD PPS proposed rule due
to updated information about both the
total number of facilities and the total
number of small entity facilities
expected to receive a payment
reduction. We estimate that the payment
reductions would average
approximately $9,770.87 per facility
across the 1,790 facilities receiving a
payment reduction, and $10,748.02 for
each small entity facility. We also
estimate that there are 833 small entity
facilities in total, and that the aggregate
ESRD PPS payments to these facilities
would decrease 0.33 percent in CY
2024.
Therefore, the Secretary has
determined that this final rule would
not have a significant economic impact
on a substantial number of small
entities. The economic impact
assessment is based on estimated
Medicare payments (revenues) and
HHS’s practice in interpreting the RFA
is to consider effects economically
‘‘significant’’ only if greater than 5
percent of providers reach a threshold of
3 to 5 percent or more of total revenue
or total costs. We solicited comment on
the RFA analysis provided. We received
no comments on this section.
In addition, section 1102(b) of the Act
requires us to prepare a regulatory
impact analysis if a rule may have a
significant impact on the operations of
a substantial number of small rural
hospitals. This analysis must conform to
the provisions of section 604 of the
RFA. For purposes of section 1102(b) of
the Act, we define a small rural hospital
as a hospital that is located outside of
a metropolitan statistical area and has
fewer than 100 beds. We do not believe
this final rule would have a significant
impact on operations of a substantial
number of small rural hospitals because
most dialysis facilities are freestanding.
While there are 126 rural hospital-based
dialysis facilities, we do not know how
many of them are based at hospitals
with fewer than 100 beds. However,
overall, the 126 rural hospital-based
dialysis facilities would experience an
estimated 0.2 percent decrease in
payments.
Therefore, the Secretary has
determined that this final rule will not
have a significant impact on the
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operations of a substantial number of
small rural hospitals.
E. Unfunded Mandates Reform Act
(UMRA)
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
also requires that agencies assess
anticipated costs and benefits before
issuing any rule whose mandates
require spending in any 1 year of $100
million in 1995 dollars, updated
annually for inflation. In 2020, that
threshold is approximately $156
million. This final rule does not
mandate any requirements for state,
local, or tribal governments in the
aggregate, or by the private sector.
Moreover, HHS interprets UMRA as
applying only to unfunded mandates.
We do not interpret Medicare payment
rules as being unfunded mandates, but
simply as conditions for the receipt of
payments from the Federal Government
for providing services that meet Federal
standards. This interpretation applies
whether the facilities or providers are
private, state, local, or tribal.
F. Federalism
Executive Order 13132 establishes
certain requirements that an agency
must meet when it promulgates a
proposed rule (and subsequent final
rule) that imposes substantial direct
requirement costs on state and local
governments, preempts state law, or
otherwise has federalism implications.
We have reviewed this final rule under
the threshold criteria of Executive Order
13132, Federalism, and have
determined that it will not have
substantial direct effects on the rights,
roles, and responsibilities of states, local
or tribal governments.
G. Regulatory Reform Under Executive
Order 13771
Executive Order 13771, titled
Reducing Regulation and Controlling
Regulatory Costs was issued on January
30, 2017. It has been determined that
this is a transfer rule, which imposes no
more than de minimis costs. As a result,
this rule is not considered a regulatory
or deregulatory action under Executive
Order 13771.
H. Congressional Review Act
This final rule is subject to the
Congressional Review Act provisions of
the Small Business Regulatory
Enforcement Fairness Act of 1996 (5
U.S.C. 801 et seq.) and has been
transmitted to the Congress and the
Comptroller General for review.
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VII. Files Available to the Public via the
Internet
The Addenda for the annual ESRD
PPS proposed and final rulemakings
will no longer appear in the Federal
Register. Instead, the Addenda will be
available only through the internet and
is posted on the CMS website at https://
www.cms.gov/ESRDPayment/PAY/
list.asp. In addition to the Addenda,
limited data set files are available for
purchase at https://www.cms.gov/
Research-Statistics-Data-and-Systems/
Files-for-Order/LimitedDataSets/
EndStageRenalDiseaseSystemFile.html.
Readers who experience any problems
accessing the Addenda or LDS files,
should contact ESRDPayment@
cms.hhs.gov.
List of Subjects in 42 CFR Part 413
Diseases, Health facilities, Medicare,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR
chapter IV as follows:
PART 413—PRINCIPLES OF
REASONABLE COST
REIMBURSEMENT; PAYMENT FOR
END-STAGE RENAL DISEASE
SERVICES; PROSPECTIVELY
DETERMINED PAYMENT RATES FOR
SKILLED NURSING FACILITIES;
PAYMENT FOR ACUTE KIDNEY
INJURY DIALYSIS
1. The authority citation for part 413
continues to read as follows:
■
Authority: 42 U.S.C. 1302, 1395d(d),
1395f(b), 1395g, 1395l(a), (i), and (n),
1395x(v), 1395hh, 1395rr, 1395tt, and
1395ww.
2. Section 413.232 is amended by—
a. Revising paragraphs (b)
introductory text, (b)(1), (e), and (g)
introductory text; and
■ b. Adding paragraphs (g)(4) and (h).
The revisions and additions read as
follows:
■
■
§ 413.232
Low-volume adjustment.
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*
*
*
*
*
(b) A low-volume facility is an ESRD
facility that, as determined based on the
documentation submitted pursuant to
paragraph (g) of this section:
(1) Furnished less than 4,000
treatments in each of the 3 cost
reporting years (based on as-filed or
final settled 12-consecutive month cost
reports, whichever is most recent,
except as specified in paragraph (g)(4) of
this section) preceding the payment
year; and
*
*
*
*
*
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(e) Except as provided in paragraph (f)
of this section and unless extraordinary
circumstances justify an exception, to
receive the low-volume adjustment an
ESRD facility must provide an
attestation statement, by November 1st
of each year preceding the payment
year, to its Medicare Administrative
Contractor (MAC) that the facility meets
all the criteria established in this
section, except that:
(1) For payment year 2012, the
attestation must be provided by January
3, 2012;
(2) For payment year 2015, the
attestation must be provided by
December 31, 2014;
(3) For payment year 2016, the
attestation must be provided by
December 31, 2015; and
(4) For payment year 2021, the
attestation must be provided by
December 31, 2020.
*
*
*
*
*
(g) To receive the low-volume
adjustment, an ESRD facility must
include in their attestation provided
pursuant to paragraph (e) of this section
a statement that the ESRD facility meets
the definition of a low-volume facility
in paragraph (b) of this section. To
determine eligibility for the low-volume
adjustment, the MAC on behalf of CMS
relies upon as filed or final settled 12consecutive month cost reports, except
as specified in paragraph (g)(4) of this
section, for the 3 cost reporting years
preceding the payment year to verify the
number of treatments, except that:
*
*
*
*
*
(4) For payment years 2021, 2022, and
2023, the attestation specified in
paragraph (e)(4) of this section must
indicate that the ESRD facility meets all
the criteria specified in this section,
except that, for a facility that would not
otherwise meet the number of
treatments criterion specified in
paragraph (b)(1) of this section because
of the COVID–19 PHE, the facility may
attest that it furnished less than 2,000
treatments in any six months during the
cost-reporting period ending in 2020.
For any facility that so attests—
(i) The facility must also attest that it
furnished treatments equal to or in
excess of 4,000 in the payment year due
to temporary patient shifting as a result
of the COVID–19 PHE; and
(ii) The MAC relies on the attestation
and multiplies the total number of
treatments for the 6-month period by 2.
(h) When an ESRD facility provides
an attestation in accordance with
paragraph (e) of this section, for the
third eligibility year, the MAC verifies
the as-filed cost report and takes one of
the following actions:
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71485
(1) If the MAC determines an ESRD
facility meets the definition of a lowvolume facility as described in
paragraph (b) of this section, CMS
adjusts the low-volume facility’s base
rate for the entire payment year; or
(2) If the MAC determines an ESRD
facility does not meet the definition of
a low-volume facility as described in
paragraph (b) of this section, the MAC
reprocesses claims and recoups lowvolume adjustments paid during the
payment year.
■ 3. Section 413.234 is amended by
adding paragraph (f) to read as follows:
§ 413.234.
Drug designation process.
*
*
*
*
*
(f) Methodology for modifying the
ESRD PPS base rate to account for the
costs of calcimimetics in the ESRD PPS
bundled payment. Beginning January 1,
2021, payment for calcimimetics is
included in the ESRD PPS base rate
using the following data sources and
methodology:
(1) The methodology specified in
paragraph (f)(2) of this section for
determining the average per treatment
payment amount for calcimimetics that
is added to the ESRD PPS base rate uses
the following data sources:
(i) Total units of oral and injectable
calcimimetics and total number of paid
hemodialysis-equivalent dialysis
treatments furnished, as derived from
Medicare ESRD facility claims, that is,
the 837-institutional form with bill type
072X, for the third and fourth quarters
of calendar year 2018 and for the full
calendar year 2019.
(ii) The weighted average ASP based
on the most recent determinations by
CMS.
(2) CMS uses the following
methodology to calculate the average
per treatment payment amount for
calcimimetics that is added to the ESRD
PPS base rate:
(i) Determines utilization of oral and
injectable calcimimetics by aggregating
the total units of oral and injectable
calcimimetics in paragraph (f)(1) of this
section.
(ii) Determines a price for each form
of the drug by calculating 100 percent
of the values from the most recent
calendar quarter ASP calculations
available to the public for the oral and
injectable calcimimetic.
(iii) Calculates the total calcimimetic
expenditure amount by multiplying the
utilization of the oral and injectable
calcimimetics determined in paragraph
(f)(2)(i) of this section by their
respective prices determined in
paragraph (f)(2)(ii) of this section and
adding the expenditure amount for both
forms.
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(iv) Calculates the average per
treatment payment amount by dividing
the total calcimimetic expenditure
amount determined in paragraph
(f)(2)(iii) of this section by the total
number of paid hemodialysis-equivalent
dialysis treatments in the third and
fourth quarter of calendar year 2018 and
the full calendar year 2019.
(v) Calculates the amount added to
the ESRD PPS base rate by reducing the
average per treatment payment amount
determined in paragraph (f)(2)(iv) of this
section by 1 percent to account for the
outlier policy under § 413.237.
■ 4. Section 413.236 is amended by—
■ a. Revising paragraphs (a), (b)
introductory text, (b)(2), (4) through (6),
(c), (d) introductory text, and (d)(2); and
■ b. Adding paragraph (f).
The revisions and addition read as
follows:
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§ 413.236 Transitional add-on payment
adjustment for new and innovative
equipment and supplies.
(a) Basis and definitions. (1) Effective
January 1, 2020, this section establishes
an add-on payment adjustment to
support ESRD facilities in the uptake of
new and innovative renal dialysis
equipment and supplies under the
ESRD prospective payment system
under the authority of section
1881(b)(14)(D)(iv) of the Social Security
Act.
(2) For purposes of this section, the
following definitions apply:
Capital-related asset. Asset that an
ESRD facility has an economic interest
in through ownership (regardless of the
manner in which it was acquired) and
is subject to depreciation. Equipment
obtained by the ESRD facility through
operating leases are not considered
capital-related assets.
Depreciation. The amount that
represents a portion of the capitalrelated asset’s cost and that is allocable
to a period of operation.
Home dialysis machines.
Hemodialysis machines and peritoneal
dialysis cyclers in their entirety
(meaning that one new part of a
machine does not make the entire
capital-related asset new) that receive
FDA marketing authorization for home
use and when used in the home for a
single patient.
Particular calendar year. The year in
which the payment adjustment
specified in paragraph (d) of this section
would take effect.
Straight-line depreciation method. A
method in accounting in which the
annual allowance is determined by
dividing the cost of the capital-related
asset by the years of useful life.
Useful life. The estimated useful life
of a capital-related asset is its expected
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useful life to the ESRD facility, not
necessarily the inherent useful or
physical life.
(b) Eligibility criteria. CMS provides
for a transitional add-on payment
adjustment for new and innovative
equipment and supplies (as specified in
paragraph (d) of this section) to an ESRD
facility for furnishing a covered
equipment or supply only if the item:
*
*
*
*
*
(2) Is new, meaning within 3 years
beginning on the date of the Food and
Drug Administration (FDA) marketing
authorization;
*
*
*
*
*
(4) Has a complete Healthcare
Common Procedure Coding System
(HCPCS) Level II code application
submitted, in accordance with the
HCPCS Level II coding procedures on
the CMS website, by the HCPCS Level
II code application deadline for
biannual Coding Cycle 2 for durable
medical equipment, orthotics,
prosthetics and supplies (DMEPOS)
items and services as specified in the
HCPCS Level II coding guidance on the
CMS website prior to the particular
calendar year;
(5) Is innovative, meaning it meets the
criteria specified in § 412.87(b)(1) of this
chapter; and
(6) Is not a capital-related asset,
except for capital-related assets that are
home dialysis machines.
(c) Announcement of determinations
and deadline for consideration of new
renal dialysis equipment or supply
applications. CMS will consider
whether a new renal dialysis supply or
equipment meets the eligibility criteria
specified in paragraph (b) of this section
and announce the results in the Federal
Register as part of its annual updates
and changes to the ESRD prospective
payment system. CMS will only
consider a complete application
received by CMS by February 1 prior to
the particular calendar year. FDA
marketing authorization for the
equipment or supply must occur by the
HCPCS Level II code application
deadline for biannual Coding Cycle 2 for
DMEPOS items and services as specified
in the HCPCS Level II coding guidance
on the CMS website prior to the
particular calendar year.
(d) Transitional add-on payment
adjustment for new and innovative
equipment and supplies. A new and
innovative renal dialysis equipment or
supply will be paid for using a
transitional add-on payment adjustment
for new and innovative equipment and
supplies based on 65 percent of the
MAC-determined price, as specified in
paragraph (e) of this section. For capital-
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related assets that are home dialysis
machines, payment is based on 65
percent of the pre-adjusted per
treatment amount, as specified in
paragraph (f)(1)(ii) of this section.
*
*
*
*
*
(2) Following payment of the
transitional add-on payment adjustment
for new and innovative equipment and
supplies, the ESRD PPS base rate will
not be modified and the new and
innovative renal dialysis equipment or
supply will be an eligible outlier service
as provided in § 413.237, except a
capital-related asset that is a home
dialysis machine will not be an eligible
outlier service as provided in § 413.237.
*
*
*
*
*
(f) Pricing of new and innovative renal
dialysis equipment and supplies that
are capital-related assets that are home
dialysis machines. (1) The MACs
calculate a pre-adjusted per treatment
amount, using the prices they establish
under paragraph (e) of this section for a
capital-related asset that is a home
dialysis machine, as defined in
paragraph (a)(2) of this section, as
follows:
(i) Calculate an annual allowance to
determine the amount that represents
the portion of the cost allocable to 1
year, using the straight-line depreciation
method, by dividing the MACdetermined price by its useful life of 5
years.
(ii) Calculate a per treatment amount
for use in calculating the pre-adjusted
per treatment amount by dividing the
annual allowance, as determined in
paragraph (f)(1)(i) of this section, by the
expected number of treatments.
(iii) Calculate a pre-adjusted per
treatment amount to determine the
amount that is adjusted by the 65
percent under paragraph (d) of this
section, by subtracting the average per
treatment offset amount (as determined
using the data sources and methodology
specified in paragraphs (f)(2) and (3) of
this section, respectively, of this
section) from the per treatment amount
(as determined in paragraph (f)(1)(ii) of
this section) to account for the costs
already paid through the ESRD PPS base
rate for current home dialysis machines
that ESRD facilities already own.
(2) The methodology specified in
paragraph (f)(3) of this section for
determining the average per treatment
offset amount uses the following data
sources:
(i) Dialysis machine and equipment
cost, total cost across all dialysis
modalities, the number of hemodialysisequivalent home dialysis treatment
counts, and the number of
hemodialysis-equivalent total treatment
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counts are obtained from renal facility
cost reports (CMS form 265–11) and
hospital cost reports (CMS form 2552–
10) using calendar years 2017–2019 cost
reports.
(A) Dialysis machine and equipment
costs are obtained by summing lines
8.01 through 17.02 from Worksheet B,
Column 4 for renal facility cost reports,
and by summing lines 2 through 11
from Worksheet I–2 for hospital cost
reports.
(B) Total cost across all dialysis
modalities are obtained by summing
lines 8.01 through 17.02 from
Worksheet C, Column 2 for renal facility
cost reports, and by summing lines 1
through 10 from Worksheet I–4, Column
2 for the hospital cost reports.
(C) Hemodialysis-equivalent total
treatment counts are obtained by
summing lines 8.01 through 17.02 from
Worksheet C, Column 1 for renal facility
cost reports, and by summing lines 1
through 10 from Worksheet I–4, Column
1 for the hospital cost reports.
(D) Hemodialysis-equivalent home
dialysis treatment counts are obtained
by summing lines 14.01 through 17.02
from Worksheet C, Column 1 for renal
facility cost reports, and by summing
lines 7 through 10 from Worksheet I–4,
Column 1 for the hospital cost reports.
In both renal facility and hospital cost
reports, home Continuous Ambulatory
Peritoneal Dialysis and home
Continuous Cyclic Peritoneal Dialysis
are reported as patient weeks, so a
conversion factor of 3 is applied to
obtain hemodialysis-equivalent
treatment counts.
(ii) [Reserved]
(3) CMS uses the following
methodology to calculate the average
per treatment offset amount for home
dialysis machines that is subtracted
from the per treatment amount as
determined in paragraph (f)(1)(ii) of this
section to determine the pre-adjusted
per treatment amount specified in
paragraph (f)(1)(iii) of this section:
(i) Calculates annualized values for
calendar year 2018 at the ESRD facility
level for the metrics specified in
paragraph (f)(2)(i) of this section by
VerDate Sep<11>2014
16:50 Nov 06, 2020
Jkt 253001
dividing the numbers of days the cost
report spanned to compute a per-day
metric, then multiplying the resulting
value by the number of days in 2018 the
cost report covered to compute the
metrics attributable to the period
covered by the cost report in 2018. Next,
for ESRD facilities with multiple cost
reports covering 2018 the resulting
metrics are aggregated. Finally, each
ESRD facility’s aggregated metrics are
annualized to cover the full calendar
year 2018. The annualization factor for
an ESRD facility is the total number of
days in 2018 divided by the total days
in 2018 covered by the ESRD facility’s
cost report(s).
(ii) Calculates an estimated home
dialysis machine and equipment cost for
each ESRD facility by multiplying the
annualized dialysis machine and
equipment cost determined in
paragraph (f)(3)(i) of this section by the
ESRD facility’s hemodialysis-equivalent
home dialysis treatment percentage. The
hemodialysis-equivalent home dialysis
treatment percentage for each facility is
calculated by dividing annualized
hemodialysis-equivalent home
treatment count determined in
paragraph (f)(3)(i) of this section by
annualized hemodialysis-equivalent
treatment count across all modalities
determined in paragraph (f)(3)(i) of this
section.
(iii) Calculates an average home
dialysis machine and equipment cost
per home dialysis treatment for calendar
year 2018 by dividing the sum of the
estimated home dialysis machine and
equipment cost in paragraph (f)(3)(ii) of
this section across all ESRD facilities by
the sum of annualized hemodialysisequivalent home treatment counts
determined in paragraph (f)(3)(i) of this
section across all facilities.
(iv) Calculates the amount subtracted
from the pre-adjusted treatment amount
determined in paragraph (f)(1)(iii) of
this section by inflating the average
home dialysis machine and equipment
cost per home dialysis treatment for
calendar year 2018 determined in
paragraph (f)(3)(iii) to calendar year
2021. The average home dialysis
PO 00000
Frm 00091
Fmt 4701
Sfmt 9990
71487
machine and equipment cost per home
dialysis treatment for calendar year
2018 is inflated to calendar year 2021 by
multiplying this value by the payment
rate update factor required under
section 1881(b)(14)(F)(i) of the Social
Security Act for calendar years 2019,
2020, and 2021. This value is then
divided by a scaling factor to be
converted to the ESRD PPS payment
scale. The scaling factor is calculated by
dividing the calendar year 2018 total
cost per treatment inflated to calendar
year 2021 by the average ESRD PPS
payment per treatment projected for
calendar year 2021.
(v) Effective January 1, 2022, CMS
annually updates the amount
determined in paragraph (f)(3)(iv) of this
section by the ESRD bundled market
basket percentage increase factor minus
the productivity adjustment factor.
■ 5. Section 413.237 is amended—
■ a. In paragraphs (a)(1)(i) through (iii)
by removing the semicolon at the end of
the sentence and adding a period in its
place;
■ b. In paragraph (a)(1)(iv) by removing
‘‘; and’’ and adding a period in its place;
and
■ c. By revising paragraph (a)(1)(v).
The revision reads as follows:
§ 413.237
Outliers.
(a) * * *
(1) * * *
(v) Renal dialysis equipment and
supplies, except for capital-related
assets that are home dialysis machines
(as defined in § 413.236(a)(2)), that
receive the transitional add-on payment
adjustment as specified in § 413.236,
after the payment period has ended.
*
*
*
*
*
Dated: October 28, 2020.
Seema Verma,
Administrator, Centers for Medicare &
Medicaid Services.
Dated: October 28, 2020.
Alex M. Azar II,
Secretary, Department of Health and Human
Services.
[FR Doc. 2020–24485 Filed 11–2–20; 4:15 pm]
BILLING CODE 4120–01–P
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]]>Agencies
[Federal Register Volume 85, Number 217 (Monday, November 9, 2020)]
[Rules and Regulations]
[Pages 71398-71487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-24485]
[[Page 71397]]
Vol. 85
Monday,
No. 217
November 9, 2020
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 413
Medicare Program; End-Stage Renal Disease Prospective Payment System,
Payment for Renal Dialysis Services Furnished to Individuals With Acute
Kidney Injury, and End-Stage Renal Disease Quality Incentive Program;
Final Rule
Federal Register / Vol. 85 , No. 217 / Monday, November 9, 2020 /
Rules and Regulations
[[Page 71398]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 413
[CMS-1732-F]
RIN 0938-AU08
Medicare Program; End-Stage Renal Disease Prospective Payment
System, Payment for Renal Dialysis Services Furnished to Individuals
With Acute Kidney Injury, and End-Stage Renal Disease Quality Incentive
Program
AGENCY: Centers for Medicare & Medicaid Services (CMS), Health and
Human Services (HHS).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule updates and makes revisions to the End-Stage
Renal Disease (ESRD) Prospective Payment System (PPS) for calendar year
(CY) 2021. This rule also updates the payment rate for renal dialysis
services furnished by an ESRD facility to individuals with acute kidney
injury (AKI). In addition, this rule updates requirements for the ESRD
Quality Incentive Program (QIP).
DATES: These regulations are effective on January 1, 2021.
FOR FURTHER INFORMATION CONTACT: [email protected], for issues
related to the ESRD PPS and coverage and payment for renal dialysis
services furnished to individuals with AKI.
Delia Houseal, (410) 786-2724, for issues related to the ESRD QIP.
SUPPLEMENTARY INFORMATION:
Table of Contents
To assist readers in referencing sections contained in this
preamble, we are providing a Table of Contents.
I. Executive Summary
A. Purpose
B. Summary of the Major Provisions
C. Summary of Cost and Benefits
II. Calendar Year (CY) 2021 End-Stage Renal Disease (ESRD)
Prospective Payment System (PPS)
A. Background
B. Summary of the Proposed Provisions, Public Comments, and
Responses to Comments on the Calendar Year (CY) 2021 ESRD PPS
C. Transitional Add-On Payment Adjustment for New and Innovative
Equipment and Supplies (TPNIES) for CY 2021 Payment
III. Calendar Year (CY) 2021 Payment for Renal Dialysis Services
Furnished to Individuals With Acute Kidney Injury (AKI)
A. Background
B. Summary of the Proposed Provisions, Public Comments, and
Responses to Comments on the Annual Payment Rate Update for CY 2021
IV. End-Stage Renal Disease Quality Incentive Program (ESRD QIP)
A. Background
B. Summary of the Proposed Provisions, Public Comments,
Responses to Comments, and Finalized Policies for the ESRD QIP
C. Updates to Requirements Beginning With the PY 2023 ESRD QIP
D. Updates for the PY 2024 ESRD QIP
V. Collection of Information Requirements
A. Legislative Requirement for Solicitation of Comments
Requirements in Regulation Text
C. Additional Information Collection Requirements
VI. Economic Analyses
A. Regulatory Impact Analysis
B. Detailed Economic Analysis
C. Accounting Statement
D. Regulatory Flexibility Act Analysis (RFA)
E. Unfunded Mandates Reform Act Analysis (UMRA)
F. Federalism
G. Regulatory Reform Under Executive Order 13771
H. Congressional Review Act
VII. Files Available to the Public via the Internet
I. Executive Summary
A. Purpose
This final rule finalizes changes related to the End-Stage Renal
Disease (ESRD) Prospective Payment System (PPS), payment for renal
dialysis services furnished to individuals with acute kidney injury
(AKI), and the ESRD Quality Incentive Program (QIP).
1. End-Stage Renal Disease (ESRD) Prospective Payment System (PPS)
On January 1, 2011, we implemented the ESRD PPS, a case-mix
adjusted, bundled PPS for renal dialysis services furnished by ESRD
facilities as required by section 1881(b)(14) of the Social Security
Act (the Act), as added by section 153(b) of the Medicare Improvements
for Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110-275).
Section 1881(b)(14)(F) of the Act, as added by section 153(b) of MIPPA,
and amended by section 3401(h) of the Patient Protection and Affordable
Care Act (the Affordable Care Act) (Pub. L. 111-148), established that
beginning calendar year (CY) 2012, and each subsequent year, the
Secretary of the Department of Health and Human Services (the
Secretary) shall annually increase payment amounts by an ESRD market
basket increase factor, reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act. This rule
updates and makes revisions to the ESRD PPS for CY 2021.
2. Coverage and Payment for Renal Dialysis Services Furnished to
Individuals With Acute Kidney Injury (AKI)
On June 29, 2015, the President signed the Trade Preferences
Extension Act of 2015 (TPEA) (Pub. L. 114-27). Section 808(a) of the
TPEA amended section 1861(s)(2)(F) of the Act to provide coverage for
renal dialysis services furnished on or after January 1, 2017, by a
renal dialysis facility or a provider of services paid under section
1881(b)(14) of the Act to an individual with acute kidney injury (AKI).
Section 808(b) of the TPEA amended section 1834 of the Act by adding a
new subsection (r) that provides for payment for renal dialysis
services furnished by renal dialysis facilities or providers of
services paid under section 1881(b)(14) of the Act to individuals with
AKI at the ESRD PPS base rate beginning January 1, 2017. This rule
updates the AKI payment rate for CY 2021.
3. End-Stage Renal Disease Quality Incentive Program (ESRD QIP)
The End-Stage Renal Disease Quality Incentive Program (ESRD QIP) is
authorized by section 1881(h) of the Act. The Program fosters improved
patient outcomes by establishing incentives for dialysis facilities to
meet or exceed performance standards established by the Centers for
Medicare & Medicaid Services (CMS). This final rule finalizes several
updates for the payment year (PY) 2023. Although no new requirements
were proposed for the PY 2024 ESRD QIP, this final rule includes
policies continuing for PY 2024.
B. Summary of the Major Provisions
1. ESRD PPS
Update to the ESRD PPS base rate for CY 2021: The final CY
2021 ESRD PPS base rate is $253.13. This amount reflects the
application of the wage index budget-neutrality adjustment factor
(.999485), the addition to the base rate of $9.93 to include
calcimimetics, and a productivity-adjusted market basket increase as
required by section 1881(b)(14)(F)(i)(I) of the Act (1.6 percent),
equaling $253.13 (($239.33 x .999485) + $9.93) x 1.016 = $253.13).
Annual update to the wage index: We adjust wage indices on
an annual basis using the most current hospital wage data and the
latest core-based statistical area (CBSA) delineations to account for
differing wage levels in areas in which ESRD facilities are located.
For CY 2021, we are updating the wage index values based on the latest
available data.
[[Page 71399]]
2018 Office of Management and Budget (OMB) delineations
and 2-year transition policy: We are updating the Office of Management
and Budget (OMB) delineations as described in the September 14, 2018
OMB Bulletin No. 18-04, beginning with the CY 2021 ESRD PPS wage index.
In addition, we are finalizing the application of a 5 percent cap on
any decrease in an ESRD facility's wage index from the ESRD facility's
wage index from the prior CY. This transition will be phased in over 2
years, such that the reduction in an ESRD facility's wage index will be
capped at 5 percent in CY 2021, and no cap will be applied to the
reduction in the wage index for the second year, CY 2022.
Update to the outlier policy: We are updating the outlier
policy using the most current data, as well as updating the outlier
services fixed-dollar loss (FDL) amounts for adult and pediatric
patients and Medicare allowable payment (MAP) amounts for adult and
pediatric patients for CY 2021 using CY 2019 claims data. Based on the
use of the latest available data, the final FDL amount for pediatric
beneficiaries will increase from $41.04 to $44.78, and the MAP amount
will decrease from $32.32 to $30.88, as compared to CY 2020 values. For
adult beneficiaries, the final FDL amount will increase from $48.33 to
$122.49, and the MAP amount will increase from $35.78 to $50.92. The
1.0 percent target for outlier payments was not achieved in CY 2019.
Outlier payments represented approximately 0.5 percent of total
payments rather than 1.0 percent.
Inclusion of calcimimetics in the ESRD PPS base rate: We
are finalizing the methodology for modifying the ESRD PPS base rate to
include calcimimetics in the ESRD PPS bundled payment. Using the final
methodology based on the latest available data, we are adding $9.93 to
the CY 2021 ESRD PPS base rate.
Changes to the eligibility criteria for the transitional
add-on payment adjustment for new and innovative equipment and supplies
(TPNIES): For CY 2021, we are finalizing the proposed changes to the
TPNIES eligibility criteria in light of the changes implemented in CY
2020 to provide a biannual coding cycle for code applications for new
Healthcare Common Procedure Coding System (HCPCS) codes for durable
medical equipment, orthotics, prosthetics and supplies (DMEPOS) items
and services. We are finalizing that for purposes of eligibility for
the TPNIES, a complete HCPCS code application must be submitted by the
HCPCS Level II code application deadline for biannual Coding Cycle 2
for DMEPOS items and services as specified in the HCPCS Level II coding
guidance on the CMS website. In addition, a copy of the applicable Food
and Drug Administration (FDA) marketing authorization must be submitted
to CMS by the HCPCS Level II code application deadline for biannual
Coding Cycle 2 for DMEPOS items and services as specified in the HCPCS
Level II coding guidance on the CMS website in order for the equipment
or supply to be eligible for the TPNIES the following year. We are also
finalizing the proposed definition of ``new'' for purposes of the
TPNIES policy as within 3 years beginning on the date of the FDA
marketing authorization.
Expansion of the TPNIES to include new and innovative
capital-related assets that are home dialysis machines when used in the
home for a single patient: We are expanding eligibility for the TPNIES
to include certain capital-related assets that are home dialysis
machines when used in the home for a single patient. As with other
renal dialysis equipment and supplies potentially eligible for the
TPNIES, CMS will evaluate the application to determine whether the home
dialysis machine represents an advance that substantially improves,
relative to renal dialysis services previously available, the diagnosis
or treatment of Medicare beneficiaries, and meets the other
requirements under 42 CFR 413.236(b). We are finalizing the additional
steps that the Medicare Administrative Contractors (MACs) must follow
to establish the basis of payment of the TPNIES for these capital-
related assets that are home dialysis machines when used in the home,
including an offset to the pre-adjusted per treatment amount to account
for the cost of the home dialysis machine that is already in the ESRD
PPS base rate. We will pay 65 percent of the MAC-determined pre-
adjusted per treatment amount reduced by an offset for 2-calendar
years. We are finalizing that after the 2-year TPNIES period, the home
dialysis machines will not become outlier services and that no change
will be made to the ESRD PPS base rate.
Low-Volume Payment Adjustment (LVPA): We are finalizing
our proposal to hold harmless ESRD facilities that would otherwise
qualify for the LVPA but for a temporary increase in dialysis
treatments furnished in 2020 due to the Public Health Emergency (PHE)
for the coronavirus disease 2019 (COVID-19) pandemic. For purposes of
determining LVPA eligibility for payment years 2021, 2022, and 2023, we
will only consider total dialysis treatments furnished for any 6 months
of a facility's cost-reporting period ending in 2020; ESRD facilities
will select those 6 months (consecutive or non-consecutive) during
which treatments will be counted for purposes of the LVPA
determination. We are finalizing that ESRD facilities will attest that
their total dialysis treatments for those 6 months of their cost-
reporting period ending in 2020 are less than 2,000 and that, although
the total number of treatments furnished in the entire year otherwise
exceeded the LVPA threshold, the excess treatments furnished were due
to temporary patient shifting resulting from the COVID-19 PHE. MACs
will annualize the total dialysis treatments for the total treatments
reported in those 6 months by multiplying by 2. ESRD facilities will be
expected to provide supporting documentation to the MACs upon request.
2. Payment for Renal Dialysis Services Furnished to Individuals With
AKI
We are updating the AKI payment rate for CY 2021. The final CY 2021
payment rate is $253.13, which is the same as the base rate finalized
under the ESRD PPS for CY 2021.
3. ESRD QIP
We are finalizing our proposal to update the scoring methodology
used to calculate the Ultrafiltration Rate reporting measure so that
facilities are scored based on the number of eligible patient-months,
instead of facility-months. We are also finalizing our proposal to
reduce the number of records that facilities selected for National
Health Safety Network (NHSN) validation are required to submit. This
final rule also clarifies the timeline for facilities to make changes
to their NHSN Bloodstream Infection (BSI) clinical measure and NHSN
Dialysis Event reporting measure data for purposes of the ESRD QIP.
This final rule also announces final performance standards and payment
reductions that will apply for PY 2023.
This final rule describes several policies continuing for PY 2024,
but does not include any new requirements beginning with the PY 2024
ESRD QIP.
C. Summary of Costs and Benefits
In section VI of this final rule, we set forth a detailed analysis
of the impacts of the finalized changes for affected entities and
beneficiaries. The impacts include the following:
[[Page 71400]]
1. Impacts of the Final CY 2021 ESRD PPS
The impact chart in section VI.B of this final rule displays the
estimated change in payments to ESRD facilities in CY 2021 compared to
estimated payments in CY 2020. The overall impact of the CY 2021
changes is projected to be a 2.0 percent increase in payments.
Hospital-based ESRD facilities have an estimated 0.2 percent decrease
in payments compared with freestanding facilities with an estimated 2.0
percent increase.
We estimate that the aggregate ESRD PPS expenditures will increase
by approximately $250 million in CY 2021 compared to CY 2020. This
reflects a $210 million increase from the payment rate update, a $50
million increase due to the updates to the outlier threshold amounts,
and an $10 million decrease from the finalized addition to the ESRD PPS
base rate to include calcimimetics and no longer provide the
transitional drug add-on payment adjustment (TDAPA) for calcimimetics.
As a result of the projected 2.0 percent overall payment increase, we
estimate there will be an increase in beneficiary co-insurance payments
of 2.0 percent in CY 2021, which translates to approximately $60
million.
These figures do not reflect increases or decreases in expenditures
based on expanding the TPNIES to include certain capital-related assets
that are home dialysis machines when used in the home for a single
patient. The fiscal impact of this cannot be determined because these
new and innovative home dialysis machines are not yet identified and
would vary in uniqueness and costs.
2. Impacts of the Final CY 2021 Payment for Renal Dialysis Services
Furnished to Individuals With AKI
The impact chart in section VI.B of this final rule displays the
estimated change in payments to ESRD facilities in CY 2021 compared to
estimated payments in CY 2020. The overall impact of the final CY 2021
changes is projected to be a 5.7 percent increase in payments for
individuals with AKI. Hospital-based ESRD facilities have an estimated
5.8 percent increase in payments compared with freestanding ESRD
facilities with an estimated 5.7 percent increase. The overall impact
reflects the effects of the updated wage index, the finalized addition
to the ESRD PPS base rate of $9.93 to include calcimimetics in the ESRD
PPS bundled payment, and the payment rate update.
We estimate that the aggregate payments made to ESRD facilities for
renal dialysis services furnished to AKI patients at the final CY 2021
ESRD PPS base rate will increase by $4 million in CY 2021 compared to
CY 2020.
3. Impacts of the Final ESRD QIP
We estimate that the overall economic impact of the PY 2023 ESRD
QIP would be approximately $224 million as a result of the policies we
have previously finalized and the proposals we are finalizing in this
final rule. The $224 million figure for PY 2023 includes costs
associated with the collection of information requirements, which we
estimate would be approximately $208 million, and $16 million in
estimated payment reductions across all facilities. We note that the
total overall economic impact and the collection of information
requirements have been updated from the estimates in the proposed rule
due to updated information about the total number of facilities
participating in the ESRD QIP and the total number of patients. We also
estimate that the overall economic impact of the PY 2024 ESRD QIP would
be approximately $224 million as a result of the policies we have
previously finalized. The $224 million figure for PY 2024 includes
costs associated with the collection of information requirements, which
we estimate would be approximately $208 million, and has been updated
from the estimates in the proposed rule due to updated information
about the total number of facilities participating in the ESRD QIP and
the total number of patients.
II. Calendar Year (CY) 2021 End-Stage Renal Disease (ESRD) Prospective
Payment System (PPS)
A. Background
1. Statutory Background
On January 1, 2011, we implemented the End-Stage Renal Disease
(ESRD) Prospective Payment System (PPS), a case-mix adjusted bundled
PPS for renal dialysis services furnished by ESRD facilities, as
required by section 1881(b)(14) of the Social Security Act (the Act),
as added by section 153(b) of the Medicare Improvements for Patients
and Providers Act of 2008 (MIPPA). Section 1881(b)(14)(F) of the Act,
as added by section 153(b) of MIPPA and amended by section 3401(h) of
the Patient Protection and Affordable Care Act (the Affordable Care
Act), established that beginning with CY 2012, and each subsequent
year, the Secretary of the Department of Health and Human Services (the
Secretary) shall annually increase payment amounts by an ESRD market
basket increase factor, reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act.
Section 632 of the American Taxpayer Relief Act of 2012 (ATRA)
(Pub. L. 112-240) included several provisions that apply to the ESRD
PPS. Section 632(a) of ATRA added section 1881(b)(14)(I) to the Act,
which required the Secretary, by comparing per patient utilization data
from 2007 with such data from 2012, to reduce the single payment for
renal dialysis services furnished on or after January 1, 2014 to
reflect the Secretary's estimate of the change in the utilization of
ESRD-related drugs and biologicals (excluding oral-only ESRD-related
drugs). Consistent with this requirement, in the CY 2014 ESRD PPS final
rule we finalized $29.93 as the total drug utilization reduction and
finalized a policy to implement the amount over a 3- to 4-year
transition period (78 FR 72161 through 72170).
Section 632(b) of ATRA prohibited the Secretary from paying for
oral-only ESRD-related drugs and biologicals under the ESRD PPS prior
to January 1, 2016. And section 632(c) of ATRA required the Secretary,
by no later than January 1, 2016, to analyze the case-mix payment
adjustments under section 1881(b)(14)(D)(i) of the Act and make
appropriate revisions to those adjustments.
On April 1, 2014, the Protecting Access to Medicare Act of 2014
(PAMA) (Pub. L. 113-93) was enacted. Section 217 of PAMA included
several provisions that apply to the ESRD PPS. Specifically, sections
217(b)(1) and (2) of PAMA amended sections 1881(b)(14)(F) and (I) of
the Act and replaced the drug utilization adjustment that was finalized
in the CY 2014 ESRD PPS final rule (78 FR 72161 through 72170) with
specific provisions that dictated the market basket update for CY 2015
(0.0 percent) and how the market basket should be reduced in CY 2016
through CY 2018.
Section 217(a)(1) of PAMA amended section 632(b)(1) of ATRA to
provide that the Secretary may not pay for oral-only ESRD-related drugs
under the ESRD PPS prior to January 1, 2024. Section 217(a)(2) of PAMA
further amended section 632(b)(1) of ATRA by requiring that in
establishing payment for oral-only drugs under the ESRD PPS, the
Secretary must use data from the most recent year available. Section
217(c) of PAMA provided that as part of the CY 2016 ESRD PPS
rulemaking, the Secretary shall establish a process for (1) determining
when a product is no longer an oral-only drug; and (2) including new
injectable and intravenous products into the ESRD PPS bundled payment.
[[Page 71401]]
Finally, on December 19, 2014, the President signed the Stephen
Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE) (Pub.
L. 113-295). Section 204 of ABLE amended section 632(b)(1) of ATRA, as
amended by section 217(a)(1) of PAMA, to provide that payment for oral-
only renal dialysis services cannot be made under the ESRD PPS bundled
payment prior to January 1, 2025.
2. System for Payment of Renal Dialysis Services
Under the ESRD PPS, a single, per-treatment payment is made to an
ESRD facility for all of the renal dialysis services defined in section
1881(b)(14)(B) of the Act and furnished to individuals for the
treatment of ESRD in the ESRD facility or in a patient's home. We have
codified our definitions of renal dialysis services at Sec. 413.171,
which is in 42 CFR part 413, subpart H, along with other ESRD PPS
payment policies. The ESRD PPS base rate is adjusted for
characteristics of both adult and pediatric patients and accounts for
patient case-mix variability. The adult case-mix adjusters include five
categories of age, body surface area, low body mass index, onset of
dialysis, four comorbidity categories, and pediatric patient-level
adjusters consisting of two age categories and two dialysis modalities
(Sec. 413.235(a) and (b)).
The ESRD PPS provides for three facility-level adjustments. The
first payment adjustment accounts for ESRD facilities furnishing a low
volume of dialysis treatments (Sec. 413.232). The second adjustment
reflects differences in area wage levels developed from core based
statistical areas (CBSAs) (Sec. 413.231). The third payment adjustment
accounts for ESRD facilities furnishing renal dialysis services in a
rural area (Sec. 413.233).
The ESRD PPS provides a training add-on for home and self-dialysis
modalities (Sec. 413.235(c)) and an additional payment for high cost
outliers due to unusual variations in the type or amount of medically
necessary care when applicable (Sec. 413.237).
The ESRD PPS provides for a transitional drug add-on payment
adjustment (TDAPA) for certain new renal dialysis drugs and biological
products (Sec. 413.234(c)).
The ESRD PPS also provides for a transitional add-on payment
adjustment for new and innovative equipment and supplies (TPNIES) for
certain qualifying, new and innovative renal dialysis equipment and
supplies (Sec. 413.236(d)).
3. Updates to the ESRD PPS
Policy changes to the ESRD PPS are proposed and finalized annually
in the Federal Register. The CY 2011 ESRD PPS final rule was published
on August 12, 2010 in the Federal Register (75 FR 49030 through 49214).
That rule implemented the ESRD PPS beginning on January 1, 2011 in
accordance with section 1881(b)(14) of the Act, as added by section
153(b) of MIPPA, over a 4-year transition period. Since the
implementation of the ESRD PPS, we have published annual rules to make
routine updates, policy changes, and clarifications.
On November 8, 2019, we published a final rule in the Federal
Register titled, ``Medicare Program; End-Stage Renal Disease
Prospective Payment System, Payment for Renal Dialysis Services
Furnished to Individuals with Acute Kidney Injury, End-Stage Renal
Disease Quality Incentive Program, Durable Medical Equipment,
Prosthetics, Orthotics and Supplies (DMEPOS) Fee Schedule Amounts,
DMEPOS Competitive Bidding Program (CBP) Amendments, Standard Elements
for a DMEPOS Order, and Master List of DMEPOS Items Potentially Subject
to a Face-to-Face Encounter and Written Order Prior to Delivery and/or
Prior Authorization Requirements,'' referred to as the ``CY 2020 ESRD
PPS final rule''. In that rule, we updated the ESRD PPS base rate, wage
index, and outlier policy, for CY 2020. We also finalized revisions to
the eligibility criteria for the TDAPA for certain new renal dialysis
drugs and biological products that fall within an existing ESRD PPS
functional category, modified the basis of payment for the TDAPA for
calcimimetics, established a new policy to condition the TDAPA payment
on our receipt of average sales price (ASP) data, established the
TPNIES to support ESRD facilities in their uptake of certain new and
innovative renal dialysis equipment and supplies, and discontinued the
erythropoiesis-stimulating agent (ESA) monitoring policy under the ESRD
PPS. For further detailed information regarding these updates, see 84
FR 60648.
B. Summary of the Proposed Provisions, Public Comments, and Responses
to Comments on the Calendar Year (CY) 2021 ESRD PPS
The proposed rule, titled ``Medicare Program; End-Stage Renal
Disease Prospective Payment System, Payment for Renal Dialysis Services
Furnished to Individuals with Acute Kidney Injury, and End-Stage Renal
Disease Quality Incentive Program'' (85 FR 42132 through 42208),
referred to as the ``CY 2021 ESRD PPS proposed rule,'' was published in
the Federal Register on July 13, 2020, with a comment period that ended
on September 4, 2020. In that proposed rule, we proposed to make a
number of annual updates for CY 2021, including updates to the ESRD PPS
base rate, wage index, and outlier policy. We also proposed to modify
the ESRD PPS base rate to incorporate calcimimetics, revise the
eligibility criteria for the TPNIES, and expand the TPNIES to include
capital-related assets that are home dialysis machines when used in the
home by a single patient. We also proposed revisions to the low-volume
payment adjustment (LVPA) regulations in response to the Public Health
Emergency (PHE) for the coronavirus disease 2019 (COVID-19) pandemic.
We received 114 public comments on our proposals, including comments
from: ESRD facilities; national renal groups, nephrologists and patient
organizations; patients and care partners; manufacturers; health care
systems; and nurses.
We also received many comments related to issues that we either did
not discuss in the proposed rule or that we discussed for the purpose
of background or context, but for which we did not propose changes.
These include, for example, refinements to modeling payment and
accounting for new and innovative items and services under the ESRD
PPS, incentives for home dialysis, reporting furnished services on the
ESRD claim, network fee, and issues related to the COVID-19 pandemic.
While we are not addressing those comments in this final rule because
they are either out of scope of the proposed rule or concern topics for
which we did not propose changes, we thank the commenters for their
input and will consider the recommendations in future rulemaking.
In this final rule, we provide a summary of each proposed
provision, a summary of the public comments received and our responses
to them, and the policies we are finalizing for the CY 2021 ESRD PPS.
1. Inclusion of Calcimimetics Into the ESRD PPS Bundled Payment
a. Background on Oral-Only Renal Dialysis Drugs
Section 1881(b)(14)(A)(i) of the Act requires the Secretary to
implement a payment system under which a single payment is made to a
provider of services or a renal dialysis facility for renal dialysis
services in lieu of any other payment. Section 1881(b)(14)(B) of the
Act defines renal dialysis services,
[[Page 71402]]
and clause (iii) of such section states that these services include
other drugs and biologicals that are furnished to individuals for the
treatment of ESRD and for which payment was made separately under this
title, and any oral equivalent form of such drug or biological.
We interpreted this provision as including not only injectable
drugs and biological products used for the treatment of ESRD (other
than ESAs and any oral form of ESAs, which are included under clause
(ii) of section 1881(b)(14)(B) of the Act), but also all oral drugs and
biological products used for the treatment of ESRD and furnished under
Title XVIII of the Act. We also concluded that, to the extent oral-only
drugs or biological products used for the treatment of ESRD do not fall
within clause (iii) of section 1881(b)(14)(B) of the Act, such drugs or
biological products would fall under clause (iv) of such section, and
constitute other items and services used for the treatment of ESRD that
are not described in clause (i) of section 1881(b)(14)(B) of the Act.
We finalized and promulgated the payment policies for oral-only
renal dialysis service drugs and biological products in the CY 2011
ESRD PPS final rule (75 FR 49038 through 49053), where we defined renal
dialysis services at Sec. 413.171 as including other drugs and
biological products that are furnished to individuals for the treatment
of ESRD and for which payment was made separately prior to January 1,
2011 under Title XVIII of the Act, including drugs and biological
products with only an oral form. We further described oral-only drugs
as those that have no injectable equivalent or other form of
administration (75 FR 49038 through 49039). Although we included oral-
only renal dialysis service drugs and biological products in the
definition of renal dialysis services in the CY 2011 ESRD PPS final
rule (75 FR 49044), we also finalized a policy to delay payment for
these drugs under the PPS until January 1, 2014. In the CY 2011 ESRD
PPS proposed and final rules (74 FR 49929 and 75 FR 49038,
respectively), we noted that the only oral-only drugs and biological
products that we identified were phosphate binders and calcimimetics,
which fall into the bone and mineral metabolism ESRD PPS functional
category. We stated that there were certain advantages to delaying the
implementation of payment for oral-only drugs and biological products,
including allowing ESRD facilities additional time to make operational
changes and logistical arrangements in order to furnish oral-only renal
dialysis service drugs and biological products to their patients.
Accordingly, we codified the delay in payment for oral-only renal
dialysis service drugs and biological products at Sec. 413.174(f)(6),
and provided that payment to an ESRD facility for renal dialysis
service drugs and biological products with only an oral form is
incorporated into the PPS payment rates effective January 1, 2014.
Since oral-only drugs are generally not a covered service under
Medicare Part B, this delay of payment under the ESRD PPS also allowed
the coverage under Medicare to continue under Part D.
On January 3, 2013, ATRA was enacted. Section 632(b) of ATRA
precluded the Secretary from implementing the policy under Sec.
413.176(f)(6) relating to oral-only renal dialysis service drugs and
biological products prior to January 1, 2016. Accordingly, in the CY
2014 ESRD PPS final rule (78 FR 72185 through 72186), we delayed
payment for oral-only renal dialysis service drugs and biological
products under the ESRD PPS until January 1, 2016. We implemented this
delay by revising the effective date at Sec. 413.174(f)(6) from
January 1, 2014 to January 1, 2016. In addition, we changed the date
when oral-only renal dialysis service drugs and biological products
would be eligible for outlier services under the outlier policy
described in Sec. 413.237(a)(1)(iv) from January 1, 2014 to January 1,
2016.
On April 1, 2014, PAMA was enacted. Section 217(a)(1) of PAMA
amended section 632(b)(1) of ATRA and precluded the Secretary from
implementing the policy under Sec. 413.174(f)(6) relating to oral-only
renal dialysis service drugs and biological products prior to January
1, 2024. We implemented this delay in the CY 2015 ESRD PPS final rule
(79 FR 66262) by modifying the effective date for providing payment for
oral-only renal dialysis service drugs and biological products under
the ESRD PPS at Sec. 413.174(f)(6) from January 1, 2016 to January 1,
2024. We also changed the date in Sec. 413.237(a)(1)(iv) regarding
outlier payments for oral-only renal dialysis service drugs made under
the ESRD PPS from January 1, 2016 to January 1, 2024. Section 217(a)(2)
of PAMA further amended section 632(b)(1) of ATRA by requiring that in
establishing payment for oral-only drugs under the ESRD PPS, the
Secretary must use data from the most recent year available.
On December 19, 2014, ABLE was enacted. Section 204 of ABLE amended
section 632(b)(1) of ATRA, as amended by section 217(a)(1) of PAMA, and
precluded the Secretary from implementing the policy under Sec.
413.174(f)(6) relating to oral-only renal dialysis service drugs and
biological products prior to January 1, 2025. We implemented this delay
in the CY 2016 ESRD PPS final rule (80 FR 69027 through 69028) by
modifying the effective date for providing payment for oral-only renal
dialysis service drugs and biological products under the ESRD PPS at
Sec. 413.174(f)(6) from January 1, 2024 to January 1, 2025. We also
changed the date in Sec. 413.237(a)(1)(iv) regarding outlier payments
for oral-only renal dialysis service drugs made under the ESRD PPS from
January 1, 2024 to January 1, 2025.
b. ESRD PPS Drug Designation Process and Calcimimetics
In addition to delaying implementation of the policy for oral-only
renal dialysis service drugs and biological products under the ESRD
PPS, discussed previously in this final rule, PAMA included section
217(c), which provided that as part of the CY 2016 ESRD PPS rulemaking,
the Secretary shall establish a process for (1) determining when a
product is no longer an oral-only drug; and (2) including new
injectable and intravenous products into the ESRD PPS bundled payment.
Therefore, in the CY 2016 ESRD PPS final rule (80 FR 69013 through
69027), we finalized a process that allows us to recognize when an
oral-only renal dialysis service drug or biological product is no
longer oral-only, and a process to include new injectable and
intravenous (IV) products into the ESRD PPS bundled payment, and when
appropriate, modify the ESRD PPS payment amount to reflect the costs of
furnishing that product.
In accordance with section 217(c)(1) of PAMA, we established Sec.
413.234(d), which provides that an oral-only drug is no longer
considered oral-only if an injectable or other form of administration
of the oral-only drug is approved by FDA. We defined an oral-only drug
at Sec. 413.234(a) to mean a drug or biological with no injectable
equivalent or other form of administration other than an oral form.
Additionally, in accordance with section 217(c)(2) of PAMA, we
codified the drug designation process at Sec. 413.234(b). In the CY
2016 ESRD PPS final rule (80 FR 69024), we finalized that the drug
designation process is dependent upon the ESRD PPS functional
categories, consistent with our policy since the implementation of the
PPS in 2011. We provided a detailed discussion on how we accounted for
renal dialysis drugs and biological products in the ESRD PPS base rate
[[Page 71403]]
since its implementation on January 1, 2011 (80 FR 69013 through
69015). We explained that, in the CY 2011 ESRD PPS final rule (75 FR
49044 through 49053), in order to identify drugs and biological
products that are used for the treatment of ESRD and therefore meet the
definition of renal dialysis services (defined at Sec. 413.171) that
would be included in the ESRD PPS base rate, we performed an extensive
analysis of Medicare payments for Part B drugs and biological products
billed on ESRD claims and evaluated each drug and biological product to
identify its category by indication or mode of action. We stated in the
CY 2011 ESRD PPS final rule that categorizing drugs and biological
products on the basis of drug action allows us to determine which
categories (and therefore, the drugs and biological products within the
categories) would be considered used for the treatment of ESRD (75 FR
49047).
In the CY 2016 ESRD PPS final rule, we also explained that, in CY
2011 ESRD PPS rulemaking, we grouped the injectable and IV drugs and
biological products into ESRD PPS functional categories based on their
action (80 FR 69014). This was done for the purpose of adding new drugs
or biological products with the same functions to the ESRD PPS bundled
payment as expeditiously as possible after the drugs become
commercially available so that beneficiaries have access to them. In
the CY 2016 ESRD PPS final rule, we finalized the definition of an ESRD
PPS functional category in Sec. 413.234(a) as a distinct grouping of
drugs or biologicals, as determined by CMS, whose end action effect is
the treatment or management of a condition or conditions associated
with ESRD (80 FR 69077).
We finalized a policy in the CY 2016 ESRD PPS final rule (80 FR
69017 through 69022) that, effective January 1, 2016, if a new
injectable or IV product is used to treat or manage a condition for
which there is an ESRD PPS functional category, the new injectable or
IV product is considered included in the ESRD PPS bundled payment and
no separate payment is available. The new injectable or IV product
qualifies as an outlier service. The ESRD bundled market basket updates
the PPS base rate annually and accounts for price changes of the drugs
and biological products reflected in the base rate.
We established in Sec. 413.234(b)(2) that, if the new injectable
or IV product is used to treat or manage a condition for which there is
not an ESRD PPS functional category, the new injectable or IV product
is not considered included in the ESRD PPS bundled payment and the
following steps occur. First, an existing ESRD PPS functional category
is revised or a new ESRD PPS functional category is added for the
condition that the new injectable or IV product is used to treat or
manage. Next, the new injectable or IV product is paid for using the
TDAPA described in Sec. 413.234(c). Finally, the new injectable or IV
product is added to the ESRD PPS bundled payment following payment of
the TDAPA.
In the CY 2016 ESRD PPS final rule, we finalized a policy in Sec.
413.234(c) to base the TDAPA on pricing methodologies under section
1847A of the Act and pay the TDAPA until sufficient claims data for
rate setting analysis for the new injectable or IV product are
available, but not for less than 2 years. During the time a new
injectable or IV product is eligible for the TDAPA, it is not eligible
as an outlier service. We established that, following payment of the
TDAPA, the ESRD PPS base rate will be modified, if appropriate, to
account for the new injectable or IV product in the ESRD PPS bundled
payment.
We also established, in the CY 2016 ESRD PPS final rule (80 FR
69024 through 69027), an exception to the drug designation process for
calcimimetics. We noted that in the CY 2011 ESRD PPS proposed and final
rules (74 FR 49929 and 75 FR 49038, respectively), the only oral-only
drugs and biological products we identified were phosphate binders and
calcimimetics, which fall into the bone and mineral metabolism ESRD PPS
functional category. We stated that we defined these oral-only drugs as
renal dialysis services in our regulations at Sec. 413.171 (75 FR
49044), delayed the Medicare Part B payment for these oral-only drugs
until CY 2014 at Sec. 413.174(f)(6), and continued to pay for them
under Medicare Part D. We explained in the CY 2016 ESRD PPS final rule
that, under Sec. 413.234(b)(1), if injectable or IV forms of phosphate
binders or calcimimetics are approved by FDA, these drugs would be
considered reflected in the ESRD PPS bundled payment because these
drugs are included in an existing functional category, so no additional
payment would be available for inclusion of these drugs.
However, we recognized the uniqueness of these drugs and stated
that we will not apply this process to injectable or IV forms of
phosphate binders and calcimimetics when they are approved because
payment for the oral forms of these drugs was delayed and dollars were
never included in the ESRD PPS base rate to account for these drugs.
Instead, we finalized a policy that once the injectable or IV phosphate
binder or calcimimetic is FDA approved and has a Healthcare Common
Procedure Coding System (HCPCS) code, we will issue a change request to
pay for all forms of the phosphate binder or calcimimetic using the
TDAPA based on the payment methodologies under section 1847A of the
Act, which could include ASP + 6 percent, for a period of at least 2
years. We explained in the CY 2016 ESRD PPS final rule that this will
allow us to collect data reflecting current utilization of both the
oral and injectable or IV forms of the drugs, as well as payment
patterns and beneficiary co-pays, before we add these drugs to the ESRD
PPS bundled payment. We stated that during this period we will not pay
outlier payments for these drugs. We further stated that at the end of
the 2 or more years, we will adopt the methodology for including the
phosphate binders and calcimimetics into the ESRD PPS bundled payment
through notice-and-comment rulemaking.
In 2017, FDA approved an injectable calcimimetic. In accordance
with the policy finalized in the CY 2016 ESRD PPS final rule, we issued
a change request to implement payment under the ESRD PPS for both the
oral and injectable forms of calcimimetics using the TDAPA. Change
Request 10065, Transmittal 1889, issued August 4, 2017, replaced by
Transmittal 1999, issued January 10, 2018, and implemented the TDAPA
for calcimimetics effective January 1, 2018.
In CYs 2019 and 2020 ESRD PPS final rules (83 FR 56927 through
56949 and 84 FR 60653 through 60677, respectively), we made several
revisions to the drug designation process regulations at Sec. 413.234.
In the CY 2019 ESRD PPS final rule, for example, we revised regulations
at Sec. 413.234(a), (b), and (c) to reflect that the process applies
for all new renal dialysis drugs and biological products that are FDA
approved regardless of the form or route of administration, that is,
new injectable, IV, oral, or other form or route of administration (83
FR 56932). In addition, we revised Sec. 413.234(b) and (c) to expand
the TDAPA to all new renal dialysis drugs and biological products, not
just those in new ESRD PPS functional categories (83 FR 56942 through
56943). We also revised Sec. 413.234(c) to reflect that we base the
TDAPA on 100 percent of ASP (ASP + 0) instead of the pricing
methodologies available under section 1847A of the Act (which includes
ASP + 6). We explained that the 6 percent add-on to
[[Page 71404]]
ASP has been used to cover administrative and overhead costs, however,
the ESRD PPS base rate includes dollars for administrative complexities
and overhead costs for drugs and biological products, so we believe ASP
+ 0 is a reasonable basis for the TDAPA under the ESRD PPS (83 FR 56943
through 56944). For circumstances when ASP data is not available, we
finalized that the TDAPA is based on wholesale acquisition cost (WAC) +
0 and, when WAC is not available, the TDAPA is based on the drug
manufacturer's invoice (83 FR 56948). We also finalized a revision to
Sec. 413.234(c) to reflect that the basis of payment for the TDAPA for
calcimimetics would continue to be based on the pricing methodologies
available under section 1847A of the Act, which includes ASP + 6 (83 FR
56948). These provisions all had an effective date of January 1, 2020.
In the CY 2020 ESRD PPS final rule, we made several additional
revisions to the ESRD PPS drug designation process regulations at Sec.
413.234. For example, we revised Sec. 413.234(b) and added paragraph
(e) to codify certain eligibility criteria changes for new renal
dialysis drugs and biological products that fall within an existing
ESRD PPS functional category. That is, we excluded certain drugs from
being eligible for the TDAPA, effective January 1, 2020 (84 FR 60672).
Specifically, as detailed in the CY 2020 ESRD PPS final rule (85 FR
60565 through 60673), we excluded generic drugs approved by FDA under
section 505(j) of the Federal Food, Drug, and Cosmetic Act (FD&C Act)
and drugs for which the new drug application (NDA) is classified by FDA
as Type 3, 5, 7 or 8, Type 3 in combination with Type 2 or Type 4, or
Type 5 in combination with Type 2, or Type 9 when the ``parent NDA'' is
a Type 3, 5, 7 or 8--from being eligible for the TDAPA. We also
established at Sec. 413.234(c) a policy to condition application of
the TDAPA on our receipt of ASP data (84 FR 60681).
In the CY 2020 ESRD PPS final rule (84 FR 60673), we also discussed
the duration of payment of the TDAPA for calcimimetics and changed the
basis of the TDAPA for such products. We stated that in accordance with
our policy for calcimimetics under the drug designation process, we
would pay for calcimimetics using the TDAPA for a minimum of 2 years
until sufficient claims data for rate setting analysis is available for
these products. We noted that at the time of the CY 2020 ESRD PPS
proposed rule we were still in the process of collecting utilization
claims data for both the oral and injectable form of calcimimetics.
Therefore, in the CY 2020 ESRD PPS proposed rule, we stated that we
would continue to pay for calcimimetics using the TDAPA in CY 2020 (84
FR 38347).
However, we also noted in the CY 2020 ESRD PPS proposed rule that
we had provided the TDAPA for calcimimetics at ASP + 6 percent for 2-
full years (that is, January 1, 2018 through December 31, 2019), and we
believed that was sufficient time for ESRD facilities to address any
administrative complexities and overhead costs that may have arisen
with regard to furnishing the calcimimetics. We noted that it was clear
that ESRD facilities were furnishing calcimimetics because payment for
them using the TDAPA had increased Medicare expenditures by $1.2
billion in CY 2018 (84 FR 60673). We explained that one of the
rationales for the 6 percent add-on to ASP was to cover administrative
and overhead costs, however, the ESRD PPS base rate has dollars
included for administrative complexities and overhead costs for drugs
and biological products. Therefore, in the CY 2020 ESRD PPS final rule,
we finalized a revision to Sec. 413.234(c) to reflect that the basis
of payment for the TDAPA for calcimimetics, beginning in CY 2020, would
be 100 percent of ASP (84 FR 60676). We explained this policy change
provided a balance between supporting ESRD facilities in their uptake
of these products and limiting the financial burden that increased
payments place on beneficiaries and Medicare expenditures. We also
noted that this policy is consistent with the policy finalized for all
other new renal dialysis drugs and biological products in the CY 2019
ESRD PPS final rule (83 FR 56948).
c. Methodology for Modifying the ESRD PPS Base Rate to Account for
Calcimimetics in the ESRD PPS Bundled Payment
As we discussed in the CY 2021 ESRD PPS proposed rule (85 FR
42138), under Sec. 413.234(d), calcimimetics were no longer considered
to be an oral-only drug once FDA approved an injectable calcimimetic in
2017. We explained that we have paid for calcimimetics under the ESRD
PPS using the TDAPA since January 1, 2018. We stated in the CY 2016
ESRD PPS final rule that for calcimimetics--for which there is an ESRD
PPS functional category, but no money in the base rate--we would
utilize the TDAPA to collect utilization data before adding this drug
to the ESRD PPS base rate. This would allow us to collect data
reflecting current utilization of both the oral and injectable or IV
forms of the drug, as well as payment patterns and beneficiary co-pays.
The collection of this data for 2 or more years would allow us, with
sufficient data, to incorporate these drugs into the ESRD PPS bundled
payment through notice-and-comment rulemaking.
As we stated in the proposed rule, we believe we have collected
sufficient claims data for a rate setting analysis for calcimimetics.
Specifically, we have collected robust claims data for 2 full years and
analyzed the utilization of every generic and brand name oral
calcimimetic, along with the utilization of the injectable
calcimimetic. We also monitored the ASP data for the calcimimetics
coinciding with the specific utilization periods. Our overall analysis
of ESRD claims data for CYs 2018 and 2019 indicated an increase in the
utilization of the oral generic calcimimetic drugs and a steep decline
in the utilization of brand-name oral calcimimetic. Weighting the ASP
price data based on the utilization data resulted in an overall lower
ASP because the generic calcimimetic drugs are less expensive than the
brand calcimimetics. Since beneficiaries have a 20 percent co-pay under
the ESRD PPS, a decrease in the payment for calcimimetics results in a
decrease in the beneficiary co-pay.
Therefore, as we stated in the CY 2021 ESRD PPS proposed rule (85
FR 42138), we believed that we were at the step of the ESRD PPS drug
designation process where we should propose to adopt the methodology
for modifying the ESRD PPS base rate to account for calcimimetics in
the ESRD PPS bundled payment, which we did in the CY 2021 ESRD PPS
proposed rule. In this final rule, we are adding a per treatment amount
to the ESRD PPS base rate to include the calcimimetics in the ESRD PPS
bundled payment amount.
In developing the methodology for including calcimimetics into the
ESRD PPS base rate, we considered the methodology that we used when we
included Part B drugs and biological products in the ESRD PPS base rate
as part of our implementation of the ESRD PPS. In the CY 2011 ESRD PPS
final rule (75 FR 49074 through 49079), we discussed how we established
which renal dialysis drugs and biological products would be reflected
in the ESRD PPS base rate. We used the utilization of those drugs and
biological products from Medicare claims data and applied ASP + 6
percent to establish the price for each drug. Then we inflated each
drug's price to 2011 using the Producer Price Index (PPI) for
prescription drugs.
[[Page 71405]]
In addition, as discussed in the CY 2011 ESRD PPS final rule (75 FR
49064), we established a dialysis treatment as the unit of payment.
Consistent with the approach we used initially to include drugs and
biological products into the ESRD PPS base rate and the ESRD PPS unit
of payment, we proposed a similar methodology to calculate a one-time
modification to the ESRD PPS base rate on a per-treatment basis to
account for calcimimetics. We stated that the methodology is similar to
the CY 2011 approach because we would determine utilization of the
drug, in this case, calcimimetics, along with the payment amounts
associated with each oral and injectable form based on the ASP + 0
instead of ASP + 6, as discussed in the CY 2020 ESRD PPS final rule.
The following sections discuss each element of our proposed
methodology in detail. As an overview, we proposed to calculate a per-
treatment amount for calcimimetics that would be added to the ESRD PPS
base rate. We proposed to apply the value from the most recent calendar
quarter ASP calculations at 100 percent of ASP (that is, ASP + 0)
available to the public for calcimimetics to the utilization data for
calcimimetics from CYs 2018 and 2019 Medicare ESRD claims data to
provide the calcimimetic expenditure amount. We proposed to divide the
calcimimetic expenditure amount by the total number of hemodialysis
(HD)-equivalent dialysis treatments paid in CYs 2018 and 2019 under the
ESRD PPS. We proposed to reduce this average per treatment amount by 1
percent to account for the outlier policy, since calcimimetics would be
ESRD outlier services eligible for outlier payments beginning January
1, 2021. We proposed to add the resulting amount to the ESRD PPS base
rate. We noted that this amount would be permanently included in the
ESRD PPS base rate and be subject to the annual ESRD PPS payment
updates (that is, the productivity-adjusted market basket increase and
wage index budget neutrality adjustment factor). Under the proposal,
CMS would stop paying for these drugs using the TDAPA for dates of
service on or after January 1, 2021.
In the CY 2021 ESRD PPS proposed rule (85 FR 42141), we proposed to
revise our drug designation regulation at Sec. 413.234, by adding
paragraph (f), to describe the methodology for modifying the ESRD PPS
base rate to account for the costs of calcimimetics, including the data
sources and the steps we would take to calculate a per treatment
amount. We proposed, for dates of service on or after January 1, 2021,
calcimimetics would no longer be paid for under the ESRD PPS using the
TDAPA (Sec. 413.234(c)) and would be paid for through the ESRD PPS
base rate and eligible for outlier payments as ESRD outlier services
under Sec. 413.237.
We noted that the proposed methodology would only modify the ESRD
PPS base rate for calcimimetic drugs. As stated in the CY 2016 ESRD PPS
final rule (80 FR 69022), the TDAPA would be paid for a minimum of 2
years, during which time we would collect and analyze utilization data.
At the end of that time, the drug would be included within its new
functional category and the base rate would potentially be modified to
account for the cost of the drug, depending upon what the utilization
data show. Accordingly, we explained, our policy is to propose and
adopt this methodology when including any future eligible new renal
dialysis drugs and biological products into the ESRD PPS base rate
through notice-and-comment rulemaking.
(1) Determining Utilization of Calcimimetics
For use in the proposed calculation, we analyzed the utilization of
both the oral and injectable forms of calcimimetics reported on the
ESRD facility claims for CYs 2018 and 2019. ESRD facilities report this
information to CMS on Medicare ESRD facility claims, that is, the 837-
institutional form with bill type 072X. The oral calcimimetic is
reported as HCPCS J0604 (Cinacalcet, oral, 1 mg, (for ESRD on
dialysis)) and the injectable calcimimetic is reported as HCPCS J0606
(Injection, etelcalcetide, 0.1 mg), that is, one unit of J0604 is 1 mg,
and one unit of J0606 is 0.1 mg. For purposes of this rate setting
analysis, we considered utilization of calcimimetics as the units of
the product furnished to an ESRD beneficiary.
For the CY 2018 utilization data for calcimimetics, we proposed to
use the latest available claims data based on the CY 2018 ESRD facility
claims updated through June 30, 2019 (that is, claims with dates of
service from January 1 through December 31, 2018, that were received,
processed, paid, and passed to the National Claims History (NCH) File
as of June 30, 2019) to calculate 2018 utilization. Claims that are
received, processed, paid, and passed to the NCH file are considered to
be ``complete'' because they have been adjudicated.
For the CY 2019 utilization data for calcimimetics, we proposed to
use the latest available claims data based on the CY 2019 ESRD facility
claims updated through January 31, 2020 (that is, claims with dates of
service from January 1 through December 31, 2019, that were received,
processed, paid, and passed to the NCH File as of January 31, 2020).
In the CY 2021 ESRD PPS proposed rule (85 FR 42139), we stated that
for the final rule, the latest available CY 2019 ESRD facility claims
are those updated through June 30, 2020 (that is, claims with dates of
service from January 1 through December 31, 2019, that were received,
processed, paid, and passed to the NCH File as of June 30, 2020).
We explained that while we have continued to pay the TDAPA for
calcimimetics for dates of service in CY 2020, we did not propose to
use utilization data from this period because practice patterns in CY
2020 have been altered due to the COVID-19 pandemic and the resulting
impact on data was unknown at that time. However, we noted that our
policy to continue paying for calcimimetics using the TDAPA in CY 2020
allowed us to analyze 2 full years of adjudicated Medicare claims since
CY 2019 claims include those claims from January 1, 2019 through
December 31, 2019.
We solicited comments on the proposed use of CYs 2018 and 2019
claims data to determine the utilization of calcimimetics for purposes
of calculating the proposed addition to the ESRD PPS base rate to
account for calcimimetics at proposed Sec. 413.234(f). We stated that
we believed using claims data from CYs 2018 and 2019 is appropriate
because those years provide us with not only the most complete data
set, but also the most accurate data set reflecting paid claims. We
also solicited comments as to whether we should instead use a single
year (CY 2018 or CY 2019) rather than both CYs 2018 and 2019 in our
methodology.
(2) Pricing of Calcimimetics--Methodology
We proposed to set the price for calcimimetics using values from
the most recent calendar quarter of ASP calculations available to the
public, at 100 percent of ASP (ASP + 0). As we explained in the CY 2021
ESRD PPS proposed rule, the ASP-based value is a CMS-derived weighted
average of all of the National Drug Code (NDC) sales prices submitted
by drug manufacturers and assigned by CMS to the two existing HCPCS
codes for calcimimetics. For each billing code, CMS calculates a
weighted average sales price using data submitted by manufacturers,
which includes the following: ASP data at the 11-digit NDC level, the
number of units of the 11-digit NDC sold and the ASP for those units.
Next, the number of billing units in an NDC is determined by the
[[Page 71406]]
amount of drug in the package. CMS uses the following weighting
methodology to determine the payment limit: (1) Sums the product of the
manufacturer's ASP and the number of units of the 11-digit NDC sold for
each NDC assigned to the billing and payment code; (2) divides this
total by the sum of the product of the number of units of the 11-digit
NDC sold and the number of billing units in that NDC for each NDC
assigned to the billing and payment code, and (3) weights the ASP for
an NDC by the number of billing units sold for that NDC. This
calculation methodology is discussed in the CY 2009 Physician Fee
Schedule (PFS) final rule (73 FR 69752). The general methodology for
determining ASP-based payments for the PFS is authorized in section
1847A of the Act.
We noted that ASP-based payment limits published in the quarterly
ASP Drug Pricing files include a 6 percent add-on as required in
section 1847A of the Act; however, consistent with the TDAPA basis of
payment for CY 2020, we proposed to use 100 percent of the weighted ASP
value, in other words, ASP + 0. In the CY 2020 ESRD PPS final rule, we
noted that the ESRD PPS accounts for storage and administration costs
and that ESRD facilities do not have acquisition price variation issues
when compared to physicians. We explained that we believed ASP + 0 is
reasonable for new renal dialysis drugs and biological products that
fall within an existing functional category because there are already
dollars in the per treatment base rate for a new drug's respective
category. We also explained that we believed ASP + 0 is a reasonable
basis for payment for the TDAPA for new renal dialysis drugs and
biological products that do not fall within the existing functional
category because the ESRD PPS base rate has dollars built in for
administrative complexities and overhead costs for drugs and biological
products (83 FR 56946).
As stated in the CY 2021 ESRD PPS proposed rule, we believe using a
value based on the most recent calendar quarter ASP calculations
available to the public for both oral and injectable versions of the
calcimimetics provides an accurate representation of the price of
calcimimetics for ESRD facilities because it uses manufacturer sales
information that includes discounts (that is, rebates, volume
discounts, prompt payment, cash payment specified in section 1847A of
the Act). Every calendar quarter, CMS publishes ASP-based payment
limits for certain Part B drugs and biological products that are used
for payment of such Part B covered drugs and biological products for a
specific quarter. The amount that we proposed to use for the base rate
modifications associated with the oral and injectable versions of the
calcimimetics is based on the most recent information on average sales
prices net of discounts specified in section 1847A submitted by the
manufacturers of each of the drugs.
For the CY 2021 ESRD PPS proposed rule, values from the most recent
calendar quarter of ASP calculations available to the public was the
second quarter of 2020,\1\ and as a result of the two-quarter data lag
this reflects manufacturer sales data submitted into CMS for the fourth
quarter of 2019. We stated that for the CY 2021 ESRD PPS final rule,
the most recent calendar quarter of ASP calculations available to the
public would be the fourth quarter of 2020, which reflects manufacturer
sales data submitted into CMS for the second quarter of 2020, and we
would use that value for purposes of our final calculation.
---------------------------------------------------------------------------
\1\ https://www.cms.gov/medicare/medicare-part-b-drug-average-sales-price/2020-asp-drug-pricing-files, April 2020 ASP Pricing
File.
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We proposed to update these prices by the proposed CY 2021 ESRD PPS
base rate update to reflect the estimated costs in CY 2021. That is, we
would first add the calculated per treatment payment amount to the ESRD
PPS base rate to include calcimimetics, and then we would apply the
annual payment rate update. The proposed calculation for the addition
to the ESRD PPS base rate is discussed in the following section.
Therefore, we proposed to add Sec. 413.234(f) to specify that CMS
would use 100 percent of the values from the most recent calendar
quarter ASP calculations available to the public for the oral and
injectable calcimimetic to calculate a price for each form of the drug.
We solicited comments on the proposed use of the values from the most
recent calendar quarter ASP + 0 calculations available to the public
for calcimimetics for setting the price and the proposed language at
Sec. 413.234(f).
(3) Calculation of the Addition to the ESRD PPS Base Rate To Include
Calcimimetics
To calculate the proposed amount for calcimimetics that would be
added to the ESRD PPS base rate, we applied the values from the most
recent calendar quarter 2020 ASP + 0 calculations available to the
public for calcimimetics to CYs 2018 and 2019 calcimimetic utilization
data to calculate the calcimimetic expenditure amount for both years.
As stated in the proposed rule and section II.B.1.c.(1) of this final
rule, one unit of J0604 (oral calcimimetic, cinacalcet) is 1 mg and one
unit of J0606 (injectable calcimimetic etelcalcetide) is 0.1 mg. That
is, we determined that 1,824,370,957 total units (mg) of oral
calcimimetics were used in CYs 2018 and 2019. With regard to injectable
calcimimetics, we determined that 306,714,207 total units (0.1 mg) were
used in CYs 2018 and 2019. This use indicates that 33.9 percent of ESRD
beneficiaries received calcimimetics in CYs 2018 and 2019. For the CY
2021 ESRD PPS proposed rule, we used the values from the most recent
calendar quarter ASP + 0 calculations available to the public, which at
the time of rulemaking was the second quarter of 2020. This information
can be found on the ESRD Payment website: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/ESRD-Transitional-Drug. We
used $0.231 per mg for the oral calcimimetic and $2.20 per 0.1 mg for
the injectable calcimimetic. The prices per unit correspond to 1 mg and
0.1 mg for cinacalcet and etelcalcetide respectively. (We noted that,
for the CY 2021 ESRD PPS final rule, we would update the ASP + 0 based
value on the most recent calendar quarter calculations available to the
public.) Multiplying the utilization of the oral and injectable
calcimimetics by their respective ASP and then adding the expenditure
amount for both forms of calcimimetics together would be the total 2-
year (CYs 2018 and 2019) calculated calcimimetic expenditure amount.
That is, for the CY 2021 ESRD PPS proposed rule, we calculated the
total calcimimetic expenditure amount of $1,096,200,947. The total
number of paid HD-equivalent dialysis treatments furnished to Medicare
ESRD beneficiaries in CYs 2018 and 2019 was 90,014,098. This total
number of paid treatments reflects all paid dialysis treatments
regardless of whether a calcimimetic was furnished. Dividing the
calcimimetic expenditure amount by the total number of paid HD-
equivalent dialysis treatments provides an average per treatment
payment amount of $12.18.
We then reduced this amount by 1 percent to account for the outlier
policy under Sec. 413.237 to get a total of $12.06 ($12.18 x .99 =
$12.06). Under our proposal, we would apply this 1 percent reduction
before increasing the base rate to account for outlier payments that
would be paid beginning January 1, 2021 for calcimimetics since they
would become ESRD outlier services eligible
[[Page 71407]]
for outlier payments under Sec. 413.237. As we discussed in the
proposed rule and section II.B.1.c of this final rule, in developing
the proposed methodology for including calcimimetics in the ESRD PPS
base rate, we considered the methodology applied when we developed the
ESRD PPS base rate. In the CY 2011 ESRD PPS final rule (75 FR 49074
through 49075), we explained the budget neutrality adjustments applied
to the unadjusted ESRD PPS base rate to account for statutorily
mandated reductions. Because calcimimetics would become ESRD outlier
services beginning January 1, 2021, we focused on the outlier
adjustment. That is, in CY 2011 we applied a 1 percent reduction to the
unadjusted ESRD PPS base rate to account for outlier payments. In order
for the application of the 1 percent outlier to be maintained, we
stated that we believe the 1 percent must be excluded from the addition
to the ESRD PPS base rate for calcimimetics.
Then, to determine the estimated costs in CY 2021 we proposed to
inflate the average per treatment payment amount for calcimimetics
($12.06) to 2021 using the CY 2021 ESRD PPS base rate update. As
discussed in section II.B.4.d of the CY 2021 ESRD PPS proposed rule (85
FR 42164), the proposed CY 2021 ESRD PPS base rate was $255.59. This
amount reflected a proposed CY 2021 wage index budget-neutrality
adjustment factor of .998652, a proposed base rate addition of $12.06
to include calcimimetics, and the proposed CY 2021 ESRD PPS payment
rate update of 1.8 percent. We stated that using the annual payment
rate update effectively updates the prices set for calcimimetics from
CY 2020 to CY 2021 because this is consistent with how the other
components of the base rate are updated for inflation each year, which
includes drugs. We noted, that the inflation factor used for drugs and
biological products for the ESRD bundled market basket is the Producer
Price Index as discussed in the CY 2019 ESRD PPS final rule (83 FR
56958 through 56959).
Therefore, we proposed to add Sec. 413.234(f) to specify that CMS
would multiply the utilization of the oral and injectable calcimimetics
by their respective prices and add the expenditure amount for both
forms together to calculate the total calcimimetic expenditure amount.
Then, CMS would divide the total calcimimetic expenditure amount by the
total number of paid HD-equivalent dialysis treatments in CYs 2018 and
2019, to calculate the average per-treatment payment amount. CMS would
reduce the average per-treatment payment amount by 1 percent to account
for the outlier policy under Sec. 413.237 in order to determine the
amount added to the ESRD PPS base rate.
We stated in the CY 2021 ESRD PPS proposed rule that, in keeping
with the principles of a PPS, which include motivating healthcare
providers to structure cost-effective, efficient patient care that
avoids unnecessary services, thereby reining in costs, we believe the
cost of the calcimimetics should be spread across all the dialysis
treatments, rather than be directed only to the patients receiving the
calcimimetics.
We solicited comments on the proposed revisions to Sec. 413.234 to
add paragraph (f) to Sec. 413.234 to establish the methodology for
modifying the ESRD PPS base rate to account for calcimimetics in the
ESRD PPS bundled payment.
As an alternative methodology, we considered dividing the total
Medicare expenditures for all calcimimetics in CYs 2018 and 2019
(approximately $2.3 billion) by the total number of paid HD-equivalent
dialysis treatments furnished during that same time period. However, we
noted that this approach would not factor in the impact of oral generic
calcimimetics, which entered the market from late December 2018 through
early January 2019. For example, under the proposed methodology, the
ASP calculations incorporate the more recent pricing of the oral
generic calcimimetics into the weighting which has resulted in a
significant decline in the ASP-based value. In addition, this
alternative methodology would not reflect our current policy to base
the TDAPA on ASP + 0, since in CYs 2018 and 2019 we paid for
calcimimetics using the TDAPA at ASP + 6. We stated that we believe it
is more appropriate for the ESRD PPS base rate to reflect the values
from the most recent calendar quarter of ASP calculations available
since that aligns with how ESRD facilities would be purchasing and
furnishing the oral calcimimetics rather than using expenditure data
from previous periods. We further stated that we believe that ESRD
facilities would want to support CMS's goal of lower drug and
biological products prices for its beneficiaries. In addition, we
noted, this alternative methodology would have a more significant
impact on beneficiary cost sharing in terms of a higher 20 percent co-
pay than the methodology in the proposed rule. We solicited comment on
this alternative methodology, which would entail dividing the total
Medicare expenditures (that is, actual spend) for all calcimimetics in
CYs 2018 and 2019 by the total number of paid HD-equivalent dialysis
treatments furnished during that same time period.
The comments and our responses to the comments on our proposed
methodology for including calcimimetics in the ESRD PPS base rate are
set forth below.
Comment: The majority of commenters recommended that CMS trim the
analysis data set to exclude data that is not representative of steady
utilization trends. The commenters were supportive of CMS collecting 2
full years of data for rate-setting purposes, but disagreed with the
methodology to incorporate the full data set into the analysis.
Specifically, the commenters recommended CMS remove CY 2018 claims
utilization from the analysis because it includes early utilization
data from CY 2018, the first year that CMS began paying for
calcimimetics under the ESRD PPS using the TDAPA. Commenters described
various changes occurring with regard to calcimimetics, including
changes in prescriber behavior, facility operational systems, and the
use of oral and IV calcimimetic products. The commenters asserted that
the following factors make utilization data from 2018 inaccurate
because the data fails to account for: (1) Slow adoption of the
intravenous form of calcimimetics due to the change in payment for the
drugs under Part D to Part B; (2) the time it takes for ESRD facilities
to adopt new treatment methods; and (3) a recent steady increase in
clinical utilization.
The commenters stated that the first quarter of 2018 is not an
accurate depiction of utilization because many beneficiaries had a
supply of oral calcimimetics that was paid under the Part D benefit
from 2017, being used at the start of 2018, which reduced utilization
under Part B. The commenters also stated that moving the payment from
Medicare Part D to Part B disrupted business and billing practices for
ESRD facilities. The commenters maintained that small and independent
ESRD facilities had a difficult time incorporating calcimimetics into
clinical practice compared to larger and hospital-based facilities. The
commenters explained that ESRD facilities usually need a longer time to
institute system modifications and adjust business practices when new
treatment methods become available.
The commenters stated that in the beginning of 2018 the new
intravenous form of calcimimetics was approved for treatment, and
clinical adoption has been gradual because it was a new form of
treatment, which is evidenced by
[[Page 71408]]
very low utilization in the early part of CY 2018 followed by steady
growth throughout the year, as shown in the Part B claims data. The
commenters stated that, while use of the intravenous drug increased
each quarter in 2018, the pace of that increase flattened out during CY
2019.
The commenters stated that due to these challenges and shifts in
utilization, they believed that claims data from CY 2018 reflected
lower units of calcimimetics being reported. A few commenters who
disagreed with including CY 2018 claims in the analysis, suggested CMS
trim the first and second quarter of 2018 utilization data from the
data set; however, another subset of commenters recommended CMS remove
the entire year of 2018 data and use CY 2019 data only, since their
analysis shows that year of data to be stable. The majority of the
commenters who disagreed with including the CY 2018 data recommended
that CMS use the most recent 12 months for which complete claims data
are available for rate-setting purposes. In addition, the commenters
asserted that using the most recent utilization data would align with
the proposed approach to use the most recent ASP.
MedPAC supported increasing the ESRD PPS base rate to include the
costs of calcimimetics in the ESRD PPS bundled payment. However, MedPAC
recommended refinements to CMS's proposed methodology to use units
reported on claims from both CYs 2018 and 2019 to determine utilization
for calcimimetics. MedPAC recommended that CMS use only the single year
of claims data that would result in the lowest add-on payment amount
for these products. MedPAC stated that this approach would be
consistent with the methodology used to establish the ESRD PPS base
rate beginning January 1, 2011, as required under MIPPA, which provided
that the estimated amount of total payments under the ESRD PPS for 2011
must be made based on the lowest per patient utilization data from
2007, 2008, or 2009. (Based on CMS's analysis in the CY 2011 ESRD PPS
final rule, claims data from CY 2007 reflected the lowest utilization
of ESRD services.) MedPAC noted the increase of utilization in ESAs
prior to the CY 2011 ESRD PPS final rule and recommended that our
methodology to include calcimimetics in the base rate be consistent
with the lowest per patient utilization methodology. Therefore, MedPAC
recommended that CMS use the year that would result in the lowest
average payment amount per treatment for calcimimetics.
Response: We appreciate the feedback on our proposal and the
viewpoints expressed by the commenters. Based on the recommendations we
received to use a single year or the most recent 12 months of claims
data, we re-examined the most recently available data. First, an
approach that uses the most recent 12 months of claims data would
result in a base rate increase that is larger than when both 2018 and
2019 data are used. Second, using the most recent 12 months of claims
data would not sufficiently capture the developments with calcimimetics
that took place at the end of 2018. For these reasons, we believe this
is not the better approach.
Next, using only 2019 claims data would diminish the impact of the
entry of oral generic calcimimetics into the market in mid-2018. In
examining the 2 full years of data, we see a continued increase in the
utilization of the oral generic calcimimetic drugs, a steep decline in
the brand-name oral calcimimetic, and a slow increase in the brand-name
injectable version. Using only CY 2019 claims data would also result in
a base rate increase that is larger than when both CYs 2018 and 2019
data are used. We recognize the 2018 claims data may have demonstrated
low uptake for the injectable calcimimetic, but it also may reflect
that the significant upswings in utilization of the injectable
calcimimetic in 2019 were from ESRD facilities anticipating CMS ending
the TDAPA for calcimimetics beginning January 2020. As MedPAC noted,
when the ESRD PPS was implemented in 2011, there had been a pattern of
ESA overutilization before the ESRD PPS bundled payment was implemented
and a decline in utilization of ESAs post-implementation of the ESRD
PPS that required a rebasing of the amount included in the ESRD PPS
bundled payment for ESAs. We believe it is appropriate to consider both
the slow uptake of the injectable calcimimetic and the ramping up of
utilization of generic oral calcimimetics, following the loss of the
exclusivity of the brand name product in addition to the anticipation
of the TDAPA ending in 2019. If we used only CY 2019 data, we believe
that we would be overestimating the use of calcimimetics in the ESRD
PPS bundled payment. For these reasons, we also believe using only 2019
claims data for rate setting is not the better approach.
Lastly, we examined an approach that would take into account some
commenters' request for the lowest add-on payment amount, other
commenters' request to focus on more recent data, and CMS's goal to use
a robust data set that accounts for the different types of medication
and innovation. For this approach, we examined 18 months of claims data
starting with the third quarter of 2018 through the fourth quarter of
2019. In reviewing the 18 months of data, we continue to capture the
increase in the utilization of the oral generic calcimimetic drugs and
the decline in the brand-name oral calcimimetic, which, as we noted
above, was apparent to us when we examined the full 2 years of data.
Using the 18 months of data from the third quarter of 2018 through the
fourth quarter of 2019 would result in a base rate increase that is
larger than when both CYs 2018 and 2019 data are used, but smaller than
when only CY 2019 is used. We believe the data set should reflect both
the slow uptake of the injectable calcimimetic and the ramping up of
utilization of generic oral calcimimetics. We also believe that the
commenters are reasonable in wanting to incorporate more recent data in
the utilization, and view the use of 18 months of data as a mid-point
between the proposal and what commenters suggested is appropriate.
Accordingly, we have concluded that using 18 months of claims data is
the most appropriate approach. We also agree with commenters that there
have been shifts in the utilization of calcimimetics. We believe that
the shifts in utilization reveal a rapidly changing market. We plan to
revisit the calcimimetic Medicare expenditures in the future, such as
when a generic injectable comes on the market.
We believe using 18 months of claims data provides us with the most
accurate data set reflecting paid claims for generic and brand-name
oral calcimimetic, along with the injectable calcimimetic. Therefore,
for this final rule, we used adjudicated claims from the third quarter
of 2018 through the fourth quarter of 2019 in the final calculation of
the modification to the base rate. For the CY 2018 utilization data for
calcimimetics, we used the latest available claims data based on the
third and fourth quarters of CY 2018 ESRD facility claims, updated
through June 30, 2019 (that is, claims with dates of service from July
1 through December 31, 2018, that were received, processed, paid, and
passed to the NCH file as of June 30, 2019). For CY 2019 utilization
data, we used the latest available CY 2019 ESRD facility claims,
updated through June 30, 2020 (that is, claims with dates of service
from January 1 through December 31, 2019, that were received,
processed, paid, and passed to the NCH file as of June 30, 2020).
Comment: MedPAC recommended that we set the price for calcimimetics
[[Page 71409]]
using values from the calendar quarter of ASP data that would result in
the lowest total expenditures for these drugs, at ASP+0. MedPAC also
stated that using the most recent calendar quarter of 2020 ASP data
would best reflect the increasing use of oral generic calcimimetics,
which entered the market in late December 2018, and how ESRD facilities
are likely to purchase and furnish the oral calcimimetics in the
future. MedPAC recommended this methodology because it is consistent
with how CMS bases the price for calcimimetics under current
regulations. MedPAC strongly supported pricing for calcimimetics under
the proposed methodology at ASP+0.
The majority of the commenters recommended that CMS calculate the
price using the most recent quarter ASP data available at ASP+6 because
they believed this would more accurately reflect the cost ESRD
facilities incur when purchasing and administering these drugs.
Commenters stated that most small and independent providers experience
less favorable acquisition costs for calcimimetics than other provider
types, with costs that exceed 100 percent of ASP. The commenters stated
that CMS's methodology should account for actual acquisition costs
incurred by providers, especially small and independent providers with
limited resources, and for these reasons, recommended that the
methodology be refined to add the price for calcimimetics at ASP+6
rather than ASP+0.
Response: We appreciate the feedback we received from the
commenters with regard to our proposal to base pricing for
calcimimetics at ASP+0. We agree with MedPAC that ASP+0 is appropriate
as the basis for calcimimetics. Although some commenters suggested that
the base pricing for calcimimetics should be ASP + 6, we believe this
would be a duplicative payment because the 6 percent accounts for
storage and administration of drugs and drug products, along with
routine administrative costs, and these costs are already included in
the ESRD PPS base rate. We understand the concerns expressed by the
commenters about ASP, and the difficulties that small ESRD facilities
may encounter if they are unable to negotiate the lower drug prices
attributed to volume, and inaccessibility to supply chain discounts;
however, we do not think this overrides the concern about providing
duplicative payment. As we discussed in the CY 2019 ESRD PPS final rule
(83 FR 56945), the intent of the TDAPA is to support ESRD facilities in
the uptake of the drugs and biological products that are eligible for
the add-on payment adjustment. In addition to the reasons discussed
previously, and since our payment policy for the TDAPA is based on
ASP+0, we believe basing the price for calcimimetics in the ESRD PPS
base rate on ASP+0 is appropriate and consistent with our policy;
therefore we are finalizing as proposed.
Comment: A few commenters recommended CMS create a methodology for
a beneficiary-targeted add-on payment to the ESRD PPS base rate. The
commenters recommended a targeted adjustment for the oral calcimimetic
and a separate adjustment for the intravenous calcimimetic, given that
only a subset of beneficiaries receive calcimimetics and the costs of
calcimimetics would be targeted to only beneficiaries receiving the
drug. MedPAC agreed with our proposal to spread the cost of
calcimimetics across all dialysis treatments, rather than just for the
treatments of beneficiaries receiving the drugs.
Response: The ESRD PPS is a payment system based on the ``average
patient,'' which means it is based on the costs of the average patient.
Currently, payment under the ESRD PPS is not targeted towards patients
who utilize specific drugs, items, or services. Our proposed
methodology would result in a flat increase to the base rate for all
treatments and would not vary when facilities use more or less than the
average amount. We believe the proposed methodology aligns with how
other services are paid under the bundled payment system and reflects
the average cost for furnishing renal dialysis services to patients.
Therefore, we are finalizing this aspect of our proposal as proposed.
Comment: A few commenters disagreed with the proposed methodology
to reduce the average per-treatment payment amount by 1 percent. The
commenters stated that it would be harder for ESRD facilities to meet
the eligibility requirements for outlier payments in CY 2021 and
beyond.
Response: Beginning January 1, 2021, calcimimetics are eligible for
outlier payments. In the CY 2011 ESRD PPS final rule, we applied a 1
percent reduction to the unadjusted ESRD PPS base rate to account for
outlier payments. An ESRD facility that treats beneficiaries with
unusually high resource requirements, as measured by their use of
identified services beyond a specified threshold, is entitled to
outlier payments. In order for the application of the 1 percent outlier
to be maintained, we believe 1 percent must be excluded from the
addition to the ESRD PPS base rate for calcimimetics. We continue to
believe that a 1 percent outlier payment adjustment balances the need
to pay for unusually costly resource-intensive cases, while also
ensuring an adequate add-on to the base rate for beneficiaries who do
not qualify for outlier payments. Therefore, we are finalizing this
aspect of our proposal as proposed.
Comment: Some commenters stated that CMS should not use the
alternative method discussed in the CY 2021 ESRD PPS proposed rule,
under which total calcimimetic expenditures would be divided by the
total number of HD-equivalent dialysis treatments in 2018 and 2019. The
commenters stated that the alternative method expenditures for
calcimimetics is based upon the previous policy of paying ASP+6 percent
and does not reflect ASP+0. The commenters stated that the alternative
method would likely result in a much higher increase to the base rate,
which in turn would result in higher cost-sharing for beneficiaries.
The commenters agreed that the alternative method does not factor in
the impact of the oral generic calcimimetics, whereas the proposed
methodology incorporates the recent pricing of oral generic
calcimimetics into the weighting.
Response: We agree with the commenters' assessment of the
alternative methodology, that it does not factor in the impact of oral
generic calcimimetics and does not reflect ASP+0, and we are not
adopting it in this final rule. We continue to believe that it is more
appropriate for the ESRD PPS base rate to reflect the values from the
most recent calendar quarter of ASP calculations available, since that
aligns with how ESRD facilities would be purchasing and furnishing the
oral calcimimetics, rather than using expenditure data from previous
periods. Further, including the higher payment for oral calcimimetics
that have lower priced generic equivalents is not in keeping with the
agency's overall goals of lowering drug prices.
Comment: We received several comments that were beyond the scope of
the proposed rule. Some commenters stated that CMS should apply the 3-
year data collection policy to all TDAPA-eligible therapies in the
future because it is critical for CMS to have 2-full calendar years of
claims data (which requires 3 years of payment of the TDAPA to address
data lags) to enable an appropriate understanding of actual product
utilization in clinical care.
Response: Currently, the TDAPA payment is applicable for a minimum
period of 2 years. For new drugs and biological products that are
eligible for the TDAPA in the future and are not considered included in
the ESRD PPS
[[Page 71410]]
base rate, CMS will continue to require that the TDAPA is paid until
sufficient claims data for rate setting analysis is available, as
required by the regulations. When a new renal dialysis drug or
biological product is already included in a functional category, then
the purpose of the TDAPA is to facilitate uptake of the new product
into the business process of the ESRD facility. Although we would
collect the data for purposes of analyzing utilization, we would not
collect it for purposes of a potential modification to the base rate.
Therefore we would not need 3 years of data for those drugs.
Comment: Some commenters stated concerns with the payment increase
to the patient's out-of-pocket cost due to the proposed increase to the
ESRD PPS bundled payment for calcimimetics, and recommended CMS keep
the financial burden to the beneficiary population in consideration.
Response: We understand that beneficiary coinsurance is a concern.
When evaluating the methodology for modifying the ESRD PPS base rate
for calcimimetics, we were cognizant of the burden of beneficiary co-
insurance and worked to strike a balance with beneficiary need for
access at a reasonable price, and supporting a new therapy for a
significant portion of the dialysis population. We believe the final
policy for the inclusion of dollars in the base rate strikes the
balance we are seeking.
Final Rule Action: After consideration of the comments we received,
we are finalizing Sec. 413.234 to add paragraph (f), which establishes
the methodology for modifying the ESRD PPS base rate to account for
calcimimetics in the ESRD PPS bundled payment, as proposed, with one
modification. We are using claims data from the third quarter of CY
2018 through the fourth quarter of CY 2019, instead of CYs 2018 and
2019 claims data, to determine the utilization of calcimimetics for
purposes of our methodology.
Specifically, to calculate the final amount for calcimimetics to be
added to the ESRD PPS base rate beginning January 1, 2021, we applied
the values from the most recent calendar quarter 2020 ASP + 0
calculations available to the public for calcimimetics to the
utilization period of third quarter of 2018 through the fourth quarter
of 2019 to calculate the calcimimetic expenditure amount for 18 months.
We determined that 1,350,414,515 total units (mg) of oral
calcimimetics were used from Q3 2018 through Q4 2019. With regard to
injectable calcimimetics, we determined that 280,998,916 total units
(0.1 mg) were used from Q3 2018 through Q4 2019. We used the values
from the most recent calendar quarter ASP + 0 calculations available to
the public, which is the fourth quarter of 2020. We used $0.085 per mg
for the oral calcimimetic and $2.023 per 0.1 mg for the injectable
calcimimetic. The prices per unit correspond to 1 mg and 0.1 mg for
cinacalcet and etelcalcetide, respectively. Multiplying the utilization
of the oral and injectable calcimimetics by their respective ASP and
then adding the expenditure amount for both forms of calcimimetics
together results in the total 18-months (Q3 2018 through Q4 2019)
calculated calcimimetic expenditure amount. That is, for this final
rule, we calculated the total calcimimetic expenditure amount to be
$683,246,041.
The total number of paid HD-equivalent dialysis treatments
furnished to Medicare ESRD beneficiaries from the third quarter of CY
2018 through the fourth quarter of CY 2019 was 68,148,651. This total
number of paid treatments reflects all paid dialysis treatments
regardless of whether a calcimimetic was furnished. Dividing the
calcimimetic expenditure amount by the total number of paid HD-
equivalent dialysis treatments provides an average per treatment
payment amount of $10.03. We then reduced this amount by 1 percent to
account for the outlier policy under Sec. 413.237 to get a total of
$9.93 ($10.03 x .99 = $9.93). Due to the effect of generic
calcimimetics in lowering the drug prices for calcimimetics, $9.93 is
the final amount added to the CY 2021 ESRD PPS base rate to account for
calcimimetics in the ESRD PPS bundled payment.
2. Changes to the TPNIES Eligibility Criteria
a. Background
In the CY 2020 ESRD PPS final rule (84 FR 60681 through 60698), CMS
established a transitional add-on payment adjustment for certain new
and innovative renal dialysis equipment and supplies under the ESRD
PPS, under the authority of section 1881(b)(14)(D)(iv) of the Act, in
order to support ESRD facility use and beneficiary access to these new
technologies. We established this payment adjustment to help address
the unique circumstances experienced by ESRD facilities when
incorporating new and innovative equipment and supplies into their
businesses and to support ESRD facilities transitioning or testing
these products during the period when they are new to market. We added
Sec. 413.236 to establish the eligibility criteria and payment
policies for the transitional add-on payment adjustment for new and
innovative renal dialysis equipment and supplies, which we call the
TPNIES.
We established in Sec. 413.236(b) that for dates of service
occurring on or after January 1, 2020, CMS will provide the TPNIES to
an ESRD facility for furnishing a covered equipment or supply only if
the item: (1) Has been designated by CMS as a renal dialysis service
under Sec. 413.171, (2) is new, meaning it is granted marketing
authorization by FDA on or after January 1, 2020, (3) is commercially
available by January 1 of the particular calendar year, meaning the
year in which the payment adjustment would take effect, (4) has a HCPCS
application submitted in accordance with the official Level II HCPCS
coding procedures by September 1 of the particular calendar year, (5)
is innovative, meaning it meets the criteria specified in Sec.
412.87(b)(1) and related guidance, and (6) is not a capital-related
asset that an ESRD facility has an economic interest in through
ownership (regardless of the manner in which it was acquired).
Regarding the innovation requirement in Sec. 413.236(b)(5), in the
CY 2020 ESRD PPS final rule (84 FR 60690), we stated that CMS will use
the following criteria to evaluate substantial clinical improvement
(SCI) for purposes of the TPNIES under the ESRD PPS, based on the
inpatient hospital prospective payment system (IPPS) SCI criteria in
Sec. 412.87(b)(1) and related guidance. Section 412.87(b)(1) includes
the criteria used under the IPPS new technology add-on payment (NTAP)
to determine whether a new technology represents an advance that
substantially improves, relative to renal dialysis services previously
available, the diagnosis or treatment of Medicare beneficiaries.
The totality of the circumstances is considered when making a
determination that a new renal dialysis equipment or supply represents
an advance that substantially improves, relative to renal dialysis
services previously available, the diagnosis or treatment of Medicare
beneficiaries.
A determination that a new renal dialysis equipment or supply
represents an advance that substantially improves, relative to renal
dialysis services previously available, the diagnosis or treatment of
Medicare beneficiaries means one of the following:
The new renal dialysis equipment or supply offers a
treatment option for a patient population unresponsive to, or
ineligible for, currently available treatments; or
[[Page 71411]]
The new renal dialysis equipment or supply offers the
ability to diagnose a medical condition in a patient population where
that medical condition is currently undetectable, or offers the ability
to diagnose a medical condition earlier in a patient population than
allowed by currently available methods, and there must also be evidence
that use of the new renal dialysis service to make a diagnosis affects
the management of the patient; or
The use of the new renal dialysis equipment or supply
significantly improves clinical outcomes relative to renal dialysis
services previously available as demonstrated by one or more of the
following: (1) A reduction in at least one clinically significant
adverse event, including a reduction in mortality or a clinically
significant complication; (2) a decreased rate of at least one
subsequent diagnostic or therapeutic intervention; (3) a decreased
number of future hospitalizations or physician visits; (4) a more rapid
beneficial resolution of the disease process treatment including, but
not limited to, a reduced length of stay or recovery time; (5) an
improvement in one or more activities of daily living; (6) an improved
quality of life; or (7) a demonstrated greater medication adherence or
compliance; or,
The totality of the circumstances otherwise demonstrates
that the new renal dialysis equipment or supply substantially improves,
relative to renal dialysis services previously available, the diagnosis
or treatment of Medicare beneficiaries.
Evidence from the following published or unpublished information
sources from within the United States (U.S.) or elsewhere may be
sufficient to establish that a new renal dialysis equipment or supply
represents an advance that substantially improves, relative to renal
dialysis services previously available, the diagnosis or treatment of
Medicare beneficiaries: Clinical trials, peer reviewed journal
articles; study results; meta-analyses; consensus statements; white
papers; patient surveys; case studies; reports; systematic literature
reviews; letters from major healthcare associations; editorials and
letters to the editor; and public comments. Other appropriate
information sources may be considered.
The medical condition diagnosed or treated by the new renal
dialysis equipment or supply may have a low prevalence among Medicare
beneficiaries.
The new renal dialysis equipment or supply may represent an advance
that substantially improves, relative to renal dialysis services
previously available, the diagnosis or treatment of a subpopulation of
patients with the medical condition diagnosed or treated by the new
renal dialysis equipment or supply.
We also established a process modeled after IPPS's process of
determining if a new medical service or technology meets the SCI
criteria specified in Sec. 412.87(b)(1). Specifically, similar to the
IPPS NTAP, we wanted to align our goals with the agency's efforts to
transform the healthcare delivery system for the ESRD beneficiary
through competition and innovation to provide patients with better
value and results. As we discuss in the CY 2020 ESRD PPS final rule (84
FR 60682), we believe it is appropriate to facilitate access to new and
innovative equipment and supplies through add-on payments similar to
the IPPS NTAP program and to provide innovators with standard criteria
for both inpatient and outpatient settings. In Sec. 413.236(c), we
established a process for our announcement of TPNIES determinations and
a deadline for consideration of new renal dialysis equipment or supply
applications under the ESRD PPS. CMS will consider whether a new renal
dialysis equipment or supply meets the eligibility criteria specified
in Sec. 413.236(b) and summarize the applications received in the
annual ESRD PPS proposed rules. Then, after consideration of public
comments, we will announce the results in the Federal Register as part
of our annual updates and changes to the ESRD PPS in the ESRD PPS final
rule. The TPNIES applications for CY 2021 were discussed in section
II.C.2 of the CY 2021 ESRD PPS proposed rule as well as section II.C.2
of this final rule. CMS will only consider a complete application
received by CMS by February 1 prior to the particular calendar year,
meaning the year in which the payment adjustment would take effect, and
FDA marketing authorization for the equipment or supply must occur by
September 1 prior to the particular calendar year. We stated in the CY
2020 ESRD PPS final rule (80 FR 60690) that we would establish a
workgroup of CMS medical and other staff to review the studies and
papers submitted as part of the TPNIES application, the public comments
we receive, and the FDA marketing authorization and HCPCS application
information and assess the extent to which the product provides SCI
over current technologies.
We established Sec. 413.236(d) to provide a payment adjustment for
a new and innovative renal dialysis equipment or supply. Section
413.236(d)(1) states that the TPNIES is paid for 2-calendar years.
Section 413.236(d)(2) provides that, following payment of the TPNIES,
the ESRD PPS base rate will not be modified and the new and innovative
renal dialysis equipment or supply will become an eligible outlier
service as provided in Sec. 413.237.
Under Sec. 413.236(e)(1), the Medicare Administrative Contractors
(MACs), on behalf of CMS, will establish prices for the new and
innovative renal dialysis equipment and supplies that meet the
eligibility criteria specified in Sec. 413.236(b) using verifiable
information from the following sources of information, if available:
(1) The invoice amount, facility charges for the item, discounts,
allowances, and rebates; (2) the price established for the item by
other MACs and the sources of information used to establish that price;
(3) payment amounts determined by other payers and the information used
to establish those payment amounts; and (4) charges and payment amounts
required for other equipment and supplies that may be comparable or
otherwise relevant.
b. Changes to Eligibility for the TPNIES
Currently, in Sec. 413.236(b)(2), one eligibility requirement for
the TPNIES is that an equipment or supply must be new, meaning it is
granted marketing authorization by FDA on or after January 1, 2020. In
establishing this requirement, we tied what is considered new to
January 1, 2020, the effective date of the TPNIES policy. We explained
in the CY 2020 ESRD PPS final rule (84 FR 60685) that by including FDA
marketing authorizations on or after January 1, 2020, we intended to
support ESRD facility use and beneficiary access to the latest
technological improvements to renal dialysis equipment and supplies. As
we stated in the CY 2021 ESRD PPS proposed rule, while we continue to
believe it is appropriate to tie the newness requirement to the date of
the FDA marketing authorization for the reasons discussed in the CY
2020 ESRD PPS final rule, we do not believe newness should be tied to
the effective date of the TPNIES policy going forward, for the reasons
discussed below. In addition, we believe this eligibility criterion
should address when an equipment or supply is no longer considered new.
Under the current requirement at Sec. 413.236(b)(2), we could receive
an application for the TPNIES for equipment and supplies many years
after FDA marketing authorization, when the equipment is no longer new.
In the CY 2020 ESRD PPS proposed rule (84 FR 38353), while we
proposed to define new renal dialysis equipment
[[Page 71412]]
and supplies as those that are granted marketing authorization by FDA
on or after January 1, 2020, we also solicited comment on whether a
different FDA marketing authorization date, for example, on or after
January 1, 2019, might be appropriate. We explained in the CY 2020 ESRD
PPS final rule (84 FR 60688 through 60689) that while some commenters
expressed support for the proposed definition, most of the comments
were focused on the merits of establishing a date for newness that
precedes the effective date of the TPNIES policy and whether all renal
dialysis equipment and supplies must seek FDA marketing authorization.
None of the comments addressed whether tying TPNIES eligibility to the
TPNIES policy effective date or any fixed date would limit the TPNIES
to new and innovative equipment and supplies.
After careful consideration of these comments, in the CY 2020 ESRD
PPS final rule, we finalized the proposed definition of new to mean the
renal dialysis equipment or supply was granted marketing authorization
by FDA on or after January 1, 2020. We stated that while we appreciated
that manufacturers of renal dialysis equipment and supplies that were
granted FDA marketing authorization in prior years would want these
products to be eligible for the TPNIES, our goal is not to provide a
payment adjustment for all the products that have received FDA
marketing authorization or for products that have had limited market
uptake, but rather to establish an add-on payment adjustment for
certain new and innovative products in order to support uptake by ESRD
facilities of new and innovative renal dialysis equipment and supplies.
In addition, we stated in the CY 2020 ESRD PPS final rule that we
appreciated the complex issues the commenters raised if we were to
select an earlier FDA marketing authorization date, and believed our
approach will avoid the need to address those issues. We noted that the
ESRD PPS is a prospective payment system, in which changes are
generally made prospectively, including eligibility requirements for
add-on payment adjustments. In addition, we noted that this FDA
marketing authorization date of January 1, 2020 or later is consistent
with the TDAPA's definition of a new renal dialysis drug or biological
product.
As we stated in the CY 2021 ESRD PPS proposed rule (85 FR 42142
through 42143), we no longer believe an item should be considered new,
based on the TPNIES policy effective date of January 1, 2020. Rather,
we believe that it is important for the TPNIES policy to provide a
window of time when a new renal dialysis equipment or supply is
considered new to provide transparency to potential applicants. We
noted that, under the proposal, the TPNIES policy would still be
effective as of January 1, 2020 and therefore no equipment or supply
receiving FDA marketing authorization before January 1, 2020 would be
eligible for the TPNIES. However, we proposed to revise Sec.
413.236(b)(2) to remove ``on or after January 1, 2020'' and to reflect
the definition of new to mean, within 3 years beginning on the date of
FDA marketing authorization. By defining new in this manner, we would
be giving entities wishing to apply for the TPNIES for their equipment
or supply 3 years beginning on the date of FDA marketing authorization
in which to submit their applications, while still limiting eligibility
for the TPNIES to new technologies. We proposed a 3-year newness window
to be consistent with the timeframes under the IPPS NTAP requirements
in Sec. 412.87(b)(2). Under the NTAP, new technologies are considered
to be new for 2 to 3 years after the point at which data begin to
become available reflecting the inpatient hospital code assigned to the
new service or technology. We noted that under the hospital outpatient
PPS the pass-through payment application for a medical device must also
be submitted within 3 years from the date of the initial FDA approval
or clearance, if required, unless there is a documented, verifiable
delay in U.S. market availability after FDA approval or clearance is
granted, in which case CMS will consider the pass-through payment
application if it is submitted within 3 years from the date of market
availability.
In addition, we proposed to revise Sec. 413.236(b) to remove ``For
dates of service occurring on or after January 1, 2020'' and to revise
Sec. 413.236(a) to reflect the January 1, 2020 effective date of the
TPNIES policy finalized in the CY 2020 ESRD PPS final rule. We also
proposed other revisions to this paragraph, which are discussed in
section II.B.3.b.(1) of this final rule.
We sought comment on our proposal to define new for purposes of the
TPNIES eligibility as within 3 years beginning on the date of FDA
marketing authorization. In addition, we stated that we understood
there may be situations in which a manufacturer has FDA marketing
authorization for an item, but the process of manufacturing the item
has been delayed, for example, by a PHE, such as the current COVID-19
pandemic. Therefore, we also sought comment on the number of years for
an item to be considered new, or if newness should be based on
different criteria such as the later of marketing availability or the
date of FDA marketing authorization.
Currently, Sec. 413.236(b)(4) requires applicants for the TPNIES
to have a HCPCS application submitted in accordance with the official
Level II HCPCS coding procedures by September 1 of the particular
calendar year. Section 413.236(c) currently requires applicants for
TPNIES to have the FDA marketing authorization for the equipment or
supply by September 1 prior to the particular calendar year.
After publication of the CY 2020 ESRD PPS final rule, CMS updated
its HCPCS Level II coding procedures to enable shorter and more
frequent HCPCS code application cycles. Beginning in January 2020, CMS
implemented quarterly HCPCS code application opportunities for drugs
and biological products, and biannual application opportunities for
durable medical equipment, prosthetics, orthotics, and supplies
(DMEPOS) and other non-drug, non-biological items and services.
As the Administrator of CMS announced \2\ in May 2019, this change
is part of CMS' broader, comprehensive initiative to foster innovation
and expedite adoption of and patient access to new medical
technologies. CMS' delivery on this important goal necessitated
procedural changes that balance the need to code more frequently with
the amount of time necessary to accurately process applications. CMS
has released two documents with detailed information on the updated
HCPCS Level II coding procedures, application instructions, and
deadlines for 2020. Both documents, HCPCS Level II Coding Procedures
\3\, and HCPCS Level II Code Modification Application Instructions for
the 2020 Coding Cycle \4\ are available on the CMS website. Under the
new guidance, coding cycles for DMEPOS items and services will occur no
less frequently than biannually. For 2020, the deadline for HCPCS Level
II code applications for biannual Coding Cycle 1 for DMEPOS items and
services was January 6, 2020 with issuance of final code decisions
occurring July 2020.
[[Page 71413]]
These final code decisions are effective October 1, 2020. For biannual
Coding Cycle 2, the code application deadline for DMEPOS items and
services is June 29, 2020 with issuance of final code decisions
occurring January 2021 or earlier. These final code decisions are
effective April 1, 2021. These dates are specific for 2020 and may
change annually. Specific dates for biannual Coding Cycles 1 and 2 for
future years will be published on the HCPCS website annually.
---------------------------------------------------------------------------
\2\ https://www.cms.gov/newsroom/press-releases/cms-outlines-comprehensive-strategy-foster-innovation-transformative-medical-technologies.
\3\ https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/2018-11-30-HCPCS-Level2-Coding-Procedure.pdf.
\4\ https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/2020-HCPCS-Application-and-Instructions.pdf.
---------------------------------------------------------------------------
Under the new biannual Coding Cycle 2 for DMEPOS items and
services, in order to obtain a final HCPCS Level II code decision by
January 1, 2021, the applicant must have submitted a complete HCPCS
Level II code application along with the FDA marketing authorization
documentation to CMS by June 29, 2020. In light of the change to
biannual coding cycles, we stated in the CY 2021 ESRD PPS proposed rule
that we reassessed the TPNIES eligibility criterion in Sec.
413.236(b)(4), which is related to submission of the HCPCS Level II
code application as well as Sec. 413.236(c), which discusses the
deadlines for consideration of new renal dialysis equipment or supply
applications and found that they conflict with the current HCPCS Level
II coding guidelines.
Because our HCPCS Level II coding guidelines require that
applicants submit complete code applications for DMEPOS items and
services to CMS by the deadline for biannual Coding Cycle 2 as
specified in the HCPCS Level II coding guidance on the CMS website in
order for a final HCPCS Level II code decision to be made by the
following January 1 and require that documentation of FDA marketing
authorization be submitted by the applicant to CMS by the HCPCS Level
II code application deadline, we proposed to align the TPNIES
regulation at Sec. 413.236(b)(4) and (c) with these guidelines. We
stated in the CY 2021 ESRD PPS proposed rule (85 FR 42144) that we
believe this alignment would provide consistency across CMS processes
and transparency on deadlines for applicants for the TPNIES. We further
stated that in the event of a delay in the final HCPCS Level II coding
decision, a miscellaneous code will be used in the interim until a
final coding decision is made.
We also proposed to correct a technical error in Sec.
413.236(b)(4), which requires the HCPCS application to be submitted by
September 1 ``of'' the particular calendar year, meaning the year in
which the payment adjustment would take effect. As we explained in the
CY 2021 ESRD PPS proposed rule (85 FR 42144), in accordance with the
TPNIES policy, we would need to have the HCPCS application submitted
``prior to'' the particular calendar year to be able to make a
determination of TPNIES eligibility for payment to occur in the
particular calendar year.
Therefore, we proposed to revise Sec. 413.236(b)(4) to add the
word ``complete'' and to replace ``September 1'' with ``the HCPCS Level
II code application deadline for biannual Coding Cycle 2 for DMEPOS
items and services as specified in the HCPCS Level II coding guidance
on the CMS website,'' and replace the word ``of'' with ``prior to'' to
reflect that the HCPCS code application for biannual Coding Cycle 2
must be complete and submitted as specified in the HCPCS Level II
coding guidance on the CMS website prior to the particular calendar
year. We explained in the CY 2021 ESRD PPS proposed rule that this
HCPCS application submission deadline for a HCPCS Level II code
application may result in a final HCPCS code determination by January
1, when the TPNIES payment would begin. We noted that, for 2020
biannual Coding Cycle 2, final decisions on HCPCS Level II codes issued
by January 1, 2021 are not effective until April 1, 2021. For this
reason, during this interim period, we proposed to use a miscellaneous
HCPCS code to provide the TPNIES payment. We stated that in the event
of a delay in the final HCPCS Level II coding decision, a miscellaneous
code will be used in the interim until the later effective date. In
addition, we proposed a technical change to Sec. 413.236(b)(4) to be
consistent with how CMS references the HCPCS Level II coding
procedures. That is, we proposed to revise Sec. 413.236(b)(4) from
``official Level II HCPCS coding procedures'' to ``HCPCS Level II
coding procedures on the CMS website''.
In addition, we proposed to revise Sec. 413.236(c) to replace
``September 1'' with ``the HCPCS Level II code application deadline for
biannual Coding Cycle 2 for DMEPOS items and services as specified in
the HCPCS Level II coding guidance on the CMS website'' to reflect that
FDA marketing authorization for the new and innovative equipment or
supply must accompany the HCPCS application prior to the particular
calendar year in order for the item to qualify for the TPNIES in the
next calendar year. Although applicants for the TPNIES may submit a
TPNIES application while the equipment or supply is undergoing the FDA
marketing authorization process (since the deadline for the TPNIES
application is February 1), under our proposal, FDA marketing
authorization of the equipment or supply must be granted prior to the
HCPCS Level II code application deadline. If FDA marketing
authorization is not granted prior to the HCPCS Level II code
application deadline, the TPNIES application would be denied and the
applicant would need to reapply and submit an updated application by
February 1 of the following year or within 3 years beginning on the
date of FDA marketing authorization, in accordance with the proposed
revisions to Sec. 413.236(b)(2) discussed previously in this final
rule.
Currently, Sec. 413.236(b)(5) requires that the new equipment or
supply be innovative, meaning it meets the criteria specified in Sec.
412.87(b)(1) of this chapter and related guidance. As discussed
previously in the CY 2021 ESRD PPS proposed rule and this final rule,
Sec. 412.87(b)(1) includes the criteria used under the IPPS NTAP to
determine whether a new technology represents an advance that
substantially improves, relative to technologies previously available,
the diagnosis or treatment of Medicare beneficiaries. In Sec.
413.236(b)(5) we adopted the same SCI criteria to determine if a new
renal dialysis equipment or supply is innovative for purposes of the
TPNIES under the ESRD PPS. We also stated in the CY 2020 ESRD PPS final
rule (84 FR 60690) our intention to adopt any future modifications to
the IPPS SCI criteria so that innovators would have standard criteria
to meet for both settings. While we adopted the IPPS SCI criteria under
Sec. 412.87(b)(1), we did not adopt the alternative pathway for
breakthrough devices (84 FR 42296) under the ESRD PPS.
In the fiscal year (FY) 2020 IPPS final rule (84 FR 42180 through
42181), CMS codified additional SCI criteria that had been included in
manuals and other sub-regulatory guidance. In accordance with the
reference to Sec. 412.87(b)(1), we adopted the FY 2020 IPPS changes to
the SCI criteria, and any future changes to the SCI criteria, by
reference, unless and until we make any changes to the criteria through
notice-and-comment rulemaking. Although the codification of the related
guidance for the IPPS SCI occurred prior to the publication of the CY
2020 ESRD PPS final rule, we inadvertently included a reference to
related guidance in Sec. 413.236(b)(5). Therefore, we proposed to
revise Sec. 413.236(b)(5) to remove ``and related guidance'' to
reflect that all related SCI guidance has now been incorporated into
Sec. 412.87(b)(1).
The comments and our responses to the comments on our proposed
changes
[[Page 71414]]
to the eligibility criteria for the TPNIES are set forth below.
Comment: Several national associations of dialysis stakeholders,
including organizations representing large dialysis organizations (LDO)
and non-profit facilities, expressed support for the proposal to change
the current definition of ``new'' to give entities wishing to apply for
the TPNIES 3 years beginning on the date of FDA marketing authorization
in which to submit their applications. An LDO requested that CMS
monitor this window to ensure that 3 years is sufficient to allow
manufacturers time to gather high-quality evidence of SCI for their
technologies. However, a software company that developed a renal
product that has demonstrated SCI, but was approved by the FDA almost 7
years ago, commented that 3 years is not long enough for its product to
qualify for TPNIES consideration. The software company asked CMS to
consider a longer period of eligibility for the TPNIES primarily
because the dialysis industry is slow to uptake innovations. The
company suggested that CMS could extend the window selectively if the
applicant can show that an innovative technology has no other FDA-
authorized counterpart with similar technology. The software company
asserted that by lengthening the period of eligibility for the TPNIES
program, with added criteria to maintain a high level of selectivity,
CMS would allow that company and other worthy innovators to receive the
TPNIES. The company asked that CMS consider making changes to the
eligibility criteria for TPNIES that will open up the potential for
providers to receive reimbursement for the use of technologies that can
still be proven to be innovative and demonstrate SCI even though their
FDA authorization is beyond the 3-year period.
Response: We appreciate the commenters' support for the proposal
and want to point out that TPNIES applicants may submit an application
while the equipment or supply is pending marketing authorization by the
FDA, however, FDA marketing authorization must be submitted with the
HCPCS application. We believe that 3 years is sufficient time for
manufacturers to gather high-quality evidence of SCI for their product
and establish their manufacturing, marketing, and distribution
strategies. This is consistent with the period of time during which
qualifying items and services under the Hospital Inpatient Prospective
Payment System NTAP are considered new. We intend to monitor the
process to ensure we provide the TPNIES to new and innovative renal
dialysis equipment and supplies.
Regarding the suggestion that CMS extend the window of TPNIES
eligibility if the applicant can show an innovative technology has no
other FDA-authorized counterpart with similar technology, we thank the
commenter for this input. We did not propose this policy in the CY 2021
ESRD PPS proposed rule, but will take this into consideration for
future rulemaking.
Comment: Several national associations of dialysis stakeholders,
including organizations representing LDOs and non-profit facilities,
expressed support for the proposal to align the TPNIES with the new
biannual Coding Cycle 2 application deadline as specified in the HCPCS
Level II coding guidance on the CMS website. One commenter pointed out
the alignment of the TPNIES and HCPCS processes can promote developer
and manufacturer confidence by enabling them to better navigate
multiple processes, specifically, marketing authorization at the FDA
and HCPCS coding at CMS, both critical to bringing a product to market.
Response: We appreciate the support for the proposal.
Comment: We did not receive comments on the proposed technical
change to Sec. 413.236(b)(5) to remove ``and related guidance'' to
reflect that all related SCI guidance has been incorporated into Sec.
412.87(b)(1). However, several commenters expressed their views about
the SCI criteria. While most commenters expressed support for the use
of the SCI criteria to target the increase in Medicare payments and
beneficiary coinsurance to clinically meaningful and innovative items,
others stated that the criteria are overly restrictive. One commenter
stated that some of the SCI criteria do not seem relevant to home
dialysis machines and suggested that the user-friendly nature of these
devices should be considered in the SCI criteria. Several commenters
requested that CMS establish a two-way process for the review of
evidence for TPNIES applicants that allows for rapid patient access to
new and innovative products and that CMS provide reasonable and clear
parameters in discussions with applicants on the types of evidence and
studies technical expert panel reviewers want to see.
Several organizations recommended that the TPNIES process follow
the NTAP program and exempt home dialysis devices classified as
``breakthrough'' by the FDA from the SCI requirement for the two-year
TPNIES period. One association asserted that requiring these devices to
navigate approval processes in both the FDA and CMS creates another
disincentive to parties entering the kidney care arena.
Another commenter stated that evaluation of home dialysis machines
is not the same as evaluation of medications by the FDA where the
evidence of efficacy and safety can be readily attributed to medication
exposure. The commenter noted that, in evaluating home dialysis
machines, clinical outcomes cannot be so readily attributed to the
machine itself because the effect of a home dialysis prescription is a
complex function of three factors: The technical specifications of the
machine; the dialysis prescription; and how patients and care partners
interact with the machine. The commenter disagreed with an exclusive
focus on clinical outcomes in evaluating TPNIES applications and
suggested an approach that involves evaluation of whether the home
dialysis machine improves access to home dialysis, the length of home
dialysis, and clinical outcomes.
Response: We note that the SCI criteria were put into regulation
with the establishment of the TPNIES in the CY 2020 ESRD PPS final
rule. We did not propose changes to Sec. 413.236(b)(5) beyond the
technical change described previously or to the SCI criteria in Sec.
412.87(b)(1). We note that, as we stated in the CY 2020 ESRD PPS final
rule (84 FR 60691), since renal dialysis services are routinely
furnished to hospital inpatients and outpatients, we believe the same
SCI criteria should be used to assess whether a new renal dialysis
equipment or supply warrants additional payment under the ESRD PPS.
However, we appreciate the information provided by the commenters and
will take the comments regarding SCI criteria for the TPNIES into
consideration in future rulemaking.
Final Rule Action: After consideration of the comments we received,
we are finalizing the changes to Sec. 413.236(b) introductory text,
(b)(2) through (5), and (c), as proposed, with the following
modification. As we stated previously, we proposed to revise Sec.
413.236(b)(4) to replace ``September 1'' with ``the HCPCS Level II code
application deadline for biannual Coding Cycle 2 for DMEPOS items and
services as specified in the HCPCS Level II coding guidance on the CMS
website.'' However, we inadvertently omitted the word ``items'' from
the proposed regulation text. In this final rule, we are adding the
word ``items'' to Sec. 413.236(b)(4) consistent with our proposal.
[[Page 71415]]
3. Expansion of the TPNIES for New and Innovative Capital-Related
Assets That are Home Dialysis Machines When Used in the Home for a
Single Patient
a. Background
In response to the proposed expansion of the TDAPA in the CY 2019
ESRD PPS proposed rule, we received several comments regarding payment
under the ESRD PPS for certain new, innovative equipment and supplies
used in the treatment of ESRD. For example, as we described in the CY
2019 ESRD PPS final rule (83 FR 56972), a device manufacturer and
device manufacturer association asked CMS to establish a transitional
add-on payment adjustment for new FDA devices that have received FDA
marketing authorization. They commented on the lack of new devices that
have received FDA marketing authorization for use in an ESRD facility,
highlighting the need to promote dialysis device innovation.
Other commenters, including a professional association and a LDO
urged CMS and other relevant policymakers to prioritize the development
of a clear pathway to add new devices to the ESRD PPS bundled payment
(83 FR 56973). A home dialysis patient group also expressed concern
regarding the absence of a pathway for adding new devices to the ESRD
PPS bundled payment, stating that it left investors and industry wary
of investing in the development of new devices for patients. In
response, we expressed appreciation for the commenters' thoughts
regarding payment for new and innovative devices, and stated that
because we did not include any proposals regarding this issue in the CY
2019 ESRD PPS proposed rule, we considered these suggestions to be
beyond the scope of that rule.
However, in response to this feedback, in the CY 2020 ESRD PPS
proposed rule (84 FR 38354 through 38355), we agreed that additional
payment for certain renal dialysis equipment and supplies may be
warranted under specific circumstances. We proposed to provide the
TPNIES for certain new and innovative renal dialysis equipment and
supplies furnished by ESRD facilities, but excluded from eligibility
capital-related assets, which are defined in the Provider Reimbursement
Manual (chapter 1, section 104.1) as assets that a provider has an
economic interest in through ownership (regardless of the manner in
which they were acquired). The Provider Reimbursement Manual is
available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021929. Examples
of capital-related assets for ESRD facilities are dialysis machines and
water purification systems.
As we explained in the CY 2020 ESRD PPS proposed rule (84 FR
38354), we did not believe capital-related assets should be eligible
for additional payment through the TPNIES because the cost of these
items is captured in cost reports, they depreciate over time, and they
are generally used for multiple patients. In addition, we noted that
since the costs of these items are reported in the aggregate, there is
considerable complexity in establishing a cost on a per treatment
basis. For these reasons, we therefore believed capital-related assets
should be excluded from eligibility for the TPNIES at that time, and we
proposed an exclusion to the eligibility criteria in Sec.
413.236(b)(6). However, we noted that CMS uses capital-related asset
cost data from cost reports in regression analyses to refine the ESRD
PPS so that the cost of any new capital-related assets is accounted for
in the ESRD PPS payment.
In response to the proposed exclusion of capital-related assets, we
received comments from a device manufacturers' association, which
stated that since most medical equipment is purchased as a capital-
related asset, the TPNIES effectively would exclude the innovative
equipment identified in the title of the adjustment. The association
asserted that meaningful clinical improvements and patient experience
improvements are arguably more likely to come from innovation outside
single-use supplies. The association maintained that expanding the
TPNIES to include medical equipment, regardless of how it is purchased
by the provider, would stimulate greater investment in a broader array
of new technologies for ESRD patients.
In response, we stated in the CY 2020 ESRD PPS final rule (84 FR
60688) that we recognize that accounting for renal dialysis service
equipment can vary depending on the individual ESRD facility's business
model. For example, when the owner of the capital-related asset retains
title, then the renal dialysis service equipment is a depreciable asset
and depreciation expense could be itemized. When there is no ownership
of the renal dialysis service equipment, then the item is recorded as
an operating expense.
In addition, in response to comments regarding capital leases, we
noted that regulations at Sec. 413.130(b)(1) specify that leases and
rentals are includable in capital-related costs if they relate to the
use of assets that would be depreciable if the provider owned them
outright. We stated that in the future, we will be closely examining
the treatment of capital-related assets under Medicare, including our
regulations at Sec. 412.302 regarding capital costs in inpatient
hospitals and Sec. 413.130, as they relate to accounting for capital-
related assets, including capital leases and the newly implemented
guidance for finance lease arrangements, to determine if similar
policies would be appropriate under the ESRD PPS.
b. Additional Payment for New and Innovative Capital-related Assets
That are Home Dialysis Machines When Used in the Home for a Single
Patient
Following publication of the CY 2020 ESRD PPS final rule, in which
we finalized the TPNIES policy, we continued to study the issue of
payment for capital-related assets under the ESRD PPS, taking into
account information from a wide variety of stakeholders and recent
developments and initiatives regarding kidney care. For example, we
received additional comments and information from dialysis equipment
and supply manufacturers, and a Technical Expert Panel (TEP) meeting
held in December 2019, regarding the need for additional payment for
capital-related assets under the ESRD PPS.
We also took into account the President's Executive order, signed
on July 10, 2019, aimed at transforming kidney care in America. The
Executive order discussed many new initiatives, including the launch of
a public awareness campaign to prevent patients from going into kidney
failure and proposals for the Secretary to support research regarding
preventing, treating, and slowing progression of kidney disease and
encouraging the development of breakthrough technologies to provide
patients suffering from kidney disease with better options for care
than those that are currently available. Currently, most dialysis is
furnished at ESRD facilities. In-center dialysis can be time-consuming
and burdensome for patients. In addition, the current system
prioritizes payment to in-center dialysis and the goal of the agency is
to incentivize in-home dialysis. A key focus of the Executive order is
the effort to encourage in-home dialysis.
The Executive order is available at: https://www.whitehouse.gov/presidential-actions/executive-order-advancing-american-kidney-health/.
In conjunction with the Executive order, HHS laid out three goals
for improving kidney health (see https://www.hhs.gov/about/news/2019/
07/10/hhs-launches-president-trump-
[[Page 71416]]
advancing-american-kidney-health-initiative.html):
Reducing the number of Americans developing ESRD by 25
percent by 2030.
Having 80 percent of new ESRD patients in 2025 either
receiving dialysis at home or receiving a transplant; and
Doubling the number of kidneys available for transplant by
2030.
In addition, in connection with the President's Executive order, on
July 10, 2019, CMS issued a proposed rule (84 FR 34478) to implement a
new mandatory payment model, known as the ESRD Treatment Choices (ETC)
Model, which would provide new incentives to encourage the provision of
dialysis in the home. The ETC Model, which CMS finalized in a final
rule published in the Federal Register on September 29, 2020 (85 FR
61114), is a mandatory payment model, focused on encouraging greater
use of home dialysis and kidney transplants for ESRD beneficiaries
among ESRD facilities and Managing Clinicians located in selected
geographic areas.
Lastly, as we noted in the CY 2021 ESRD PPS proposed rule, ESRD
patients who receive in-center dialysis are particularly vulnerable
during a PHE and other disasters, and greater use of home dialysis
modalities may expose these patients to less risk. The U.S. is
responding to an outbreak of respiratory disease caused by a novel
(new) coronavirus that was first detected in China and which has now
been detected in more than 215 countries internationally, and all 50
states and the District of Columbia. The virus has been named ``severe
acute respiratory syndrome coronavirus 2'' (SARS-CoV-2) and the disease
it causes has been named ``coronavirus disease 2019'' (`COVID-19').
On January 30, 2020, the International Health Regulations Emergency
Committee of the World Health Organization (WHO) declared the outbreak
a ``Public Health Emergency of international concern.'' On January 31,
2020, the Secretary determined that a PHE exists for the U.S. to aid
the nation's healthcare community in responding to COVID-19 and on
April 21, 2020, the Secretary renewed, effective April 26, 2020, the
determination that a PHE exists. On March 11, 2020, the WHO publicly
declared COVID-19 a pandemic. On March 13, 2020, the President of the
U.S. declared the COVID-19 pandemic a national emergency.
As we discussed in the CY 2021 ESRD PPS proposed rule, the
experience of multiple countries across the globe has demonstrated that
older patients and patients with multiple comorbidities and underlying
health conditions are patients who are more susceptible to the virus
and have a higher risk of morbidity than younger patients without
underlying health conditions. Per the CDC, the risk factors for COVID-
19 include older adults and people of any age who have serious
underlying medical conditions, such as diabetes and chronic kidney
disease undergoing dialysis. Medicare's ESRD population aligns with the
profile of patients who are more susceptible to COVID-19. Therefore, it
is important to reduce the risk of infection and this can be done
through isolating patients from in-center exposure by encouraging home
dialysis.
We also noted that home dialysis would mitigate the risks
associated with dialysis for these patients if the pandemic lasts
longer than expected or is refractory in some way.
(1) Expansion of the TPNIES to Certain New and Innovative Capital-
Related Assets That are Home Dialysis Machines When Used in the Home
for a Single Patient
In response to the President's Executive order, the various HHS
home dialysis initiatives, and the particular benefits of home dialysis
for ESRD beneficiaries during PHEs like the current COVID-19 pandemic,
which we discussed in the previous section, and in consideration of the
feedback we have received from stakeholders, we stated in the CY 2021
ESRD PPS proposed rule that we agree that additional payment through
the TPNIES for certain capital-related assets may be warranted under
specific circumstances outlined in the proposed rule. We noted that in
the CY 2020 ESRD PPS final rule (84 FR 60607), we specifically excluded
capital-related assets from the TPNIES. In commenting on the CY 2020
ESRD PPS proposed rule, most stakeholders expressed concern that the
TPNIES would exclude capital-related assets. In our response to
commenters, we acknowledged that significant innovation and technology
improvement is occurring with dialysis machines and peritoneal dialysis
(PD) cyclers, as well as innovation in the efficiency and effectiveness
of water systems. However, at that time we did not have enough
information regarding current usage of the various financial and
leasing arrangements, such as those involving capital leases for
depreciable assets versus operating leases recorded as operating
expenses. In addition, we noted that we would need to assess
methodological issues regarding depreciation to determine whether
TPNIES eligibility for these items would be appropriate.
We stated in the CY 2020 ESRD PPS final rule that we needed to
further study the specifics of the various business arrangements for
equipment related to renal dialysis services. This would include items
that are: (1) Purchased in their entirety and owned as capital-related
assets; (2) assets that are acquired through a capital lease
arrangement; (3) equipment obtained through a finance lease and
recorded as an asset per the Financial Accounting Standards Board
(FASB) guidance on leases (Topic 842) effective for fiscal years
beginning after December 15, 2018; \5\ or (4) equipment obtained
through an operating lease and recorded as an operating expense. In
addition to the variety of business arrangements, we noted, there are
unknown issues relating to ownership of the item and who retains title,
which may affect the equipment's maintenance expenses for capital-
related assets.
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\5\ https://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176167901010&acceptedDisclaimer=true.
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Further, we noted the issue of single use versus multiple use for
capital-related assets used for renal dialysis services. For example,
some capital-related assets used in-center and in the home setting,
such as skilled nursing facilities (SNFs) and nursing facilities, may
be used by multiple patients in a day, and by multiple patients over
their useful lifetime. Specifically, equipment classified as capital-
related assets may be refurbished and used by another patient. For
example, capital-related assets used by multiple patients in a day
could be Hoyer lifts to transfer patients and wheelchair scales. In the
CY 2021 ESRD PPS proposed rule, we did not propose to include capital-
related assets with multi-patient usage as being eligible for the
TPNIES because we aimed to support the President's Executive order and
HHS goals of promoting home dialysis, which involves a single machine
for patient use. In addition, as we discussed earlier in this section,
it is more complicated to develop a per treatment payment amount for
those items. However, we sought comments on this aspect of our
proposal, and stated our intention to gather additional information
about how ESRD facilities obtain their capital-related assets that have
multi-patient usage in future meetings with the TEP.
We stated in the CY 2021 ESRD PPS proposed rule that as we further
studied this issue, we determined that one business arrangement, that
is, where the capital-related assets are purchased in their entirety
and owned as capital-related assets, could be considered for
[[Page 71417]]
TPNIES eligibility. We noted that we continued to analyze other
business arrangements, but we understood this arrangement is more
straightforward due to ownership being clear, retained at the end of
the TPNIES period, and on the facility's balance sheet. CMS' intent
would be to pay for assets that are owned, whether purchased or
attained through a capital lease. The entity who holds the title to the
asset is the legal owner. At the end of the TPNIES period, the entity
retains ownership of the asset. We stated we would not pay the TPNIES
for equipment that is leased, as the ESRD facility has no ownership
rights. We stated that we believe this is an appropriate initial step
to support home dialysis.
In support of the HHS goals and initiatives to increase home
dialysis following the President's Executive order, we proposed to
provide the TPNIES for eligible new and innovative capital-related
assets that are home dialysis machines when used in the home. We would
limit the payment for new and innovative dialysis machines to those
used for home dialysis in order to target the additional payment
through the TPNIES to equipment that supports the various home dialysis
initiatives currently underway, as discussed previously in the CY 2021
ESRD PPS proposed rule and this section of this final rule. As more
ESRD patients and their nephrologists and other clinicians opt for home
dialysis modalities, we would seek to support ESRD facility use and
beneficiary access to the latest technological improvements to HD and
PD home dialysis machines. As we explained in prior ESRD PPS rules
establishing the TDAPA and TPNIES, ESRD facilities face unique
challenges in incorporating new renal dialysis drugs, biological
products, equipment and supplies into their businesses and these add-on
payment adjustments are intended to support ESRD facilities' use of new
technologies during the uptake period for these new products.
To codify our proposals for expanding the TPNIES to include
capital-related assets that are home dialysis machines when used in the
home for a single patient, we proposed further revisions to Sec.
413.236, in addition to the revisions finalized earlier in section
II.B.2 of this final rule.
Specifically, we proposed to revise the heading at Sec. 413.236(a)
and add paragraphs (a)(1) and (2) to distinguish this paragraph as both
the ``basis and definitions.'' We proposed to define ``capital-related
asset'' at Sec. 413.236(a)(2) as an asset that an ESRD facility has an
economic interest in through ownership (regardless of the manner in
which it was acquired) and is subject to depreciation. Equipment
obtained by the ESRD facility through operating leases are not
considered capital-related assets. This proposed definition was based
on the definition of ``depreciable assets'' in the Provider
Reimbursement Manual (chapter 1, section 104.1). The Provider
Reimbursement Manual is available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021929.
We proposed to define ``home dialysis machines'' at Sec.
413.236(a)(2) as hemodialysis machines and peritoneal dialysis cyclers
in their entirety, meaning that one new part of a machine does not make
the entire capital-related asset new, that receive FDA marketing
authorization for home use and when used in the home for a single
patient. FDA provides a separate marketing authorization for equipment
intended for home use, and our proposal was focused on supporting
efforts to increase home dialysis.
We proposed to define ``particular calendar year'' at Sec.
413.236(a)(2) as the year in which the payment adjustment specified in
paragraph (d) of Sec. 413.236 would take effect. We also proposed to
include definitions for the terms ``depreciation,'' ``straight-line
depreciation method,'' and ``useful life,'' which are discussed in
section II.B.3.b.(2) of this final rule.
We proposed to revise Sec. 413.236(b)(6) to provide an exception
to the general exclusion for capital-related assets from eligibility
for the TPNIES for capital-related assets that are home dialysis
machines when used in the home for a single patient and that meet the
other eligibility criteria in Sec. 413.236(b). We also proposed to
remove ``that an ESRD facility has an economic interest in through
ownership (regardless of the manner in which it was acquired)'' in
Sec. 413.236(b)(6) since we proposed a separate definition for
``capital-related asset'' at Sec. 413.236(a)(2).
Under the proposal, we continued to exclude other capital-related
assets from the TPNIES that are not home dialysis machines when used in
the home because those items would not be advancing HHS's goal of
increasing home dialysis. Examples of capital-related assets that would
continue to be excluded from TPNIES are water purification systems and
dialysis machines when they are used in-center. We stated that we
continue to believe we should not provide additional payment for these
capital-related assets because the cost of these items are captured in
cost reports and reported in the aggregate, depreciate over time, are
generally used for multiple patients and, most importantly, it would
not support the goal of increasing use of home dialysis. However,
capital-related assets that are home dialysis machines when used in the
home are intended for use by a single patient and can be reported on a
per treatment basis on the ESRD facility's claim. These characteristics
provide for a simple methodology for aligning the use of the asset with
the per treatment TPNIES payment.
As we stated previously in this section, we did not propose to
expand the TPNIES eligibility to in-center dialysis machines or home
dialysis machines when they are used in-center. Currently, our focus is
promoting the increase in home dialysis rather than in-center dialysis.
In addition, in-center dialysis machines are used by multiple patients
each day and would require additional analysis, along with 72X claims
and cost report modifications, in order to provide payment. For this
same reason, we did not propose to provide the TPNIES for home dialysis
machines when they are used in SNFs and nursing facilities that are
used by multiple patients each day.
We stated in the CY 2021 ESRD PPS proposed rule that we believe the
SCI criteria required under Sec. 413.236(b)(5), with our proposed
revisions, and the process used to evaluate SCI currently applicable to
TPNIES equipment and supplies are also appropriate for identifying new
and innovative capital-related assets that are home dialysis machines
that are worthy of temporary additional payment under the ESRD PPS.
This approach would provide consistent criteria and evaluation for all
equipment and supplies that are potentially eligible for the TPNIES. In
addition, we noted that we want to ensure we do not pay the TPNIES for
new home dialysis machines that are substantially similar to existing
machines and not truly innovative.
We proposed to utilize the determination process we established in
the CY 2020 ESRD PPS final rule for the TPNIES and those requirements
we proposed to revise in section II.B.2 of the CY 2021 ESRD PPS
proposed rule. That is, pursuant to Sec. 413.236(c), interested
parties would submit all information necessary for determining that the
home dialysis machine meets the TPNIES eligibility criteria listed in
Sec. 413.236(b). This would include FDA marketing authorization
information, the HCPCS application information, and studies submitted
as part of these two standardized processes, an approximate date of
commercial availability, and any information necessary for SCI criteria
evaluation. For example, clinical trials,
[[Page 71418]]
peer reviewed journal articles, study results, meta-analyses,
systematic literature reviews, and any other appropriate information
sources can be considered. We noted, for purposes of determining
whether the home dialysis machine is new under Sec. 413.236(b)(2), we
would look at the date the machine is granted marketing authorization
by FDA for home use.
We stated that, using our current process at Sec. 413.236(c), we
would provide a description of the new home dialysis machine and
pertinent facts in the ESRD PPS proposed rule so the public may comment
on them and then publish the results in this ESRD PPS final rule. We
would consider whether the new home dialysis machine meets the
eligibility criteria specified in the proposed revisions to Sec.
413.236(b) and announce the results in the Federal Register as part of
our annual updates and changes to the ESRD PPS. Per Sec. 413.236(c),
we would only consider, for additional payment using the TPNIES for a
particular calendar year, an application for a capital-related asset
that is a home dialysis machine we receive by February 1 prior to the
particular calendar year. If the application is not received by
February 1, the application would be denied and the applicant would
need to reapply within 3 years beginning on the date of FDA marketing
authorization in order to be considered for the TPNIES, in accordance
with the proposed revisions to Sec. 413.236(b)(2). We noted,
applicants are expected to submit information on the price of their
home dialysis machine as part of the TPNIES application. While we
recognize this information is proprietary, CMS requests this
information along with the equipment or supply's projected utilization.
For example, under our proposed revisions to Sec. 413.236, in
order for a particular home dialysis machine to be eligible for the
TPNIES under the ESRD PPS beginning in CY 2022, CMS must receive a
complete application meeting our requirements no later than February 1,
2021. FDA marketing authorization and submission of the HCPCS Level II
code application for Coding Cycle 2 for DMEPOS items and services must
occur as specified in the HCPCS Level II coding guidance on the CMS
website. We would include a discussion of the new capital-related asset
that is a home dialysis machine in the CY 2022 ESRD PPS proposed rule
and the CMS final determination would be announced in the CY 2022 ESRD
PPS final rule. If the home dialysis machine qualifies for the TPNIES,
the payment adjustment would begin January 1, 2022 with a miscellaneous
code and the designated HCPCS code would be effective April 1, 2022.
In accordance with Sec. 413.236(c), the CMS TPNIES final
determinations for CY 2021 are presented in section II.C of this final
rule.
The comments and our responses to the comments on our proposed
expansion of the TPNIES to include certain home dialysis machines are
set forth below.
Comment: Most commenters generally supported expanding the
eligibility for TPNIES to include capital-related assets that are home
dialysis machines and provided suggestions on ways to improve the
proposal. However, MedPAC and LDOs did not support the proposal. MedPAC
and other commenters stated that, instead of paying the TPNIES for new
home dialysis machines, CMS should address the clinical and nonclinical
factors known to affect home dialysis use. They stated that CMS's
proposal to expand the TPNIES as proposed would undermine the integrity
of the ESRD PPS bundled payment and limit the competitive forces that
generate price reductions. They stated that if CMS proceeds with the
proposal, eligible equipment should be innovative and payment should
not be duplicative. They urged CMS to take more time and engage the
industry to develop a comprehensive policy and indicated there were
more meaningful ways to support the Executive order. One LDO commented
that access to home dialysis machines is not currently a roadblock to
home therapy, and proposed add-on payments to purchase home machines
will not address any of the real barriers to home dialysis or further
the goals of the Executive order. Another LDO expressed concerns about
the proposed exclusion of dialysis machines used in-center and urged
CMS to expand the capital-related assets policy before it is finalized.
However, several device manufacturers and a home dialysis patient
organization urged CMS to not make patients wait over a year to have
access to the newest innovative home dialysis machines. Instead, they
proposed that CMS, in the final rule, allow a new application
submission period to consider applicants under the capital-related home
dialysis machines pathway for eligibility for payment beginning April
1, 2021, and provide for a 30-day comment period. They believe
proceeding in such a way would satisfy the Administrative Procedure Act
requirements for notice and comment and put CMS on a faster pathway to
success in meeting the rapidly growing demand from patients for home
dialysis, given the COVID-19 pandemic, by providing them with new
options to perform treatments safely and easily in their homes. The
patient organization noted that patients need choices and, currently,
if a patient fails to thrive on a home dialysis machine, often the
patient has no choice but to return to in-center dialysis. The patient
organization stated that new home dialysis machines in the pipeline
will be critical to achieving the Executive order goal of moving
dialysis patients home. Another commenter urged CMS to act boldly and
without delay.
Response: In order to support the goals of the Executive order, we
believe that providing the TPNIES for new and innovative home dialysis
machines is a good start because it will increase home dialysis by
leading to technological change in those machines, which will make a
difference in patient-related outcomes and long-term adherence to home
dialysis. For example, beneficiary feedback reveals that one of the
most significant drawbacks to home dialysis is fear of self-
cannulation; despite training, this remains a significant drawback. A
new and innovative home dialysis machine that is able to cannulate the
dialysis recipient would substantially improve the treatment of ESRD
beneficiaries and be a huge advancement toward increasing home
dialysis.
With regard to the suggestion that we issue the final rule with a
comment period in order to accept new applications for capital-related
home dialysis machines for payment eligibility beginning April 1, 2021,
we note that our process of evaluating substantial clinical improvement
is lengthy. An IFC published in November 2020, and accepting
applications for capital-related assets that are home dialysis machines
used in the home by February 1, 2021, with a payment eligibility date
of April 1, 2021 would not provide adequate time for review of SCI. We
note that a commenter indicated there at least 3 home dialysis machines
currently under development. Providing eligibility for home dialysis
machines earlier than our proposed effective date would give an unfair
advantage to the current applicant that has already received FDA
marketing authorization for home use. Had the other companies known
about an earlier effective date, they may have altered their testing
protocols and marketing plans. We thank MedPAC and the LDOs for their
comments and share their concern about maintaining the integrity of the
ESRD PPS bundled payment. We have tried to strike a balance between
supporting the uptake of new and
[[Page 71419]]
innovative home dialysis machines that demonstrate substantial clinical
improvement, while maintaining the integrity of the ESRD PPS bundled
payment. As discussed later in this section, as part of our final
methodology, we are offsetting the TPNIES payment for home dialysis
machines used in the home by $9.32, the amount currently included in
the base rate for the dialysis machine. Regarding the expansion of
capital-related assets to include in-center dialysis machines, at this
time we are striving to support the Executive order for payment
incentives for greater use of home dialysis.
Comment: Several commenters, including both LDOs and small dialysis
organizations, asked CMS to affirm in the final rule that the TPNIES
will attach to the device and not to the initial patient utilizing the
device. They acknowledged that CMS seeks to develop a policy for home
dialysis machines that are used by a single patient, however, they
pointed out that it is the current standard of care and practice that
such home dialysis machines are repurposed during their lifetimes to
serve successive patients who have the exclusive use of the machine
while it is in the patient's custody. They asked CMS to affirm in the
final rule that a facility may continue to claim the TPNIES for that
specific device until the facility reaches the maximum allowable TPNIES
amount pursuant to the adopted methodology.
The organization of LDOs also recommended that CMS modify the
policy to ensure that ESRD facilities are held harmless for missed
treatments. The commenter stated that the proposed methodology ties
TPNIES to the per-treatment claim for a patient. If a patient misses a
treatment, whether due to personal choice, hospitalization, travel, or
otherwise, the facility will lose a portion of the TPNIES payment. They
suggested that CMS consider an alternate methodology that would allow
providers to continue to claim these TPNIES payments for missed
treatments. For example, they suggested that CMS could allow each
facility to continue to claim the TPNIES payment on an ongoing basis
until the facility reaches the maximum allowable TPNIES amount pursuant
to the adopted methodology.
Response: The TPNIES is paid based on the HCPCS code and as such is
attached to the device, when the HCPCS code is billed. In addition, we
are aware that patients may, for various reasons, no longer require the
home dialysis machine, or may become unable to do home dialysis, and
that, when a patient no longer uses the home dialysis machine, the
machine may be refurbished and given to another home patient. With
regard to the suggestion that facilities bill Medicare for the machine
even though it wasn't used because the treatment was not furnished, it
is not appropriate for payment purposes since payment is only made for
services furnished and when the device is used. Such an approach would
not comport with the False Claims Act. We note that the calculated
TPNIES amount based on the invoice, is not a guarantee for a maximum
allowable reimbursement. Payment is tied to the dialysis treatment
provided. If the machine is purchased and not used in a treatment, the
TPNIES is not paid. The TPNIES is a payment adjustment to the ESRD PPS
base rate and is dependent on the ESRD facility providing the dialysis
treatment.
Comment: One commenter stated that although the phrase ``in the
home for a single patient'' is clear, the phrase causes confusion about
whether CMS is encouraging on-site dialysis in a SNF. The commenter
noted that in the ESRD Treatment Choices payment model proposal, CMS
included condition code 80 (home dialysis furnished in a SNF or nursing
facility) in its definition of home dialysis, suggesting that CMS
recognizes that dialysis in a SNF ought to be classified as home
dialysis--on par with home dialysis in a private residence. However,
the commenter stated that CMS's proposal seems to take the position
that the TPNIES expansion will not apply to on-site dialysis in the
SNF, apparently because a single machine there may be used by multiple
patients. The commenter recommended that, if the concern is that a
single machine may be used by multiple patients, resulting in excess
payment to the ESRD facility, then CMS could reduce the TPNIES amount
by a factor commensurate with the average number of treated patients
per machine. The commenter stated that it is in the interest of CMS and
patients alike to promote on-site dialysis in the SNF and recommended
using the TPNIES expansion to do so.
Response: It is our longstanding policy 6 7 under the
ESRD PPS (and the composite rate system that preceded it) that a
skilled nursing facility (SNF) or a nursing facility (NF) can be
considered a patient's home for dialysis. As a result, ESRD facilities
may furnish home dialysis to individual patients who are residing in
these facilities. Therefore, for purposes of the TPNIES, our
longstanding policy holds. That is, ESRD facilities may furnish home
dialysis to patients residing in SNFs and NFs, and we would provide the
TPNIES for home dialysis machines when they are used in SNFs and NFs
and are used by a single patient. Per the 1981 Committee on United
States Senate Finance Report,\8\ home dialysis machines were intended
for single patient use. While we have provided additional flexibilities
9 10 during the current PHE for ESRD facilities to furnish
in-center dialysis to groups of ESRD patients residing in SNFs or NFs,
we would not provide the TPNIES for the use of home dialysis machines
for multiple patients.
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\6\ https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/QSO18-24-ESRD.pdf.
\7\ https://ecfr.io/Title-42/Section-494.100.
\8\ https://www.finance.senate.gov/imo/media/doc/SPrt97-9.pdf.
\9\ https://www.cms.gov/files/document/qso-20-19-esrd-revised.pdf.
\10\ https://www.cms.gov/files/document/covid-19-esrd-facilities.pdf.
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Comment: We received comments from stakeholders across the ESRD
industry asking that CMS consider other factors that are critical to
successful home dialysis as we assess innovative home dialysis machines
for TPNIES eligibility. For example, one commenter stated that some of
these machines may require patients to have internet and broadband
services so that data can easily transfer from the patient's home to
the ESRD facility managing the home dialysis. The commenter stated that
in rural areas particularly, access to internet and broadband services
may be challenging and patients in rural areas in many ways could most
benefit from new access to innovative home dialysis machines, which
could help them avoid frequent extended travel times to and from ESRD
facilities to receive in-center treatment.
Another commenter recommended expansion of the TPNIES to include
water and sewer systems, explaining that innovation in the efficiency
and effectiveness of water systems would both improve patient quality
of care, as well as reduce costs for facilities and reduce the amount
of water that ESRD facilities currently waste, helping to preserve the
nation's water supply.
One organization expressed appreciation that CMS is refining TPNIES
and considering ways to include some capital-related assets in the
TPNIES policy, but stated the final rule should recognize the option
for other capital-related assets to qualify for the TPNIES potentially
in the future. The organization asked that CMS gather
[[Page 71420]]
additional information about home dialysis machines that may be
eligible for the TPNIES, as well as other types of capital-related
assets, and construct a policy that supports the TPNIES for more than
one narrow type of product. The organization suggested that we seek
additional information about how ESRD facilities obtain their capital-
related assets that have multi-patient usage through a request for
information, as well as convening a technical expert panel(s).
An LDO and LDO organization stated that the TPNIES policy should be
focused on transition payment for new equipment that represents SCI,
and not skewed by site of service. They stated that to combine the
requirement for SCI with an in-home only requirement would likely
discourage investment in new technology, undercutting the entire TPNIES
policy. They also agreed, stating that the ESRD program's fundamental
purpose is to service all patients. The LDO urged CMS not to establish
a policy that benefits only those ESRD patients who are clinically
suited for and have the social support structure necessary to elect
home dialysis. Rather, CMS should adopt a comprehensive TPNIES capital-
related expenses policy that supports technological advances across all
treatment modalities and provides adequate and sustained payment upon a
TPNIES's expiration. They encouraged CMS to establish a working group
or a TEP to inform the development of a broader TPNIES eligibility to
include in-center capital-related assets.
We received many comments from patient groups, device
manufacturers, dialysis organizations, health plans and a pharmacy
regarding the requirement that the home dialysis machine must be owned
by the ESRD facility and not leased equipment. One commenter stated
that financial incentives for acquiring breakthrough dialysis
innovations should not be limited only to the facilities that have the
financial reserves to outright purchase this equipment, that is, the
larger dialysis providers in the marketplace. They stated that smaller
and medium-size ESRD facilities may lack the capital to be able to
purchase the latest home dialysis technologies, and thus may prefer to
rely on operating leases to obtain it.
A pharmacy stated that smaller and medium-size facilities and their
patients must not be disadvantaged compared to larger facilities with
regard to financial incentives to propel use of the latest, clinically
optimal home dialysis equipment. The pharmacy commented that facilities
might choose to obtain the new home dialysis devices via operating
leases because technical support services are available under that
arrangement, which benefits both the facility and the patient. In
addition, operating leases can provide clinics the ability to more
quickly scale and increase the volume of available new devices, as more
patients choose home therapies. They believe these business
arrangements complement the accelerated trend toward home dialysis, and
therefore should be supported under the TPNIES policy. Another
commenter urged CMS to consider business arrangements other than
outright purchase of home dialysis machines and equipment, stating that
many facilities maintain subscriptions with manufacturers or lease
equipment, and the commenter believes that these arrangements should be
accounted for under TPNIES.
Response: We thank the commenters for their suggestions. We will
take these suggestions under consideration for future rulemaking. We
believe it is appropriate to implement a narrow capital-related asset
eligibility under the TPNIES at this time to advance the goals of the
Executive order. We believe we will gain valuable information through
implementation of the TPNIES for home dialysis machines that are owned
in their entirety by the ESRD facility and used for a single patient.
We are continuing to analyze and consider how to account for
depreciation for multi-patient use machines and other capital-related
assets, such as water and sewer systems. We will also consider the
commenters' suggestion regarding a TEP or RFI to get information from
ESRD facilities about the machines they use and how they acquire them.
When there is no ownership of the renal dialysis service equipment,
then the item is recorded as an operating expense. Equipment obtained
by the ESRD facility through operating leases are not considered
capital-related assets. The proposed definition of capital-related
assets is based on the definition of ``depreciable assets'' in the
Provider Reimbursement Manual (chapter 1, section 104.1). The Provider
Reimbursement Manual is available on the CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021929. We did not propose to make an add-on payment
adjustment for operating expenses, but appreciate the suggestion and
will consider it in future rulemaking.
We appreciate the suggestions that we consider other factors than
SCI for TPNIES eligibility and allow the TPNIES for in-center
treatments. While we considered other factors than SCI for TPNIES
eligibility, our focus on the beneficiary and clinical improvement was
a primary factor. As we stated previously in the background section of
this final rule, at this point we believe it is important we use the
same criteria used under the NTAP so there are consistent standards for
manufacturers and CMS. At this time, our focus is on supporting the
goals of the Executive order to increase home dialysis as opposed to
in-center dialysis.
Comment: A health plan expressed appreciation for CMS's efforts to
encourage innovation through new technology payments, and especially
supported the proposed addition of in-home dialysis equipment to the
TPNIES program, as there has been very little innovation in this arena
in the past decade. However, the health plan expressed concern about
the financial barriers to ESRD facilities adopting new technology. As
an example, the commenter stated that the Tablo[supreg] Hemodialysis
System described in section II.C of this final rule can cost
approximately $40,000 which is twice the cost of alternative home
dialysis systems. The health plan explained that, although there may be
benefits to the new Tablo[supreg] system, the cost is financially
prohibitive to many small ESRD facilities. Even if the system (or
components of the system) are approved for the new technology add-on
payment adjustment, CMS will only pay for 65 percent of the cost,
leaving the remainder to be covered by the dialysis provider. They
stated that this arrangement will be cost-prohibitive for most small
and rural dialysis providers and will discourage the use of new
technology. The health plan is also concerned that providing new
technology add-on payment adjustments will discourage other companies
from developing similar, less expensive alternatives until the add-on
period has ended. They believe it is imperative for CMS to encourage
both competition and innovation.
Response: The intent of the TPNIES is to support ESRD facilities in
the uptake of new and innovative equipment and supplies under the ESRD
PPS that provide substantial clinical improvements to patients, which
will facilitate beneficiary access to those renal dialysis equipment
and supplies. Additionally, consistent with CMS's longstanding goals,
our goal with the TPNIES policy is to support better care at lower
costs. We expect ESRD facilities to be judicious in the selection of
new machines, balancing the cost of the machine with the promised
clinical
[[Page 71421]]
improvement the machine would provide. We also expect increased
competition for market share through both lower acquisition costs and
TPNIES dollars will enhance access to machines providing clinical
improvement for ESRD patients. We disagree that improvements would not
occur when the TPNIES is being paid for a particular home dialysis
machine. We anticipate that manufacturers will continue to develop
equipment that can compete for market share. While we do not control
what manufacturers charge ESRD facilities, as new machines in the
development pipeline come to market, there is likely to be significant
competition among manufacturers which should lead to lower prices as
the manufacturers compete for the home dialysis market.
Comment: Another commenter strongly encouraged CMS to include the
perspectives of current home dialysis patients in its evaluation of new
home dialysis machines. The commenter stated that CMS staff,
nephrologists, allied health care professionals, and epidemiologists
cannot collectively evaluate whether machines are truly innovative and
truly life-changing if patient perspectives are not solicited. The
commenter stated that, while patients are often invited to submit
letters during a public comment period following a proposed rule at the
behest of manufacturers, these letters often involve formulaic content,
not personal perspectives. The commenter asserted that most patients
are unaware of rulemaking and do not submit comments. The commenter
advised CMS to convene a TEP that includes patients to evaluate each
application and encouraged town hall forums for active patient input.
Response: We appreciate the commenter's input regarding patient
perspective. The TPNIES payment was modeled after the IPPS NTAP system,
which process includes a public meeting. We did not have a public
meeting as part of the TPNIES this first year, but a public meeting for
future TPNIES applications could draw the patient participation and
perspective the commenter suggests and we will consider adding a
patient representative to the workgroup that reviews TPNIES
applications in future rulemaking.
Final Rule Action: After consideration of public comments, we are
finalizing the revision to Sec. 413.236(b)(6) to provide an exception
to the general exclusion for capital-related assets from eligibility
for the TPNIES for capital-related assets that are home dialysis
machines when used in the home for a single patient and that meet the
other eligibility criteria in Sec. 413.236(b), as proposed. We are
also finalizing the revision to the heading at Sec. 413.236(a) and the
addition of the paragraphs (a)(1) and (2) to distinguish this paragraph
as both the ``basis and definitions.'' We are finalizing the
definitions for ``capital-related asset,'' ``depreciable assets,''
``particular calendar year,'' ``depreciation,'' ``straight-line
depreciation method,'' and ``useful life,'' which are discussed in
section II.B.3.b.(2) of this final rule, as proposed. With regard to
the definition of ``home dialysis machines,'' we are revising the
proposed definition to include parentheses to make the sentence more
readable in the preamble and the regulation text.
We are also finalizing the removal of ``that an ESRD facility has
an economic interest in through ownership (regardless of the manner in
which it was acquired)'' in Sec. 413.236(b)(6), as proposed, since we
are finalizing a separate definition for ``capital-related asset'' at
Sec. 413.236(a)(2) as discussed below.
(2) Pricing of New and Innovative Capital-Related Assets That are Home
Dialysis Machines When Used in the Home
As we explained in the CY 2020 ESRD PPS final rule (84 FR 60692),
we are not aware of pricing compendia currently available to price
renal dialysis equipment and supplies for the TPNIES. We also noted
that, unlike new renal dialysis drugs and biological products eligible
for the TDAPA, ASP and WAC pricing do not exist for renal dialysis
equipment and supplies, including capital-related assets that are home
dialysis machines.
In addition, as we explained in the CY 2020 ESRD PPS final rule (84
FR 60692), ESRD facility charges are gross values; that is, charges
before the application of allowances and discounts deductions. We
believe the TPNIES payment amount should reflect the discounts, rebates
and other allowances the ESRD facility (or its parent company)
receives. These terms are defined in the Provider Reimbursement Manual
(chapter 8).\11\ If the TPNIES payment amount does not reflect
discounts, rebates and other allowances, the price would likely exceed
the facility's cost for the item and result in higher co-insurance
obligations for beneficiaries.
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\11\ Medicare Provider Reimbursement Manual (chapter 8).
Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R450PR1.pdf.
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For this reason, in Sec. 413.236(e), we established an invoice-
based approach for MACs to use on behalf of CMS to price new and
innovative renal dialysis equipment and supplies that meet the
eligibility criteria for the TPNIES. We require the MACs to establish a
price, using verifiable information from the following sources of
information, if available: (1) The invoice amount, facility charges for
the item, discounts, allowances, and rebates; (2) the price established
for the item by other MACs and the sources of information used to
establish that price; (3) payment amounts determined by other payers
and the information used to establish those payment amounts; and (4)
charges and payment amounts required for other equipment and supplies
that may be comparable or otherwise relevant. As discussed in the CY
2020 ESRD PPS final rule (84 FR 60692 through 60693), in order to
maintain consistency with the IPPS NTAP payment policy and to mitigate
the Medicare expenditures incurred as a result of the TPNIES, we
finalized a policy at Sec. 413.236(d) to base the TPNIES payment on 65
percent of the MAC-determined price.
As we explained in the CY 2021 ESRD PPS proposed rule (85 FR 42148
through 42149), we believe that the invoice-based approach established
for the TPNIES also should be applied to capital-related assets that
are home dialysis machines, which are the focus of the TPNIES
expansion. However, capital-related assets that are home dialysis
machines when used in the home for a single patient are depreciable
assets as defined in the Provider Reimbursement Manual (chapter 1,
section 104), which defines depreciation as ``that amount which
represents a portion of the depreciable asset's cost or other basis
which is allocable to a period of operation.'' The Provider
Reimbursement Manual provides the American Institute of Certified
Public Accountant's definition of depreciation as a process of cost
allocation: ``Depreciation accounting is a system of accounting which
aims to distribute the cost or other basic value of tangible capital
assets, less salvage (if any), over the estimated useful life of the
unit (which may be a group of assets) in a systematic and rational
manner. It is a process of allocation, not of valuation. Depreciation
for the year is the portion of the total charge under such a system
that is allocated to the year.''
Because capital-related assets that are home dialysis machines when
used in the home for a single patient are depreciable assets, we
proposed to apply a 5-year straight-line depreciation method to
determine the basis of the TPNIES for these items. The Provider
Reimbursement Manual (chapter 1,
[[Page 71422]]
section 116.1) discusses the straight-line depreciation method as a
method where the annual allowance is determined by dividing the cost of
the capital-related asset by the years of useful life. Section 104.17
of the Provider Reimbursement Manual discusses that the useful life of
a capital-related asset is its expected useful life to the provider,
not necessarily the inherent useful or physical life. Further, the
manual provides that under the Medicare program, only the American
Hospital Association (AHA) guidelines may be used in selecting a proper
useful life for computing depreciation.
Using the Provider Reimbursement Manual definitions as the basis,
we proposed to define the following terms at Sec. 413.236(a)(2):
``depreciation'' as the amount that represents a portion of the
capital-related asset's cost and that is allocable to a period of
operation; ``straight-line depreciation method'' as a method in
accounting in which the annual allowance is determined by dividing the
cost of the capital-related asset by the years of useful life; and
``useful life'' as the estimated useful life of a capital-related asset
is its expected useful life to the ESRD facility, not necessarily the
inherent useful or physical life.
In keeping with the Medicare policy, we proposed to rely on the AHA
guidelines to determine the useful life of a capital-related asset that
is a home dialysis machine. That is, the useful life of a home dialysis
machine is 5 years. Since we proposed a methodology using the Provider
Reimbursement Manual's guidance, we believe these terms are appropriate
to codify for purposes of calculating the price of a home dialysis
machine that is a capital-related asset. That is, under Sec.
413.236(e), MACs, on behalf of CMS, would establish prices, using
verifiable information as described above, for new and innovative
capital-related assets that are home dialysis machines when used in the
home for a single patient that meet the eligibility criteria specified
in Sec. 413.236(b). This price would be the only element used to
determine the total cost basis for applying the straight-line
depreciation method. For example, we would exclude financing, sales
tax, freight, installation and testing, excise taxes, legal or
accounting fees, and maintenance. This specific price element would act
as the proxy for the all-encompassing cost basis in other accounting
methodologies. Using the straight-line depreciation method, we would
divide the MAC-determined price by the useful life of the capital-
related asset that is a home dialysis machine when used in the home for
a single patient. The resulting number is the annual allowance.
We considered other depreciation methods, such as units of
production and accelerated depreciation methods such as double
declining balance and sum-of-the-years-digits, but concluded that these
methods would be more complex to implement and that the simpler method
would be preferable for the calculation of an add-on payment
adjustment. In addition, we stated in the CY 2021 ESRD PPS proposed
rule that since we are not reimbursing the cost of the equipment, nor
are we revising the ESRD PPS at the end of the two-year add-on payment
period, based on the information gathered, we believe this policy is
appropriate for encouraging and supporting the uptake of new and
innovative renal dialysis equipment and supplies.
In order to determine the basis of payment for capital-related
assets that are home dialysis machines when used in the home for a
single patient, we proposed certain additional steps that MACs would
take after determining the price to develop the TPNIES per treatment
payment amount. That is, we proposed to add paragraph (f) to Sec.
413.236 to establish the pricing for the TPNIES for capital-related
assets that are home dialysis machines when used in the home for a
single patient that meet the eligibility criteria in Sec. 413.236(b).
We proposed in Sec. 413.236(f)(1) that, using the price determined
under Sec. 413.236(e), the MACs would follow a 2-step methodology for
calculating a pre-adjusted per treatment amount.
Under the first step, the MACs would determine the annual allowance
that represents the amount of the MAC-determined price that is
allocable to 1 year. To calculate the annual allowance, we proposed
that the MACs would use the straight-line depreciation method by
dividing the MAC-determined price by the useful life of the home
dialysis machine. In accordance with the straight-line depreciation
method, the MAC would divide the MAC-determined price by 5 (the useful
life for dialysis machines established by the AHA is 5 years).
Under the second step, the MACs would calculate a pre-adjusted per
treatment amount by dividing the annual allowance by the expected
number of treatments to yield a pre-adjusted per treatment amount. That
is, the MACs would establish a pre-adjusted per treatment amount by
dividing the annual allowance by the number of treatments expected to
be furnished in a year. For home dialysis machines that are expected to
be used 3 times per week, the annual number of treatments is 156 (3
treatments/week x 52 weeks = 156 treatments/year). We noted, for
purposes of calculating this TPNIES add-on payment adjustment, MACs do
not determine the number of expected treatments. This information will
be provided by CMS through the Change Request.
(a) Alternative To Offset the Pre-Adjusted Per Treatment Amount
In the CY 2011 ESRD PPS final rule (75 FR 49075), we stated that
when we computed the ESRD PPS base rate, we used the composite rate
payments made under Part B in 2007 for dialysis in computing the ESRD
PPS base rate. These are identified in Table 19 of the CY 2011 ESRD PPS
final rule (75 FR 49075) as ``composite rate services.'' Sections
1881(b)(14)(A)(i) and 1881(b)(14)(B) of the Act specify the renal
dialysis services that must be included in the ESRD PPS bundled
payment, which includes items and services that were part of the
composite rate for renal dialysis services as of December 31, 2010. As
we indicated in the CY 2011 ESRD PPS proposed rule (74 FR 49928), the
case-mix adjusted composite payment system represents a limited PPS for
a bundle of outpatient renal dialysis services that includes
maintenance dialysis treatments and all associated services including
historically defined dialysis-related drugs, laboratory tests,
equipment, supplies and staff time (74 FR 49928). In the CY 2011 ESRD
PPS final rule (75 FR 49062), we noted that total composite rate costs
in the per treatment calculation included costs incurred for training
expenses, as well as all home dialysis costs.
In addition, as we discussed in the CY 2021 ESRD PPS proposed rule
(85 FR 42150 through 42151), these composite rate payments, and
consequently the ESRD PPS base rate, include an amount associated with
the costs of capital-related assets that are home dialysis machines. As
we discussed in the CY 2021 ESRD PPS proposed rule, we believe that
capital-related assets are distinguishable from drugs and biological
products and supplies, which are single-use or disposable items,
whereas ESRD facilities can continually use a home dialysis machine
past its expected useful life and for multiple patients
(consecutively). Therefore, we stated that an offset of the proposed
TPNIES pre-adjusted per treatment amount may be warranted so that the
TPNIES would cover the estimated marginal costs of new and innovative
home dialysis machines. That is, ESRD facilities using the new and
innovative
[[Page 71423]]
home dialysis machine would receive a per treatment payment to cover
some of the cost of the new machine per treatment minus a per treatment
payment amount that we estimate to be included in the ESRD PPS base
rate for current home dialysis machines that they already own.
To account for the costs already paid through the ESRD PPS base
rate for current home dialysis machines that ESRD facilities already
own, we considered an alternative to our proposal that would include an
additional step to calculating the TPNIES. That is, we would apply an
offset to the pre-adjusted per treatment amount. We noted in the CY
2021 ESRD PPS proposed rule that if we were to adopt an offset in the
final rule, we would add language to the proposed Sec. 413.236(f)
specifying the methodology used to compute the offset and its place--
the final step--in the computation of the TPNIES for new and innovative
home dialysis machines that meet the eligibility criteria.
(b) Methodology for Estimating Home Machine and Equipment Cost Per Home
Treatment
In order to establish the value of the offset, which would be an
estimate of an average home dialysis machine and equipment cost per HD-
equivalent home dialysis treatment to use as the offset amount, we
proposed the following methodology. First, we would estimate annualized
dialysis machine and equipment cost and treatment counts from cost
reports for each ESRD facility for 2018. Next, we would compute an HD-
equivalent home dialysis treatment percentage for each ESRD facility by
dividing the annualized HD-equivalent home treatment counts by the
annualized HD-equivalent treatment counts across all modalities. Then
we would apply the home dialysis treatment percentage to the annualized
dialysis machine and equipment cost to derive an estimated home
dialysis machine and equipment cost for each ESRD facility. Next, we
would aggregate the home dialysis machine and equipment costs and the
HD-equivalent home treatment counts to derive an average home dialysis
machine and equipment cost per home dialysis treatment across all ESRD
facilities. Finally, we would inflate the 2018 average home dialysis
machine and equipment cost per home treatment to 2021 using the ESRDB
market basket update less productivity for CY 2019, CY 2020, and CY
2021, and scale the costs to ESRD PPS payments using the ratio of total
cost per treatment for CY 2021, which is obtained by scaling the CY
2018 cost per treatment to CY 2021 using the ESRDB market basket update
less productivity for CY 2019, CY 2020, and CY 2021, to the total ESRD
PPS payment per treatment projected for CY 2021.
We would obtain annualized dialysis machine and equipment cost and
treatment counts from freestanding and hospital-based ESRD cost
reports. For independent/freestanding ESRD facilities, we would use
renal facility cost reports (CMS form 265-11). We would obtain dialysis
machine and equipment cost \12\ from Worksheet B, Column 4, and sum up
Lines 8.01 through 17.02. We would obtain dialysis treatment counts by
modality from Worksheet D, Column 1, Lines 1 through 10. Since home
continuous ambulatory peritoneal dialysis (CAPD) and continuous cycling
peritoneal dialysis (CCPD) treatment counts are reported in patient
weeks, we would multiply them by 3 to get HD-equivalent counts.
Finally, we would aggregate all home dialysis treatment counts to
obtain each ESRD facility's HD-equivalent home dialysis treatment
counts and we would aggregate the treatment counts to obtain each
freestanding ESRD facility's HD-equivalent dialysis treatment counts
for all modalities.
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\12\ Here dialysis machine and equipment cost includes capital-
related costs of moveable equipment, rented and/or purchased, and
maintenance on the dialysis machine and any support equipment. This
also includes the equipment and associated maintenance and repair
and installation costs necessary to render the water acceptable for
use in dialysis.
---------------------------------------------------------------------------
For hospital-based ESRD facilities, we would use hospital cost
reports (CMS form 2552-10). We would obtain dialysis machine and
equipment cost from Worksheet I-2, Column 2, and then sum up Lines 2
through 11. We would derive dialysis treatment counts by modality from
Worksheet I-4, Column 1, Lines 1 through 10. Home Continuous Ambulatory
Peritoneal Dialysis and Continuous Cyclic Peritoneal Dialysis treatment
counts are reported in patient weeks, so we would multiply them by 3 to
get HD-equivalent counts. We would aggregate all home treatment counts
to obtain each hospital-based ESRD facility's HD-equivalent home
dialysis treatment counts. Then we would aggregate all treatment counts
to obtain each hospital-based ESRD facility's HD-equivalent dialysis
treatment counts for all modalities.
We stated in the CY 2021 ESRD PPS proposed rule that using this
methodology for both freestanding and hospital-based ESRD facilities
would result in an offset of $9.23. We noted that if we were to adopt
this approach, the MAC would apply this additional step in calculating
the pre-adjusted per treatment amount. That is, the MAC would offset
the pre-adjusted per treatment amount by deducting $9.23 to account for
the costs already paid through the ESRD PPS base rate for current home
dialysis machines that ESRD facilities already own. We stated that we
believe this methodology would provide an approximation of the cost of
the home dialysis machine in the base rate. Further, we noted that we
believe deducting this amount from the calculated pre-adjusted per
treatment amount would be reasonable because the beneficiary would not
be using two home dialysis machines at the same time and at the end of
the 2 years, the ESRD facility would retain ownership of the asset,
specifically, the home dialysis machine.
We solicited comments on this alternative approach to apply an
offset to the proposed pre-adjusted per treatment amount and
specifically solicited comments on the methodology we would use to
compute the value of the offset.
Finally, consistent with the policies finalized last year in Sec.
413.236(d) for the TPNIES, we proposed to revise Sec. 413.236(d) to
reflect that we would pay 65 percent of the pre-adjusted per treatment
amount for capital-related assets that are home dialysis machines when
used in the home for a single patient. That is, as discussed in the CY
2020 ESRD PPS final rule (84 FR 60692 through 60693), we finalized a
policy to base the TPNIES payment on 65 percent of the MAC-determined
price in order to maintain consistency with the IPPS NTAP payment
policy and to mitigate the Medicare expenditures incurred as a result
of the TPNIES. Therefore, we proposed to pay 65 percent of the pre-
adjusted per treatment amount for these machines.
For example, for a home dialysis machine that has a MAC-determined
price of $25,000 and a 5-year useful life, using the proposed straight-
line depreciation method, the annual allowance would equate to $5,000
per year. At 156 treatments per year, the pre-adjusted per treatment
amount is $32.05 ($5,000/156) and 65 percent of that amount equals a
TPNIES per treatment add-on payment amount of $20.83 ($32.05 x .65). We
noted that, currently, the useful life of 5 years and the expected
number of treatments of 156 is fixed since these variables have been
established by CMS. That is, as we discussed previously in this section
with regard to the use of the AHA
[[Page 71424]]
guidance that dialysis machines have a 5-year useful life. With regard
to the expected number of treatments, this is based on the current
payment policy of 3 treatments per week. Under the alternative
proposal, we would reduce the pre-adjusted per treatment add-on payment
amount ($32.05) by $9.23 to offset the amount for a dialysis machine
included in the base rate ($32.05-$9.23 = $22.82). Then 65 percent of
that amount would equal a TPNIES per treatment add-on payment amount of
$14.83 ($22.82 x .65).
We explained in the CY 2021 ESRD PPS proposed rule that in the
future, if an innovative home dialysis machine is designed to require
fewer treatments per week relative to existing machines, MACs, using
the same methodology could account for fewer treatments in the
denominator in the calculation of the pre-adjusted per treatment
amount. This change to the denominator would allow the total TPNIES
amount paid at the end of the year to be equivalent to the annual
allowance and we would then proceed with the calculation to achieve the
targeted 65 percent of that annual allowance.
For a PD cycler that is used 7 times per week, the annual allowance
for TPNIES would remain at $5,000 per year. A daily modality, or 7
treatments per week, equals 364 treatments per year (7 treatments per
week x 52 weeks = 364 treatments per year). The annual allowance
(numerator) would be divided by the number of treatments (denominator).
At 364 treatments per year, the pre-adjusted per treatment amount would
be $13.74 ($5,000/364 treatments = $13.74); and 65 percent of that
amount would yield a TPNIES per treatment add-on payment of $8.93.
Under the alternative proposal, we would reduce the pre-adjusted per
treatment add-on payment amount ($13.74) by an offset to reflect the
amount for a dialysis machine included in the base rate. We would apply
the HD-equivalency calculation, that is used to convert PD treatments
for payment purposes, to the offset since the per treatment amount in
this example is a daily modality. Therefore, the offset would be $3.96
($9.23*(3/7) = $27.69/7 = $3.96). Then the pre-adjusted per treatment
add-on payment amount would be $9.51 ($13.47-$3.96 = $9.51). Then 65
percent of that amount would equal a TPNIES per treatment add-on
payment amount of $6.18 ($9.51 x .65 = $6.18).
The methodology is the same. The two variables, regardless of
modality, are: (1) The cost of the machine used to calculate annual
allowance (2) the number of treatments the machine is expected to
deliver per year.
We invited public comment on using the proposed and alternative
method for determining the pricing of capital-related assets that are
home dialysis machines when used in the home for a single patient and
that meet the eligibility criteria in Sec. 413.236(b), including the
revisions discussed in section II.B.3.b.(1) of this final rule.
Consistent with the TPNIES policy and in accordance with Sec.
413.236(d)(1), we proposed that we would apply the TPNIES for these
home dialysis machines for 2-calendar years from the effective date of
the change request, which would coincide with the effective date of a
future CY ESRD PPS final rule. In the change request we would specify
that the add-on payment adjustment would be applicable to home dialysis
treatments and provide the billing guidance on how to report the
miscellaneous code for the eligible item on the claim until a permanent
HCPCS is available.
As we stated in the CY 2021 ESRD PPS proposed rule, we believe the
duration of the application of the TPNIES for all equipment and
supplies determined eligible for this payment adjustment should be
consistent, and that 2 years would be a sufficient timeframe for ESRD
facilities to set up or adjust business practices so that there is
seamless access to the new and innovative home dialysis machines. In
addition, we noted that in light of the current COVID-19 pandemic,
stakeholders are increasingly aware of the importance of having home
dialysis readily available and in place to prevent ESRD patients from
being exposed to asymptomatic or pre-symptomatic infections that
contribute to COVID-19 transmission by having to utilize in-center
dialysis.
We further stated that we believe that providing the TPNIES for 2
years for these machines would address the stakeholders' concerns
regarding additional payment to account for higher cost of more new and
innovative home dialysis machines that they believe may not be
adequately captured by the dollars allocated in the ESRD PPS base rate.
That is, we believe that the TPNIES would help remove barriers to
market penetration and foster competition with other dialysis machines
that are already on the market. In the CY 2021 ESRD PPS proposed rule,
we noted that this proposal would increase Medicare expenditures, which
would result in increases to ESRD beneficiary co-insurance, since we
have not previously provided a payment adjustment for any capital-
related assets in the past. However, to support HHS's goals and
initiatives to increase home dialysis and the President's Executive
order of July 10, 2019, we stated that we believe that the proposed
expansion of the TPNIES to capital-related assets that are home
dialysis machines when used in the home for a single patient would be
appropriate to support ESRD facility uptake in furnishing new and
innovative renal dialysis equipment to ESRD patients.
We noted that the intent of the proposed TPNIES for new and
innovative capital-related assets that are home dialysis machines when
used in the home would be to provide a transition period to support
ESRD facility use of these machines when they are new and innovative to
the market. We stated that, at this time, we do not believe that it
would be appropriate to add dollars to the ESRD PPS base rate for new
and innovative home dialysis machines because, as noted previously, the
ESRD PPS base rate includes the cost of equipment and supplies used to
furnish a dialysis treatment.
While we would monitor renal dialysis service utilization trends
during the TPNIES payment period, we proposed that these capital-
related assets that are home dialysis machines when used in the home
would not be eligible outlier services as provided in Sec. 413.237. As
assets, capital-related home dialysis machines are distinct from
operating expenses such as the disposable supplies and leased equipment
with no conveyed ownership rights. These expenses are generally
accounted for on a per patient basis and therefore, when used in excess
of the average constitute outlier use, which makes them eligible for
outlier payments.
Therefore, we proposed revisions at Sec. 413.236(d)(2) to reflect
that following payment of the TPNIES for new and innovative capital-
related assets that are home dialysis machines when used in the home
for a single patient, the ESRD PPS base rate will not be modified and
the equipment would not be an eligible outlier service as provided in
Sec. 413.237. In addition, we proposed revisions at Sec.
413.237(a)(1)(v) to exclude capital-related assets that are home
dialysis machines when used in the home for a single patient from
outlier eligibility after the TPNIES period ends. We also proposed
minor editorial changes to paragraph (a)(1)(i) to remove the semicolon
at the end of the sentence and add a period in its place; and in
paragraph (a)(1)(iv) to remove ``; and'' and add a period in its place.
With regard to the TPNIES application, we would post any final
[[Page 71425]]
changes to both the timing of the various eligibility criteria and the
content of the TPNIES application to the TPNIES website, along with
information about all renal dialysis equipment and supplies that CMS
has determined are eligible for the TPNIES, consistent with the
policies we finalize in the CY 2021 ESRD PPS final rule. The TPNIES
website is available at: https://www.cms.gov/medicare/esrd-pps/esrd-pps-transitional-add-payment-adjustment-new-and-innovative-equipment-and-supplies-tpnies.
The comments we received and our responses to the comments on our
proposed and alternative pricing methodology are set forth below:
Comment: A group of organizations, representing the kidney and
medical technology communities recommended that CMS extend the TPNIES
period from 2 years to at least 3 years. They stated that 2 years is an
inadequate amount of time after taking into account the scale of
resources and time necessary to build a responsible support and
distribution infrastructure nationwide. This is especially true for
companies in their earlier stages, for example, small manufacturers
that tend to lack the type of distribution and support infrastructure
that their larger, more established counterparts may feature.
Furthermore, staffing constraints could mean the technology would take
too long to come to market, causing the ESRD facility to be unable to
get the TPNIES for 2 years. Accordingly, the commenter stated that a 2-
year TPNIES period creates a level of risk that would discourage
smaller start-up companies from pursuing the development of new and
innovative equipment and supplies. These commenters stated that
extending the TPNIES period would help level the playing field between
small innovators and large, global manufacturers with an existing
support and distribution footprint. They pointed out that the new
technology add-on payment that applies under the hospital inpatient
setting allows for technologies to qualify for the add-on payment up to
three years to account for the lag time in data collection to be
reflected in updated MS-DRGs. Given that it takes significantly longer
for devices, particularly home dialysis machines, to achieve
significant adoption, they stated that CMS should align with the
hospital inpatient policy and allow for an additional year of TPNIES.
Many commenters urged CMS to reconsider the proposed policy to
limit the TPNIES to only 2 years and not adjust the base rate when
truly innovative renal equipment and supplies are added to the ESRD PPS
bundled payment. They noted that, experience with the TDAPA for
calcimimetics demonstrates that having a three-year transition period
is important for data collection purposes, giving CMS adequate time to
review claims and determine whether the base rate should be adjusted.
Commenters reported that small, independent and low-volume ESRD
facilities continue to experience low to negative Medicare margins and
that, while TDAPA and TPNIES can provide helpful transitional add-on
payment adjustments for limited periods of time, they do not account
for incorporating innovative renal drugs, equipment and supplies into
high-quality clinical care over the long term. Commenters suggested
that CMS could increase the base rate by the difference between the
cost of the TPNIES-eligible device and the amount to dollars already in
the base rate for similar devices and that this methodology would
recognize the dollars already in the base rate, but still establish a
fair, yet competitive, playing field allowing for long-term stability.
Other commenters pointed out that if a new home dialysis machine is
eligible for the TPNIES in 2022 and 2023, only a machine that is used
continuously between January 2022 and December 2023 will be reimbursed
at an amount equivalent to 26 percent of the MAC-determined price. In
contrast, a machine that is used continuously between January 2023 and
December 2023 will be reimbursed at an amount equivalent to only 13
percent of the MAC-determined price. The commenter encouraged CMS to
consider the following adaptation: If a home dialysis machine is
eligible for the TPNIES in 2022 and 2023, then an ESRD facility may
collect TPNIES payments for two years after the first use of the
machine among all patients in the facility. In other words, an ESRD
facility that collects its first TPNIES payment for a home dialysis
machine in October 2022 will be eligible for continued payments through
September 2024. Nevertheless, that ESRD facility must collect its first
TPNIES payment no later than December 2023. The commenter stated that
this adaptation would allow all ESRD facilities to have an opportunity
to collect 26 percent of the MAC-determined price.
Response: We believe the commenter is requesting that we pay the
TPNIES for 3 years, similar to the length of time we paid the TDAPA for
calcimimetics, and that like calcimimetics we then adjust the base rate
to account for the cost of such products. Since we are not adjusting
the base rate for the equipment and supplies eligible for the TPNIES,
the collection of data for a 3-year period of time is not necessary. We
believe the payment of the TPNIES for 2 years is adequate time for ESRD
facilities to incorporate new products into their business model. With
regard to the commenters' concern with the duration of the TPNIES and
when it would begin for ESRD facilities that are unable to obtain and
report the equipment or supply on the claim beginning January 1, we
understand the commenters' concern and will consider refinements to the
TPNIES to address this issue in future rulemaking. We continue to
believe that 2 years is adequate since the purpose of TPNIES is to
support facility uptake of these items and that this policy strikes an
appropriate balance between supporting ESRD facilities and limiting the
financial burden that increased payments place on beneficiaries and
Medicare expenditures. In addition, we note that this is the first year
of implementing the TPNIES for capital related assets that are home
dialysis machines and we intend to monitor the use and payments for the
TPNIES to assess whether new and innovative machines are adopted by the
ESRD facilities.
With regard to small manufacturers that may take longer to have
their equipment or supply come to market, we note that the purpose of
the TPNIES is to facilitate ESRD facility uptake of the new and
innovative equipment and supplies. Unlike the IPPS NTAP that will end
in an adjustment to the MS-DRG, there will be no change in the ESRD PPS
base rate when TPNIES ends, therefore, the data collection needs are
not the same. We believe providing 2 years of an add-on payment
adjustment for supplies and equipment is sufficient time for market
uptake if the manufacturers prepare in advance of the TPNIES
application. Doing so will allow ESRD facilities to align their
business plan to obtain 2 full years of TPNIES payments.
Comment: A commenter expressed concern that home dialysis machines
were being defined as in their entirety, meaning that one new part of a
machine does not make the entire capital-related asset new. The
commenter explained that PD patients often have issues related to
handling and storage of PD solution and if an innovator develops a
machine that generates PD solution that interfaces with an existing
cycler, the machine could not be considered for TPNIES eligibility. The
commenter recommended that CMS finalize a TPNIES expansion that will
offer a clear pathway to approval of machines that
[[Page 71426]]
produce on-demand PD solution. The commenter also questioned the
disqualification of water purification systems, but recognized that the
application of such systems to the home setting is unclear.
Response: The commenter is correct that a piece of equipment that
is used along with a PD cycler or HD machine would not meet our
definition of a home dialysis machine, however, such equipment could be
considered for the TPNIES as renal dialysis equipment (which was
finalized in the CY 2020 ESRD PPS final rule (84 FR 60691 through
60692) and implemented January 1, 2020). We note that the exclusion of
other capital-related assets, such as water purification systems,
applies to the systems used in ESRD facilities for in-center dialysis
and benefits all in-center patients. Our payment methodology for
capital-related assets that are home dialysis machines addresses
individual patient use in the home and is not geared to assets that
benefit all patients.
Comment: A group of organizations representing the kidney and
medical technology communities requested that CMS instruct MACs to
provide public, timely, and consistent payment determinations. They
recommended that CMS exclude the language in the regulation that gives
MACs flexibility to determine the pricing of any TPNIES supply,
equipment or capital-related asset that meets the TPNIES eligibility
criteria based on charges and payment amounts for other equipment and
supplies that may be comparable or otherwise relevant. They stated that
the regulatory language undermines CMS approvals for applicants of the
TPNIES as, by definition, approved products have achieved SCI over
existing products. They also recommended that CMS more clearly define
the payment parameters and instruct the MACs to publish a database
online that provides a discrete TPNIES payment amount no later than
March 31 of the first year of TPNIES eligibility.
MedPAC supported the proposal to base the TPNIES amount on the
price established by the MACs (using information from invoices and
other relevant sources of information) but only for the first two
calendar quarters after CMS begins applying the TPNIES. Thereafter,
they recommended that CMS set the price of new equipment and supplies
using a method based on pricing data collected directly from each
manufacturer, similar to how the agency establishes the ASP for Part B
drugs. They explained that the ASP for a Part B drug reflects the
average price realized by the manufacturer for its sales broadly across
different types of purchasers, for patients with different types of
insurance coverage, and based on the manufacturer's sales to all
purchasers (with certain exceptions) net of manufacturer rebates,
discounts, and price concessions. They stated that an approach similar
to how CMS collects ASP data would increase the consistency of pricing
data and should lead to more accurate payment rates for items paid
under the TPNIES. They further recommended that CMS link payment of the
TPNIES to a requirement that equipment and supply manufacturers submit
ASP-like data to the agency, similar to the TDAPA policy.
Response: We continue to believe that the payment amounts for other
equipment and supplies that may be comparable or otherwise relevant, as
described at Sec. 413.236(e)(1)(iv) of this final rule, as an
important consideration for the MACs to determine the price of any
TPNIES supply, equipment or capital-related asset that meets the TPNIES
eligibility criteria. While we recognize that TPNIES items will have
demonstrated SCI over existing items, we seek to avoid Medicare paying
65 percent of an excessively inflated price, for example, a dialysis
machine that is 3 times the cost of current machines. Since the
manufacturer will determine the price to be paid by the provider, the
MACs' consideration of charges and payment for comparable equipment and
supplies serves as a guard rail for the use of invoice pricing. With
regard to the suggestion that we instruct the MACs to publish an online
database with TPNIES payment amounts, we are working with MACs on
mechanisms for pricing transparency. We will consider the suggestion
for future rulemaking. With regard to the suggestion for an ASP-like
reporting system, we think the idea has merit and will take it into
consideration for future rulemaking.
Comment: An organization of LDOs stated they are supportive of CMS
fixing the expected number of treatments at 156 for the purpose of
calculating the TPNIES value, however, they expressed significant
concerns about any policy changes that would undermine the ability of
treating physicians to prescribe the frequency of dialysis that is
clinically appropriate for their patients. They suggested that CMS may
be interested in capping the TPNIES payment for a device. They proposed
that CMS adopt a modification to the methodology that would respect
both the TPNIES cap and the importance of physician prescribing with
regard to frequency of dialysis. For example, CMS could cap total
TPNIES payments for a specific device at the maximum allowable TPNIES
payment pursuant to the adopted methodology, even if that amount is
achieved prior to the end of the 2-year TPNIES period.
Response: The purpose of the 156 treatments is to compute a per
treatment amount. An ESRD patient's nephrologist may order additional
reasonable and necessary dialysis treatments beyond 3 per week. When a
MAC has determined that the additional treatments are reasonable and
necessary, we would pay the TPNIES on each covered treatment that is
furnished. At this time, we do not believe it is necessary to adopt the
commenter's suggested modification to the proposed methodology that
takes into account both the TPNIES cap and the prescribed frequency of
dialysis; however, we will monitor use of the TPNIES and consider if
such a policy is necessary for future rulemaking.
Comment: A group of organizations, representing the kidney and
medical technology communities recommended that we establish a formal
appeals process for the manufacturers whose applications for the TPNIES
are denied. They expressed concern that, without an opportunity to
review CMS' initial determination, situations may arise in which new
technologies fail to obtain a favorable TPNIES determination due to
technical errors or insufficient information necessary in the initial
TPNIES application. They asserted that a formal appeals process would
ensure that TPNIES applicants would have an opportunity to seek
additional, independent review as necessary. They noted that the
standard process for seeking review of Medicare Part A/B claims under
42 CFR part 405, subpart I, may not apply, and encouraged CMS to allow
for administrative appeals of TPNIES determinations to be conducted
within the Office of Medicare Hearings and Appeals (that is, a hearing
before the Departmental Appeals Board).
Response: We did not propose a formal appeals process for the
manufacturers whose applications for TPNIES are denied for CY 2021 and
therefore we are not adopting the suggestion. However, we thank the
commenters for this suggestion and will consider it for future
rulemaking. We note that applicants may reapply for the TPNIES if their
application is denied as long as they reapply within 3 years of the
date of FDA marketing authorization or approval.
Comment: A commenter expressed confusion about the discussion in
the proposed rule on treatment frequency insofar as it is determinative
of TPNIES payment. The commenter stated that, while the discussion is
easier to
[[Page 71427]]
contemplate for PD, as most patients undergo treatment 6 or 7 days per
week, it does not make sense for HD. The commenter noted that HD
prescriptions can be written for as few as 2 days or as many as 7 days
per week, and there is no concept of an ``ordinary'' treatment
frequency for a HD machine, whether it is used in a facility or at
home. The commenter recommended that CMS simply issue a TPNIES payment
on a monthly basis according to whether the ESRD facility claim
includes a condition code that indicates that a qualifying home
dialysis machine has been used.
Response: We disagree with the commenter's assertion that there is
no ordinary treatment frequency for HD machines. In-center HD machines
are designed to be used 3 times per week to achieve adequate dialysis.
Our intention of providing examples in the CY 2021 ESRD PPS proposed
rule using various annual treatments was to clarify that the
methodology for calculating the TPNIES per treatment payment can also
be used if a new home dialysis machine was designed to achieve adequate
dialysis in fewer treatments per week. We note that, when questioned
specifically about frequency, a home dialysis machine manufacturer
confirmed that adequate dialysis can be achieved in 3 treatments per
week, however, the treatments may take longer to administer.
Comment: An LDO recommended that we set the useful life for home
dialysis machines at 7 years rather than the 5 years we proposed. The
organization noted that standard accounting practice is to depreciate
dialysis equipment, for the center or the home, over a period of at
least 7 years.
Response: Medicare policies \13\ hold providers to strict AHA
guidelines with respect to the useful life. Under AHA guidelines,
useful life for dialysis machines is 5 years. ESRD facilities are
allowed to use more or less than the AHA guidelines for business
financial reporting but they must use the AHA guidelines for Medicare.
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\13\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021929.
---------------------------------------------------------------------------
Comment: MedPAC did not support expanding the TPNIES to include
home dialysis equipment, but stated that, if CMS finalizes its
proposal, it should remove the portion of payment attributable to home
dialysis machines from the base rate for those cases receiving the
TPNIES because paying for new home dialysis machines under the TPNIES
for two years is duplicative of payment for items with a similar
purpose or use that are already paid under the ESRD PPS base rate.
MedPAC stated that it supported the proposal if CMS subtracted the
amount for capital-related machines already included in the ESRD PPS
base rate for those cases receiving the TPNIES.
While some commenters expressed support for the offset, an
organization of renal professionals, providers and manufacturers, an
organization of LDOs, and an individual objected to offsetting the
TPNIES with the cost of the home dialysis machine already included in
the base rate, stating that the purpose of a transitional add-on
payment is to incentivize the adoption of innovative products. These
commenters stated that the purpose of the TPNIES is not to reimburse
providers dollar for dollar for their costs. In their view, the
government assumes the risk of making an additional payment during the
TPNIES period with the presumed reward of beneficiaries experiencing
clinical improvement, as claimed by the applicant. Following the end of
the TPNIES period, the providers assume that risk. The commenters
asserted that this is true of the inpatient and outpatient hospital
payment systems, as well as the TPNIES. They stated, given that the
proposed TPNIES amount is only a portion of the cost providers incur
when using the device, further reducing the TPNIES amount with the
offset would only further reduce the likelihood of adoption of the
machine.
Response: We agree with MedPAC that the TPNIES payment is
duplicative of payment for items with a similar purpose or use that are
already paid under the ESRD PPS base rate. For this reason, we are
finalizing an offset to the TPNIES payment, which we discussed in the
CY 2021 ESRD PPS rule, to reflect the value of the dialysis machine
included in the ESRD PPS base rate.
We disagree with the commenters who stated that applying an offset
to reflect the amount for a dialysis machine in the base rate would
reduce the likelihood the new machine will be purchased by ESRD
facilities. We believe that ESRD facilities will need to buy additional
dialysis machines to support the goals of the Executive order and the
ETC model and that the TPNIES payment will help support ESRD facility
uptake of new home dialysis machines.
Final Rule Action: After careful consideration of the comments we
received, we are finalizing our proposed pricing methodology for
capital-related assets that are home dialysis machines when used in the
home for a single patient and the proposed changes to Sec. 413.236(f)
requiring MACs to calculate the annual allowance and the pre-adjusted
per treatment amount with revisions.
Since we are finalizing an offset to the TPNIES payment to reflect
the value of a dialysis machine in the ESRD PPS base rate, we revised
the proposed changes to Sec. 413.236(f) to reflect the additional step
of calculating a per treatment amount for use in calculating the pre-
adjusted per treatment amount. We also revised paragraph (f) to reflect
that the pre-adjusted per treatment amount is reduced by an estimated
average per treatment offset amount to account for the costs already
paid through the ESRD PPS base rate.
In the CY 2021 ESRD PPS proposed rule, we stated our intention to
further amend Sec. 413.236(f) if we finalized the offset. Since we are
finalizing the offset, we are adding the data sources and
methodological steps for computing the offset in paragraph (f). In the
proposed rule the $9.23 offset was based on the proposed CY 2021 ESRDB
market basket less the multifactor productivity adjustment. For this
final rule, we have recomputed the offset to reflect the final CY 2021
payment rate update factor (1.6 percent). The final offset for CY 2021
is $9.32. We will continue to update the offset amount on an annual
basis so that it is consistent with how the ESRD PPS base rate is
updated.
We are also finalizing the revision to Sec. 413.236(d) to reflect
that we would pay 65 percent of the pre-adjusted per treatment amount
minus the offset for capital-related assets that are home dialysis
machines when used in the home for a single patient.
4. CY 2021 ESRD PPS Update
a. CY 2021 ESRD Bundled (ESRDB) Market Basket Update, Productivity
Adjustment, and Labor-Related Share
In accordance with section 1881(b)(14)(F)(i) of the Act, as added
by section 153(b) of MIPPA and amended by section 3401(h) of the
Affordable Care Act, beginning in 2012, the ESRD PPS payment amounts
are required to be annually increased by an ESRD market basket increase
factor and reduced by the productivity adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act. The application of the productivity
adjustment may result in the increase factor being less than 0.0 for a
year and may result in payment rates for a year being less than the
payment rates for the preceding year. The statute also provides that
the market basket increase factor should reflect the changes over time
in the prices of an appropriate mix of goods and services used to
furnish renal dialysis services.
As required under section 1881(b)(14)(F)(i) of the Act, CMS
developed an all-inclusive ESRD
[[Page 71428]]
Bundled (ESRDB) input price index (75 FR 49151 through 49162). In the
CY 2015 ESRD PPS final rule we rebased and revised the ESRDB input
price index to reflect a 2012 base year (79 FR 66129 through 66136).
Subsequently, in the CY 2019 ESRD PPS final rule, we finalized a
rebased ESRDB input price index to reflect a 2016 base year (83 FR
56951 through 56962).
Although ``market basket'' technically describes the mix of goods
and services used for ESRD treatment, this term is also commonly used
to denote the input price index (that is, cost categories, their
respective weights, and price proxies combined) derived from a market
basket. Accordingly, the term ``ESRDB market basket,'' as used in this
document, refers to the ESRDB input price index.
We proposed to use the CY 2016-based ESRDB market basket as
finalized and described in the CY 2019 ESRD PPS final rule (83 FR 56951
through 56962) to compute the CY 2021 ESRDB market basket increase
factor based on the best available data. Consistent with historical
practice, we proposed to estimate the ESRDB market basket update based
on IHS Global Inc.'s (IGI's), forecast using the most recently
available data. IGI is a nationally recognized economic and financial
forecasting firm that contracts with CMS to forecast the components of
the market baskets. Using this methodology and IGI's first quarter 2020
forecast of the CY 2016-based ESRDB market basket (with historical data
through the fourth quarter of 2019), the proposed CY 2021 ESRDB market
basket increase factor was 2.2 percent.
Under section 1881(b)(14)(F)(i) of the Act, for CY 2012 and each
subsequent year, the ESRD market basket percentage increase factor
shall be reduced by the productivity adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act. The growth in multifactor
productivity (MFP) is derived by subtracting the contribution of labor
and capital input growth from output growth. We finalized the detailed
methodology for deriving the MFP projection in the CY 2012 ESRD PPS
final rule (76 FR 40503 through 40504). The most up-to-date MFP
projection methodology is available on the CMS website at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/Downloads/MFPMethodology.pdf. Using
this methodology and IGI's first quarter 2020 forecast, the proposed
MFP adjustment for CY 2021 (the 10-year moving average of MFP for the
period ending CY 2021) was projected to be 0.4 percent.
As a result of these provisions, the proposed CY 2021 ESRD market
basket adjusted for MFP was 1.8 percent. The proposed market basket
increase is calculated by starting with the proposed CY 2021 ESRDB
market basket percentage increase factor of 2.2 percent and reducing it
by the proposed MFP adjustment (the 10-year moving average of MFP for
the period ending CY 2021) of 0.4 percentage point. We also proposed
that if more recent data become available after the publication of this
proposed rule and before the publication of the final rule (for
example, a more recent estimate of the market basket update or MFP), we
would use such data, if appropriate, to determine the final CY 2021
market basket update and/or MFP adjustment (85 FR 42152).
The comments and our responses to the comments on the proposed ESRD
market basket update and MFP adjustment for CY 2021 are set forth
below.
Comment: Several commenters stated that with new drugs being added
to the ESRD PPS bundled payment, it is more important than ever to use
the most appropriate price proxies for determining the base rate and
update each year. The commenters urged the adoption of a better price
proxy for non-ESAs that are not over-the-counter (OTC) vitamins and
recommended that CMS use the BLS Series ID: WPS063 Series Title: PPI
Commodity Data for Chemicals and Allied Products-Drugs and
Pharmaceuticals, seasonally adjusted. One commenter stated that the
timing of addressing the price proxy used for non-ESA drugs in the ESRD
market basket is relevant since new drugs in the pipeline could be
added to the ESRD PPS bundled payment during the next few years because
of the TDAPA provisions.
Response: We appreciate the commenters' suggestion that we use the
most appropriate price proxy for non-ESA drugs in the ESRD market
basket. We did not propose changes to the price proxies in the ESRD
market basket for CY 2021, so we will not be adopting such changes in
this final rule. However, as described in the CY 2019 ESRD PPS final
rule (83 FR 56960 through 56961), we believe the PPI for Vitamins,
Nutrients, and Hematinic Preparation (VNHP) is the most appropriate
price proxy for non-ESA drugs and analysis of the ASP data for Non-ESA
drugs in the bundle suggests the trends in the PPI VNHP trends are
reasonable. We appreciate the commenters' concern for the potential
shifts in the mix of drugs within the ESRD PPS bundled payment amount
as a result of the TDAPA provisions. We will continue to monitor the
impact that these changes have on the relative cost share weights and
the mix of non-ESA drugs included in the bundled payment in the ESRDB
market basket.
Comment: One commenter expressed support for the annual update to
the ESRD PPS base rate for CY 2021 and recognized that CMS does not
have the authority to eliminate the productivity adjustment, but wanted
to highlight their continued concern about the overall negative
Medicare margins. The commenter stated that the experience of ESRD
facilities disputes the idea that productivity in ESRD facilities can
be improved year over year at the rate of economy-wide productivity.
Response: Section 1881(b)(14)(F)(i) of the Act requires the
application of the MFP adjustment described in section
1886(b)(3)(B)(xi)(II) of the Act to the ESRD PPS market basket update
for 2012 and subsequent years. We will continue to monitor the impact
of the payment updates, including the effects of the MFP adjustment, on
ESRD provider margins as well as beneficiary access to care as reported
by MedPAC. However, any changes to the productivity adjustment would
require a change to current law.
In the March 2020 Report to Congress, MedPAC found most indicators
of payment adequacy to be positive, and recommend that for 2021, the
ESRD PPS base rate should be updated by the amount determined under
current law.
Final Rule Action: Consistent with our historical practice and our
proposal, we are estimating the market basket increase and the MFP
adjustment based on IGI's forecast using the most recent available
data. Based on IGI's third quarter 2020 forecast with historical data
through the second quarter of 2020, the 2016-based ESRDB market basket
percentage increase for CY 2021 is 1.9 percent. We note that the first
quarter 2020 forecast used for the proposed market basket update was
developed prior to the economic impacts of the COVID-19 pandemic. This
lower update (1.9 percent) for CY 2021 relative to the CY 2021 ESRD PPS
proposed rule (2.2 percent) is primarily driven by slower anticipated
compensation growth for both health-related and other occupations as
labor markets are expected to be significantly impacted during the
recession that started in February 2020 and throughout the anticipated
recovery.
Based on the more recent data available for this CY 2021 ESRD PPS
final rule, the current estimate of the 10-year moving average growth
of MFP for CY 2021 is projected to be 0.3 percent.
[[Page 71429]]
This MFP estimate is based on the most recent macroeconomic outlook
from IGI at the time of rulemaking (released September 2020) in order
to reflect more current historical economic data. IGI produces monthly
macroeconomic forecasts, which include projections of all of the
economic series used to derive MFP. In contrast, IGI only produces
forecasts of the more detailed price proxies used in the 2016-based
ESRDB market basket on a quarterly basis. Therefore, IGI's third
quarter 2020 forecast is the most recent forecast of the 2016-based
ESRD market basket percentage increase factor.
We note that it has typically been our practice to base the
projection of the market basket price proxies and MFP in the final rule
on the third quarter IGI forecast. For this CY 2021 ESRD PPS final
rule, we are using the IGI September macroeconomic forecast for MFP
because it is a more recent forecast, and it is important to use more
recent data during this period when economic trends, particularly
employment and labor productivity, are notably uncertain because of the
COVID-19 pandemic. However, we also note that the 10-year moving
average of MFP based on the third quarter 2020 forecast is also 0.3
percent.
Therefore, the final CY 2021 ESRD PPS payment rate update is 1.6
percent. That is, the CY 2021 ESRD market basket percentage increase
factor of 1.9 percent less the 0.3 percentage point MFP adjustment (the
10-year moving average of MFP for the period ending CY 2021).
For the CY 2021 ESRD payment update, we proposed to continue using
a labor-related share of 52.3 percent for the ESRD PPS payment, which
was finalized in the CY 2019 ESRD PPS final rule (83 FR 56963). We did
not receive any public comments on this proposal and therefore, we are
finalizing the continued use of a 52.3 percent labor-related share for
CY 2021.
b. The CY 2021 ESRD PPS Wage Indices
(1) Background
Section 1881(b)(14)(D)(iv)(II) of the Act provides that the ESRD
PPS may include a geographic wage index payment adjustment, such as the
index referred to in section 1881(b)(12)(D) of the Act, as the
Secretary determines to be appropriate. In the CY 2011 ESRD PPS final
rule (75 FR 49200), we finalized an adjustment for wages at Sec.
413.231. Specifically, CMS adjusts the labor-related portion of the
base rate to account for geographic differences in the area wage levels
using an appropriate wage index, which reflects the relative level of
hospital wages and wage-related costs in the geographic area in which
the ESRD facility is located. We use the Office of Management and
Budget's (OMB's) core-based statistical area (CBSA)-based geographic
area designations to define urban and rural areas and their
corresponding wage index values (75 FR 49117). OMB publishes bulletins
regarding CBSA changes, including changes to CBSA numbers and titles.
The bulletins are available online at https://www.whitehouse.gov/omb/information-for-agencies/bulletins/.
For CY 2021, we updated the wage indices to account for updated
wage levels in areas in which ESRD facilities are located using our
existing methodology. We used the most recent pre-floor, pre-
reclassified hospital wage data collected annually under the inpatient
PPS. The ESRD PPS wage index values are calculated without regard to
geographic reclassifications authorized under sections 1886(d)(8) and
(d)(10) of the Act and utilize pre-floor hospital data that are
unadjusted for occupational mix. For CY 2021, the updated wage data are
for hospital cost reporting periods beginning on or after October 1,
2016 and before October 1, 2017 (FY 2017 cost report data).
We have also adopted methodologies for calculating wage index
values for ESRD facilities that are located in urban and rural areas
where there is no hospital data. For a full discussion, see CY 2011 and
CY 2012 ESRD PPS final rules at 75 FR 49116 through 49117 and 76 FR
70239 through 70241, respectively. For urban areas with no hospital
data, we compute the average wage index value of all urban areas within
the state to serve as a reasonable proxy for the wage index of that
urban CBSA, that is, we use that value as the wage index. For rural
areas with no hospital data, we compute the wage index using the
average wage index values from all contiguous CBSAs to represent a
reasonable proxy for that rural area. We apply the statewide urban
average based on the average of all urban areas within the state to
Hinesville-Fort Stewart, Georgia (78 FR 72173), and we apply the wage
index for Guam to American Samoa and the Northern Mariana Islands (78
FR 72172). In the CY 2021 ESRD PPS proposed rule (85 FR 42152), we
noted that for the CY 2020 ESRD PPS final rule, we did not apply the
statewide urban average to Carson City, Nevada as we did in the CY 2020
ESRD PPS proposed rule (84 FR 38359) because hospital data was
available to compute the wage index.
A wage index floor value (0.5000) is applied under the ESRD PPS as
a substitute wage index for areas with very low wage index values.
Currently, all areas with wage index values that fall below the floor
are located in Puerto Rico. However, the wage index floor value is
applicable for any area that may fall below the floor. A description of
the history of the wage index floor under the ESRD PPS can be found in
the CY 2019 ESRD PPS final rule (83 FR 56964 through 56967).
An ESRD facility's wage index is applied to the labor-related share
of the ESRD PPS base rate. In the CY 2019 ESRD PPS final rule (83 FR
56963), we finalized a labor-related share of 52.3 percent, which is
based on the 2016-based ESRDB market basket. Thus, for CY 2021, the
labor-related share to which a facility's wage index would be applied
is 52.3 percent.
For CY 2021, in addition to updating the ESRD PPS wage index to use
more recent hospital wage data, we also proposed to adopt newer OMB
delineations and a transition policy in a budget-neutral manner as
discussed in the CY 2021 ESRD PPS proposed rule and sections
II.B.4.b.(2) and II.B.4.b.(3), respectively, of this final rule.
(2) Implementation of 2018 OMB Labor Market Delineations
As discussed previously in the CY 2021 ESRD PPS proposed rule and
this final rule, the wage index used for the ESRD PPS is calculated
using the most recent pre-floor, pre-reclassified hospital wage data
collected annually under the inpatient PPS and is assigned to an ESRD
facility on the basis of the labor market area in which the ESRD
facility is geographically located. ESRD facility labor market areas
are delineated based on the CBSAs established by the OMB. In accordance
with our established methodology, we have historically adopted through
rulemaking CBSA changes that are published in the latest OMB bulletin.
Generally, OMB issues major revisions to statistical areas every 10
years, based on the results of the decennial census. However, OMB
occasionally issues minor updates and revisions to statistical areas in
the years between the decennial censuses.
[[Page 71430]]
In the CY 2015 ESRD PPS final rule (79 FR 66137 through 66142), we
finalized changes to the ESRD PPS wage index based on the newest OMB
delineations, as described in OMB Bulletin No. 13-01 \14\ issued on
February 28, 2013. We implemented these changes with a 2-year
transition period (79 FR 66142). OMB Bulletin No. 13-01 established
revised delineations for U.S. Metropolitan Statistical Areas,
Micropolitan Statistical Areas, and Combined Statistical Areas based on
the 2010 Census. OMB Bulletin No. 13-01 also provided guidance on the
use of the delineations of these statistical areas using standards
published on June 28, 2010 in the Federal Register (75 FR 37246 through
37252).
---------------------------------------------------------------------------
\14\ https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2013/b13-01.pdf.
---------------------------------------------------------------------------
On July 15, 2015, OMB issued OMB Bulletin No. 15-01,\15\ which
updated and superseded OMB Bulletin No. 13-01 issued on February 28,
2013. The attachment to OMB Bulletin No. 15-01 provided detailed
information on the update to statistical areas since February 28, 2013.
These updates were based on the application of the 2010 Standards for
Delineating Metropolitan and Micropolitan Statistical Areas to the U.S.
Census Bureau population estimates for July 1, 2012 and July 1, 2013.
---------------------------------------------------------------------------
\15\ https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2015/15-01.pdf.
---------------------------------------------------------------------------
On August 15, 2017, OMB issued OMB Bulletin No. 17-01,\16\ which
updated and superseded OMB Bulletin No. 15-01 issued on July 15, 2015.
The attachment to OMB Bulletin No. 17-01 provided detailed information
on the update to statistical areas since July 15, 2015. These updates
were based on the application of the 2010 Standards for Delineating
Metropolitan and Micropolitan Statistical Areas to the U.S. Census
Bureau population estimates for July 1, 2014 and July 1, 2015. In OMB
Bulletin No. 17-01, OMB announced a new urban CBSA, Twin Falls, Idaho
(CBSA 46300).
---------------------------------------------------------------------------
\16\ https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/bulletins/2017/b-17-01.pdf.
---------------------------------------------------------------------------
On April 10, 2018, OMB issued OMB Bulletin No. 18-03 \17\ which
updated and superseded OMB Bulletin No. 17-01 issued on August 15,
2017. The attachment to OMB Bulletin No. 18-03 provided detailed
information on the update to statistical areas since August 15, 2017.
On September 14, 2018, OMB issued OMB Bulletin No. 18-04,\18\ which
updated and superseded OMB Bulletin No. 18-03 issued on April 10, 2018.
OMB Bulletin Numbers 18-03 and 18-04 established revised delineations
for Metropolitan Statistical Areas, Micropolitan Statistical Areas, and
Combined Statistical Areas, and provided guidance on the use of the
delineations of these statistical areas. These updates were based on
the application of the 2010 Standards for Delineating Metropolitan and
Micropolitan Statistical Areas to the U.S. Census Bureau population
estimates for July 1, 2015 and July 1, 2016.
---------------------------------------------------------------------------
\17\ https://www.whitehouse.gov/wp-content/uploads/2018/04/OMB-BULLETIN-NO.-18-03-Final.pdf.
\18\ https://www.whitehouse.gov/wp-content/uploads/2018/09/Bulletin-18-04.pdf.
---------------------------------------------------------------------------
As we discussed in the CY 2021 ESRD PPS proposed rule (85 FR
42153), while OMB Bulletin No. 18-04 is not based on new census data,
there were some material changes to the CBSA-based geographic area
designations based on the 2018 OMB delineations. For example, some new
CBSAs and urban counties would become rural, rural counties would
become urban, and existing CBSAs would be split apart. We explained
that we believe that the 2018 OMB delineations accurately reflect the
local economies and wage levels of the areas where ESRD facilities are
located. We also explained that we believe it is important for the ESRD
PPS to use the most recent OMB delineations practicable in order to
maintain a more accurate and up-to-date payment system that reflects
the reality of population shifts and labor market conditions. We
further believe that using the newer OMB delineations would increase
the integrity of the ESRD PPS wage index system by creating a more
accurate representation of geographic variations in wage levels.
Therefore, we proposed to adopt the newer OMB delineations
established in OMB Bulletin No. 18-04 effective for CY 2021 under the
ESRD PPS. We also proposed a wage index transition applicable to all
ESRD facilities that experience negative impacts due to the proposed
implementation of the 2018 OMB delineations. This transition policy is
discussed in section II.B.4.b.(3) of the CY 2021 ESRD PPS proposed rule
and section II.B.4.b.(3) of this final rule.
In the CY 2021 ESRD PPS proposed rule (85 FR 42153), we noted that,
on March 6, 2020, OMB issued OMB Bulletin 20-01 (available at https://www.whitehouse.gov/wp-content/uploads/2020/03/Bulletin-20-01.pdf).
While the March 6, 2020 OMB Bulletin 20-01 was not issued in time for
development of the proposed rule, we were able to review the updates it
provides and have determined that they were minor. We stated that while
we do not believe the minor updates included in OMB Bulletin 20-01
would impact our CY 2021 updates to the CBSA-based labor market area
delineations, if appropriate, we would propose any updates from this
Bulletin in the CY 2022 ESRD PPS proposed rule.
As we stated in the CY 2021 ESRD PPS proposed rule (85 FR 42153),
to implement the newer OMB delineations established in OMB Bulletin No.
18-04 under the ESRD PPS beginning in CY 2021, it is necessary to
identify the new labor market area delineation for each affected county
and ESRD facility in the U.S. We discuss these changes in more detail
in the following sections.
(a) Urban Counties That Would Become Rural Under the 2018 OMB
Delineations
In the CY 2021 ESRD PPS proposed rule (85 FR 42153 through 42155),
we proposed to implement the 2018 OMB labor market area delineations
(based upon the 2010 Decennial Census data) beginning in CY 2021. Our
analysis of the 2018 OMB delineations showed that a total of 34
counties (and county equivalents) that are currently considered part of
an urban CBSA would be considered located in a rural area, beginning in
CY 2021. In the CY 2021 ESRD PPS proposed rule (85 FR 42154), we listed
the 34 urban counties as set forth in Table 1, which would be rural if
we finalized our proposal to adopt the 2018 OMB delineations beginning
in CY 2021.
Table 1--CY 2021 Proposed Urban to Rural CBSA Crosswalk
----------------------------------------------------------------------------------------------------------------
County/county
FIPS county code equivalent State Current CBSA CBSA title
----------------------------------------------------------------------------------------------------------------
01127 WALKER................ AL.................... 13820 Birmingham-Hoover, AL.
12045 GULF.................. FL.................... 37460 Panama City, FL.
13007 BAKER................. GA.................... 10500 Albany, GA.
[[Page 71431]]
13235 PULASKI............... GA.................... 47580 Warner Robins, GA.
15005 KALAWAO............... HI.................... 27980 Kahului-Wailuku-
Lahaina, HI.
17039 DE WITT............... IL.................... 14010 Bloomington, IL.
17053 FORD.................. IL.................... 16580 Champaign-Urbana, IL.
18143 SCOTT................. IN.................... 31140 Louisville/Jefferson
County, KY-IN.
18179 WELLS................. IN.................... 23060 Fort Wayne, IN.
19149 PLYMOUTH.............. IA.................... 43580 Sioux City, IA-NE-SD.
20095 KINGMAN............... KS.................... 48620 Wichita, KS.
21223 TRIMBLE............... KY.................... 31140 Louisville/Jefferson
County, KY-IN.
22119 WEBSTER............... LA.................... 43340 Shreveport-Bossier
City, LA.
26015 BARRY................. MI.................... 24340 Grand Rapids-Wyoming,
MI.
26159 VAN BUREN............. MI.................... 28020 Kalamazoo-Portage, MI.
27143 SIBLEY................ MN.................... 33460 Minneapolis-St. Paul-
Bloomington, MN-WI.
28009 BENTON................ MS.................... 32820 Memphis, TN-MS-AR.
29119 MC DONALD............. MO.................... 22220 Fayetteville-
Springdale-Rogers, AR-
MO.
30037 GOLDEN VALLEY......... MT.................... 13740 Billings, MT.
31081 HAMILTON.............. NE.................... 24260 Grand Island, NE.
38085 SIOUX................. ND.................... 13900 Bismarck, ND.
40079 LE FLORE.............. OK.................... 22900 Fort Smith, AR-OK.
45087 UNION................. SC.................... 43900 Spartanburg, SC.
46033 CUSTER................ SD.................... 39660 Rapid City, SD.
47081 HICKMAN............... TN.................... 34980 Nashville-Davidson--
Murfreesboro--Frankli
n, TN.
48007 ARANSAS............... TX.................... 18580 Corpus Christi, TX.
48221 HOOD.................. TX.................... 23104 Fort Worth-Arlington,
TX.
48351 NEWTON................ TX.................... 13140 Beaumont-Port Arthur,
TX.
48425 SOMERVELL............. TX.................... 23104 Fort Worth-Arlington,
TX.
51029 BUCKINGHAM............ VA.................... 16820 Charlottesville, VA.
51033 CAROLINE.............. VA.................... 40060 Richmond, VA.
51063 FLOYD................. VA.................... 13980 Blacksburg-
Christiansburg-
Radford, VA.
53013 COLUMBIA.............. WA.................... 47460 Walla Walla, WA.
53051 PEND OREILLE.......... WA.................... 44060 Spokane-Spokane
Valley, WA.
----------------------------------------------------------------------------------------------------------------
We proposed that the wage data for all ESRD facilities located in
the counties listed above would be considered rural, beginning in CY
2021, when calculating their respective state's rural wage index. We
stated in the CY 2021 ESRD PPS proposed rule (85 FR 42155) that we
recognize that rural areas typically have lower area wage index values
than urban areas, and ESRD facilities located in these counties may
experience a negative impact in their payment under the ESRD PPS due to
the proposed adoption of the 2018 OMB delineations. A discussion of the
proposed wage index transition policy is available in section
II.B.4.b.(3) of the CY 2021 ESRD PPS proposed rule and section
II.B.4.b.(3) of this final rule.
(b) Rural Counties That Would Become Urban Under the 2018 OMB
Delineations
In the CY 2021 ESRD PPS proposed rule (85 FR 42155 through 42157),
we proposed to implement the 2018 OMB labor market area delineations
(based upon the 2010 Decennial Census data) beginning in CY 2021. Our
analysis of the 2018 OMB delineations showed that a total of 47
counties (and county equivalents) that are currently considered located
in rural areas would be considered located in urban CBSAs, beginning in
CY 2021. In the CY 2021 ESRD PPS proposed rule (85 FR 42156), we listed
the 47 rural counties that would be urban, as set forth in Table 2, if
we finalized our proposal to adopt the 2018 OMB delineations beginning
in CY 2021.
Table 2--CY 2021 Proposed Rural to Urban CBSA Crosswalk
----------------------------------------------------------------------------------------------------------------
County/county
FIPS county code equivalent State name Proposed CBSA Proposed CBSA title
----------------------------------------------------------------------------------------------------------------
01063 GREENE................ AL.................... 46220 Tuscaloosa, AL.
01129 WASHINGTON............ AL.................... 33660 Mobile, AL.
05047 FRANKLIN.............. AR.................... 22900 Fort Smith, AR-OK.
12075 LEVY.................. FL.................... 23540 Gainesville, FL.
13259 STEWART............... GA.................... 17980 Columbus, GA-AL.
13263 TALBOT................ GA.................... 17980 Columbus, GA-AL.
16077 POWER................. ID.................... 38540 Pocatello, ID.
17057 FULTON................ IL.................... 37900 Peoria, IL.
17087 JOHNSON............... IL.................... 16060 Carbondale-Marion, IL.
18047 FRANKLIN.............. IN.................... 17140 Cincinnati, OH-KY-IN.
18121 PARKE................. IN.................... 45460 Terre Haute, IN.
18171 WARREN................ IN.................... 29200 Lafayette-West
Lafayette, IN.
19015 BOONE................. IA.................... 11180 Ames, IA.
19099 JASPER................ IA.................... 19780 Des Moines-West Des
Moines, IA.
20061 GEARY................. KS.................... 31740 Manhattan, KS.
21043 CARTER................ KY.................... 26580 Huntington-Ashland, WV-
KY-OH.
[[Page 71432]]
22007 ASSUMPTION............ LA.................... 12940 Baton Rouge, LA.
22067 MOREHOUSE............. LA.................... 33740 Monroe, LA.
25011 FRANKLIN.............. MA.................... 44140 Springfield, MA.
26067 IONIA................. MI.................... 24340 Grand Rapids-Kentwood,
MI.
26155 SHIAWASSEE............ MI.................... 29620 Lansing-East Lansing,
MI.
27075 LAKE.................. MN.................... 20260 Duluth, MN-WI.
28031 COVINGTON............. MS.................... 25620 Hattiesburg, MS.
28051 HOLMES................ MS.................... 27140 Jackson, MS.
28131 STONE................. MS.................... 25060 Gulfport-Biloxi, MS.
29053 COOPER................ MO.................... 17860 Columbia, MO.
29089 HOWARD................ MO.................... 17860 Columbia, MO.
30095 STILLWATER............ MT.................... 13740 Billings, MT.
37007 ANSON................. NC.................... 16740 Charlotte-Concord-
Gastonia, NC-SC.
37029 CAMDEN................ NC.................... 47260 Virginia Beach-Norfolk-
Newport News, VA-NC.
37077 GRANVILLE............. NC.................... 20500 Durham-Chapel Hill,
NC.
37085 HARNETT............... NC.................... 22180 Fayetteville, NC.
39123 OTTAWA................ OH.................... 45780 Toledo, OH.
45027 CLARENDON............. SC.................... 44940 Sumter, SC.
47053 GIBSON................ TN.................... 27180 Jackson, TN.
47161 STEWART............... TN.................... 17300 Clarksville, TN-KY.
48203 HARRISON.............. TX.................... 30980 Longview, TX.
48431 STERLING.............. TX.................... 41660 San Angelo, TX.
51097 KING AND QUEEN........ VA.................... 40060 Richmond, VA.
51113 MADISON............... VA.................... 47894 Washington-Arlington-
Alexandria, DC-VA-MD-
WV
51175 SOUTHAMPTON........... VA.................... 47260 Virginia Beach-Norfolk-
Newport News, VA-NC.
51620 FRANKLIN CITY......... VA.................... 47260 Virginia Beach-Norfolk-
Newport News, VA-NC.
54035 JACKSON............... WV.................... 16620 Charleston, WV.
54065 MORGAN................ WV.................... 25180 Hagerstown-
Martinsburg, MD-WV.
55069 LINCOLN............... WI.................... 48140 Wausau-Weston, WI.
72001 ADJUNTAS.............. PR.................... 38660 Ponce, PR.
72083 LAS MARIAS............ PR.................... 32420 Mayag[uuml]ez, PR.
----------------------------------------------------------------------------------------------------------------
We proposed that when calculating the area wage index, beginning
with CY 2021, the wage data for ESRD facilities located in these
counties would be included in their new respective urban CBSAs. We
stated in the CY 2021 ESRD PPS proposed rule (85 FR 42157) that
typically, ESRD facilities located in an urban area receive a higher
wage index value than or equal wage index value to ESRD facilities
located in their state's rural area. A discussion of the proposed wage
index transition policy is available in section II.B.4.b.(3) of the CY
2021 ESRD PPS proposed rule and section II.B.4.b.(3) of this final
rule.
(c) Urban Counties That Would Move to a Different Urban CBSA Under the
2018 OMB Delineations
In the CY 2021 ESRD PPS proposed rule (85 FR 42157 through 42158),
we stated that in certain cases, adopting the 2018 OMB delineations
would involve a change only in CBSA name and/or number, while the CBSA
continues to encompass the same constituent counties. For example, we
noted that CBSA 19380 (Dayton, OH) would experience both a change to
its number and its name, and become CBSA 19430 (Dayton-Kettering, OH),
while all of its three constituent counties would remain the same. We
also stated that in other cases, only the name of the CBSA would be
modified, and none of the currently assigned counties would be
reassigned to a different urban CBSA. In the CY 2021 ESRD PPS proposed
rule (85 FR 42158), we listed the CBSAs where there would be a change
either in CBSA name or CBSA number, as set forth in Table 3, if we
finalized our proposal to adopt the 2018 OMB delineations beginning in
CY 2021.
Table 3--CY 2021 Proposed Change in CBSA Name and/or Number Crosswalk
------------------------------------------------------------------------
Current CBSA Proposed CBSA Proposed CBSA
Current CBSA code title code title
------------------------------------------------------------------------
10540 Albany, OR....... 10540 Albany-Lebanon,
OR.
11500 Anniston-Oxford- 11500 Anniston-Oxford,
Jacksonville, AL. AL.
12060 Atlanta-Sandy 12060 Atlanta-Sandy
Springs-Roswell, Springs-
GA. Alpharetta, GA.
12420 Austin-Round 12420 Austin-Round Rock-
Rock, TX. Georgetown, TX.
13460 Bend-Redmond, OR. 13460 Bend, OR.
13980 Blacksburg- 13980 Blacksburg-
Christiansburg- Christiansburg,
Radford, VA. VA.
14740 Bremerton- 14740 Bremerton-
Silverdale, WA. Silverdale-Port
Orchard, WA.
15380 Buffalo- 15380 Buffalo-
Cheektowaga- Cheektowaga, NY.
Niagara Falls,
NY.
19430 Dayton-Kettering, 19380 Dayton, OH.
OH.
24340 Grand Rapids- 24340 Grand Rapids-
Wyoming, MI. Kentwood, MI.
24860 Greenville- 24860 Greenville-
Anderson- Anderson, SC.
Mauldin, SC.
25060 Gulfport-Biloxi- 25060 Gulfport-Biloxi,
Pascagoula, MS. MS.
25540 Hartford-West 25540 Hartford-East
Hartford-East Hartford-
Hartford, CT. Middletown, CT.
25940 Hilton Head 25940 Hilton Head
Island-Bluffton- Island-Bluffton,
Beaufort, SC. SC.
[[Page 71433]]
28700 Kingsport-Bristol- 28700 Kingsport-
Bristol, TN-VA. Bristol, TN-VA.
31860 Mankato-North 31860 Mankato, MN.
Mankato, MN.
33340 Milwaukee- 33340 Milwaukee-
Waukesha-West Waukesha, WI.
Allis, WI.
34940 Naples-Immokalee- 34940 Naples-Marco
Marco Island, FL. Island, FL.
35660 Niles-Benton 35660 Niles, MI.
Harbor, MI.
36084 Oakland-Hayward- 36084 Oakland-Berkeley-
Berkeley, CA. Livermore, CA.
36500 Olympia-Tumwater, 36500 Olympia-Lacey-
WA. Tumwater, WA.
38060 Phoenix-Mesa- 38060 Phoenix-Mesa-
Scottsdale, AZ. Chandler, AZ.
39150 Prescott Valley- 39140 Prescott, AZ.
Prescott, AZ.
23224 Frederick- 43524 Silver Spring-
Gaithersburg- Frederick-
Rockville, MD. Rockville, MD.
44420 Staunton- 44420 Staunton, VA.
Waynesboro, VA.
44700 Stockton-Lodi, CA 44700 Stockton, CA.
45940 Trenton, NJ...... 45940 Trenton-
Princeton, NJ.
46700 Vallejo- 46700 Vallejo, CA.
Fairfield, CA.
47300 Visalia- 47300 Visalia, CA.
Porterville, CA.
48140 Wausau, WI....... 48140 Wausau-Weston,
WI.
48424 West Palm Beach- 48424 West Palm Beach-
Boca Raton- Boca Raton-
Delray Beach, FL. Boynton Beach,
FL.
------------------------------------------------------------------------
In the CY 2021 ESRD PPS proposed rule (85 FR 42159), we explained
that ESRD facilities located in an urban area that, due to the 2018 OMB
delineations, involves a change only in the CBSA name or number would
not experience a consequential change in their wage index value.
However, we also stated that in other cases, if we adopted the 2018
OMB delineations, counties would shift between existing and new CBSAs,
changing the constituent makeup of the CBSAs. We considered these types
of changes, where CBSAs are split into multiple new CBSAs or a CBSA
loses one or more counties to another urban CBSAs, to be significant
modifications.
In the CY 2021 ESRD PPS proposed rule (85 FR 42160), we listed the
urban counties that would move from one urban CBSA to another a newly
proposed or modified CBSA, as set forth in Table 4, if we finalized our
proposal to adopt the 2018 OMB delineations beginning in CY 2021.
Table 4--CY 2021 Proposed Urban to a Different Urban CBSA Crosswalk
--------------------------------------------------------------------------------------------------------------------------------------------------------
County/county Proposed CBSA
FIPS county code equivalent State Current CBSA Current CBSA name code Proposed CBSA name
--------------------------------------------------------------------------------------------------------------------------------------------------------
17031 COOK.................. IL.................... 16974 Chicago-Naperville- 16984 Chicago-Naperville-
Arlington Heights, IL. Evanston, IL.
17043 DU PAGE............... IL.................... 16974 Chicago-Naperville- 16984 Chicago-Naperville-
Arlington Heights, IL. Evanston, IL.
17063 GRUNDY................ IL.................... 16974 Chicago-Naperville- 16984 Chicago-Naperville-
Arlington Heights, IL. Evanston, IL.
17093 KENDALL............... IL.................... 16974 Chicago-Naperville- 20994 Elgin, IL.
Arlington Heights, IL.
17111 MC HENRY.............. IL.................... 16974 Chicago-Naperville- 16984 Chicago-Naperville-
Arlington Heights, IL. Evanston, IL.
17197 WILL.................. IL.................... 16974 Chicago-Naperville- 16984 Chicago-Naperville-
Arlington Heights, IL. Evanston, IL.
34023 MIDDLESEX............. NJ.................... 35614 New York-Jersey City- 35154 New Brunswick-
White Plains, NY-NJ. Lakewood, NJ.
34025 MONMOUTH.............. NJ.................... 35614 New York-Jersey City- 35154 New Brunswick-
White Plains, NY-NJ. Lakewood, NJ.
34029 OCEAN................. NJ.................... 35614 New York-Jersey City- 35154 New Brunswick-
White Plains, NY-NJ. Lakewood, NJ.
34035 SOMERSET.............. NJ.................... 35084 Newark, NJ-PA......... 35154 New Brunswick-
Lakewood, NJ.
36027 DUTCHESS.............. NY.................... 20524 Dutchess County-Putnam 39100 Poughkeepsie-Newburgh-
County, NY. Middletown, NY.
36071 ORANGE................ NY.................... 35614 New York-Jersey City- 39100 Poughkeepsie-Newburgh-
White Plains, NY-NJ. Middletown, NY.
36079 PUTNAM................ NY.................... 20524 Dutchess County-Putnam 35614 New York-Jersey City-
County, NY. White Plains, NY-NJ.
47057 GRAINGER.............. TN.................... 28940 Knoxville, TN......... 34100 Morristown, TN.
54043 LINCOLN............... WV.................... 26580 Huntington-Ashland, WV- 16620 Charleston, WV.
KY-OH.
72055 GUANICA............... PR.................... 38660 Ponce, PR............. 49500 Yauco, PR.
72059 GUAYANILLA............ PR.................... 38660 Ponce, PR............. 49500 Yauco, PR.
72111 PENUELAS.............. PR.................... 38660 Ponce, PR............. 49500 Yauco, PR.
72153 YAUCO................. PR.................... 38660 Ponce, PR............. 49500 Yauco, PR.
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 71434]]
We stated in the CY 2021 ESRD PPS proposed rule (85 FR 42160), that
if ESRD facilities located in these counties move from one CBSA to
another under the 2018 OMB delineations, there may be impacts, both
negative and positive, to their specific wage index values. A
discussion of the proposed wage index transition policy is available in
II.B.4.b.(3) of the CY 2021 ESRD PPS proposed rule and section
II.B.4.b.(3) of this final rule.
(d) Changes to the Statewide Rural Wage Index
In the CY 2021 ESRD PPS proposed rule (85 FR 42160), we stated that
ESRD facilities currently located in a rural area may remain rural
under the 2018 OMB delineations but experience a change in their rural
wage index value due to the movement of constituent counties. If ESRD
facilities located in these counties move from one CBSA to another
under the 2018 OMB delineations, there may be impacts, both negative
and positive, upon their specific wage index values. A discussion of
the proposed wage index transition policy is available in section
II.B.4.b.(3) of the CY 2021 ESRD PPS proposed rule and section
II.B.4.b.(3) of this final rule.
We explained that we believe these revisions to the CBSA-based
labor market area delineations as established in OMB Bulletin 18-04
would ensure that the ESRD PPS area wage level adjustment most
appropriately accounts for and reflects the relative wage levels in the
geographic area of the ESRD facility. Therefore, we proposed to adopt
the 2018 OMB delineations under the ESRD PPS, effective January 1, 2021
and invited public comment on this proposal.
(3) Transition for ESRD Facilities Negatively Impacted
In the CY 2021 ESRD PPS proposed rule (85 FR 42160 through 42161),
we stated that in the past we provided for transition periods when
adopting changes that have significant payment implications,
particularly large negative impacts, in order to mitigate the potential
impacts of proposed policies on ESRD facilities. For example, we have
proposed and finalized budget-neutral transition policies to help
mitigate negative impacts on ESRD facilities following the adoption of
the OMB delineations as described in the February 28, 2013 OMB Bulletin
No. 13-01 (79 FR 66142). Specifically, as part of the CY 2015 ESRD PPS
rulemaking, we implemented a 2-year transition blended wage index for
all ESRD facilities. ESRD facilities received 50 percent of their CY
2015 wage index value based on the OMB delineations for CY 2014 and 50
percent of their CY 2015 wage index value based on the newer OMB
delineations. This resulted in an average of the two values. Then, in
CY 2016, an ESRD facility's wage index value was based 100 percent on
the newer OMB delineations.
As we stated in the CY 2021 ESRD PPS proposed rule (85 FR 42161),
we considered having no transition period and fully implementing the
2018 OMB delineations beginning in CY 2021, which would mean that all
ESRD facilities would have payments based on updated hospital wage data
and the 2018 OMB delineations starting on January 1, 2021. However,
because the overall amount of ESRD PPS payments would increase slightly
due to the 2018 OMB delineations, the wage index budget neutrality
factor would be higher. This higher factor would reduce the ESRD PPS
per treatment base rate for all ESRD facilities paid under the ESRD
PPS, despite the fact that the majority of ESRD facilities would be
unaffected by the 2018 OMB delineations. Thus, we explained that we
believe it would be appropriate to provide for a transition period to
mitigate the resulting short-term instability of a lower ESRD PPS base
rate as well as consequential negative impacts to ESRD facilities that
experience reduced payments. For example, ESRD facilities currently
located in CBSA 35614 (New York-Jersey City-White Plains, NY-NJ) that
would be located in new CBSA 35154 (New Brunswick-Lakewood, NJ) under
the proposed changes to the OMB delineations would experience a nearly
17 percent decrease in the wage index as a result of the proposed
change.
Therefore, under the authority of section 1881(b)(14)(D)(iv)(II) of
the Act and consistent with past practice, we proposed a transition
policy to help mitigate any significant, negative impacts that ESRD
facilities may experience due to our proposal to adopt the 2018 OMB
delineations under the ESRD PPS. Specifically, as a transition for CY
2021, we proposed to apply a 5 percent cap on any decrease in an ESRD
facility's wage index from the ESRD facility's wage index from the
prior calendar year. This transition would allow the effects of our
proposed adoption of the 2018 OMB delineations to be phased in over 2
years, where the estimated reduction in an ESRD facility's wage index
would be capped at 5 percent in CY 2021, and no cap would be applied to
the reduction in the wage index for the second year, CY 2022. We
explained that we believe a 5 percent cap on the overall decrease in an
ESRD facility's wage index value, regardless of the circumstance
causing the decline, would be an appropriate transition for CY 2021 as
it would provide predictability in payment levels from CY 2020 to the
upcoming CY 2021 and additional transparency because it is
administratively simpler than our prior 2-year 50/50 blended wage index
approach. We further explained that we believe 5 percent is a
reasonable level for the cap because it would effectively mitigate any
significant decreases in an ESRD facility's wage index for CY 2021. We
solicited comment on the proposal to apply a 5 percent cap on any
decrease in an ESRD facility's wage index for CY 2021 from the ESRD
facility's wage index from the prior calendar year, CY 2020.
(4) Budget Neutrality Adjustments for Changes to the ESRD PPS Wage
Index
In the CY 2021 ESRD PPS proposed rule (85 FR 42161), we stated that
consistent with the historical wage index budget-neutrality adjustment
policy finalized in the CY 2012 ESRD PPS final rule (76 FR 70241
through 70242) under the authority of section 1881(b)(14)(D)(iv)(II) of
the Act, we proposed that the proposed adoption of the 2018 OMB
delineations and the proposed transition policy would not result in any
change of estimated aggregate ESRD PPS payments by applying a budget
neutrality factor to the ESRD PPS base rate. We noted budget neutrality
was also applied to the adoption of newer OMB delineations and
transition policy in the CY 2015 ESRD PPS final rule (79 FR 66128
through 66129). Our methodology for calculating this budget neutrality
factor is discussed in section II.B.4.d.(2) of the CY 2021 ESRD PPS
proposed rule and section II.B.4.d.(2) of this final rule.
The comments and our responses to the comments on our proposed
adoption of the 2018 OMB delineations are set forth below.
Comment: Several commenters supported the adoption of the 2018 OMB
delineations under the ESRD PPS, effective January 1, 2021.
Response: We appreciate the comments supporting the adoption of the
2018 OMB delineations.
Comment: A national non-profit dialysis organization expressed
concern that its analysis of the proposal indicates that it will have
multiple facilities negatively impacted by the adoption of the 2018 OMB
delineations, which is worsened by the current COVID-19 pandemic.
Response: We appreciate the detailed concerns described by the
commenter
[[Page 71435]]
regarding the impact that the 2018 OMB delineations would have on its
specific facilities. While we understand the commenter's concern
regarding the potential financial impact, we believe that implementing
the 2018 OMB delineations will result in a more accurate representation
of labor market areas nationally and in ESRD facility wage index values
being more representative of the actual costs of labor in a given area.
We believe that the OMB standards for delineating Metropolitan and
Micropolitan Statistical Areas are appropriate for determining area
wage differences and that the values computed under the revised
delineations will result in more appropriate payments to ESRD
facilities by more accurately accounting for and reflecting the
differences in area wage levels.
We recognize that using the updated OMB delineations will mean
there are areas that will experience a decrease in their wage index. As
such, it is our longstanding policy to provide a temporary transition
to mitigate negative impacts from the adoption of new policies or
procedures. In the CY 2021 ESRD PPS proposed rule, we proposed a 2-year
transition in order to mitigate the resulting short-term instability
and negative impacts on certain ESRD facilities and to provide time for
facilities to adjust to their new labor market delineations. We
continue to believe that the 1-year 5-percent cap transitional policy
provides an adequate safeguard against any significant payment
reductions, allows for sufficient time for facilities to make
operational changes for future CYs, and provides a reasonable balance
between mitigating some short-term instability in ESRD PPS payments and
improving the accuracy of the payment adjustment for differences in
area wage levels.
We also recognize the impact that the COVID-19 PHE is having on all
health care providers, which is why we have issued waivers and
flexibilities 19 20 to ease burden and allow providers to
respond effectively during the COVID-19 PHE.
---------------------------------------------------------------------------
\19\ https://www.cms.gov/files/document/qso-20-19-esrd-revised.pdf.
\20\ https://www.cms.gov/files/document/covid-19-esrd-facilities.pdf.
---------------------------------------------------------------------------
Comment: Several commenters supported the use of a transition
policy to mitigate the impact of changes to the wage index values and
the proposed transition methodology. Some of these commenters,
including MedPAC, suggested alternatives to the methodology. MedPAC
suggested that the 5 percent cap limit should apply to both increases
and decreases in the wage index so that no ESRD facility would have its
wage index value increase or decrease by more than 5 percent for CY
2021.
A patient organization acknowledged the reasoning of CMS proposing
a less administratively complex methodology of managing the transition
given the relatively small proportion of ESRD facilities that will be
affected. The commenter noted that if the total change in payment is 10
percent or less for all facilities, a methodology that caps the
decrease in a facility's wage index at 5 percent in the first year
makes sense. However, the commenter expressed concern that at least one
facility will see a 17 percent decrease in the wage index, which would
defer the burden of the transition to the second year. The commenter
noted that while providing an extra year for the facility to adjust to
the change is helpful, for ESRD facilities that see a drop in wage
index payments in the second year and that are located in states
without staffing requirements, the negative implications for hiring and
retention of staff will be significant. The commenter indicated that it
would prefer for CMS to apply the 50/50 blended wage index to manage
the transition, but could support the 5 percent cap approach if staff
time saved by using a less complex methodology is redirected to
addressing higher priority issues, such as securing staff assistance
for home dialysis patients or developing a flexible approach to
interpretation of the SCI criteria for the TPNIES.
Finally, a national non-profit dialysis organization recommended
that CMS provide an extended transition period, beyond the proposed 5
percent limit for 2021, for at least 3 years.
Response: We appreciate the comments supporting the proposed
transition methodology. Further, we appreciate MedPAC's suggestion that
the 5 percent cap should also be applied to increases in the wage
index. However, as we discussed in the CY 2021 ESRD PPS proposed rule
(85 FR 42161), the purpose of the proposed transition policy, as well
as those we have implemented in the past, is to help mitigate the
significant negative impacts of certain wage index changes, not to
curtail the positive impacts of such changes, and thus we do not
believe it would be appropriate to apply the 5 percent cap on wage
index increases as well. To the extent that an ESRD facility's wage
index would increase under the 2018 OMB delineations, this means that
the ESRD facility is currently being paid less than their reported wage
data suggests is appropriate. We believe the transition policy, as
proposed, would help ensure these ESRD facilities do not receive a wage
index adjustment that is lower than appropriate and that payments are
as accurate as possible.
With regard to recommendation that we apply the 50/50 blended wage
index to manage the transition since some facilities will see a wage
index decrease greater than 10 percent, we believe that this approach
would not be appropriate for the proportion of ESRD facilities that
will be impacted. The use of a 50/50 blended wage index transition
would affect all ESRD facilities. We believe it would be more
appropriate to allow ESRD facilities that would experience an increase
in their wage index value to receive the full benefit of their
increased wage index value, which is intended to reflect accurately the
higher labor costs in that area. The utilization of a cap on negative
impacts restricts the transition to only those with negative impacts
and allows ESRD facilities who would experience positive impacts to
receive the full amount of their wage index increase. As such, we
believe a 5 percent cap on the overall decrease in an ESRD facility's
wage index value is an appropriate transition as it would effectively
mitigate any significant decreases in an ESRD facility's wage index for
CY 2021. With regard to the comment suggesting staff time be used to
address higher priority issues, we believe that the comment was
referring to CMS staff. We appreciate the commenter's recommendation
for polices that impact home dialysis and innovation.
With regard to the suggestion that we extend the transition period,
beyond the proposed 5 percent limit for CY 2021, for at least 3 years,
we believe this would undermine the goal of the wage index policy,
which is to improve the accuracy of payments under the ESRD PPS.
Extending the transition period and applying a cap would serve to
further delay improving the accuracy of the ESRD PPS by continuing to
pay certain ESRD facilities more than their wage data suggest is
appropriate. Therefore, while we believe that a transition policy is
necessary to help mitigate some initial significant negative impacts
from the revised OMB delineations, we also believe this mitigation must
be balanced against the importance of ensuring accurate payments.
The general comments received on the CY 2021 ESRD PPS wage index
and our responses to the comments are set forth below.
Comment: Two health insurance organizations in Puerto Rico
commented on the wage index for Puerto Rico. One health insurance
organization in Puerto
[[Page 71436]]
Rico expressed appreciation for the wage index floor of 0.5000 and
explained that it represents an important acknowledgment of the many
complexities associated with providing dialysis in Puerto Rico. The
commenter noted that in the post-hurricane environment particularly,
infrastructure challenges lead to high costs of dialysis care. The
commenter strongly encouraged CMS to continue to look closely at the
wage index as it relates to Puerto Rico.
One of the health insurance organizations asserted that a wage
index floor of 0.70 would result in rates that more accurately reflect
actual cost per treatment based on costs after multiple natural
disasters and the disruptions in 2020 due to COVID-19. The commenter
expressed concern that the financial viability of dialysis providers in
Puerto Rico is under stress and that it is in the interest of
beneficiaries, the Medicare program, and the fragile healthcare
infrastructure in Puerto Rico to have available multiple competing
dialysis services providers. The commenter stated that the average in-
center HD costs for independent facilities in Puerto Rico is $232.25
per treatment using CMS data from 2017. The commenter asserted that
this number is significantly higher than the average FFS payment rate
for Puerto Rico and significantly lower than the rates contracted by
Medicare Advantage companies for the same service. The commenter noted
that in-center HD represents the majority of the treatments for Puerto
Rico ESRD patients. The commenter suggested that CMS consider basing
the ESRD wage index on a new survey of ESRD outpatient facility wage
costs as a means for wage index reform.
Both health insurance organizations referred to the wage index
policy changes included in the FY 2020 IPPS/LTCH PPS final rule (84 FR
42326 through 42332). Specifically, the commenters urged that the FFS
ESRD PPS wage index system for Puerto Rico should use the recently
adjusted inpatient facility (Part A) wage index values to reverse the
wage index ``downward spiral'' consistently across all Medicare payment
systems. Finally, they recommended that CMS assure that the
corresponding adjustment in Medicare Advantage benchmarks for ESRD is
made to reflect any adjustments in ESRD PPS payments.
Response: We did not propose specific policies relating to the wage
index floor. We thank the commenters for sharing their concerns
regarding Puerto Rico's wage index and their suggestions for wage index
reform, along with the recommendation of a wage index for Puerto Rico
of 0.70 and their concern regarding the Medicare Advantage benchmarks
for ESRD. We will take these thoughtful suggestions into consideration
when considering future rulemaking.
Final Rule Action: After considering the comments received, for the
reasons set forth in this final rule and in the CY 2021 ESRD PPS
proposed rule, we are finalizing our proposal to adopt the newer OMB
delineations contained in OMB Bulletin 18-04 as proposed. We are also
finalizing our proposal to apply a 5 percent cap on any decrease in an
ESRD facility's wage index for CY 2021 from the ESRD facility's wage
index from the prior calendar year (CY 2020) as proposed. We did not
receive comments on our proposal regarding wage index budget
neutrality, therefore we are finalizing the application of a budget
neutrality factor to the ESRD PPS base rate to ensure that the adoption
of the 2018 OMB delineations and the transition policy will not result
in any change of estimated aggregate ESRD PPS payments.
We are finalizing the CY 2021 ESRD PPS wage indices based on the
latest hospital wage data as proposed. For CY 2021, the labor-related
share to which a facility's wage index is applied is 52.3 percent.
The final CY 2021 ESRD PPS wage index is set forth in Addendum A
and is available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/End-Stage-Renal-Disease-ESRD-Payment-Regulations-and-Notices.html. Addendum A provides a
crosswalk between the CY 2020 wage index for an ESRD facility using the
current OMB delineations in effect in CY 2020, the CY 2021 wage index
using the current OMB delineations in effect in CY 2020, and the CY
2021 wage index using the final 2018 OMB delineations. Addendum B
provides an ESRD facility-level impact analysis. Addendum B includes
the final transition wage index values that will be in effect in CY
2021. Addendum B is available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/End-Stage-Renal-Disease-ESRD-Payment-Regulations-and-Notices.html.
c. CY 2021 Update to the Outlier Policy
Section 1881(b)(14)(D)(ii) of the Act requires that the ESRD PPS
include a payment adjustment for high cost outliers due to unusual
variations in the type or amount of medically necessary care, including
variability in the amount of ESAs necessary for anemia management. Some
examples of the patient conditions that may be reflective of higher
facility costs when furnishing dialysis care would be frailty, obesity,
and comorbidities, such as secondary hyperparathyroidism. The ESRD PPS
recognizes high cost patients, and we have codified the outlier policy
and our methodology for calculating outlier payments at Sec. 413.237.
The policy provides that the following ESRD outlier items and services
are included in the ESRD PPS bundle: (1) Renal dialysis drugs and
biological products that were or would have been, prior to January 1,
2011, separately billable under Medicare Part B; (2) Renal dialysis
laboratory tests that were or would have been, prior to January 1,
2011, separately billable under Medicare Part B; (3) Renal dialysis
medical/surgical supplies, including syringes, used to administer renal
dialysis drugs and biological products that were or would have been,
prior to January 1, 2011, separately billable under Medicare Part B;
(4) Renal dialysis drugs and biological products that were or would
have been, prior to January 1, 2011, covered under Medicare Part D,
including renal dialysis oral-only drugs effective January 1, 2025; and
(5) Renal dialysis equipment and supplies that receive the transitional
add-on payment adjustment as specified in Sec. 413.236 after the
payment period has ended.
In the CY 2011 ESRD PPS final rule (75 FR 49142), we stated that
for purposes of determining whether an ESRD facility would be eligible
for an outlier payment, it would be necessary for the facility to
identify the actual ESRD outlier services furnished to the patient by
line item (that is, date of service) on the monthly claim. Renal
dialysis drugs, laboratory tests, and medical/surgical supplies that
are recognized as outlier services were originally specified in
Attachment 3 of Change Request 7064, Transmittal 2033 issued August 20,
2010, rescinded and replaced by Transmittal 2094, dated November 17,
2010. Transmittal 2094 identified additional drugs and laboratory tests
that may also be eligible for ESRD outlier payment. Transmittal 2094
was rescinded and replaced by Transmittal 2134, dated January 14, 2011,
which included one technical correction.
Furthermore, we use administrative issuances and guidance to
continually update the renal dialysis service items available for
outlier payment via our quarterly update CMS Change Requests, when
applicable. We use this separate guidance to identify renal dialysis
service drugs that were or would have been covered under Medicare Part
D for
[[Page 71437]]
outlier eligibility purposes and in order to provide unit prices for
calculating imputed outlier services. In addition, we identify through
our monitoring efforts items and services that are either incorrectly
being identified as eligible outlier services or any new items and
services that may require an update to the list of renal dialysis items
and services that qualify as outlier services, which are made through
administrative issuances.
Under Sec. 413.237, an ESRD facility is eligible for an outlier
payment if its actual or imputed Medicare allowable payment (MAP)
amount per treatment for ESRD outlier services exceeds a threshold. The
MAP amount represents the average incurred amount per treatment for
services that were or would have been considered separately billable
services prior to January 1, 2011. The threshold is equal to the ESRD
facility's predicted ESRD outlier services MAP amount per treatment
(which is case-mix adjusted and described in the following paragraphs)
plus the fixed-dollar loss (FDL) amount. In accordance with Sec.
413.237(c), facilities are paid 80 percent of the per treatment amount
by which the imputed MAP amount for outlier services (that is, the
actual incurred amount) exceeds this threshold. ESRD facilities are
eligible to receive outlier payments for treating both adult and
pediatric dialysis patients.
In the CY 2011 ESRD PPS final rule and at Sec. 413.220(b)(4),
using 2007 data, we established the outlier percentage, which is used
to reduce the per treatment base rate to account for the proportion of
the estimated total payments under the ESRD PPS that are outlier
payments, at 1.0 percent of total payments (75 FR 49142 through 49143).
We also established the FDL amounts that are added to the predicted
outlier services MAP amounts. The outlier services MAP amounts and FDL
amounts are different for adult and pediatric patients due to
differences in the utilization of separately billable services among
adult and pediatric patients (75 FR 49140). As we explained in the CY
2011 ESRD PPS final rule (75 FR 49138 through 49139), the predicted
outlier services MAP amounts for a patient are determined by
multiplying the adjusted average outlier services MAP amount by the
product of the patient-specific case-mix adjusters applicable using the
outlier services payment multipliers developed from the regression
analysis used to compute the payment adjustments.
In the CY 2020 ESRD PPS final rule (84 FR 60705), we stated that
based on the CY 2018 claims data, outlier payments represented
approximately 0.5 percent of total payments. We also noted that,
beginning in CY 2020, the total expenditure amount includes add-on
payment adjustments made for calcimimetics under the TDAPA policy. We
projected that for each dialysis treatment furnished, the average
amount attributed to the TDAPA would be $21.03 (84 FR 60704).
For CY 2021, we proposed that the outlier services MAP amounts and
FDL amounts would be derived from claims data from CY 2019. As we
stated in the CY 2021 ESRD PPS proposed rule (85 FR 42162), because we
believe that any adjustments made to the MAP amounts under the ESRD PPS
should be based upon the most recent data year available in order to
best predict any future outlier payments, we proposed that the outlier
thresholds for CY 2021 would be based on utilization of renal dialysis
items and services furnished under the ESRD PPS in CY 2019. We noted
that, for CY 2020, the total expenditure amount includes add-on payment
adjustments made for calcimimetics under the TDAPA policy (calculated
to be $14.87 per treatment). However, as discussed in section II.B.1 of
this final rule, for CY 2021 we modified the ESRD PPS base rate by
adding $9.93 to account for calcimimetics in the ESRD PPS bundled
payment and will no longer pay for these drugs using the TDAPA. In
addition, we are finalizing that beginning January 1, 2021,
calcimimetics will be eligible outlier services.
As discussed in section II.B.4.c.(2) of this final rule, CY 2019
claims data show outlier payments represented approximately 0.5 percent
of total payments. As we stated in the CY 2021 ESRD PPS proposed rule,
we recognize that the utilization of ESAs and other outlier services
have continued to decline under the ESRD PPS, and that we have lowered
the MAP amounts and FDL amounts every year under the ESRD PPS. We
stated that, for CY 2021, the adult predicted outlier services MAP
amounts and FDL amounts have increased as a result of our incorporation
of oral and injectable calcimimetics into the outlier policy.
(1) CY 2021 Update to the Outlier Services MAP Amounts and FDL Amounts
For this final rule, the outlier services MAP amounts and FDL
amounts were updated using 2019 claims data. The impact of this update
is shown in Table 5, which compares the outlier services MAP amounts
and FDL amounts used for the outlier policy in CY 2020 with the updated
estimates for this final rule. The estimates for the CY 2021 outlier
policy, which are included in Column II of Table 5, were inflation
adjusted to reflect projected 2021 prices for outlier services.
TABLE 5--Outlier Policy: Impact of Using Updated Data To Define the Outlier Policy
----------------------------------------------------------------------------------------------------------------
Column I final outlier policy Column II final outlier policy
for CY 2020 (based on 2018 for CY 2021 (based on 2019
data, price inflated to 2020) data, price inflated to 2021)
* -------------------------------
--------------------------------
Age < 18 Age >= 18 Age < 18 Age >= 18
----------------------------------------------------------------------------------------------------------------
Average outlier services MAP amount per $30.95 $37.33 $30.33 $53.08
treatment......................................
----------------------------------------------------------------------------------------------------------------
Adjustments
----------------------------------------------------------------------------------------------------------------
Standardization for outlier services............ 1.0655 0.9781 1.0390 0.9789
MIPPA reduction................................. 0.98 0.98 0.98 0.98
Adjusted average outlier services MAP amount.... $32.32 $35.78 $30.88 $50.92
FDL amount that is added to the predicted MAP to $41.04 $48.33 $44.78 $122.49
determine the outlier threshold................
Patient-months qualifying for outlier payment... 11.35% 10.38% 8.80% 5.15%
----------------------------------------------------------------------------------------------------------------
Note: Column I was obtained from Column II of Table 2 from the CY 2020 ESRD PPS final rule (84 FR 60705).
[[Page 71438]]
As demonstrated in Table 5, the estimated FDL amount per treatment
that determines the CY 2021 outlier threshold amount for adults (Column
II; $122.49) is higher than that used for the CY 2020 outlier policy
(Column I; $48.33). The higher threshold is accompanied by an increase
in the adjusted average MAP for outlier services from $35.78 to $50.92.
For pediatric patients, there is an increase in the FDL amount from
$41.04 to $44.78 and a decrease in the adjusted average MAP for outlier
services, from $32.32 to $30.88.
As we stated previously, the predicted outlier services MAP amounts
and FDL amounts have increased as a result of the incorporation of oral
and injectable calcimimetics into the outlier policy. Approximately 30
percent of ESRD beneficiaries receive calcimimetics and a subset of
these beneficiaries tend to have the highest ESRD PPS expenditures,
which trigger outlier payments under the ESRD PPS. Since the highest
per-beneficiary ESRD PPS expenditures will increase due to
calcimimetics being eligible ESRD outlier services, the outlier FDL
will increase to ensure that total outlier payments project to 1
percent of total Medicare ESRD PPS expenditures.
We estimate that the percentage of patient months qualifying for
outlier payments in CY 2021 will be 5.15percent for adult patients and
8.80 percent for pediatric patients, based on the 2019 claims data. The
outlier MAP and FDL amounts continue to be lower for pediatric patients
than adults due to the continued lower use of outlier services
(primarily reflecting lower use of calcimimetics, ESAs and other
injectable drugs).
(2) Outlier Percentage
In the CY 2011 ESRD PPS final rule (75 FR 49081) and under Sec.
413.220(b)(4), we reduced the per treatment base rate by 1 percent to
account for the proportion of the estimated total payments under the
ESRD PPS that are outlier payments as described in Sec. 413.237. Based
on the 2019 claims, outlier payments represented approximately 0.5
percent of total payments, which is below the 1 percent target due to
declines in the use of outlier services. Recalibration of the
thresholds using 2019 data is expected to result in aggregate outlier
payments close to the 1 percent target in CY 2021.
We believe the update to the outlier MAP and FDL amounts for CY
2021 will increase payments for ESRD beneficiaries requiring higher
resource utilization and move us closer to meeting our 1 percent
outlier policy because we are using more current data for computing the
MAP and FDL, which is more in line with current outlier services
utilization rates. The inclusion of calcimimetics as ESRD outlier
services in CY 2021 will fundamentally change the per-treatment
distribution of outlier services relative to previous CYs. In 2019
claims, roughly 33 percent of ESRD beneficiaries and 28 percent of
dialysis treatments are associated with calcimimetics and those that
often have significantly higher utilization of ESRD outlier services
relative to beneficiaries who do not receive calcimimetics. The MAP and
FDL increases account for this change. We note that recalibration of
the FDL amounts in this final rule will result in no change in payments
to ESRD facilities for beneficiaries with renal dialysis services that
are not eligible for outlier payments.
The comments and our responses to the comments on our proposed
updates to the outlier policy are set forth below.
Comment: Although we did not propose changes to the outlier target
percentage or methodology for computing the MAP or FDL amounts, we
received many comments from MedPAC, national dialysis associations,
large dialysis organizations, non-profit dialysis associations, a
patient advocacy organization, and an academy of nutrition and
dietetics expressing concern that the outlier policy has not been
effective. Most of the commenters opposed the proposed changes to the
MAP and FDL along with suggestions that ranged in complexity for the
policy's reform, which are described in detail below. We also received
data from the commenters' analysis that studied the impact of outlier
payments once calcimimetics become ESRD outlier services.
All commenters noted that since the beginning of the ESRD PPS, the
outlier pool has not paid out the full amount withheld each year.
MedPAC noted that every year the outlier threshold has been reduced and
yet still turns out to have been set too high. MedPAC stated that this
phenomenon suggests a declining trend in the use of outlier-eligible
services (that is, drugs and laboratory services that were separately
billable under the prior payment system) for ESRD beneficiaries with
very high estimated spending on those services. MedPAC asserted that
CMS' strategy of updating the base year of data used to calculate the
outlier threshold to bring the outlier payments closer to the targeted
1 percent, has not been effective.
Many commenters recommended that CMS adjust the outlier percentage
to more accurately represent the percentage of total payments that have
been historically paid under the outlier policy. For example,
commenters suggested that CMS reduce the outlier pool withheld to less
than 1 percent, indicating that they believe this approach to be
consistent with the intent of Congress since a minimum percentage was
not set in the legislation. One non-profit dialysis organization
recommended removing the outlier provision from the bundled payment
system but recognized that the provision is required by statute and
suggested that the percentage be decreased from 1 percent to 0.5
percent. A few other commenters agreed with reducing the percentage to
0.5 and recommended that CMS finalize this change for CY 2021.
An LDO recommended that CMS establish a mechanism to return unpaid
amounts withheld from ESRD facilities as part of the target percentage
when it does not achieve the 1 percent outlier policy in a given year.
An academy of nutrition and dietetics made a similar comment and stated
when these dollars are paid back to ESRD facilities they would be
invested in patient care.
A national dialysis association stated that CMS is correctly adding
resources to the ESRD PPS bundled payment to help continued patient
access to calcimimetics after the end of the TDAPA period, but this
correct policy decision creates adverse, unintended consequences for
the outlier pool that must be mitigated in the final rule.
Several commenters opposed the proposal to increase the adult FDL
and MAP outlier amounts accounting for the calcimimetics. Some
commenters, including MedPAC, stated that this action could further
exacerbate the longstanding issue of the outlier pool being underpaid.
MedPAC identified two problems that are additive; meaning the outlier
payments may be too low because (1) the outlier threshold calculation
does not account for the trend of decreasing spending for services
previously eligible for an outlier payment; and (2) in making
calcimimetics eligible for outlier payments in CY 2021, the outlier
threshold calculation does not account for the likelihood that
calcimimetic use will be lower after payment for calcimimetics is added
to the ESRD PPS bundled payment. MedPAC indicated that the fact that
CMS is proposing to increase the outlier threshold by 126 percent in
2021, rather than decrease the threshold as the agency has done in
every other year, corroborates the reliance on high calcimimetic use
for receiving an outlier payment in 2021. MedPAC further stated that,
if calcimimetic use decreases between
[[Page 71439]]
2019 (when the products were paid using the TDAPA) and 2021 (when the
products will be paid as part of the ESRD PPS base rate), the outlier
threshold will be set too high and outlier payments will be lower than
the 1 percent of total 2021 payments.
Several commenters urged CMS to lower the thresholds proposed for
2021. The commenters expressed concern that increases to the outlier
threshold would cause a shift in the cases qualifying for an outlier
payment. They stated that the increases to the thresholds would limit
most outlier payments to those patients who use IV calcimimetics,
largely excluding outlier payments for the care of patients using other
relatively high-cost items and services that otherwise would be
eligible for outliers absent adoption of the proposed substantial
increases to the outlier thresholds. Many commenters referred to a
study performed by the Moran Company which was submitted in a comment
letter from a national dialysis organization. The study demonstrated
that as a result of the proposed policy changes to increase the outlier
thresholds, 76.3 percent of the outlier pool will be dedicated solely
to patients that utilize calcimimetics, leaving few resources for other
high-cost patients.
Several commenters expressed concern that the dynamic shift of the
allocation of outlier payments seen in the Moran Company's analyses for
calcimimetics would continue to happen in the future when new therapies
become ESRD outlier services. One commenter explained that any new
product that qualifies for the outlier policy and has a significant
cost associated with it will lead to higher threshold amounts. Several
commenters referred to MedPAC's public comment for the CY 2020 ESRD PPS
rulemaking, in which MedPAC recommended that CMS exclude payments
during a TDAPA--or TPNIES--period from outlier pool calculations given
that CMS policy makes a drug or equipment or supply ineligible for
outlier payments during the add-on period. The commenters described
this as a policy misalignment that causes outlier payments to be less
than the outlier target percentage.
Two commenters suggested comprehensive refinement of the outlier
policy methodology. MedPAC recommended that CMS consider an approach
that reflects the trend in separately billable spending over time.
MedPAC noted that other CMS payment systems use trend information when
establishing similar payment policies. For example, in establishing
county benchmark rates, MedPAC stated that the Medicare Advantage
program uses a prediction method that accounts for utilization trends
for specific services combined with the most recent available prices.
MedPAC asserted that such an approach could produce a more reliable
outlier threshold estimate and may result in the outlier payment
amounts that, on average, are closer to the target.
Several commenters recommended that CMS explore reserving a portion
of the outlier pool to be in proportion to the share of new ESRD
outlier services, in this case calcimimetics, compared to the current
spending on all other ESRD outlier services in the ESRD PPS. Under this
type of policy, CMS could establish a MAP and fixed-loss amount for
each sub-pool. The total value of the outlier pool could remain at 1
percent (or less as noted above) of the ESRD PPS. CMS could recalculate
the size of the sub-pool based on the most recently available claims
data. Over time, CMS could evaluate whether additional functional
categories (in addition to bone and mineral metabolism) would merit the
creation of additional sub-pools. One national kidney dialysis
organization explained that in addition to allowing the outlier pool to
address higher-costs patients outside of the calcimimetic costs, the
distributed nature of the sub-pools would decrease the risk of dollars
being removed from the payment system unintentionally.
A national dialysis association provided a simulation of the
calculation of outlier payments performed by the Moran Company testing
two sub-pools of the outlier withhold: One for patients using
calcimimetics and another for other, high cost patients who do not use
calcimimetics. The Moran Company found that use of sub-pools would
improve the distribution of outlier payments for all high cost
patients, but indicated that it is not likely to eliminate all leakage
from the ESRD PPS due to the outlier pool. The commenter stated that
this finding underscores the need to reduce the withhold amount to 0.5
percent and correct the misalignment between CMS's policies that
withhold dollars during an add-on payment period when the treatment is
not eligible for outlier payments. The commenter urged CMS to include
its recommended approach to bifurcate the outlier policy in the CY 2021
ESRD PPS final rule. The commenter suggested that CMS could publish an
interim final rule with comment period, if needed, to ensure that the
public can comment on these proposals prior to implementation. However,
the commenter emphasized that these policies should take effect for CY
2021 to ensure that the outlier pool continues to support high cost
patients under the ESRD PPS.
Many commenters expressed interest in working with CMS to refine
the outlier policy methodology to make sure that it addresses the needs
of all types of high costs patients. The commenters suggested that a
larger discussion of a solution to the outlier pool being dominated by
a single product is warranted, perhaps through a TEP or in another
forum.
Response: We appreciate all of the thoughtful suggestions provided
by commenters. We acknowledge that, even with annually adjusting the
MAP and FDL to reflect the most recent utilization and costs of ESRD
PPS eligible outlier services, total outlier payments have not yet
reached the 1 percent target. However, it is also true that use of
eligible ESRD outlier services declined each year. That is, ESRD
facilities incurred lower costs than anticipated, and those savings
accrued to facilities more than offsetting the extent to which the
consequent outlier payments fell short of the 1.0 percent target.
We appreciate the comments suggesting solutions for refining the
outlier policy methodology, for example, reducing the outlier
percentage pool withhold to less than 1 percent or establishing a
mechanism that pays back ESRD facilities those allocated outlier
amounts that did not pay out in the year projected. We also appreciate
the comments suggesting more complex solutions, such as the approach
provided by MedPAC, that uses trend information for establishing
thresholds or the approach from other commenters that bifurcates the
outlier pool into sub-pools. We did not propose any changes to the
outlier policy methodology in the CY 2021 ESRD PPS proposed rule. Our
proposal was limited to updating the outlier services MAP amounts and
FDL amounts to reflect the utilization of outlier services reported on
2019 claims. Therefore, we are not finalizing these significant
methodological changes the commenters suggested.
However, we recognize that the incorporation of calcimimetics into
the ESRD PPS bundled payment system, and of which effective January 1,
2021 are ESRD PPS eligible outlier services, brings with them a unique
dynamic. As the commenters have indicated, these products are expensive
and these high costs have been loaded into the projections for the
outlier payments. We also agree with the commenters that as new
therapies become eligible ESRD outlier services, they too will bring
significant costs that could further
[[Page 71440]]
complicate the allocation of outlier payments to beneficiaries that may
not be using the particular new therapy. As we noted in the previous
paragraph, we do not believe it is appropriate to finalize significant
methodological changes, such as bifurcating the outlier pool into sub-
pools, without performing detailed analyses to inform us on the
implications of the changes. Similarly, we do not agree with the
suggestion that CMS publish an interim final rule with comment period
to finalize complex changes to the outlier policy methodology so that
they can take effect in CY 2021; doing so would be premature since we
would not have carefully studied and considered the potential
consequences.
We appreciate the commenters' expressed interest in working with
CMS to refine the outlier policy methodology to make sure that it
addresses the needs of all types of high costs patients. While
commenters suggested a TEP or another forum to develop a solution to
the outlier pool being dominated by a single product, we had already
indicated in the CY 2020 ESRD PPS final rule (84 FR 60607) that a TEP
would address the outlier policy as part of the efforts to refine the
ESRD PPS. Following publication of the CY 2020 ESRD PPS final rule, a
TEP was held in December 2019. The outlier policy was on the agenda and
our data contractor discussed: The current approach to outlier
payments, stakeholder concerns regarding the current outlier payment,
an alternative methodology to achieve the 1 percent outlier target, and
feedback on the proposed approach.
Under the alternative approach discussed at the TEP, the underlying
basis of the alternative methodology is to relax the assumption of
constant utilization of eligible outlier services over time, which
allows for the modeling of the MAP amounts as they change over time. It
also allows for the use of data from a greater number of years to
inform trends. Details regarding the session dedicated to the outlier
policy are available on the CMS website: https://www.cms.gov/files/document/end-stage-renal-disease-prospective-payment-system-technical-expert-panel-summary-report-december.pdf.
We believe that the information gathered at the TEP and the
thoughtful suggestions provided in the public comments submitted in
response to the CY 2021 ESRD PPS proposed rule can be taken into
consideration in the future as we explore ways to refine the outlier
policy methodology.
Final Rule Action: After considering the public comments, we are
finalizing the updated outlier thresholds for CY 2021 displayed in
Column II of Table 5 of this final rule and based on CY 2019 data.
d. Final Impacts to the CY 2021 ESRD PPS Base Rate
(1) ESRD PPS Base Rate
In the CY 2011 ESRD PPS final rule (75 FR 49071 through 49083), we
established the methodology for calculating the ESRD PPS per-treatment
base rate, that is, ESRD PPS base rate, and the determination of the
per-treatment payment amount, which are codified at Sec. Sec. 413.220
and 413.230. The CY 2011 ESRD PPS final rule also provides a detailed
discussion of the methodology used to calculate the ESRD PPS base rate
and the computation of factors used to adjust the ESRD PPS base rate
for projected outlier payments and budget neutrality in accordance with
sections 1881(b)(14)(D)(ii) and 1881(b)(14)(A)(ii) of the Act,
respectively. Specifically, the ESRD PPS base rate was developed from
CY 2007 claims (that is, the lowest per patient utilization year as
required by section 1881(b)(14)(A)(ii) of the Act), updated to CY 2011,
and represented the average per treatment MAP for composite rate and
separately billable services. In accordance with section 1881(b)(14)(D)
of the Act and our regulation at Sec. 413.230, the per-treatment
payment amount is the sum of the ESRD PPS base rate, adjusted for the
patient specific case-mix adjustments, applicable facility adjustments,
geographic differences in area wage levels using an area wage index,
any applicable outlier payment and training adjustment add-on, the
TDAPA, and the TPNIES.
(2) Annual Payment Rate Update for CY 2021
We are finalizing an ESRD PPS base rate for CY 2021 of $253.13.
This update reflects several factors, described in more detail as
follows:
Wage Index Budget-Neutrality Adjustment Factor: We compute
a wage index budget-neutrality adjustment factor that is applied to the
ESRD PPS base rate. For CY 2021, we are not proposing any changes to
the methodology used to calculate this factor, which is described in
detail in the CY 2014 ESRD PPS final rule (78 FR 72174). We computed
the proposed CY 2021 wage index budget-neutrality adjustment factor
using treatment counts from the 2019 claims and facility-specific CY
2020 payment rates to estimate the total dollar amount that each ESRD
facility would have received in CY 2020. The total of these payments
became the target amount of expenditures for all ESRD facilities for CY
2021. Next, we computed the estimated dollar amount that would have
been paid for the same ESRD facilities using the ESRD PPS wage index
for CY 2021. As discussed in section II.B.4.b of this final rule, the
final ESRD PPS wage index for CY 2021 includes an update to the most
recent hospital wage data, the adoption of the 2018 OMB delineations,
and a 5 percent cap on wage index decreases applied for CY 2021. The
total of these payments becomes the new CY 2021 amount of wage-adjusted
expenditures for all ESRD facilities. The wage index budget-neutrality
factor is calculated as the target amount divided by the new CY 2021
amount. When we multiplied the wage index budget-neutrality factor by
the applicable CY 2021 estimated payments, aggregate payments to ESRD
facilities would remain budget neutral when compared to the target
amount of expenditures. That is, the wage index budget-neutrality
adjustment factor ensures that wage index adjustments do not increase
or decrease aggregate Medicare payments with respect to changes in wage
index updates. The final CY 2021 wage index budget-neutrality
adjustment factor is .999485. This application would yield a CY 2021
ESRD PPS base rate of $239.21, ($239.33 x .999485 = $239.21), prior to
the addition to the ESRD PPS base rate to include calcimimetics and the
application of the final market basket increase.
Addition to the ESRD PPS Base Rate to Include
Calcimimetics: As discussed in section II.B.1 of this final rule, for
CY 2021 we are modifying the ESRD PPS base rate by adding $9.93 to
account for calcimimetics in the ESRD PPS bundled payment. This
application would yield a CY 2021 ESRD PPS base rate of $249.14
($239.21 + $9.93 = $249.14), prior to the application of the final
market basket increase.
Market Basket Increase: Section 1881(b)(14)(F)(i)(I) of
the Act provides that, beginning in 2012, the ESRD PPS payment amounts
are required to be annually increased by the ESRD market basket
percentage increase factor. The latest projection of the ESRDB market
basket percentage increase factor for CY 2021 is 1.9 percent. In CY
2021, this amount must be reduced by the productivity adjustment
described in section 1886(b)(3)(B)(xi)(II) of the Act, as required by
section 1881(b)(14)(F)(i)(II) of the Act. As discussed previously, the
final MFP adjustment for CY 2021 is 0.3 percentage point, thus yielding
an update to the base rate of 1.6 percent for CY 2021. Therefore, the
final CY 2021
[[Page 71441]]
ESRD PPS base rate is $253.13 ($249.14 x 1.016 = $253.13).
In summary, we are finalizing a CY 2021 ESRD PPS base rate of
$253.13. This amount reflects a CY 2021 wage index budget-neutrality
adjustment factor of .999485, an addition of $9.93 to the ESRD PPS base
rate to include calcimimetics, and the CY 2021 ESRD PPS payment update
of 1.6 percent.
The comments and our responses to the comments on our updates to
the CY 2021 ESRD PPS base rate are set forth below.
Comment: Commenters were supportive of the updates to the ESRD PPS
base rate for CY 2021.
Response: We appreciate the comments in support of the updates.
Comment: An academy of nutrition and dietetics urged CMS to
consider access to care in rural areas when setting the rates under the
ESRD PPS. The commenter referred to MedPAC's March 2020 Report to
Congress,\21\ and noted MedPAC's concern about the gap in the Medicare
margin between rural and urban facilities. The commenter believes that
the proposal to cap any decrease in an ESRD facility's wage index is
one way to address these access to care concerns, including access to
registered dietitian nutritionists (RDNs). The commenter explained that
RDNs perform many roles in ESRD facilities aimed at improving outcomes
and promoting therapy adherence, including dialysis treatments, dietary
recommendations, and medication regimes. The commenter expressed
concern that there are significant challenges to the hiring and
retention of RDNs in rural area ESRD facilities, therefore rates for
the rural facilities require an adequate margin to support recruitment
and retention of qualified RDNs to address the needs of this
nutritionally high-risk population.
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Response: We appreciate the commenter's recommendation for CMS to
consider access to care in rural areas when setting the rates under the
ESRD PPS, specifically with regard to hiring and retaining specialized
staff that provide quality care to ESRD beneficiaries. As we stated in
the CY 2020 ESRD PPS final rule (84 FR 60701), the annual update factor
is intended to account for the overall increase in cost of care at the
national level. The patient case-mix payment adjustments and the
facility level adjustments, such as the rural adjustment and low-volume
payment adjustment account for differences in both patient and facility
characteristics. These payment adjustments are provided to address the
variation of costs of a particular facility relative to the national
standard. The CY 2016 ESRD PPS final rule discusses the methodology for
calculating the patient and facility-level adjustments (80 FR 68972
through 69004). In addition, the ESRD PPS base rate is adjusted for any
applicable outlier payment, training add-on payment, the TDAPA, and the
TPNIES to arrive at the per treatment payment amount.
For these reasons, we believe that the CY 2021 ESRD PPS base rate
is appropriate despite the challenges some ESRD facilities experience.
We also continue to believe that the payment adjustments, such as the
rural adjustment and the low volume payment adjustment help mitigate
the challenges faced by those facilities that are eligible for the
adjustments.
Final Rule Action: We are finalizing a CY 2021 ESRD PPS base rate
of $253.13.
5. Changes to the Low-Volume Payment Adjustment
a. Background
As required by section 1881(b)(14)(D)(iii) of the Act, the ESRD PPS
includes a payment adjustment that reflects the extent to which costs
incurred by low-volume facilities in furnishing renal dialysis services
exceed the costs incurred by other facilities in furnishing such
services. We have established a LVPA factor of 23.9 percent for ESRD
facilities that meet the definition of a low-volume facility. Under
Sec. 413.232(b), a low-volume facility is an ESRD facility that, based
on the submitted documentation--(1) Furnished less than 4,000
treatments in each of the 3 cost reporting years (based on as-filed or
final settled 12-consecutive month cost reports, whichever is most
recent) preceding the payment year; and (2) Has not opened, closed, or
received a new provider number due to a change in ownership in the 3
cost reporting years (based on as-filed or final settled 12-consecutive
month cost reports, whichever is most recent) preceding the payment
year. Under Sec. 413.232(c), for purposes of determining the number of
treatments furnished by the ESRD facility, the number of treatments
considered furnished by the ESRD facility equals the aggregate number
of treatments furnished by the ESRD facility and the number of
treatments furnished by other ESRD facilities that are both under
common ownership with, and 5 road miles or less from, the ESRD facility
in question.
For purposes of determining eligibility for the LVPA,
``treatments'' mean total HD-equivalent treatments (Medicare and non-
Medicare as well as ESRD and non-ESRD). For PD patients, 1 week of PD
is considered equivalent to 3 HD treatments. As noted previously, we
base eligibility on the 3 years preceding the payment year and those
years are based on cost reporting periods. Specifically, under Sec.
413.232(g), the ESRD facility's cost reports for the periods ending in
the 3 years preceding the payment year must report costs for 12-
consecutive months (76 FR 70237).
In order to receive the LVPA under the ESRD PPS, an ESRD facility
must submit a written attestation statement to its MAC confirming that
it meets all of the requirements specified in Sec. 413.232 and
qualifies as a low-volume ESRD facility. The attestation is required
because: (1) ESRD facility's cost reporting periods vary and may not be
based on the calendar year; and (2) the cost reports are due 5 months
after the close of the cost reporting period (that is, there is a lag
in the cost reporting submission). Thus, the MACs may not have the cost
report for the third year to determine eligibility and would need to
rely on the attestation for that year until the cost report is
available. Section 413.232(e) imposes a yearly November 1 deadline for
attestation submissions, with a few exceptions where the deadline is
December 31. The November 1 timeframe provides 60 days for a MAC to
verify that an ESRD facility meets the LVPA eligibility criteria (76 FR
70236).
As stated in the Medicare Benefit Policy Manual, (Pub. L. 100-02),
(chapter 11, section 60.B.1),\22\ once the attested ESRD facility's
cost report is submitted to the MAC, the MAC verifies the as-filed cost
report for the third eligibility year and finds that the ESRD facility
met the eligibility criteria, the ESRD facility would then receive the
LVPA payment for all the Medicare-eligible treatments in the payment
year. However, if the attested ESRD facility's cost report for the
third eligibility year exceeds the total dialysis treatment threshold,
then the MAC recoups by reprocessing claims paid during the payment
year in which the ESRD facility incorrectly received the LVPA.
Recoupment also occurs if any cost reports used for eligibility are
subsequently found to have not met the low-volume criteria, for
example, reopening or appeals.
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Further information regarding the administration of the LVPA is
provided
[[Page 71442]]
in the Medicare Benefit Policy Manual, chapter 11, section 60.B.1.\23\
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b. Revisions to the LVPA Requirements and Regulations
As we discussed in the CY 2019 ESRD PPS final rule (83 FR 56949)
and the CY 2021 ESRD PPS proposed rule (85 FR 42165), we have heard
from stakeholders that low-volume facilities rely on the LVPA and loss
of the adjustment could result in beneficiary access issues.
Specifically, stakeholders expressed concern that the eligibility
criteria in the LVPA regulations are very explicit and leave little
room for flexibility in certain circumstances.
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42165),
according to the Centers for Disease Control and Prevention (CDC), the
risk factors for COVID-19 include older adults and people of any age
who have serious underlying medical conditions, such as diabetes and
chronic kidney disease undergoing dialysis. Medicare's ESRD population
aligns with the profile of patients who are more susceptible to COVID-
19. As a result, ESRD facilities are working together to keep the risk
of spreading COVID-19 down as much as possible by shifting patients
among the ESRD facilities in the same area. In some cases, this
shifting of patients has caused some low-volume ESRD facilities to
temporarily dialyze patients that they otherwise would not have
dialyzed if there had not been a PHE. In addition, since cases of acute
kidney injury (AKI) have increased in certain areas of the country due
to COVID-19, there is also an increase in the number of patients
discharged that need outpatient dialysis for some period of time while
their kidneys regain normal function. We expressed concern that these
increases in dialysis treatments due to the COVID-19 PHE in CY 2020 may
put certain low-volume facilities over the LVPA's treatment threshold
causing the loss of, or the inability to qualify for, the 23.9 percent
per treatment payment adjustment for payment years 2021, 2022, and
2023. We noted that in CY 2020, 338 ESRD facilities receive the LVPA.
We also noted that in a typical year, we estimate that between 50-60
facilities lose their LVPA status. That is, there are between 50-60
ESRD facilities that typically lose their LVPA status because their
patient population grew for reasons other than the COVID-19 PHE.
In light of the unique circumstance due to the COVID-19 PHE, we
proposed to hold ESRD facilities harmless if an increase in their
treatment counts in 2020 is COVID-19-related such that the increase
would prevent them from qualifying for the LVPA. We proposed that the
ESRD facility would attest that the increase in treatments, meaning
total HD-equivalent treatments (for ESRD and AKI), was temporary and
related to the redistribution of patients in response to the COVID-19
PHE. When this occurs, instead of using total dialysis treatments
furnished in cost reporting periods ending in 2020, CMS would rely on
the facility's attestation that the increase in total dialysis
treatments was due to the PHE for the COVID-19 pandemic. We proposed
that for purposes of determining LVPA eligibility for payment years
2021, 2022, and 2023, we would only consider total dialysis treatments
furnished for 6 months of a facility's cost-reporting period ending in
2020, and that an ESRD facility would decide which 6 months to use
(consecutive or non-consecutive) for purposes of reporting total
treatments. That is, ESRD facilities would attest that, while it
furnished 4,000 or more treatments in its cost-reporting period ending
in 2020, the number of treatments exceeding the allowed threshold to
otherwise qualify for the LVPA was due to temporary patient shifting as
a result of the COVID-19 PHE, and that their total dialysis treatments
for any 6 months of that period is less than 2,000. MACs would
annualize the total dialysis treatments for those 6 months by
multiplying by 2. ESRD facilities would be expected to provide
supporting documentation to the MACs upon request.
We proposed to revise Sec. 413.232(g) by adding paragraph (g)(4)
to reflect that, for purposes of determining LVPA eligibility for
payment years 2021, 2022, and 2023, an ESRD facility's attestation must
indicate that the ESRD facility meets all the LVPA criteria except
that, for a facility that does not otherwise meet the number-of-
treatments criterion (that is, less than 4,000 in a year) because of
the COVID-19 PHE, the facility furnished less than 2,000 treatments in
any 6 months during its cost-reporting period ending in 2020 due to
temporary patient shifting as a result of the COVID-19 PHE. We also
proposed that the MAC would rely on the facility's attestation and
would annualize the total dialysis treatments for the 6 months by
multiplying those collective 6 month treatments by 2.
In addition, since CMS changed cost reporting deadlines due to the
COVID-19 PHE, we believe the extraordinary circumstances of the COVID-
19 pandemic justify an exception to the November 1, 2020 attestation
deadline. Therefore, for payment year 2021, we proposed to allow more
time for ESRD facilities to submit attestations by extending the
deadline to December 31, 2020. We would reflect this change in Sec.
413.232(e) by reformatting the section to reflect already established
exceptions to the November 1 attestation deadline in paragraphs (e)(1)
through (3), and to include in new paragraph (e)(4) that, for payment
year 2021, the attestation must be provided by December 31, 2020.
We proposed a technical change at Sec. 413.232(b) to remove the
heading ``Definition of low-volume facility'' to be consistent with the
current CFR requirements.\24\
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\24\ Document Drafting Handbook, chapter 2, section 2.10, page
2-18: https://www.archives.gov/files/federal-register/write/handbook/ddh.pdf.
---------------------------------------------------------------------------
We also proposed a technical change at Sec. 413.232(e) and (g). We
proposed to add ``MAC'' in Sec. 413.232(e) to establish the acronym
for Medicare Administrative Contractor. We proposed to replace
``Medicare Administrative Contractor (MAC)'' with ``MAC'' in Sec.
413.232(g) since the acronym would now be established in Sec.
413.232(e).
c. Clarification for MAC LVPA Determinations
As we discussed in the CY 2021 ESRD PPS proposed rule (85 FR
42166), in order to receive the LVPA, an ESRD facility must meet the
requirements of Sec. 413.232, including submitting attestations to the
MACs indicating its eligibility for the adjustment. In its attestation
for the third eligibility year, which is the cost-reporting year
immediately preceding the payment year, a facility attests that it will
be eligible for the adjustment; this attestation typically occurs prior
to the MAC having the facility's cost report for the third eligibility
year, in which case the MAC relies on the facility's attestation to
determine if the facility qualifies for the LVPA. When an ESRD facility
qualifies for the adjustment, the LVPA would be applied to all the
Medicare-eligible treatments for the entire payment year. If the MAC
subsequently determines, however, that the ESRD facility failed to
qualify for the LVPA, and the facility had already begun to receive the
adjustment to which the MAC has determined it is not entitled, the MAC
would reprocess the claims to remove and recoup the low-volume
payments.
We understand that in some instances, MACs may be discontinuing
LVPA payments to a facility in the payment year for which the facility
is eligible for the adjustment. However,
[[Page 71443]]
the established policy is such that, if an ESRD facility meets the LVPA
eligibility criteria in Sec. 413.232, it is entitled to the payment
adjustment for the entire payment year. Because there may be some
inconsistent application of this policy, we are taking this opportunity
to make this aspect of the LVPA policy clear in the regulation text.
We proposed to revise Sec. 413.232 by adding paragraph (h) to
specify that, if an ESRD facility provides an attestation in accordance
with Sec. 413.232(e) for the third eligibility year, the MAC verifies
the as-filed cost report. If the MAC determines an ESRD facility meets
the definition of a low-volume facility, CMS adjusts the low-volume
facility's base rate for the entire payment year. However, if the MAC
determines an ESRD facility does not meet the definition of a low-
volume facility, the MAC reprocesses claims and recoups low volume
adjustments paid during the payment year.
The comments and our responses to the comments on our LVPA
proposals are set forth below.
Comment: Several commenters expressed support for the proposal to
hold harmless ESRD facilities that would otherwise qualify for the LVPA
but for a temporary increase in dialysis treatments due to the PHE for
the COVID-19 pandemic. Two of the commenters indicated that holding
these ESRD facilities harmless will better ensure ESRD patients' access
to life-sustaining dialysis.
Response: We appreciate the support of the commenters as we strive
to ensure access to care during this unprecedented time.
Comment: One commenter expressed concern that the intent of the
proposal would not be met as the length of the PHE for COVID-19 remains
uncertain.
Response: We thank the commenter for its support for the proposed
LVPA modifications while appreciating this concern. While the end of
the PHE for COVID-19 remains uncertain, we believe that the
modification adequately address the current and foreseen impact of
COVID-19 on low volume ESRD facilities. We will consider the COVID-19
PHE during rulemaking in the future, if warranted.
Comment: One commenter expressed confusion over the proposed
methodology, indicating that LVPA attestation data can be pulled from
any six-month period in the preceding three years. The commenter
expressed concern that facilities who would have exceeded the
threshold, even in the absence of COVID-19, can `mask' their
disqualification.
Response: We acknowledge the commenter's confusion over the
proposal. For purposes of determining LVPA eligibility for payment
years 2021, 2022, and 2023, the facility would attest that its total
dialysis treatments for those 6 months of their cost-reporting period
ending in 2020 are less than 2,000 and that, although the total number
of treatments furnished throughout the entire year otherwise exceeded
the LVPA threshold of 4,000, the excess treatments are a direct result
of patient shifting from the COVID-19 PHE. ESRD facilities would select
6 months (consecutive or non-consecutive) of total dialysis treatments
furnished for purposes of the LVPA determination and, if eligible, will
receive the benefit for the entire payment year. If the ESRD facility
would have not qualified for the LVPA in the absence of COVID-19, the
facility cannot attest that the COVID-19 PHE caused its excess
treatments. The policy is intended to directly address the burden
placed on ESRD facilities in 2020 due to the COVID-19 PHE. Future
rulemaking will address the PHE's impact on the LVPA, if the impact
continues into following years.
Comment: We received comments that suggested we adopt a methodology
including a combination of the rural and LVPA adjusters to create a
tiered LVPA, targeting facilities providing less than 4,000 treatments
per year, and expanding the adjuster to include a second tier that
includes facilities providing less than 6,000 treatments per year.
Response: We appreciate commenters' suggestions for an alternative
methodology and will take their suggestions into consideration for
future rulemaking.
Final Rule Action: After consideration of public comments, for CY
2021, we are finalizing the revisions to the LVPA, as proposed. We are
finalizing the revision to Sec. 413.232(g) by adding paragraph (g)(4)
to codify the process. We are also finalizing the proposal to reformat
Sec. 413.232(e) to reflect already established exceptions to the
November 1 attestation deadline in paragraphs (e)(1) through (3), and
to include in new paragraph (e)(4) that, for payment year 2021, the
attestation must be provided by December 31, 2020. We are finalizing a
technical change at Sec. 413.232(b) to remove the heading ``Definition
of low-volume facility.'' We are also finalizing technical changes at
Sec. 413.232(e) and (g), whereby ``MAC'' would be added in Sec.
413.232(e) to establish the acronym for Medicare Administrative
Contractor and ``MAC'' would replace ``Medicare Administrative
Contractor (MAC)'' in Sec. 413.232(g). Lastly, we are finalizing the
revision of Sec. 413.232 by adding paragraph (h) to specify that, if
an ESRD facility provides an attestation in accordance with Sec.
413.232(e) for the third eligibility year, the MAC verifies the as-
filed cost report.
C. Transitional Add-On Payment Adjustment for New and Innovative
Equipment and Supplies for CY 2021 Payment
1. Background
In the CY 2020 ESRD PPS final rule, we finalized the establishment
of a transitional add-on payment adjustment for new and innovative
equipment and supplies (TPNIES) to support ESRD facilities in the
uptake of certain new and innovative renal dialysis equipment and
supplies under the ESRD PPS. Under our current regulation at Sec.
413.236(b), we will provide the TPNIES to an ESRD facility for
furnishing a covered equipment or supply only if the item: (1) Has been
designated by CMS as a renal dialysis service under Sec. 413.171, (2)
is new, meaning it is granted marketing authorization by FDA on or
after January 1, 2020, (3) is commercially available by January 1 of
the particular calendar year, meaning the year in which the payment
adjustment would take effect; (4) has a Healthcare Common Procedure
Coding System (HCPCS) application submitted in accordance with the
official Level II HCPCS coding procedures by September 1 of the
particular calendar year; (5) is innovative, meaning it meets the
criteria specified in Sec. 412.87(b)(1) of this chapter and related
guidance; and (6) is not a capital-related asset that an ESRD facility
has an economic interest in through ownership (regardless of the manner
in which it was acquired). Specifically, the equipment or supply must
represent an advance that substantially improves, relative to renal
dialysis services previously available, the diagnosis or treatment of
Medicare beneficiaries.
Under the first criterion, as reflected in the CY 2020 ESRD PPS
final rule, renal dialysis equipment and supplies will be considered
``new'' if FDA grants them marketing authorization on or after January
1, 2020. By including FDA marketing authorizations on or after January
1, 2020, we intended to support ESRD facility use and beneficiary
access to the latest technological improvements to renal dialysis
equipment and supplies. We note that in section II.B.2.b of this final
rule, we are refining the newness criterion (year in which the product
was granted FDA marketing
[[Page 71444]]
authorization) and establish that an equipment or supply is considered
``new'' within 3 years beginning on the date of FDA marketing
authorization for that equipment or supply. For capital-related assets
that are dialysis machines when used in the home setting for a single
patient, the 3 years would begin from the date of FDA marketing
authorization for home use. We note that the changes to the newness
criteria and the other changes discussed in section II.B.2.b are
effective beginning January 1, 2021, that is, applicable for the TPNIES
applications received in 2021.
As we stated in the CY 2021 ESRD PPS proposed rule (85 FR 42166),
we believed the IPPS SCI criteria and the process used to evaluate SCI
under the IPPS could be used for identifying new and innovative
equipment and supplies worthy of additional payment under the ESRD PPS.
We noted that under the IPPS, CMS has been assessing new technologies
for many years to assure that the additional new technology add-on
payments to hospitals are made only for truly innovative and
transformative products, and we stated that CMS is proposing to adopt
the IPPS SCI criteria under the ESRD PPS for the same reason. We
explained that we wanted to ensure that the add-on payment adjustments
made under the ESRD PPS are limited to new equipment and supplies that
are truly innovative. In addition, since renal dialysis services are
routinely furnished to hospital inpatients and outpatients, we stated
that we believed the same SCI criteria should be used to assess whether
a new renal dialysis equipment or supply warrants additional payment
under Medicare.
We finalized the adoption of IPPS's SCI criteria specified in Sec.
412.87(b)(1), including modifications finalized in future IPPS final
rules, to determine when a new and innovative renal dialysis equipment
or supply is eligible for the TPNIES under the ESRD PPS. That is, we
would adopt IPPS's SCI criteria in Sec. 412.87(b)(1) and any
supporting policy around these criteria as discussed in IPPS preamble
language. We stated that we believed that by incorporating the IPPS SCI
criteria for new and innovative renal dialysis equipment under the ESRD
PPS, we would be consistent with IPPS and innovators would have
standard criteria to meet for both settings. We also proposed to
establish a process modeled after IPPS's process of determining if a
new medical service or technology meets the SCI criteria specified in
Sec. 412.87. That is, we proposed that CMS would use a similar process
to determine whether the renal dialysis equipment or supply meets the
eligibility criteria proposed in newly added Sec. 413.236(b). Similar
to how we evaluate whether a new renal dialysis drug or biological
product is eligible for the TDAPA, as discussed in the CY 2016 ESRD PPS
final rule (80 FR 69019), we would need to determine whether the renal
dialysis equipment and supply meets our eligibility criteria for the
TPNIES.
Specifically, under Sec. 413.236(b)(5) we evaluate SCI for
purposes of the TPNIES under the ESRD PPS based on the IPPS SCI
criteria (see Sec. 412.87(b)(1)). We note that in the CY 2021 ESRD PPS
proposed rule as well as section II.B.2.a of this final rule, we
provide a detailed discussion of the SCI criteria. In addition, in
section II.B.2.b of this final rule we are revising Sec. 413.236(b)(5)
to remove ``and related guidance'' to reflect that all related SCI
guidance has now been incorporated into Sec. 412.87(b)(1).
As we discussed in the CY 2021 ESRD PPS proposed rule and in
section II.B.2.a of this final rule, we established in Sec. 413.236(c)
a process for our announcement of TPNIES determinations and a deadline
for consideration of new renal dialysis equipment or supply
applications under the ESRD PPS. CMS will consider whether a new renal
dialysis equipment or supply meets the eligibility criteria specified
in Sec. 413.236(b). Then, after consideration of public comments we
will announce the results in the Federal Register as part of our annual
ESRD PPS final rule. We noted we would only consider a complete
application received by February 1 prior to the particular calendar
year. FDA marketing authorization for the equipment or supply must
occur by September 1 prior to the particular calendar year. We note in
section II.B.2.b of this final rule, we are revising Sec. 413.236(c)
to replace ``September 1'' with ``the HCPCS Level II code application
deadline for Coding Cycle 2 for DMEPOS items and services as specified
in the HCPCS Level II coding guidance on the CMS website'' to reflect
that FDA marketing authorization for the new and innovative equipment
or supply must accompany the HCPCS application prior to the particular
calendar year in order for the item to qualify for the TPNIES in the
next calendar year.
2. Applications for TPNIES Payment for CY 2021
We received two applications for the TPNIES for CY 2021. A
discussion of these applications is presented below.
a. Theranova 400 Dialyzer and Theranova 500 Dialyzer
(1) Baxter Healthcare Corporation (Baxter) Application
Baxter submitted an application for the Theranova 400 Dialyzer/
Theranova 500 Dialyzer. The 400 and 500 denote differences in surface
area. The applicant stated that Theranova represents an SCI over
currently available HD therapies for the treatment of renal failure.
The applicant stated that Theranova is a new class of hollow-fiber,
single-use dialyzer intended to treat renal failure by HD. The
applicant stated that it features an innovative 3-layer membrane
structure that offers a higher permeability than high-flux dialyzers,
with improved removal of large proteins up to 45 kilodaltons (kDa)
while selectively maintaining essential proteins such as
albumin.25 26 27 The applicant stated that Theranova has the
potential to transform in-center HD by allowing Medicare beneficiaries
with renal failure to benefit from expanded hemodialysis (HDx). HDx is
defined as a process of blood purification that includes the clearance
of small uremic toxins through large middle molecule (LMM) (categorized
as uremic solute whose molecular size is 25 kDa up to 60 kDa) toxins
without the need for an external infusion of replacement fluid. For
purposes of the application, HDx is collectively referred to in the
application as ``Theranova''. The applicant asserted that the Theranova
dialyzer integrates with existing HD machines that an ESRD facility
already owns and that the Theranova dialyzer replaces other dialyzers.
---------------------------------------------------------------------------
\25\ Boschetti-de-Fierro, A., et al., ``MCO Membranes: Enhanced
Selectivity in High-Flux Cases,'' www.nature.com/Scientific Reports,
[5:18448] DOI: 10.1038/srep18448.
\26\ Krause, B., et al., ``Highly selective membranes for Blood
purification,'' Gambro Dialysatoren GmbH, Hechingen/Germany,
Presentation abstract March 26, 2015.
\27\ Zweigart, C., et al., ``Medium cut-off membranes--closer to
the natural kidney removal function,'' Int. J Artif Organs, 2017,
40(7), pp. 328-334. DOI: 10.5301/uijao.5000603.
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The applicant described the Theranova membrane as unique and stated
it allows for the removal of an expanded range of solutes, creating a
filtration profile closer to a natural kidney. The applicant described
the membrane structure as being divided into three distinct layers: A
fingerlike porous outer layer, a sponge-like intermediate layer, and a
very thin inner layer (skin). By reducing the inner diameter of the
membrane, internal filtration is increased, allowing for enhanced
clearance of LMMs through
[[Page 71445]]
additional convective transport.\28\ The Theranova dialyzer enables the
efficient removal of uremic toxins (up to 45 kDa).29 30 The
applicant included an adapted figure from a book titled, ``Modelling
and Control of Dialysis Systems \31\ to compare removal of toxins by
Theranova to the kidney and to other dialysis therapies, such as low
flux dialyzers (LF), high flux dialyzers (HFD) and hemodiafiltration
(HDF). The applicant's adapted figure showed the following: LF, HFD,
HDF and HDx remove urea (60 Daltons (Da)), phosphate (96 Da),
Parathyroid hormone (9,500 Da); HFD, HDF and HDx remove Beta 2
microglobulin (12 kDa), cystatin C (13 kDa), Myoglobulin (17 kDa), and,
kappa free-light-chains (23 kDa); HDF and HDx remove complement factor
D (24 kDa), Interleukin (IL)-6 (25 kDa), alpha 1 microglobulin (33
kDa); and, HDx removes Chitinase-3-like protein 1 (40 kDa), lambda
free-light-chains (45 kDa) and albumin (67 kDa).
---------------------------------------------------------------------------
\28\ Lorenzin, A., et al., ``Quantification of Internal
Filtration in Hollow Fiber Hemodialyzers with Medium Cut-Off
Membrane,'' Blood Purif, 2018, 46, pp. 196-204.
\29\ Boschetti-de-Fierro, A., et al., ``MCO Membranes: Enhanced
Selectivity in High-Flux Cases,'' www.nature.com/Scientific Reports,
[5:18448] DOI: 10.1038/srep18448.
\30\ Boschetti-de-Fierro, A., et al., ``MCO Dialyzers: Enhanced
Selectivity High-Flux,'' Gambro Dialysatoren GmbH, Research and
Development, Hechingen, Germany, Poster No. SAT-481 (Baxter).
\31\ Azar, A.T. and Canaud, B., ``Chapter 8: Hemodialysis
System,'' Modeling and Control of Dialysis Systems, 2013, pp. 99-
106, SCI 404 Berlin, Springer-Verlag, Berlin, Heidelberg. ISBN: 978-
3642274572.
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The applicant stated that compared with low-flux HD, high-flux HD,
and HDF, the Theranova dialyzer filtration profile is more similar to
that of a natural kidney, as shown in vitro 32 33 giving it
expanded clearance of uremic toxins.
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\32\ Krause, B., et al., ``Highly selective membranes for Blood
purification,'' Gambro Dialysatoren GmbH, Hechingen/Germany,
Presentation abstract March 26, 2015.
\33\ Boschetti-de-Fierro, A., et al., ``MCO Membranes: Enhanced
Selectivity in High-Flux Cases,'' www.nature.com/Scientific Reports,
[5:18448] DOI: 10.1038/srep18448.
---------------------------------------------------------------------------
The applicant asserted that the design of the Theranova dialyzer
allows for use on any HD machine, made by any manufacturer, by merely
changing the dialyzer. The applicant stated that the membrane is
compatible with standard fluid quality and does not require any
additional fluid quality control measure.
Theranova received approval for Investigational Device Exemption
(IDE) protocol from the FDA, on August 31, 2017, and then received
approval for coverage on September 13, 2017. The Class II
investigational device exemption received the code G170157.\34\ The FDA
requested a 6-month clinical study to validate efficacy of large toxin
removal and safety. According to the applicant, safety is defined in
part by albumin loss. The applicant stated that it is seeking marketing
authorization through the FDA's De Novo pathway and marketing
authorization this year for the May 2020 cycle. The applicant stated
that it plans to submit a HCPCS application to CMS in June 2020.
---------------------------------------------------------------------------
\34\ Available on p. 49828 at: https://www.federalregister.gov/documents/2017/10/27/2017-23447/medicare-and-medicaid-programs-quarterly-listing-of-program-issuances-july-through-september-2017.
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The applicant noted that it has not submitted an application for
pass-through payments under the Medicare Outpatient Prospective Payment
System (OPPS) or the NTAP program under the Medicare IPPS for the
Theranova 400 Dialyzer/Theranova 500 Dialyzer.
The applicant stated that it expects Theranova to be commercially
available immediately after receiving marketing authorization and will
provide proof of commercial availability.
With regard to demonstrating the requirements for SCI, the
applicant asserted that Theranova represents an SCI in outcomes for
Medicare beneficiaries over currently available HD therapies treating
renal failure. The applicant noted that ESRD patients on current HD
therapies suffer unsatisfactorily high mortality and morbidity from
cardiovascular disease and infections.\35\
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\35\ United States Renal Data System. 2018 USRDS annual data
report: Epidemiology of kidney disease in the United States.
National Institutes of Health, National Institute of Diabetes and
Digestive and Kidney Diseases, Bethesda, MD, 2018.
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In addition, the applicant stated that the HDx enabled by Theranova
effectively targets the removal of LMM uremic toxins (25 kDa to 60
kDa), which are linked to the development of inflammation,
cardiovascular disease, and other comorbidities in dialysis patients.
The applicant stated that this results in improved clinical outcomes,
relative to current dialyzers in four clinical categories. First, a
decreased rate of subsequent therapeutic interventions, including fewer
infections, reduced hospitalization duration, and reduced medication
usage. Specifically, the applicant stated that patients treated with
HDx therapy have decreased infections. A prospective cross-over study
found an average of seven episodes of infection for patients treated
with HDx versus 18 for high flux HD (p = 0.003).\36\ The applicant also
stated that patients receiving HDx therapy with Theranova had hospital
stays averaging 4.4 days versus 5.9 days for patients receiving
traditional HD (p = 0.0001) along with lower hospitalization rates (71
percent versus 77 percent (p = 0.69)).\37\ The U.S. IDE Randomized
Controlled Trial (NCT032574 l 0) of 172 patients, although not powered
for all-cause hospitalization events, showed a 49 percent decreased
number of hospitalization events in the Theranova arm (18 events) as
compared to the control arm (37 events).\38\ With regard to improved
medication usage, the applicant stated that patients receiving HDx
therapy had reduced medication usage. The applicant cited three studies
that showed a significant decrease in erythropoietin stimulating agents
(ESA) usage.39 40 41 One study also found a substantial
reduction in the need for iron usage.42 43 Two studies saw
an improvement in EPO resistance index (ERI) and one study showed a
statistically significant decrease in phosphate binder (calcium
carbonate) usage.44 45
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\36\ Cozzolino, C., et al., ``Effects of a medium cut-off
(Theranova) dialyzer on haemodialaysis patients: A prospective,
cross-over study,'' Clinical Kidney Journal, 2019, pp. 1-8. Doi
10.1093/ckj/sfz 155.
\37\ Sanabria, R.M., et al. ``Expanded Hemodialysis and its
effects on hospitalizations and medication usage,'' Submitted for
publication.
\38\ Weiner, D.E., et al. 2019, ``Efficacy and Safety of
Expanded Hemodialysis with the Theranova 400 Dialyzer: A Randomized
Control Trial,'' Abstract at ASN meeting, FR-PO 488.
\39\ Gallo, M., ``The Real-Life Study on Expanded Hemodialysis
(HDx): 9 Months Experience of a Single Hemodialysis Unit,''
Nephrology Dialysis Transplantation, 34, Issue Supplement_1, June
2019, gfz106.FP539, https://doi.org/10.1093/ndt/gfz106.FP539.
\40\ Sanabria, R.M., et al., Ibid.
\41\ Lim, J-H., et al., ``Novel Medium Cut-Off Dialyzer Improves
Erythropoietin Stimulating Agent Resistance in Maintenance
Hemodialysis Patients: A Randomized Controlled Trial,'' Manuscript
submitted for publication.
\42\ Sanabria, R.M., et al., Ibid.
\43\ Lim, J-H., et al., Ibid.
\44\ Sanabria, R.M., et al., Ibid.
\45\ Lim, J-H., et al. Ibid.
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The second clinical improvement category listed by the applicant is
a more rapid beneficial resolution of the disease process treatment.
The applicant cited a 2019 publication which noted that the average
recovery time after dialysis is reduced with HDx therapy, with the
median self-reported recovery time at 120 minutes, 60 min., 60 min.,
and 105 min. at 3, 6, 9, and 12 months compared to a baseline 240 min.
(p < 0.01 for 6, 9, and 12-month ratings; N = 110).\46\
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\46\ Bolton, S., et al., ``Dialysis symptom burden and recovery
time in expanded hemodialysis,'' Manuscript submitted.
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The third category of improved clinical outcomes listed by the
applicant
[[Page 71446]]
is reduced inflammation in patients receiving HDx Therapy with
Theranova. The applicant referenced a 2018 review article, which notes
that chronic inflammation in ESRD patients is associated with the
build-up of known uremic toxins spanning the molecular size spectrum
from 12 kDa to 45 kDa such as beta-2-microglobulin, soluble tumor
necrosis factor (TNF), Receptor 2, IL-1, Prolactin, IL-18, IL-6,
Hyaluronic Acid, TNF-a, Soluble TNF Receptor 1, Pentraxin-3, and
Advanced Glycation End-Products. The same article notes the following:
(1) LMM (25 kDa to 60 kDa) have been associated with inflammation,
cardiovascular events and other dialysis-related comorbidities; (2)
current dialytic therapies, though efficient in removing small solutes,
have limited capability in removing LMM; (3) current dialyzer design,
limited by membrane permeability, does not provide long-lasting,
effective reduction of the full spectrum of small molecular uremic
toxins (<500 Da), conventional middle molecular uremic toxins (500 Da
to <25 kDa) and large middle molecular uremic toxins (25 kDa to 60
kDa), even when their usage is enhanced with convective transport; and
(4) a broad spectrum of uremic toxins are not effectively treated by
conventional HD nor HDF which is not readily utilized in the U.S.\47\
The applicant asserted that for the first time, HDx enabled by
Theranova results in the superior removal of the aggregate of small,
conventional middle and large middle molecular uremic toxins.\48\ The
applicant asserted that Theranova, in effectively targeting the
spectrum of uremic toxins, that this spectrum encompasses the totality
of these inflammation-modulating molecules.
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\47\ Wolley, M., et al., ``Exploring the Clinical Relevance of
Providing Increased Removal of Large Middle Molecules,'' Cli, J Am
Soc Nephrol, 2018, 13, pp. 805-813.
\48\ Kirsch AH, Lyko R, Nilsson LG., et al. Performance of
hemodialysis with novel medium cut-off dialyzers. Nephrol Dial
Transplant 2017; 32: 165-172.
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The applicant also asserted that when analyzing the full set of
studies utilizing Theranova dialyzers, the collective evidence shows
consistent improvement in these inflammatory marker levels. Of 14
measurements of inflammation across four studies,49 50 51 52
71 percent (10 of 14) showed statistically significant improvement in
the inflammatory marker. For the remaining 29 percent of the measured
inflammatory markers, all showed improvement in the inflammatory
profile but were not statistically significant. In most of the
situations where statistically significant results were not achieved,
the applicant asserted, the studies were underpowered to demonstrate
statistically significant change of the particular marker.
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\49\ Belmouaz, M., et al., ``Comparison of the Removal of Uremic
Toxins with Medium Cut-Off and High Flux Dialyzers: A Randomized
Clinical Trial,'' Nephrol Dial Transplant, 2020, 35, pp. 328-335.
\50\ Kharbanda, K., et al., ``A Randomised Study Investigating
the Effect of Medium Cut-Off Haemodialysis on Markers of Vascular
Health Compared with On-Line Haemodiafiltration (MoDal Study)''.
Poster presented at the American Society of Nephrology, 2019.
\51\ Cozzolino, M., ``Effects of Mediun Cut-Off (Theranova)
Dialyzer on Hemodialysis Patients: A Prospective Cross-Over Study
[Abstract].'' J Am Soc Nephrol, 29. 2018, pp. 616-617.
\52\ Cantaluppi, V., et al., ``Removal of Large Middle Molecules
on Expanded Hemodialysis (HDx): A Multicentric Observantional Study
of 6 Months Follow-Up,'' J Am Soc Nephrol, 29, 2018, Poster TH-PO
357.
---------------------------------------------------------------------------
The applicant stated that studies have demonstrated stable albumin
levels,53 54 and a reduction of endothelial dysfunction and
Albumin and C-Reactive Protein (CRP) levels.55 56 57 In
addition, the applicant specifically described a single cohort study (N
= 41) showing a significant decrease in serum levels for urea,
[beta]2m, kappa and lambda free light chain at 3 months. At 3 and 6
months, there was a substantial decrease in serum CRP levels. Also,
blood assay demonstrated a decline in the production of IL-6.\58\ In a
40-participant cross-over prospective study, HDx with Theranova versus
high flux HD demonstrated both a higher reduction ratio and a decrease
in serum levels for lambda free light chains.59 60 61
---------------------------------------------------------------------------
\53\ Krishnasamy, R., et al., ``Trial evaluating mid cut-off
value membrane clearance of albumin and light chains in hemodialysis
patients (REMOVAL-HD): A safety and efficacy study,'' 2018, ASN 2018
Kidney Week Abstract TH-P0353.
\54\ Bunch, A., et al., ``Long-Term Effects of Expanded
Hemodialysis (HDx) on Clinical and Laboratory Parameters in a Large
Cohort of Dialysis Patients,'' 2018, ASN 2018 Kidney Week Abstract
FR-P0766.
\55\ Kharbanda, K., et al. 2019, Ibid.
\56\ Cantaluppi, V., et al., Ibid.
\57\ Cantaluppi, V., et al., ``Removal of Large- Middle
Molecules, Inhibition of Neutrophil Activation and Modulation of
Inflammation-Related Endothelial Dysfunction During Expanded
Hemodialysis (HDx),'' June 2019, Nephrol Dial Transplantation, 34,
Issue Supplement_1. gfz096.FO048, https://doi.org/10.1093/ndt/gfz096.FO048.
\58\ Cantaluppi, V., et al., Ibid.
\59\ Belmouaz, M., et al., ``Comparison of the Removal of Uremic
Toxins with Medium Cut-Off and High Flux Dialyzers: A Randomized
Clinical Trial,'' J Am Soc Nephrol, 2018, 29, Poster TH-PO348.
\60\ Belmouaz M, et al., ``Comparison of hemodialysis with
medium cut-off dialyzer and on-line hemodiafiltration on the removal
of small and middle-sized molecules,'' Clin Nephrol. Jan 2018, 89
(2018)(1):50-56.
\61\ Belmouaz, M., et al., ``Comparison of the Removal of Uremic
Toxins with Medium Cut-Off and High-Flux Dialyzers: A Randomized
Clinical Trial,'' Nephrol Dial Transplant, 2020, 35, pp. 328-335.
---------------------------------------------------------------------------
The applicant also noted that, in addition to IL-6, a well-
recognized biological marker of inflammation, there is also a broader
spectrum of uremic toxins associated with inflammation. The applicant
listed references for elevated levels of IL-6 leading to the following:
Hepcidin production with decreased iron availability; \62\ increased
endothelial damage; 63 64 increased CRP and decreased
albumin production.\65\ The applicant attested that with the use of
Theranova, patients present clinically with the opposite of each of the
above listed concerns, suggesting that chronic inflammation mediated by
IL-6 is reduced by treatment with Theranova. However, the applicant
submitted a reference that concluded that when compared to HD using
high flux membrane, HD using a medium cut-off (MCO) membrane may not be
inferior in albumin loss.\66\
---------------------------------------------------------------------------
\62\ Caramelo, C., et al., ``Anemia: Pathophysiology,
pathogenesis, treatment, incognitate,'' Rev Esp Cardiol., 2007, 60,
pp. 848-60.
\63\ Kharbanda, K., et al., ``A randomized study investigating
the effect of medium cut off haemodialysis on markers of vascular
health compared with on-line hemodiafiltration (MoDal Study),''
2019, Presented at the Scientific Congress American Society of
Nephrology, 2019.
\64\ Cozzolino, C., et al., ``Effects of a medium cut-off
(Theranova) dialyzer on haemodialaysis patients: A prospective,
cross-over study,'' Clinical Kidney Journal, 2019, pp. 1-8. Doi
10.1093/ckj/sfz 155.
\65\ Gillerot, G., et al. ``Genetic and Clinical Factors
Influence the Baseline Permeability of the Peritoneal Membrane,''
Kidney Int. 2005, 67, pp. 2477-2487.
\66\ Jung, J.H., et al., ``A 6-Month Study on the Efficacy of
Hemodialysis Therapy Using Dialyzers with Mediun Cut-Off Membranes
in Asian Patients with End-Stage Renal Disease,'' Nephrol Dial
Transplant, June 2019. 84, Issue Supplement, gfz103.SP487, https://doi.org/10.1093/ndt/gfz103.SP487.
---------------------------------------------------------------------------
An additional prospective cross-over study (N=20) showed reduced
levels of IL-6 (6.4561.57 pg/m vs. 9.4862.15 pg/ml) in patients treated
with HDx.\67\ The applicant included findings from their U.S. IDE Study
in the TPNIES application. Although the IL-6 level was not a primary
endpoint of the US IDE Study (NCT03257410), nor was the study
sufficiently powered to statistically prove a change in IL-6 level, the
analysis of the US IDE Study (NCT032574 l 0), comparing Theranova to HD
with Elisio 17H, indicates a trend for difference in the pre- to post-
dialysis change in plasma IL-6 level, favoring Theranova (p=0.07 and
p=0.08 at 4 weeks and 24 weeks, respectively). The pre-dialysis level
of IL-6 shows a
[[Page 71447]]
positive trend for Theranova (p=0.2).\68\ The applicant stated that the
accumulation of IL-6 and lambda free light chains may contribute to the
chronic inflammation state of ESRD patients, increasing the risk of
chronic vascular disease and bacterial infections, respectively. The
applicant noted that the company is exploring options to assess the
impact of the reduction of these solutes via HDx in ongoing studies.
---------------------------------------------------------------------------
\67\ Cozzolino, C., et al., 2019, Ibid.
\68\ Weiner, D.E., et al., 2019 ``Efficacy and Safety of
Expanded Hemodialysis with the Theranova 400 Dialyzer: A Randomized
Control Trial,'' Abstract at ASN meeting, FR-P.O. 488.
---------------------------------------------------------------------------
Finally, the last category of improved clinical outcomes listed by
the applicant is enhanced quality of life across many different
measures, including, but not limited to, decreased recovery time,
decreased restless leg syndrome, and reduced pruritus. The applicant
stated that there was decreased symptom burden, citing a study of
patients who switched to HDx with Theranova in a multicenter
6-month observational study (N=992), who had statistically significant
improvements in measures of symptoms of kidney disease, effects of
kidney disease, and the burden of kidney disease.\69\ The applicant
also stated that there was improved reported mental health component
and statistically significant reduced Restless Leg Syndrome
diagnosis.70 71 72 73 Regarding improved physical
functioning and decreased pruritus, the applicant submitted an article
reporting the results of a randomized control trial (N=50), where
Theranova resulted in improved results for physical functioning and
physical role, and the mean scores of mean pruritus distribution and
frequency of scratching during sleep were significantly lower with
Theranova.\74\ In another study (single cohort, N=14), Theranova was
associated with statistically significant improvement in the physical
and mental component quality of life measures.\75\ The applicant also
submitted a case report of a HD patient with pruritus who responded to
the initiation of HDx using a MCO dialysis membrane.\76\
---------------------------------------------------------------------------
\69\ Alarcon, J.C., et al., ``Real World Evidence on the Impact
of Expanded Hemodialysis (HDx) Therapy on Patient
Reported Outcomes (PROs): COREXH Registry,'' Manuscript submitted
for Publication.
\70\ Alarcon, J.C., Manuscript submitted for publication, Ibid.
\71\ Gernone, G., et al., ``Mid-term Evaluation of the New
Medium Cut-Off Filter (Theranova) on Removal Efficiency and Quality
of Life,'' Nephrology Dialysis Transplantation, 2018, ERA EDTA
Scientific Congress Abstract, SP 489, doi.10.1093/ndt/gfy104.
\72\ Florens, N and Juillard, L., ``Expanded haemodialysis: News
from the field,'' Nephrol Dial Transplant, 2018, 33, pp. iii48-
iii52.
\73\ Bunch, A., et al. ``Long-Term Effects of Expanded
Hemodialysis (HDx) on Clinical and Laboratory Parameters
in a Large Cohort of Dialysis Patients'' ASN 2018 Kidney Week
Abstract FR-P0766.
\74\ Lim, J-H., et al. ``Novel medium cut off dialyzer improves
erythropoietin stimulating agent resistance in maintenance
hemodialysis: A randomized controlled trial,'' Submitted for
publication.
\75\ Gernone, G., et al., ``Mid-term Evaluation of the New
Medium Cut-Off Filter (Theranova) on Removal Efficiency and Quality
of Life,'' Nephrology Dialysis Transplantation, 2018, ERA EDTA
Scientific Congress Abstract, SP 489, doi.10.1093/ndt/gfy104.
\76\ Penny, J., et al. ``Pruritus: ls there a salty truth?''
Submitted for publication.
---------------------------------------------------------------------------
(2) CMS Analysis
(a) Summary of Submitted Evidence of the Theranova Dialyzer by CMS
CMS evaluated the claims and assertions made by Baxter with regard
to the articles submitted by them for the Theranova Dialyzer.
Patients with ESRD requiring dialysis are at high risk of mortality
due to the presence of uremic toxins.\77\ However, identifying the
putative uremic toxin (or toxins) has proven challenging; the European
Uremic Toxin Work Group previously identified at least 90 compounds
that are retained in patients undergoing dialysis.\78\ Current HD
technology relies on diffusion of toxins across a semi-permeable
membrane to allow for the removal of small-sized (<500 Da) water-
soluble molecules. While HD is generally able to remove water-soluble
small toxins (<500 Da), HD has limited ability to clear protein bound
solutes, those that are sequestered, or LMM solutes (>500
Da).79 80 81 The accumulation of uremic toxins with higher
molecular weight is associated with immunodeficiency, inflammation,
protein-wasting, and cardiovascular complications. For instance,
solutes such as Beta-2 microglobulin (11.8 kDa) 82 83 are
associated with increased mortality.\84\ Protein-bound solutes such as
indoxyl sulfate and p-cresol sulfate also appear to be poorly
dialyzable and are associated with the uremic syndrome and
cardiovascular disease.\85\
---------------------------------------------------------------------------
\77\ Boschetti-de-Fierro, A., et al., ``MCO Membranes: Enhanced
Selectivity in High-Flux Cases,'' www.nature.com/Scientific Reports,
[5:18448] DOI: 10.1038/srep18448.
\78\ Vanholder R, et al., European Uremic Toxin Work Group
(EUTox). Review on uremic toxins: Classification, concentration, and
interindividual variability. Kidney Int, 2003 May; 63 (5):1934-43.
\79\ Mac[iacute]as N., et al., ``Middle molecule elimination in
expanded haemodialysis: only convective transport'' Clin Kidney J.,
Dec. 2018, 15;12 (3), pp. 447-455.
\80\ Garc[iacute]a-Prieto, A., et al., ``Evaluation of the
efficacy of a medium cut-off dialyser and comparison with other
high-flux dialysers in conventional haemodialysis and online
haemodiafiltration.'' Clin Kidney J., Oct. 2018, 11(5):742-746.
\81\ Dobre, M., et al., ``Searching for Uremic Toxins'' Clinical
Journal of American Society of Nephrology. February 2013, 8 (2) 322-
327.
\82\ Belmouaz, M., et al. ``Comparison of the Removal of Uremic
Toxins with Medium Cut-Off and High-Flux Dialyzers: A Randomized
Clinical Trial,'' J Am Soc Nephrol, 29, 2018, Poster TH-PO348.
\83\ Belmouaz, M., et al., ``Comparison of hemodialysis with
medium cut-off dialyzer and on-line hemodiafiltration on the removal
of small and middle-sized molecules,''Clin Nephrol. Jan 2018, 89
(2018)(1):50-56.
\84\ Cordeiro, I., et al.'' High-Flux versus High-Retention-
Onset Membranes: In vivo Small and Middle Molecules Kinetics in
Convective Dialysis Modalities,'' Blood Purification, Jul 2019,
30:1-8.
\85\ Vanholder, R., et al., ``Protein-bound uremic solutes: The
forgotten toxin,'' Kidney International. Feb 2001, 59 (78), S266-
S270.
---------------------------------------------------------------------------
While dialysis can eliminate the immediate risk of death from
uremia, it does not replace functioning kidneys. Patients receiving
adequate dialysis do not completely recover from the uremic syndrome,
indicating that other uremic toxins may not fully be
cleared.86 87 Compared to the general population, patients
with ESRD who receive dialysis are at an increased risk of death,
commonly suffer from uremic symptoms such as itching, restless legs,
and malnutrition, and are at increased infection risk. Conventional
dialysis is effective in removing small molecules, but is less
effective in removing larger molecules, sequestered molecules, and
protein-bound toxins. Accumulation of middle molecule and protein-bound
toxins may contribute to adverse outcomes among patients receiving
dialysis \88\ and may explain why even a small amount of ``residual''
kidney function is strongly associated with increased survival
89 90 and higher quality of life.91 92
---------------------------------------------------------------------------
\86\ Tanaka H, Sirich TL, Plummer NS, Weaver DS, Meyer TW. An
Enlarged Profile of Uremic Solutes. PLoS One. 2015; 10(8): e0135657.
\87\ Sirich, T.L, et al., ``The Frequent Hemodialysis Network
Trial Group. Limited reduction in uremic solute concentrations with
increased dialysis frequency and time in the Frequent Hemodialysis
Network Daily Trial.Kidney Int, May 2017, 91 (5): 1186-
1192.doi:10,1016/j.kint.2016.11.002.Epub 2017 Jan 12.
\88\ Clark, W.R., et al. ``Uremic Toxins and their Relation to
Dialysis Efficacy.'' Blood Purif., 2019,48(4), pp.299-314. Epub 2019
Sep 27.
\89\ Obi, Y., et al., ``Residual Kidney Function Decline and
Mortality in Incident Hemodialysis Patients,'' J Am Soc Nephrol.,
Dec. 2016, 27(12), pp. 3758-3768. Epub 2016 May 11.
\90\ Wang, A.Y. and Lai, K.N. ``The importance of residual renal
function in dialysis patients.'' Kidney Int., May, 2006, 69(10), pp.
1726-32.
\91\ Dobre, M., et al., ``Searching for Uremic Toxins'' Clinical
Journal of American Society of Nephrology. February 2013, 8 (2) 322-
327.
\92\ Bargman, J.M., et al., ``CANUSA Peritoneal Dialysis Study
Group. Relative contribution of residual renal function and
peritoneal clearance to adequacy of dialysis: A reanalysis of the
CANUSA Study,'' J Am Soc Nephrol., Oct. 2001, 12(10), pp. 2158-62.
---------------------------------------------------------------------------
[[Page 71448]]
Innovations in dialysis care include the development of
technologies that might remove potential toxins resistant to clearance
using current devices. One technology called HDF removes larger
molecules by combining convection with diffusion. Convection relies on
pressure gradients across the dialyzer membrane, leading to more
effective removal of middle to large molecules from the blood.
Substantial fluid losses with convection, must be replaced via infusion
of typically ultrapure water and dialysis fluids.\93\ This newer
technology was later supplemented by online HDF, which enables dialysis
providers with ultrapure water systems to generate replacement fluid
solution. Although HDF has been associated with improvements to
survival in retrospective, observational studies,\94\ randomized
controlled trials have been less consistent.95 96 97 98
Online HDF has become more widely used in Europe, but it not commonly
used in the U.S. due to costs associated with the need for ultrapure
water.\99\
---------------------------------------------------------------------------
\93\ Zweigart, C., et al., ``Medium cut-off membranes--closer to
the natural kidney removal function,'' Int. J Artif Organs, 2017,
40(7), pp. 328-334. DOI: 10.5301/uijao.5000603.
\94\ Garc[iacute]a-Prieto, A., et al., ``Evaluation of the
efficacy of a medium cut-off dialyser and comparison with other
high-flux dialysers in conventional haemodialysis and online
haemodiafiltration.'' Clin Kidney J., Oct. 2018, 11(5):742-746.
\95\ Grooteman, M.P., et al.; ``CONTRAST Investigators. Effect
of online hemodiafiltration on all-cause mortality and
cardiovascular outcomes,'' J Am Soc Nephrol., June 2012, 23(6),
pp.1087-1096.
\96\ Maduell, F., et al., ``ESHOL Study Group. High-efficiency
postdilution online hemodiafiltration reduces all-cause mortality in
hemodialysis patients'' J Am Soc Nephrol., Feb 2013, 24(3), pp. 487-
497. doi: 10.1681/ASN.2012080875. Epub 2013 Feb 14. Erratum in: J Am
Soc Nephrol. 2014 May; 25(5):1130.
\97\ Morena, M., et al., ``FRENCHIE Study Investigators.
Treatment tolerance and patient-reported outcomes favor online
hemodiafiltration compared to high-flux hemodialysis in the
elderly,'' Kidney Int., June 2017, 91(6):1495-1509.
\98\ Ok, E., et al., ``Online Haemodiafiltration Study.
Mortality and cardiovascular events in online haemodiafiltration
(OL-HDF) compared with high-flux dialysis: Results from the Turkish
OL-HDF Study,'' Nephrol Dial Transplant, Jan 2013, 28(1), pp. 192-
202.
\99\ Zweigart, C., 2017. Ibid.
---------------------------------------------------------------------------
Newer dialysis membranes aimed at improved middle molecule
clearance are an active area of research.\100\ High flux membranes with
larger pore sizes can remove larger molecules, including inflammatory
cytokines and immunoglobulin light chains but at the cost of albumin
loss.\101\ This is significant because low albumin levels are
associated with higher mortality rates in patients with ESRD.\102\
---------------------------------------------------------------------------
\100\ Zweigart, C., 2017. Ibid.
\101\ Krause, B., et al., ``Highly selective membranes for Blood
purification,'' Gambro Dialysatoren GmbH, Hechingen/Germany,
Presentation abstract March 26, 2015.
\102\ Zweigart, C., et al., ``Medium cut-off membranes--closer
to the natural kidney removal function,'' Int. J Artif Organs, 2017,
40(7), pp. 328-334. DOI: 10.5301/uijao.5000603.
---------------------------------------------------------------------------
In addition to potential risks associated with efforts to remove
larger molecules during dialysis (such as the loss of albumin and
immunoglobulins), benefits of improved middle molecule clearance have
not been demonstrated in large, randomized-controlled trials. In 2002,
a large multicenter randomized controlled trial (HEMO) compared
patients receiving maintenance dialysis via high-flux versus low-flux
dialyzer membranes. There was no difference in the primary endpoint
(death from all causes) or in secondary endpoints (hospitalizations for
cardiac cause or death, and hospitalizations for infection or death)
between the two groups. In rhabdomyolysis, myoglobin clearance has been
demonstrated with large pore dialyzers and HDF, but clinical benefit
remains largely unproven.\103\ Similarly, HDF has historically garnered
much attention in sepsis due to its ability to efficiently clear
inflammatory cytokines like IL-6, but numerous studies have shown no
mortality benefit in sepsis with possible downsides in the form of
shortened filter life.\104\ No trials have examined the potential
benefit of removing larger quantities of middle molecules than is
typically achieved from high-flux membranes.
---------------------------------------------------------------------------
\103\ Amyot, S.L, et al., ``Myoglobin clearance and removal
during continuous venovenous hemofiltration,'' Intensive Care
Medicine, 1999 (25), PP. 1169-1172.
\104\ Friedrich J.O., et al., ``Hemofiltration compared to
hemodialysis for acute kidney injury: Systematic review and meta-
analysis,'' Critical Care, Aug 6, 2012 (16): R146.
---------------------------------------------------------------------------
The clearance of protein-bound and sequestered molecules remains a
technical challenge and may explain why HDF and other technologies
aimed at improved middle-molecule clearance have not significantly
changed clinical outcomes.\105\ Theoretically, intensive, long-duration
dialysis should improve the clearance of these difficult to remove
substances.\106\ In practice, large, randomized trials have not shown
any difference in the level of substances like indoxyl sulfate and p-
cresol sulfate.107 108 Improving clearance of these
molecules could improve clinical outcomes in patients without residual
renal function and would be a boon to the dismal outcomes faced by
patients undergoing dialysis.
---------------------------------------------------------------------------
\105\ Vanholder, R., et al., ``Protein-bound uremic solutes: The
forgotten toxin,'' Kidney International. Feb 2001, 59 (78), S266-
S270.
\106\ Sirich, T.L, et al., ``The Frequent Hemodialysis Network
Trial Group. Limited reduction in uremic solute concentrations with
increased dialysis frequency and time in the Frequent Hemodialysis
Network Daily Trial.'' Kidney Int, May 2017, 91 (5): 1186-
1192.doi:10,1016/j.kint.2016.11.002. Epub 2017 Jan 12.
\107\ Kalim, S., et al., ``Extended Duration Nocturnal
Hemodialysis and Changes in Plasma Metabolite Profiles,'' Clin J Am
Soc Nephrol, Mar 7, 2018, 13(3), pp.436-444.
\108\ Sirich, T.L., et al., ``The Frequent Hemodialysis Network
Trial Group. Limited reduction in uremic solute concentrations with
increased dialysis frequency and time in the Frequent Hemodialysis
Network Daily Trial.'' Kidney Int, May 2017, 91 (5): 1186-
1192.doi:10,1016/j.kint.2016.11.002.Epub 2017 Jan 12.
---------------------------------------------------------------------------
(b) Assessment of Substantial Similarity to Currently Available
Equipment or Supplies
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42171),
with regard to the criterion as to whether Theranova uses the same or a
similar mechanism of action to achieve a therapeutic outcome, CMS
believes that this product slightly modifies existing HD technology. A
MCO membrane was designed for use in HD (but not HFD or HDF) modes.
These modifications include the removal of larger molecules and
increased convection compared to existing HD. As to whether the new use
of the technology involves treatment of the same or similar type of
disease and the same or similar patient population, CMS noted that
Theranova treats similar patients, specifically, patients with ESRD.
(c) Preliminary Assessment of SCI (see Sec. Sec. 413.236(b)(5) and
412.87(b)(1)) by CMS
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42171),
with regard to the SCI criteria, we noted that Theranova is a treatment
modality and does not offer the ability to diagnose a medical condition
as discussed in Sec. 412.87(b)(1)(ii)(B). We noted that Theranova does
not offer a treatment option for a patient population unresponsive to,
or ineligible for, currently available treatments. The patients who are
eligible for this treatment would also be eligible for HD, HDF, or
online HDF. CMS carefully analyzed the evidence submitted as to whether
Theranova significantly improves the treatment and clinical outcomes of
Medicare beneficiaries relative to renal dialysis services previously
available as demonstrated by the totality of the circumstances. Below,
we have summarized the clinical evidence for claims of SCI, along with
the additional references submitted by
[[Page 71449]]
the applicant following the publication of the proposed rule.
There is significant literature on the topic of MCO membranes and
high retention onset dialyzers. To evaluate this specific technology,
CMS performed a literature search for published articles using the
Theranova dialyzer and reviewed all articles submitted by the
applicant. They are categorized according to an estimated degree of
peer review. Summaries are also provided beneath each citation with
disclosures also noted. On the studies with more clinically significant
measures, there is more annotation added.
(d) Clinical Evidence for Claims of SCI
Below is a list of references for SCI based on evidence beginning
with the highest form of evidence, peer-reviewed journals. We summarize
the studies grouped by listings with the most rigorous review to those
with the least rigorous review, specifically, those published in Peer-
Reviewed Journals, then Review Articles and Editorials, to Posters and
Abstracts, including submitted manuscripts, and ending with Incomplete
Manuscripts.
Published in Peer-Reviewed Journals
Belmouaz M, et al.\109\ is a retrospective analysis of 10
patients treated with online HDF and then switched to MCO dialysis over
1 year. The authors evaluated three dialysis sessions per patient and
noted that there were not significant differences between the two
methods in clearance of urea, creatinine, [beta]2-microglobulin, and
myoglobin. The authors received funding support by Baxter.
---------------------------------------------------------------------------
\109\ Belmouaz M, Diolez J, Bauwens M, Duthe F, Ecotiere L,
Desport E, Bridoux F. Comparison of hemodialysis with medium cut-off
dialyzer and online HDF on the removal of small and middle-sized
molecules. Clin Nephrol. 2018 Jan;89 (2018)(1):50-56.
---------------------------------------------------------------------------
Belmouaz M, et al.\110\ is a cross-over prospective study
performed in France. It included 40 patients randomly assigned to
receive either 3 months of medium cut-off hemodialysis (MCO-HD)
followed by 3 months of high-flux HD (HF-HD), or vice versa. The
primary endpoint was myoglobin reduction ratio (RR) after 3 months of
MCO-HD. Secondary endpoints were the effect of MCO-HD on other middle-
weight toxins and protein-bound toxins, and on parameters of nutrition,
inflammation, anemia, and oxidative stress. Compared with HF-HD, MCO-HD
provides higher myoglobin and other middle molecules RR and is
associated with moderate hypoalbuminemia. The authors noted that the
potential benefits of this strategy on long-term clinical outcomes
deserve further evaluation. This study was supported by Baxter.
---------------------------------------------------------------------------
\110\ Belmouaz M, Bauwens M, Hauet T, Bossard V, Jamet P, Joly
F,Chikhi E, Joffrion S, Gand E, Bridoux F. Comparison of the removal
of uremic toxins with medium cut-off and high-flux dialysers: A
randomized clinical trial. Nephrol Dial Transplant. 2020:35:328-335.
---------------------------------------------------------------------------
Boschetti-de-Fierro A, et al.\111\ is a report on in vitro
testing of four prototypes for MCO membranes as compared to high-flux,
high cut-off membranes, and a rat glomerular membrane model. Sieving
characteristics were evaluated before and after blood contact. Authors
noted that increasing pore sizes often results in loss of albumin but
controlling the pore size diameter and variance results in enhanced
selection for middle sized proteins. A protein layer also forms along
the synthetic membrane, further restricting the loss of albumin. All
authors were employed by Gambro Dialysatoren, which is part of Baxter
International Inc.
---------------------------------------------------------------------------
\111\ Boschetti-de-Fierro A, Voigt M, Storr M, Krause B. MCO
Membranes: Enhanced Selectivity in High-Flux Class. Sci. Rep. 5,
18448; doi: 10.1038/srep18448 (2015).
---------------------------------------------------------------------------
Cordeiro ISF, et al.\112\ is a prospective crossover trial
of 16 patients undergoing HF-HD and switched to online
hemodiafiltration (olHDF) and high retention onset (HRO) HD for 4
weeks. Molarity concentrations were lowered to greater extent in olHDF
and HRO-HD.
---------------------------------------------------------------------------
\112\ Cordeiro ISF, Cordeiro L, Wagner CS, et al. High-Flux
versus High-Retention-Onset Membranes: In vivo Small and Middle
Molecules Kinetics in Convective Dialysis Modalities. Blood
Purification. 2019 Jul 30:1-8.
---------------------------------------------------------------------------
Cozzolino M, et al.\113\ is an Italian prospective, open-
label, cross-over study in 20 patients which compared the Theranova 400
HDx membrane to conventional HD, showing a non-significant
trend of lower IL-1B and IL-6 levels with HDx. Although
infections were statistically more likely in the HD population, the
definition of infection was vague, and most of them appeared to be with
respiratory tract and fever of unknown origin. Because culture evidence
was not required, the risk of bias in the categorization of infection
is high (for example, upper respiratory tract infections
inappropriately treated with antibiotics). The HDx had a
non-significant trend towards fewer hospitalizations. Potential risks
from HDx include an allergic reaction to polysulphone and
lower serum albumin levels. The small sample size, single center
disease, and short follow-up mean that the results, while promising,
require substantial corroborating evidence in the form of a multi-
center, blinded randomized controlled trial. The study was supported by
an unrestricted grant from Baxter.
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\113\ Cozzolino M. Magagnoli L, Ciceri P, Conte F, Galassi A.
Effects of a medium cut-off (Theranova) dialyser on haemodialysis
patients: A prospective, cross-over study. Clinical Kidney Journal,
2019, 1-8.
---------------------------------------------------------------------------
Garc[iacute]a-Prieto A, et al.\114\ is a crossover study
of 18 HD patients who received online HDF for one week, then
conventional HD the second week, and the use of a MCO membrane for the
third week. Authors collected RR and albumin losses and noted that MCO
membranes were similar in efficacy as olHDF. Both online and MCO
methods had greater reduction of middle molecules. The study was
conducted in Spain and authors did not declare any conflicts of
interest.
---------------------------------------------------------------------------
\114\ Garc[iacute]a-Prieto A,Vega A, Linares T, Abad S,
Mac[iacute]as N, Aragoncillo I, Torres E, Hern[aacute]ndez A,
Barbieri D, Lu[ntilde]o J. Evaluation of the efficacy of a medium
cut-off dialyser and comparison with other high-flux dialysers in
conventional haemodialysis and online haemodiafiltration. Clin
Kidney J. 2018 Oct;11(5):742-746.
---------------------------------------------------------------------------
Gillerot G, et al.\115\ is a research paper submitted by
the applicant in which the investigators tested the role of IL-6 gene
expression on 156 PD patients and its putative role in inflammation.
They tested a homogeneous population of 152 from Belgium and the North
of France. The investigators stated their findings substantiate the
critical role played by IL-6 in the peritoneal membrane and support the
hypothesis that underlying mechanisms (regulation of IL-6 gene
expression) could regulate systemic and local inflammation in
association with comorbidity and uremia. However, they noted that
confirmation of this hypothesis will require well-designed, adequately
powered studies, in different populations and different settings. This
study was focused on PD and the Theranova membrane is used in HD, so
extrapolation of the IL-6 data to that modality is questionable. These
studies were supported by Baxter Belgium.
---------------------------------------------------------------------------
\115\ Gillerot G, Goffin E, Michel C, Evenepoel,P, Van Biesen W,
TIntillier M, Stenvinkel P, Heimburger O, Lindholm B, Nordfors L,
Robert A, Devuyst O. Genetic and Clinical Factors Influence the
Baseline Permeability of the Peritoneal Membrane. Kid Int. 2005; 76:
2477-2487.
---------------------------------------------------------------------------
Lorenzin A, et al.\116\ is a performed mathematical
modeling, and through it, the authors calculated that the HRO membranes
allowed for internal filtration and high convective volumes.
---------------------------------------------------------------------------
\116\ Lorenzin A, Neri M, Clark WR, et al. Ronco C (ed):
Expanded Hemodialysis--Innovative Clinical Approach in Dialysis.
Contrib Nephrol. Basel, Karger, 2017, vol 191, pp 127-141.
---------------------------------------------------------------------------
Lorenzin A, et al.\117\ is a paper in which the authors
used semi-empirical
[[Page 71450]]
methods to estimate convective volumes for Theranova 400 and Theranova
500 under standard 4-hour HD conditions. Using their ``most complex''
mathematical model that incorporated gradients and blood changes along
the dialyzer length, authors estimated internal filtration rates of
300ml/min and 400 ml/min for both hemodialyzers.
---------------------------------------------------------------------------
\117\ Lorenzin A, Neri M, Clark WR, Garzotto F, Brendolan A,
Nalesso F, Marchionna N, Zanella M, Sartori M, Fiore GB, Ronco C.
Modeling of Internal Filtration in Theranova Hemodialyzers. Contrib
Nephrol. 2017;191:127-141.
---------------------------------------------------------------------------
Lorenzin A, et al.\118\ is an in vitro test of Theranova
400 and 500 at zero net ultrafiltration. Albumin macro-aggregates were
labeled with Technetium-99m (99mTc) to assess cross filtration through
the length of the filter. Using a gamma camera, local cross filtration
and internal filtration were calculated. Authors noted that the MCO
membrane allowed for clearance of medium-large molecular weight solutes
(~11 KDa) and retention of more albumin without requiring special
equipment. The authors had no disclosures.
---------------------------------------------------------------------------
\118\ Lorenzin A, Neri M, Lupi A, Todesco M, Santimaria M,
Alghisi A, Brendolan A, Ronco C. Quantification of Internal
Filtration in Hollow Fiber Hemodialyzers with Medium Cut-Off
Membrane. Blood Purif. 2018;46(3):196-204.
---------------------------------------------------------------------------
Mac[iacute]as N, et al.\119\ is a prospective study of 14
patients on maintenance olHDF. Patients underwent a midweek dialysis
session with the Theranova-500 machine under their usual dialysis
conditions. Researchers measured the presence of uremic toxins at
various molecular weights pre-dialysis, and post-dialysis. Pressures at
the inlet and outlet of dialyzer compartments were also measured to
estimate direct filtration and back filtration volumes. Researchers
used semi-empirical methods to determine that diffusive clearance was
more prominent than convective transport (which requires higher
volumes). No funding or financial contribution was supplied. Membranes,
monitors, and laboratory tests were those routinely used in the
dialysis unit.
---------------------------------------------------------------------------
\119\ Mac[iacute]as N, Vega A, Abad S, Aragoncillo I,
Garc[iacute]a-Prieto AM, Santos A, Torres E, Lu[ntilde]o J. Middle
molecule elimination in expanded haemodialysis: Only convective
transport? Clin Kidney J. 2018 Dec 15;12(3):447-455.
---------------------------------------------------------------------------
Reque J, et al.\120\ is a prospective study of eight
patients who either underwent olHDF or underwent HDx with Theranova 500
for 24 sessions. After a 1-week washout with HF-HD, all patients
crossed over to the alternative method. Laboratory values were obtained
before and after each session, specifically of urea, creatinine,
phosphorous, beta2-microglobulin, myoglobin, and prolactin. The urea
and beta2-microglobulin reduction ratios were the same but HDx
demonstrated higher RR of myoglobin (60 percent compared to 35 percent
in HDF). The authors had no disclosures.
---------------------------------------------------------------------------
\120\ Reque J, P[eacute]rez Alba A, Panizo N, S[aacute]nchez-
Canel JJ, Pascual MJ, Pons Prades R. Is Expanded Hemodialysis an
Option to Online Hemodiafiltration for Small- and Middle-Sized
Molecules Clearance? Blood Purif. 2019;47(1-3):126-131.
---------------------------------------------------------------------------
Review Articles/Editorials
This is the second grouping in the list of evidence for SCI from
most compelling to least compelling. We summarize the studies the
applicant provided as follows:
Caramelo C, et al.\121\ is an article that reviews the
clinical and pathophysiological characteristics of anemia in this
context. Particular emphasis has been placed on cellular and molecular
regulatory mechanisms, and their implications for treatment. The
applicant referenced the review article's language on hepcidin, because
it is considered the homeostatic regulator of iron in its intestinal
absorption, its recycling by macrophages and its mobilization from
liver stores. Its transcription is markedly induced in inflammatory
processes, especially by cytokines like IL-6.
---------------------------------------------------------------------------
\121\ Caramelo C, Just S, Gil P. Anemia in Heart Failure:
Pathophysiology, Pathogenesis, Treatment and Incognitae. Rev Esp
Cardiol. 2007; 60(8): 848-860.
---------------------------------------------------------------------------
Florens N, et al.\122\ is a review article included in
Baxter's application. It summarizes feedback from the first routine use
of HDx therapy under real-life conditions in European
facilities. The authors reported no adverse event after 5,191
HDx treatments, and opined that patients suffering from
itching, restless legs syndrome, persistent asthenia or malnourishment
could benefit from HDx therapy. While they discussed the
promising applications in which HDx could be valuable
(myeloma, rhabdomyolysis or cardiovascular diseases), the message is
mitigated by reminding why and how prudence should be taken in the
design of future HDx studies, particularly with poor de-
aeration of the filter in automatic mode and manual intervention
required to prime the membrane. Some patients required more anti-
coagulation using the Theranova membrane. In addition, patients were
aware of the use of the Theranova device because of lack of logo
removal. The authors noted that although promising, the clinical
evidence is incomplete. Both authors received a grant Investigator
Initiated research for the evaluation of HDx in clinical
practice and one performed occasional lectures for Baxter.
---------------------------------------------------------------------------
\122\ Florens N, Juillard L. ``Expanded Haemodialysis: News from
the Field,'' Nephrol Dial Transplant, 2018; 33: iii48-iii52.
---------------------------------------------------------------------------
Wolley M, et al.\123\ is a clinical review article that
recognizes that advances in dialysis technology do not always improve
patient outcomes, and it reviews the clinical relevance regarding the
removal of LMMs, particularly those involved in chronic inflammation,
atherosclerosis, structural heart disease, and secondary
immunodeficiency. The authors noted that single-center safety and
efficacy studies have identified that use of these membranes in
maintenance dialysis populations is associated with limited loss of
albumin and increased clearance of large middle molecules. When the
review was published in 2018, the authors noted that larger, robustly
conducted, multicenter studies were evaluating these findings. They
concluded that after completion of these safety and efficacy studies,
the perceived clinical benefits of providing clearance of LMMs must be
assessed in rigorously conducted, randomized clinical studies. One of
the authors received research funding from Baxter and participated on
advisory boards and speaker bureaus for Baxter.
---------------------------------------------------------------------------
\123\ Wolley M, Jardin M, Hutchinson, C. ``Exploring the
Clinical Relevance of Providing Increased Removal of Large Middle
Molecules,'' Cli, J Am Soc Nephrol 2018;13: 805-813.
---------------------------------------------------------------------------
Zweigart C, et al.\124\ is an editorial review submitted
by the applicant on MCOs, which was generally favorable with regard to
high quality and good performance. All of the authors are employees of
the Gambro Dialysatoren GmbH, Hechingen (Germany) or Gambro Lundia AG.
Gambro AB (including all direct and indirect subsidiaries) is now part
of Baxter International Inc.
---------------------------------------------------------------------------
\124\ Zweigart C, Boschetti-de-Fierro A, Hulko M, Nilsson L-G,
Beck W, Storr M, Krause B. Medium Cut-Off Membranes--Closer to the
Natural Kidney Removal Function. Int j Artif Organs. 2017; 40(7);
328-334.
---------------------------------------------------------------------------
Posters and Abstracts
This is the third grouping in the list of evidence for SCI from
most compelling to least compelling. We summarize the poster sessions
and abstracts, including submitted manuscripts which the applicant
provided as follows:
Belmouaz M, et al.\125\ is a randomized open label
crossover study in which 46 patients underwent MCO-HD and HF-H). MCO-HD
had higher medium RRs of myoglobin and beta-2 microglobulin and
increased albumin
[[Page 71451]]
loss compared to HF-HD. The authors received funding support by Baxter.
---------------------------------------------------------------------------
\125\ Belmouaz M, Bauwens M, Bouteau I, Thierry A, Ecotiere L,
Bridoux F. Comparison of the Removal of Uremic Toxins with Medium
Cut-Off and High-Flux Dialyzers: A Randomized Clinical Trial. TH-
PO348, 2018.
---------------------------------------------------------------------------
Boschetti-de-Fierro A, et al.\126\ is a poster in which
the investigators assessed the performance of the MCO devices in
simulated HD and HDF treatments. The applicant's submission of the
material presented in this poster was incomplete regarding date and
location of the poster session. This study was funded by Baxter.
---------------------------------------------------------------------------
\126\ Boschetti-de-Fierro A, Voigt M, Huiko M, Krause B. MCO
Dialyzers: Enhanced Selectivity in High-Flux. Gambro Dialysatoren
GmbH, Research and Development, Hechingen, Germany, Poster No. SAT-
481 (Baxter).
---------------------------------------------------------------------------
Kharbanda K, et al.\127\ is a randomized study funded by
Baxter Healthcare and the National Institute for Health Research which
compared HDF with HDx and suggested an improved recovery
time with HDx. The study showed lower levels of endothelial
cell microvesicles in HDx. However, the study did not have
comparable baseline recovery times (for example, 41 percent with < 2
hours with HDx versus 35 percent with HDF) and the authors
performed a per-protocol rather than an intention to treat analysis,
exacerbating bias in the study.
---------------------------------------------------------------------------
\127\ Kharbanda K, Herring A, Wilkinson F, Alexander Y, Mitra S.
A Randomised Study Investigating the Effect of Medium Cut-Off
Haemodialysis on Markers of Vascular Health Compared with On-Line
Haemodiafiltration (MoDal Study). Manchester Metropolitan
University. 2019
---------------------------------------------------------------------------
Kirsch AH, et al.\128\ is a poster that summarizes a two
pilot randomized controlled prospective open-label crossover studies,
in which 39 HD patients underwent treatment with MCO membranes, a HFD,
and HDF. The authors concluded that MCO-HD removed middle molecules
(free light chain) more effectively than high-flux and high-volume HDF.
However, the authors noted that there are several limitations of the
study. First, compared to the control dialyzers used, the experimental
membranes used were different, less tight membranes. Second, the study
design was confined to only one single treatment with each dialyzer for
each patient and the study did not examine the long term effects of
such membranes on serum levels of middle molecules and albumin. The
authors conclude that future studies should assess whether the
performance of MCO-HD improves clinical outcomes. The study was
conducted in Germany and funded by Baxter, and the conflicts of
interest statement in the paper lists three of the ten authors as
employees of Baxter.
---------------------------------------------------------------------------
\128\ Kirsch AH, Lyko R, Nilsson LG., et al. Performance of
hemodialysis with novel medium cut-off dialyzers. Nephrol Dial
Transplant 2017; 32: 165-172.
---------------------------------------------------------------------------
Bunch, A, et al.\129\ is a multicenter prospective study
in prevalent HD patients, older than 18 years old; enrolled from
September 1 to November 30, 2017, and converted to HDx using
Theranova 400. The investigators found an initial small decrease in
serum albumin level, which stabilized and was within the normal range
per their Bogata, Columbia laboratory references. Although Table 1 and
Table 2 were cited in the abstract, both were missing. Dialysis
performance adequacy (Kt/V) was achieved. No clinically significant
differences in laboratory values at 6 months with November 30 of 2017,
and converted to HDx using Theranova 400 (3 sessions per
week, 4 hours per session, same heparin dose). The lead author has been
listed as the medical director of Renal Therapy Services, owned by
Baxter, in Bogota, Columbia.
---------------------------------------------------------------------------
\129\ Bunch A., Nilsson L, Vesga J, Ardila F, Zuniga E, Alarcon
J. ``Long-Term Effects of Expanded Hemodialysis (HDx) on
Clinical and Laboratory Parameters in a Large Cohort of Dialysis
Patients'' ASN 2018 Kidney Week Abstract FR-P0766.
---------------------------------------------------------------------------
Cantaluppi V, et al.\130\ is a multicentric observational
study of 6 months follow-up. American Society of Nephrology (ASN) Week,
2018, Abstract, Thu-PO357. This multicenter (Italy) study evaluated 41
HD patients comparing standard HD molecular levels versus
HDx and found a significant decrease in urea, beta-2-
microglobulin, and free light chains. The study did not evaluate
clinical outcomes.
---------------------------------------------------------------------------
\130\ Cantaluppi V, Donati G, Lacquaniti A, Cosa F, Gernone G,
Marengo M, Teatii U Removal of large-middle molecules on expanded
hemodialysis (HDx): A multicentric observational study of 6 months
follow-up. ASN Week, 2018, Abstract, Thu-PO357.
---------------------------------------------------------------------------
Cantaluppi V, et al.\131\ is an abstract submitted by the
applicant reporting on a study where 41 HD patients (age 67,613,4) in standard high flux HD were shifted to HDx using
Theranova 400 (1.7 m2, Baxter). Each patient was studied at baseline HD
(T0), 3 months (T3) and 6 months (T6) after HDx, after which
they were evaluated the following pre-dialysis parameters: Urea,
Creatinine, Phosphate, Beta2-microglobulin, Myoglobin, Free Light
Chains, Hemoglobin, Albumin and CRP. For in vitro studies, T0 and T6
plasma were used to evaluate neutrophil activation (ROS generation,
apoptosis, adhesion) and endothelial dysfunction/senescence. The
investigators concluded that HDx therapy provided high
removal of different LMMs, leading to a significant reduction of
molecules involved in uremia-associated inflammation and organ
dysfunction (in particular Free Light Chains kappa and lambda). Long-
term studies with a larger sample size are needed to evaluate the
clinical impact of HDx.
---------------------------------------------------------------------------
\131\ Cantaluppi V, Marengo M, Allessandro Q, Berto M, Donati G,
Antonio L, Cosa F, Gernone G, Teatini U, Migliori M, Panichi V.
Removal of Large-Middle Molecules, Inhibition of Neutrophil
Activation and Modulation of Inflammation-Related Endothelial
Dysfunction During Expanded Hemodialysis (HDx), Nephrol Dial
Transplantation, June 2019, 34, Issue Supplement_1. gfz096.FO048,
https://doi.org/10.1093/ndt/gfz096.FO048.
---------------------------------------------------------------------------
Cozzolino, M.\132\ is an abstract of a pilot study with 20
prevalent HD patients studied for six months in two dialysis
treatments: One MCO (Theranova) dialyzer and one high-flux dialyzer.
The author claimed the pilot study shows the Theranova dialyzer has a
good tolerance profile and reduces the cumulative number of infections
in HD patients. The study was funded by an unrestricted grant from
Baxter.
---------------------------------------------------------------------------
\132\ ``Effects of Medium Cut-Off (Theranova) Dialyzer on
Hemodialysis Patients: A Prospective Cross-Over Study [Abstract].''
J Am Soc Nephrol, 29. 2018, pp. 616-617.
---------------------------------------------------------------------------
Gallo M.\133\ is a single cohort study in Italy which
compared HDx to baseline HD treatments in 15 patients and showed no
difference in uremic toxins, though there was a change in ESA dose.
---------------------------------------------------------------------------
\133\ Gallo M. The Real-Life study on expanded hemodialysis
(HDx): 9 months experience of a single hemodialysis unit.
Nephrol Dial Transplantation and Transplantation, June 2019, ERA
EDTA Abstract. FP539.
---------------------------------------------------------------------------
Gernone G, et al.\134\ is a single cohort study in Italy
which investigated 14 patients using Theranova with baseline HD and
showed no statistical change in outcomes, clearance, or quality of
life.
---------------------------------------------------------------------------
\134\ Gernone G, Montemurro M, Capurso D, Colucci G., Dell'Anna
D, Deltomaso F, LaRosa R, La Volpe M, Partipilo F., Pepe V, Ripa E.
Mid-term evaluation of the new medium cut-off filter (Theranova) on
removal efficiency and quality of life. Nephrology and
Transplantation, Abstract. SP489.
---------------------------------------------------------------------------
Jung JH, et al.\135\ is a study that was questionably
designed since they chose young, well-nourished patients at the start
of the study, which made it difficult to analyze the comparison of the
two groups at various points in time. This observational study of 42
Korean patients comparing HD to HDx showed no comparative
difference between the two groups in any markers.
---------------------------------------------------------------------------
\135\ Jung JH, Song JH, Ahn S-H. A 6-month study on the efficacy
of hemodialysis therapy using dialyzers with medium cut-off
membranes in Asian patients with end-stage renal disease. Nephrol
Dial Transplantation, June 2019, 84 Issues Supplement-1,
gfz103.SP487, https://doi.org/10.1093/ndt/gfz103.SP487.
---------------------------------------------------------------------------
Krishnasamy R, and Hutchinson C.\136\ is an abstract
submitted by the
[[Page 71452]]
applicant from this single-arm, multi-center study with 92 Australian/
New Zealand patients. The study examined the safety and efficacy and
patient-centered outcomes of MCO dialyzer use in chronic HD patients
over 6 months. The investigators concluded that there was a small but
acceptable reduction in serum albumin in regular HD using the MCO
dialyzer. However, the figures were not included in the abstract sent
by the applicant for review by CMS. The investigator noted that future
randomized controlled trials should assess the impact of the MCO
dialyzer on clinical and long-term patient-centered outcomes.
---------------------------------------------------------------------------
\136\ Krishnasamy R, and Hutchinson C. Trial Evaluating Mid Cut-
Off Value Membrane Clearance of Albumin and Light Chains in
Hemodialysis Patients (REMOVAL-HD): A Safety and Efficacy Study.
Oct. 2018 ASN Scientific Congress Abstract TH-PO363.
---------------------------------------------------------------------------
Krause B, et al.\137\ is a description of membrane
manufacturing utilizing hollow fiber technology.
---------------------------------------------------------------------------
\137\ Krause B, Boschetti-de-Fierro A, Dutczak S, Zweigart C.
Highly Selective Membranes for Blood Purification. Jahrestreffen der
Fachgruppen ``Fluidverfahrenstechnik'' und ``Membrantechnik'' 26 Mar
2015.
---------------------------------------------------------------------------
Weiner DE, et al.\138\ included two items for this U.S.
based study at a large academic medical center. The first was the ASN
2019 Scientific Congress abstract and the second was a copy of the
poster session at the ASN annual meeting in 2019. This open label
randomized controlled trial in 172 patients who underwent 24 weeks of
Theranova 400 MCO dialyzer compared to a high flux dialyzer showed a
potential decrease in hospitalizations with HDX, but the
authors did not produce statistical tests of significance. While this
was a randomized control trial (RCT), covariates were not well-
balanced, including substantially more patients with diabetes in the
conventional HD arm. The study showed lower lambda free light chains in
HDX compared to high flux HD. Albumin levels were maintained
in both. The presenters concluded that larger studies of longer
duration are needed to assess if better larger molecule clearance is
associated with improvements in clinical outcomes, including vascular
disease, quality of life, and mortality. The authors received
commercial support from Baxter.
---------------------------------------------------------------------------
\138\ Weiner DE, Falzon L, Beck W, Xiao M, Tran H, Bernardo AA.
Efficacy and Safety of Expanded Hemodialysis Enabled by a Medium
Cut-Off Membrane: A Randomized Control Trial. FR-PO 488, ASN 2019.
---------------------------------------------------------------------------
Alarcon J, et al.\139\ describes a study over 12 months in
which 992 patients from 12 renal clinics were followed after switching
from high-flux HD to HDX. The authors assessed many patient
quality of life outcomes using the short form kidney disease quality of
life (KDQoL-SF36), dialysis symptom index (DSI) and prevalence of
restless leg syndrome (RLS) and found modest reductions in DSI severity
scores, increases in KDQoL-SF36 scores in some domains (but unchanged
in the mental and physical domains), and reduced prevalence of restless
leg syndrome. Notably, the authors did not provide a control group.
Also, the authors performed a large number of statistical tests without
adjustment, further increasing the risk of Type 1 error. The study was
supported by Renal Therapy Services-Columbia, owned by Baxter. Five of
the eight authors are employees of Renal Therapy Services. One author
is a full-time employee of Baxter and has a patent pending for RLS
medication.
---------------------------------------------------------------------------
\139\ Alarcon J, Bunch A, Ardila F, Zuniga E, Vesga J, Rivera A,
Sanchez R, Sanabria M. Real world evidence on the impact of expanded
hemodialysis (HDX) therapy on Patient Reported Outcomes
(PROs): CPREXH Registry (in submission).
---------------------------------------------------------------------------
Ariza J, et al.\140\ is a manuscript that was provided by
the applicant. Cost estimates were extrapolated using an observational
design, which suggested lower hospital days (but not hospitalizations)
and lower medication use in the HDX. However, the lack of
randomization makes this study difficult to evaluate. Furthermore, the
authors did not show any difference in costs between HDX and
HD. The study was funded by Baxter.
---------------------------------------------------------------------------
\140\ Ariza J., Walton SM, Sanabria M, Vega J, Suarez A, Rivera
A. An Initial Evaluation of the Potential Cost Impact and Cost
Effectiveness of Expanded Hemodialysis (in submission).
---------------------------------------------------------------------------
Penny JD, et al.\141\ is a manuscript in submission that
was included by the applicant. It is a single case-study of a HD
patient with pruritis and extreme levels of tissue sodium. Both
responded to HDX therapy. The authors acknowledged that
further robust clinical exploration is required.
---------------------------------------------------------------------------
\141\ Penny JD, Salerno F, Akbari A, McIntyre, C. ``Pruritis-Is
There a Salty Truth?'' (in submission). The applicant included a
manuscript in submission.
---------------------------------------------------------------------------
Sanabria RM, et al.\142\ is manuscript provided by the
applicant and has not been published. The observational study followed
81 patients receiving high-flux HD for 1 year who subsequently switched
to HDX for 1 year. While there was a significant reduction
in number of hospital days (but no change in hospitalization rate) and
medication use, findings were limited by the lack of a control group.
The shortening of hospital stays could be attributed to a systematic
change in admission practice patterns, rather than HDX.
Furthermore, Kt/V was higher in the HDX group, but the
authors did not standardize dialysis dosing, making it difficult to
attribute effects to HDX or to other causes of increased
dialysis adequacy. Hemoglobin levels, albumin, hsCRP were not
statistically different in the two arms. All investigators are
employees of RTS Ltd, Columbia, an affiliate of Baxter Healthcare. The
study was supported by Renal Therapy Services-Columbia, an independent
entity owned by Baxter International, Inc.
---------------------------------------------------------------------------
\142\ Sanabria RM,Vesga JI, Ariza J, Sanchez R, Suarez A,
Bernardo A, Rivera A. Expanded Hemodialysis and its effects on
hospitalization and medication usage: An exploratory study. (in
submission).
---------------------------------------------------------------------------
Incomplete Manuscripts
This is the fourth and final grouping in the list of evidence for
SCI from most compelling to least compelling. We summarize the
incomplete manuscripts which the applicant provided as follows:
Bolton S, et al.\143\ is a manuscript provided by the
applicant and is unfinished. It describes a crossover study of patients
previously treated with high-flux HD and switched to Theranova. Patient
reported outcome measures (PROMs) suggested decreased self-reported
dialysis recovery time and symptom burden, especially at 6 months.
However, regression to the mean appeared common, and there was no
control group.
---------------------------------------------------------------------------
\143\ Bolton S, Gair S, Metthews M, Stewart L, McCullagh N, A 1-
year routine assessment of patient-reported symptom burden after
implementing expanded hemodialysis, 2019. (in process).
---------------------------------------------------------------------------
Lim J, et al.\144\ is a manuscript provided by the
applicant, reporting a randomized trial comparing MCO to high-flux HD,
with 50 patients undergoing 12 weeks of treatment in Korea. The study
was small, and the authors performed a large number of statistical
tests comparing quality-of-life outcomes, with only a couple
statistically significant. Without adjusting p-values for the number of
statistical test, the risk for Type 1 error is large and not
unexpected. A second trial suggested lower medication doses, but again
results were statistically significant only for a few of the parameters
of interest. The study is small and requires replication at additional
centers to confirm results.
---------------------------------------------------------------------------
\144\ Lim J, Park Y, Yook J, Choi S, Jung H, Choi J, Park S, Kim
C, Kim Y, Cho J. Randomized controlled trial of medium cut-off
versus high-flux dialyzers on quality-of-life outcomes in
maintenance hemodialysis patients. (in submission).
---------------------------------------------------------------------------
Lim J-H, et al.\145\ is a manuscript provided by the
applicant, reporting a
[[Page 71453]]
randomized trial comparing MCO to high-flux HD, with 50 patients
undergoing 12 weeks of treatment in Korea. Its purpose was to evaluate
the effects of ESA resistance of HD using a MCO dialyzer. The number of
registered patients was small and the study duration not long enough to
assess definite results. Also, the study was not blinded to clinicians,
which may have affected the ESA and iron supplementation prescriptions.
Additional studies need to be performed to assess clinical outcomes.
---------------------------------------------------------------------------
\145\ Lim J-H, Yook J-M, Choi S-Y, Jung H-Y, Choi, J-Y, Park S-
H, Kim C-D, Kim Y-L, Cho H-H. Novel Medium Cut-Off Dialyzer Improves
Erythropoiesis Stimulating Agent Resistance in Maintenance
Hemodialysis Patients: A Randomized Control Trial. (in submission).
---------------------------------------------------------------------------
(e) CMS Comments on the Baxter Application
In the CY 2021 ESRD PPS proposed rule (85 FR 42175), CMS discussed
the specific concerns regarding the evidence submitted for proof of
eligibility via the SCI criteria. While Theranova represents a unique
technology, CMS noted that the current evidence supporting SCI is
lacking but that other evidence may be forthcoming during the comment
period. CMS believes it's too early to tell if the patient-recorded
outcomes, such as fewer cardiovascular events, are significant because
of the small numbers in the studies. Specifically, a study for
infection was cited with an N=20; another had an N=10. Also, the
definition of the infection was vague. Although hospitalization rates
are discussed in the articles, the cause of the hospitalization was
unknown. Patient laboratory results should be correlated with patient-
reported results. In the submitted articles, the studies are all open-
label and observational, with tenuous findings; alternative approaches
could include larger studies focused on the U.S. dialysis population's
patient health outcomes with patients blinded in these studies.
The background information provided by the applicant and researched
by the group is conflicting. This may be due to the variation in the
location of the studies, including Columbia, France, Belgium, England,
Ireland, Australia, New Zealand, and Korea. CMS suggested a meta-
analysis be done, along with the heterogeneity of dialysis care in
those countries as compared to the care received by the Medicare
population in the U.S.
In the CY 2021 ESRD PPS proposed rule (85 FR 42176), CMS stated
that while HDX appears to be a promising technology, the
current state of evidence insufficiently demonstrates SCI in Medicare
patients undergoing dialysis, but that additional evidence may be
forthcoming in the comment period. In general, the dialyzer appears to
have improved middle molecule clearance. While observational studies
show an association between high levels of middle molecules and poor
outcomes, these correlations do not prove causation. For instance, a
growing body of evidence suggests that protein-bound solutes such as
indoxyl sulfate and p-cresol sulfate could be responsible for the
uremic syndrome. Conventional HD, HDF, and HDX do not
effectively clear protein-bound toxins.
In the CY 2021 ESRD PPS proposed rule (85 FR 42176), CMS provided a
summary of the current body of evidence:
Theranova more effectively removes middle molecules
compared to conventional dialysis with high-flux membranes. These
include molecules that have varying degrees of plausible toxicity (for
example, beta 2 microglobulin to cytokines to endothelial proteins).
Because nephrologists have not identified the putative uremic toxin, it
is not certain that clearance of these toxins will lead to improved
clinical outcomes.
Although small before and after studies suggest potential
clinical benefits from MCO dialyzer membranes compared with
conventional HD via high-flux membranes, such as reduced infection,
improved itching and restless legs, and shorter recovery time from
dialysis, these studies are mostly observational, small in nature, with
a high potential for bias. A large, multi-center trial would be
necessary to prove substantial benefit from HDX over
conventional HD.
Several small studies suggest that MCO dialyzer membranes
are comparable to HDF in removal of middle molecules, but online HDF is
not generally available in the U.S. Furthermore, online HDF has not
consistently shown to improve health outcomes relative to conventional
HD with high-flux membranes.
There may be increased removal of albumin with MCO
membranes compared to conventional high-flux dialysis, which could have
negative health consequences.
A large randomized controlled clinical trial did not
demonstrate clinical benefits from removing larger solutes, including
middle molecules, but the study did not examine newer technologies such
as hemodiafiltration which are more efficient in removing those. This
negative study provides reason to be somewhat skeptical about the
benefits of HDX over HD.
Following the FDA-requested 6-month clinical study to
validate efficacy of large toxin removal and safety, the applicant
stated that it anticipates FDA marketing approval in May 2020. However,
we note that, per the application, safety is defined in part by albumin
loss. At this time we do not believe the clinical trials included
safety and efficacy studies for the large middle molecules the
applicant asserts to be the cause of inflammation. Therefore, the
perceived clinical benefits of providing clearance of those large
middle molecules were not assessed in rigorously conducted, randomized
clinical studies.
As stated previously, at the time of the CY 2021 ESRD PPS proposed
rule there was concern about the sufficiency of the evidence available
for Theranova demonstrating a clear clinical benefit for Medicare
dialysis patients. However, we noted that additional evidence could be
forthcoming in the comment period, and invited public comment as to
whether Theranova meets the TPNIES SCI criteria.
The collective comments and our response are set forth below.
Comment: The applicant provided information and a meta-analysis
that duplicated information provided in the CY 2021 ESRD PPS proposed
rule. Several physician commenters provided comments in support of the
research. The commenters' disclosures in their publications noted
financial support from the applicant. The commenters stated that they
believed that Theranova meets the criteria set forth in TPNIES for SCI
over the existing standard of care. The commenters urged CMS to
reconsider the data, and review such data in its combined totality
rather than focusing on each study in isolation. The commenters
asserted that existing data supported improved clinical outcomes with
the removal of large middle molecules, including Interleukin-6, YKL-40,
Alpha-1 microglobulin, and Lambda Free Light Chains (FLC), which have
been associated with inflammation, cardiovascular events, and other
dialysis-related comorbidities.
A physician commenter stated that changing over to Theranova-based
HD from conventional high-flux HD might partially restore some of the
benefits of residual renal function to patients. The commenter stated
that these larger molecules are removed poorly, if at all, by
conventional high-flux HD, resulting in plasma levels that are many
times above the normal value. The commenter stated that it is known
that clinical outcomes are improved in dialysis patients with even
small amounts of residual renal function, and that there
[[Page 71454]]
are multiple reasons for this, one likely being the failure of current
methods of dialysis to remove large middle molecules. The commenter
also stated that high plasma levels of these and similar molecules have
been associated with increased mortality, inflammation and
cardiovascular disease.
Another physician commenter stated that based on the clinical data
presented in the CY 2021 ESRD PPS proposed rule, the commenter believed
that Theranova therapy represented a substantial clinical improvement
in treatment for Medicare beneficiaries on dialysis. The commenter
studied the impact of Theranova on endothelial cells and noted that it
had a positive impact on the process of atherosclerosis formation. The
commenter also found that the effects of Theranova on vascular
calcification in vitro was significantly reduced after Theranova
therapy, compared to other high-flux dialyzers, and that cell death was
significantly lower in the Theranova group.
A physician commenter asserted that accumulated or increased levels
of Interleukin-6 may contribute to the chronic inflammation state of
ESRD patients, thereby increasing the risk of chronic vascular disease
and bacterial infections. Another physician commenter stated that
accumulated or increased levels of Interleukin-6 increased the risk of
protein energy wasting, has been associated with anemia in HD patients,
and has been identified as a principal driver of early vascular aging
with calcification. The commenters asserted that YKL-40 has been linked
to atherosclerosis, rheumatologic diseases, arterial stiffness, stroke,
mortality in type 2 diabetes, that it adds to vascular inflammation
risk prediction for all-cause and cardiovascular mortality, and is
associated with cardiovascular events in HD patients. The commenters
also noted that the removal of large middle molecules like Alpha-
1microglobulin, may alleviate insomnia, pruritus, irritability,
restless leg syndrome, anemia, and osteoarticular pain. Further, the
commenters noted that removal of FLCs, which is associated with non-
traditional cardiovascular risk factors, including markers of
inflammation, could reduce mortality risk in persons with ESRD.
The commenters noted that current dialytic therapies, due to
current design and limited by membrane permeability, have limited
capacity to remove the expanded range of uremic toxins, including the
spectrum of large middle molecules that Theranova, as demonstrated by
the collective evidence to date, removes. The commenters therefore
stated treatment with Theranova results in substantial clinical
improvement over current HD therapies treating renal failure.
Several physician commenters asserted, in reliance on research
cited as part of the primary TPNIES application, that important
clinical data has been accumulated internationally during the past 5
years demonstrating that use of the Theranova dialysis system results
in clinically meaningful improvement outcomes, including patient
quality of life measures, such as reduced symptom burden, decreased
restless leg syndrome, decreased itching, and improved physical
function. In addition, the commenters noted more rapid recovery after a
dialysis session, with preliminary data suggesting that all-cause
hospitalization length of stay might be reduced with Theranova versus
conventional HD, and that the need for ESA therapy might be reduced.
Another physician commenter stated that the Theranova dialyzer
offers the improved spectrum of larger molecule clearance associated
with hemodiafiltration, but only requires a standard HD machine, and
represents the type of innovation and improvement long lacking for
Medicare beneficiaries on HD and potentially meeting the standard for
substantial clinical improvement under TPNIES.
One commenter, a nephrologist, noted that they conducted a
randomized controlled trial of Theranova versus high-flux dialyzer in
maintenance HD patients to investigate the effect of Theranova on the
removal of middle molecules, utilizing a total of 50 patients
randomized to either Theranova or a high flux group, and stated that
the Theranova dialyzer displayed better removal of [kappa]FLC and
[lambda]FLC compared with the high-flux dialyzer. The commenter
indicated that the results were consistent with those of other studies
and asserted that taken together, Theranova dialyzer showed a greater
removal of larger middle molecules than high-flux dialyzer and could
decrease their blood concentrations.
The study also evaluated improved quality of life in those
patients, and noted that the Theranova group showed better scores in
physical functioning and role physical domains in physical component
domain at 12 weeks. The commenter stated that this suggested that the
Theranova dialyzer may improve patient-reported outcomes, particularly
physical components and uremic pruritus in HD patients.
The study also evaluated the effect of improving ESA resistance,
and the commenter hypothesized that Theranova could improve the ESA
resistance because it has better removal of large middle molecules than
hemodiafiltration. The commenter stated that the changes might be
associated with a greater reduction in TNF-[alpha] and lower serum TNF-
[alpha] level in Theranova compared to the high-flux group, and that
Theranova has potential to reduce ESA dose with further study possibly
proving the cost-effectiveness of Theranova for ESA use. The commenter
concluded that Theranova achieved more improvement in ESA resistance
than the high-flux dialyzer, removed more quantity of the inflammatory
cytokine such as TNF-[alpha] than the high-flux dialyzer, potentially
influencing the iron metabolism.
The commenter stated that although they did not yet have evidence
that Theranova could improve the survival rate of HD patients, they
noted that ongoing multicenter trials might reveal the effect of
Theranova on the survival of HD patients, and expressed hope that
before this, U.S. patients could have a chance to use Theranova, which
has proven benefits without any serious side effects.
Another physician commenter stated that Theranova offers SCI
because the commenter is able to switch patients progressively from
hemodiafiltration to HD. The commenter has also observed clinical
improvement in their patients, especially the impact in recovery time
and nutrition, even those treated for a long period by
hemodiafiltration. The commenter stated that evidence for improved
removal of large uremic toxins, without the burden of external fluid
reinjection such as in hemodiafiltration may occur immediately without
the burden of extensive training for physicians and staff.
Two commenters reiterated the CY 2021 ESRD PPS proposed rule's
explanation that, compared to the general population, patients with
ESRD who receive dialysis are at an increased risk of death, commonly
suffer from uremic symptoms such as itching, restless legs, and
malnutrition, are at increased infection risk, and dialyze with
standard high-flux dialyzers that focus entirely on removing smaller
uremic toxins. The commenters stated that the removal of large middle
molecules will address many of these concerns and is associated with
decreased hospitalization length and the number of hospitalizations, a
reduced need for certain medications, reduced inflammation and
infection, improved recovery times, and improved quality of life. The
commenters urged CMS to consider the totality of the evidence
[[Page 71455]]
combined, rather than focusing on each study in isolation, and stated
their belief that the clinical data supports Theranova's application
and claims of SCI.
Several beneficiary commenters commended CMS's efforts in promoting
dialysis innovation through the TPNIES policy. We also received
comments from other stakeholders that commended CMS on promoting
dialysis innovation. Those commenters and others, including several
physicians, stated that approval of applications for the TPNIES would
improve treatment choices for patients and address systemic barriers
that may limit access to Medicare beneficiaries suffering with kidney
failure.
Physician commenters expressed concern that CMS did not address the
COVID-19 pandemic, and strongly support efforts to expand access to new
dialysis products, particularly during the pandemic. The physician
commenters stated that COVID-19 may provoke a ``cytokine storm,'' with
cytokines leading to complications, and that Theranova may reduce the
presence of cytokines. The commenters noted that, as a result, a
clinical guideline in Italy recommends Theranova in managing COVID-19
positive patients undergoing HD to reduce the severity of a cytokine
storm. One physician commenter stated that since increased persistent
inflammation inhibits immunity and affects responses to infections, it
is logical to aim for a reduction of inflammatory drivers during HD in
a patient group at high risk of adverse outcome during COVID-19
infection. The commenters urged CMS to consider this information in
light of the COVID-19 pandemic.
Another commenter stated that as we learn more about COVID-19,
there are indications that Theranova may offer a unique clinical
benefit to COVID-19-positive patients, and urged CMS to take into
account the challenging environment and expand access to new dialysis
products, especially during the pandemic.
Several physician commenters noted that the Theranova system allows
for removal of large uremic toxins, without spilling clinically
important amounts of albumin, because the membrane pores vary less in
size than many other membranes, and because of relatively high internal
resistance, leading to increased within-dialyzer convective removal.
One physician commented that one of the major concerns with Theranova
is the risk of albumin loss and the removal of essential proteins by a
more permeable membrane. The commenter stated they compared laboratory
data including serum albumin, and as a result, laboratory data such as
hemoglobin, creatinine, phosphate, and lipid, and dialysis adequacy
were not different at baseline and 12 weeks between the two groups. The
commenter found that the serum albumin concentration after 3 months of
using Theranova dialyzer decreased by a mean of 0.13 0.23
mg/dL from baseline, and that the serum albumin concentrations did not
differ between Theranova and high flux dialyzers. The commenter
concluded that the Theranova dialyzer has a non-significant effect on
the serum albumin concentration over 12 weeks of treatment. The
commenter asserted that their conclusion was supported by long-term
studies. In their opinion, the decrease in serum albumin is more
prominent in the early period of Theranova dialyzer use. However, when
examined within the 1-year period, the change is minor and without
significance. The commenter added that regarding other adverse events
in their study, there were no serious adverse events including
cardiovascular events, patient death, or a decline of blood pressure
that required dialyzer changes throughout the 12 weeks.
One physician commenter claimed that, in their experience, albumin
levels stay stable over many months with Theranova. The commenter
further noted that during their trials, patients tolerated Theranova
very well, many reported an improved quality of life, and the commenter
indicated no knowledge of relevant side effects.
Several patient commenters expressed varied sentiments regarding
the TPNIES policy. One commenter stated that home dialysis permitted
the commenter to work until retirement. Another commenter, self-
identified as having been on dialysis for nearly a decade, encouraged
support for dialysis patients. Other commenters, both recent dialysis
patients and those with kidney failure and other related illness,
expressed general support for innovations, options and services to
support treatment. One commenter, a decade's long beneficiary, stated
the commenter had been diagnosed with ESRD since early childhood, has
had numerous kidney transplants and has been on home and in-center
dialysis. This commenter indicated that they proactively sought out the
best care, machines and innovations the market offered, since they felt
most dialysis patients are not offered such options as they are not
promoted or known. The commenter stated that they supported
advancements to information, technology and innovations to improve the
care of dialysis beneficiaries, as in their view the current system
minimally offered adequate care, which was not enough, and which
commenter stated ESRD patients needed to offer them a higher quality of
life care. One commenter, whose significant other is on PD dialysis at
home, asked for continued support of new innovations for the thousands
of dialysis beneficiaries who rely on dialysis to live, and stated that
the cycler machines were old, refurbished multiple times and that they
had to replace machines several due to noise or other issues.
An LDO commenter indicated that they performed a systematic review
of published literature in preparation for a potential meta-analysis on
hospital admissions and patient-reported outcomes, including quality of
life, comparing patients dialyzed with Theranova and high flux
dialyzers. The commenter stated that 45 relevant publications were
identified for potential inclusion in the meta-analysis, but 40 of
those publications were excluded due to the following reasons: No
availability in English or not conducted in HD patients (n=5); Review
only/not original study data (n=12); Study was performed in vitro, or
no clinical outcomes measured (n=11); and, No data on hospitalization
or patient-reported outcomes (n=12).
The commenter further stated that out of the remaining five
publications, two were disqualified because they mentioned the outcomes
of interest but did not provide information on comparator rates, with
three publications ultimately identified as potentially eligible for
inclusion in commenter's meta-analysis. The commenter noted that, out
of those three, one showed null findings for hospital data, one showed
null findings for patient reported outcomes, and the final study showed
imbalance in study groups that was larger than the difference after use
of the dialyzer and used inappropriate statistical analysis. The
commenter stated that its analysis therefore found there were not
enough robustly conducted studies for a meta-analysis to be performed,
and the few that were available showed insignificant results.
The commenter opined that the potential impact of replacing the use
of high-flux membranes with Theranova to increase removal of middle
molecules remains inconclusive and under-studied, since to date, no
strong evidence supports a survival benefit associated with increasing
removal of middle molecules. The commenter is unaware of studies
devoted to studying the effects of different dialyzers for
[[Page 71456]]
patients who are at particularly high risk for derangements in albumin
synthesis. The commenter also added that, similarly, the results of
studies of short duration may not adequately capture long-term trends
or reflect changes in compensatory mechanisms, nutritional state over
time, or worsening underlying health status. The commenter stated that
given the insufficient clinical evidence to support a finding of SCI
and specific concerns regarding the impact of Theranova's albumin-
leaking properties, the commenter supported CMS's evaluation in the CY
2021 ESRD PPS proposed rule and strongly recommended that CMS not
provide a TPNIES payment for the Theranova dialyzer.
Renal dieticians and an LDO commenters expressed their concerns
about albumin loss in the dialysis patients and the risk of infection,
along with it being a predictor of mortality and hospitalizations and
other comorbidities. One commenter stated that a low serum albumin
level complicates the fluid removal process as it causes excess fluid
to shift out of the blood space, making treatment ineffective at fluid
and toxin removal. Another commenter believed it was important for the
applicant to generate and establish Theranova's safety data via well-
controlled, randomized clinical trials of adequate duration on albumin
loss in U.S. dialysis patients. The dieticians also expressed concern
over the removal of other biological materials, aside from uremic
toxins, such as electrolytes, insulin, sodium and potassium.
Another commenter noted that a 2019 study, which concluded that an
increase of 0.25mg/dL/year in albumin decreased all-cause mortality,
and more significantly a decline in albumin of 0.5 mg/dL/year or
greater was associated with a 55 percent higher risk of mortality, did
not provide sufficient evidence in long-term consequences to serum
albumin levels to make a sound decision of approval, as it was only
conducted for a short three-month span.
An organization of LDOs commented that CMS correctly applied the
TPNIES SCI criteria in its analysis of the Theranova Dialyzers. The
commenter noted that many of the studies presented were of a small
number of patients, not conducted for an extended period of time, were
not representative of the Medicare population in the U.S., and pointed
out that given the Theranova dialyzers are available in Europe, they
were surprised that there were no long term studies with a larger
number of patients to offer insight into the relative benefit compared
with other devices. The commenter also had a stated preference for
seeing studies conducted in the U.S. and among the Medicare population
to ensure that products are compatible with our systems of care and
that devices are tested in a relevant population that is reflective of
the diversity of America's Medicare beneficiaries who are reliant upon
dialysis. A physician commenter agreed with the need for a randomized
controlled study done in the U.S., and asserted that said study would
need to ensure the diversity of participants arriving at an accurate
representation of the total under care.
Several dietician commenters noted that patients in different
countries had dietary habits that clearly were not reflective of the
U.S., and there was no accounting for differing diet habits, which may
be markedly different from the U.S. ESRD patient population.
Additionally, dialysis practice differed greatly from the U.S., and
thus, data gathered in small sample sizes from substantially different
patient populations should not be extrapolated to U.S. Medicare
patients, as the data from other countries possibly varied greatly from
this specific population. One dietician commented that the sample size
of the research conducted included a mere 50 individuals in 2017,
making it impossible to conclude the benefit of Theranova outweighs the
risks that could incur from its use.
A dialysis company commenter stated that products eligible for
TPNIES should first be evaluated through research, demonstrating
significant improvement in quality of life, mortality, facilitation of
home therapy, or some other measurable quality metric, and that such
studies should show a direct benefit or an effect on a well-established
clinical parameter associated with beneficial outcome. The commenter
stated that this scientifically-based standard, when applied to
Theranova, made it inappropriate for the TPNIES process.
An LDO commenter identified and assessed three studies that were
not included in Theranova's application or the CY 2021 ESRD PPS
proposed rule. The commenter found the studies lacking in a number of
critical areas, and thus not providing any additional basis for
approving Theranova.
A dialysis company commenter recounted past experiences with other
dialysis membrane products, namely high flux polysulphone dialysis
membranes in the 1990's touted as an improvement in dialysis with
enhanced clearance of beta-2-microglobulin. The commenter stated that,
while their use was widely adopted and paid for by Medicare through the
composite rate, when the HEMO study in 2002 finally investigated the
effect of this membrane in an article published in the New England
Journal of Medicine, no benefit was found. The commenter believed that
this experience did not need to be duplicated with Theranova.
Response: We thank all of the commenters for their informative
comments regarding the Baxter application for TPNIES for the Theranova
Dialyzer. CMS evaluated the application, accompanying articles, meta-
analysis and all the comments submitted. CMS evaluated all the criteria
at Sec. 413.236(b)(5) and 412.87(b)(1) to evaluate SCI for purposes of
the TPNIES. In doing so, we applied the following eligibility criterion
from Sec. 412.87(b)(1)(i): ``The totality of the circumstances is
considered when making a determination that a new [renal dialysis
equipment or supply] represents an advance that substantially improves,
relative to [renal dialysis services] previously available, the
diagnosis or treatment of Medicare beneficiaries.''
CMS identified two major concerns with the information presented to
CMS: (1) Studies and data presented were either low powered, did not
provide statistical significance in their results, and/or did not
include a control population; (2) Studies provided signals that albumin
might be filtered by the product, resulting in low levels of albumin
for some patients. Albumin is a critical protein that carries vitamins
and other proteins through the bloodstream, as well as performing other
functions. While there are some signals in the information provided by
the applicant that it may be possible for some patients to have albumin
levels rebound over a certain period of time, the data are considered
nascent in identifying the subpopulations whose albumin levels may be
able to respond appropriately to the filtering. Additionally,
commenters, including a major dialysis organization noted similarities
to a product that entered the market in the 1990s where the clinical
data was nascent upon entry and that ultimately clinicians considered
the product clinically similar to other products on the market.
Further, CMS clinicians involved in the review of the product were
unable to identify subpopulations for which they believed the evidence
demonstrated a substantial clinical improvement at this time. The
clinicians indicated that without additional evidence they would
consider this product similar to other products on the market and would
need
[[Page 71457]]
to closely monitor albumin levels of their patients. In other words,
they would consider using this product in a more observational manner
rather than adopting it based on any expected outcomes. As previously
noted, we did not find the submitted evidence and public comments
sufficient in meeting the ``totality of the circumstances'' regulatory
criterion.
Although CMS did not find the submitted evidence and public
comments sufficient in meeting the ``totality of the circumstances''
criterion to qualify the Theranova Dialyzer for the TPNIES adjustment
for CY 2021, we anticipate that the applicant may submit additional
evidence for the Theranova Dialyzer in support of the claim of
substantial clinical improvement for CY 2022. We note that the
applicant is eligible to apply for the TPNIES adjustment for the
Theranova Dialyzer for CY 2022 and CY 2023, and CMS would review any
new information provided for the CY 2022 rulemaking cycle. A product
that is determined to meet the criteria to receive the TPNIES would
receive the adjustment for 2-calendar years.
b. Tablo[supreg] Cartridge for Exclusive Use With the Tablo[supreg]
Hemodialysis System
(1) Outset Medical Application
For CY 2021, Outset Medical submitted an application for the TPNIES
for the Tablo[supreg] Cartridge for exclusive use with the
Tablo[supreg] Hemodialysis System. The applicant stated that the
Tablo[supreg] Cartridge is intended to substantially improve the
treatment of Medicare beneficiaries with ESRD by removing barriers to
home dialysis.
The applicant noted that the Tablo[supreg] Cartridge is necessary
to operate the Tablo[supreg] Hemodialysis System for use in home. The
cartridge is comprised of a pre-strung blood tubing set and series of
sensor-receptors mounted to a user-friendly organizer, and together
these are referred to as the Cartridge. The blood tubing set comprises
a blood pump tubing segment that interfaces with a peristaltic (blood)
pump mounted on the inner front panel of the Tablo[supreg] console and
arterial and venous lines that connect to the corresponding lines on
the patient. Additional components to the cartridge include consumable
supplies: Bicarbonate and acid concentrate jugs and straws, and an
adapter for disinfectant use.
The applicant stated that the blood tubing set is primarily
comprised of one arterial line and one venous line and is enhanced with
a recirculating adaptor, a bifurcated saline line, a pressure
transducer protector, a drip chamber with clot filter, and an arterial
pressure pod.
According to the applicant, in addition to the blood lines, there
is an integrated saline line that enables automatic priming as well as
monitored delivery of saline boluses during treatment. There is also an
infusion line and two infusion ports (arterial and venous) for manual
delivery of medicine, anticlotting agents, and blood sampling.
In describing what the Tablo[supreg] Cartridge does, the applicant
stated that it was designed with features to seamlessly integrate with
sensors on the front panel of the console (for example, air sensing,
arterial and venous pressure sensing) and to reduce touch points during
priming and blood return (for example, recirculating adapter and
bifurcated saline line) to minimize contamination. The blood pump draws
blood from the patient into the blood tubing set and passes the blood
through a dialyzer before returning the treated blood to the patient.
The applicant specifically stated that the Tablo[supreg]
Hemodialysis System includes the Tablo[supreg] Cartridge. In its
entirety, it has been specifically designed for patient-driven self-
care using an iterative human factors process, with key design
objectives being to facilitate learning and to minimize device training
time.\146\ Human factors studies performed in a laboratory setting have
demonstrated that patients can accurately learn and manage the
Tablo[supreg] Hemodialysis System after a brief training
period.147 148 A recent prospective, multicenter, open-
label, crossover trial comparing in-center and in-home HD using
Tablo[supreg] Hemodialysis System further supported the clinical
efficacy, safety, and ease of use of the system.\149\
---------------------------------------------------------------------------
\146\ Alvarez, Luis, et al. ``Clinical Experience with a New
Hemodialysis System Designed for In-Center Self-Care Hemodialysis.''
Self-Care, vol. 8, no. 3, 2017, pp. 12-18. Self-Care vol. 8, no. 3,
2017, pp.12-18.
\147\ Wilcox, Stephen B., et al. ``Results of Human Factors
Testing in a Novel Hemodialysis System Designed for Ease of Patient
Use.'' Hemodialysis International, vol. 20, no. 4,16 May 2016, pp.
643-649.doi:10.1111/hdi.12430.
\148\ Alvarez, Luis, et al. ``Tablet-Based Training for In-
Center Self Dialysis--A Pilot Study.'' Journal of the American
Society of Nephrology, vol. 27, no. Abstract Edition, Nov. 2016, p.
895A.
\149\ Plumb, Troy et al. ``Safety and efficacy of the Tablo
hemodialysis system for in-center and home hemodialysis.''
Hemodialysis International, Online, 2019, DOI:10.1111/hdi.12795.
---------------------------------------------------------------------------
The applicant stated that the Tablo[supreg] Hemodialysis System is
the first and only all-in-one technology and includes a number of
features that make it new and different from current standard of home
dialysis care. These unique features include (1) A single-use
Tablo[supreg] Cartridge with user-friendly pre-strung blood, saline,
and infusion tubing and an integrated blood pressure monitor that
interfaces with the console to enable automated features such as air
removal, priming, and blood return which minimize use, user errors,
save time and streamline the user experience; \150\ (2) on demand water
and dialysate production using a standard tap water source, eliminating
the need for time-consuming advance water preparation, bagged dialysate
or dialysate batching; \151\ (3) a consumer-centric touchscreen
interface that guides users with step-by-step instructions including
non-technical language, animation, and color-coded parts, to enable
easier training, faster set-up and simpler management including clear
alarm explanations and resolution instructions; \152\ and (4)
electronic data capture and automatic wireless transmission to
eliminate the need for manual record keeping by the patient, care
partner, or nurse.\153\
---------------------------------------------------------------------------
\150\ Outset Medical, ``Safety Reference Guide.'' DOC-0004336
Rev 04, 2019.
\151\ Outset Medical, ``Tablo Preconfigured System White
Paper.'' DOC-0004252 Rev 01, 2019.
\152\ Alvarez, Luis, et al. ``Tablet-Based Training for In-
Center Self Dialysis--A Pilot Study.'' Journal of the American
Society of Nephrology, vol. 27, no. Abstract Edition, Nov. 2016, p.
895A.
\153\ Outset Medical, ``Tablo Information Security Design White
Paper.'' DOC-0003639 Rev 03, 2019.
---------------------------------------------------------------------------
The applicant asserted, both in the written application and at an
in-person meeting with CMS, that the observational studies with the
Tablo[supreg] Hemodialysis System were able to achieve CMS adequacy
targeted on three times per week dialysis at an average treatment time
of less than 4 hours. Tablo[supreg] has demonstrated the ability to
treat to adequacy targets within the Medicare standard reimbursement of
three treatments per week.
The applicant has not submitted an application for pass-through
payments under the Medicare OPPS or the NTAP program under the Medicare
IPPS for the Tablo[supreg] Hemodialysis System, including the
Tablo[supreg] Cartridge.
This application for TPNIES is only for the Tablo[supreg] Cartridge
and its components for use in the home, which the applicant stated that
it intended to begin marketing in March 2020 following FDA clearance of
the Tablo[supreg] Hemodialysis System for home use. On March 31, 2020,
Outset Medical received FDA clearance to market the device for use in
the home, and CMS received a copy of this letter.
The applicant submitted a Premarket Notification 510(k) for
clearance of Tablo[supreg]. Previous 510(k) clearances for
[[Page 71458]]
the Tablo[supreg] Hemodialysis System and Tablo[supreg] Cartridge were
for hospital and outpatient clinic use only. The applicant could not
use or market the Tablo[supreg] Cartridge in the home setting until the
Tablo[supreg] Hemodialysis System was granted marketing authorization
by the FDA (note: Tablo[supreg] Hemodialysis System and cartridge was
granted FDA market authorization in November 2016). While the cartridge
was previously cleared through a separate 510k and was not necessary to
include in the submission for marketing authorization for home use, the
Tablo[supreg] Hemodialysis System cannot be operated without the
Tablo[supreg] Cartridge. According to the applicant, the cartridge was
included in the use instructions for the home approval.
The applicant noted that the Tablo[supreg] Cartridge is not
currently available for marketing in the home setting. As explained
above, the applicant intended to begin marketing in the home setting in
March 2020, after the FDA cleared the Tablo[supreg] Hemodialysis System
for marketing for home use. The applicant expected the first shipments
of the Tablo[supreg] Cartridge for use in the home to occur March 2020,
however, the first patient started training on June 1, 2020.
The applicant had an Investigational Device Exemption (IDE) to
study the Tablo[supreg] Hemodialysis System's safety and efficacy for
use in the home, which had been completed as of the filing of the
TPNIES application. The applicant stated that the IDE would be closed
once marketing authorization for the use of the Tablo[supreg]
Hemodialysis System in the home was granted. The IDE study reference
number was G140098. The Tablo[supreg] Cartridge was classified as a
Class II device.
The applicant stated that it submitted a HCPCS application for the
Tablo[supreg] Cartridge in advance of the September 1, 2020 deadline.
The applicant identified and described how the new and innovative
renal dialysis equipment or supply meets the criteria for SCI over
existing renal dialysis services. The applicant stated the
Tablo[supreg] Cartridge is necessary to operate the Tablo[supreg]
Hemodialysis System and therefore enables the system to deliver the
treatments that meet CMS's SCI criteria.
The applicant stated that the Tablo[supreg] Hemodialysis System
enables a treatment option for a patient population unresponsive to, or
ineligible or, currently available treatments. As supporting background
material, the applicant noted that home HD is a highly underutilized
treatment for ESRD patients. Currently 90 percent of patients receive
HD in a clinic. Fewer than 2 percent have HD treatment at home.
Contributing to this low penetration rate is also a high dropout rate
with the incumbent home devices of 25 percent and 35 percent at 12 and
24 months, respectively.\154\ The barriers to home dialysis adoption
and retention have been well studied and include: (1) Treatment burden
for patients and care partner fatigue; (2) technical challenges
operating HD machine; (3) space, home modifications, and supplies
management; (4) patients not wanting medical equipment in the home; and
(5) safety concerns.155 156 The applicant asserted that
Tablo[supreg] is the first new home HD system in over 15 years,
designed to address many of the above-mentioned barriers that currently
result in patients resigning themselves to in-center care and/or
stopping home modalities due to the associated burden of self-managed
therapy. Among other things, the objective of this order is for 80
percent of ESRD patients starting kidney replacement therapy (KRT) with
a transplant or home dialysis by 2025.\157\ The applicant stated that
this goal will require a multi-faceted solution, inclusive of less
burdensome technology, to address the key barriers to home dialysis.
---------------------------------------------------------------------------
\154\ Sehasi, Rebecca et al. Factors Associated With
Discontinuation of Home Hemodialysis, American Journal of Kidney
Disease, Volume 67, Issue 4, 2016, Pages 629-637.
\155\ Seshasai, R.K., et al. The home hemodialysis patient
experience: A qualitative assessment of modality use and
discontinuation. Hemodialysis International, 23: 139-150, 2019.
doi:10.1111/hdi.12713.
\156\ Chan, Christopher T. et al. Exploring Barriers and
Potential Solutions in Home Dialysis: An NKF-KDOQI Conference
Outcomes Report, Mar 2019, American Journal of Kidney Diseases,
Volume 73, Issue 3, 363-371.
\157\ U.S. Department of Health and Human Services, Office of
the Assistant Secretary for Planning and Evaluation, Advancing
American Kidney Health, July 10, 2019.
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The applicant stated that the Tablo[supreg] Hemodialysis System has
the potential to significantly increase home dialysis. The applicant
conducted an IDE study for the primary purpose of evaluating the safety
and efficacy of Tablo[supreg] Hemodialysis System use in the home
setting. The applicant stated that the results from the IDE study
demonstrate the following: (1) Patients will opt for home dialysis if
the Tablo[supreg] Hemodialysis System is available; (2) patients have
confidence in the safety and efficacy of the Tablo[supreg] Hemodialysis
System; (3) the unique features of the Tablo[supreg] Cartridge as part
of the Tablo[supreg] Hemodialysis System simplify set-up and use; and
(4) the wireless transmission of data feature is reassuring to patients
because it relieves patients of the burden of recording and fear that
the patient may forget to document some aspect of treatment. The
applicant claimed that the IDE study results show that these key
features will facilitate growth and ongoing use of the Tablo[supreg]
Hemodialysis System in the home setting.
During the course of the study, with an average treatment time of
3.4 hours, twenty-eight out of thirty patients completed all phases of
the trial and no patient dropouts occurred during the in-home phase.
There is only one other mobile HD machine on the market. Its IDE, based
on six times per week therapy at an average treatment duration of 2.8
hours, showed a higher drop-out rate (19 percent vs Tablo's[supreg] 7
percent) and lower adherence to treatment at home (89 percent vs
Tablo's[supreg] 99 percent).158 159
---------------------------------------------------------------------------
\158\ Kraus, M., et al., A comparison of center-based vs. home-
based daily hemodialysis for patients with end-stage renal disease.
Hemodialysis International, 11: 468-477 2007 doi:10.1111/j.1542-
4758.2007.00229.x.
\159\ Plumb, T.J., Alvarez, et al. Safety and efficacy of the
Tablo hemodialysis system for in-center and home hemodialysis.
Hemodialysis Internationa 2019l. doi:10.1111/hdi.12795.
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The applicant asserted that the Tablo[supreg] Hemodialysis System
significantly reduced training time for both patients and their
caregivers, improving training completion and reducing patient
technique failure and care partner burden. The applicant stated that
the cartridge element of the Tablo[supreg] Hemodialysis System removes
many of the manual steps and minimizes both set up time, and the need
to make difficult connections, which requires training to avoid
contamination. In human factors testing submitted to the FDA, the use
of the cartridge resulted in 90 percent of the users being able to set
up Tablo[supreg] in under 10 minutes.\160\ The applicant stated that
the Tablo[supreg] Hemodialysis System home IDE data demonstrates that
on average it takes 3.5 training sessions to learn the Tablo[supreg]
Hemodialysis System compared to 14.5 sessions on the device that is the
current standard of care for home HD.\161\ The applicant asserted that
reduced training time increases likelihood of successful completion,
reduces patient technique failure, and decreases caregiver burden. The
applicant noted the following: (1) The graphical user interface guides
users through the treatment and
[[Page 71459]]
eliminates the need for memorization and mental math; (2) sensors and
automation eliminate multiple manual steps in treatment set-up; and (3)
contextual alarms instantly alert patients to any issues with their
treatment and provide video and text direction on how to resolve them.
This is in comparison to numerical alarm codes with the incumbent
device that requires reference to the user manual or memorization with
no video guidance available.
---------------------------------------------------------------------------
\160\ Alvarez, Luis, et al. ``Clinical Experience with a New
Hemodialysis System Designed for In-Center Self-Care Hemodialysis.''
Self-Care, vol. 8, no. 3, 2017, pp. 12-18. Self-Care vol. 8, no. 3,
2017, pp.12-18
\161\ Chahal, Yaadveer, Decreased Time to Independence with the
Tablo Hemodialysis System: A Subset Analysis of the Tablo Home
Clinical Trial, Abstract accepted for the National Kidney Foundation
Spring Clinical Meeting 2020.
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The applicant stated that the Tablo[supreg] Hemodialysis System
significantly reduces set up and treatment time reducing treatment
burden, improving retention at home, and reducing the need for and
involvement of a care partner. The applicant noted that data from
Outset Medical's Tablo[supreg] Hemodialysis System home IDE trial
showed that a patient could set up the Tablo[supreg] Hemodialysis
System in 9.2 minutes.\162\ With the average number of treatments of
3.6 per week for an average duration of 3.4 hours,\163\ a Tablo[supreg]
Hemodialysis System user treating 4 times per week can expect to spend
approximately 14 hours a week preparing for and conducting treatments,
versus 40 hours a week on the incumbent device for patients who batch
solutions.164 165 The applicant stated that this significant
reduction in setup and treatment time is a result of software and
workflow improvements incorporated in the Tablo[supreg] Hemodialysis
System and its cartridge, many of which were driven by patient
feedback. Reducing overall treatment burden improves modality retention
at home on behalf of the patient and limits the care partner burden by
reducing the need for their active involvement in treatment.
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\162\ Outset Medical subset analysis of Home IDE Trial data on
set up time for Tablo Cartridge and concentrates.
\163\ Plumb, T.J., Alvarez, et al. Safety and efficacy of the
Tablo hemodialysis system for in-center and home hemodialysis.
Hemodialysis Internationa 2019l. doi:10.1111/hdi.12795.
\164\ NxStage Medical, Transitional Dialysis Care Operational
Guidance, June 2019, https://www.nxstage.com/wpcontent/uploads/2019/06/APM2548-Rev-B-TDC-Operational-Guidance.pdf.
\165\ Kraus, M., et al., A comparison of center-based vs. home-
based daily hemodialysis for patients with end-stage renal disease.
Hemodialysis International, 11: 468-477 2007 doi:10.1111/j.1542-
4758.2007.00229.x.
---------------------------------------------------------------------------
The applicant stated that the cartridge portion of the
Tablo[supreg] Hemodialysis System is pre-strung and requires only two
connections to operate as compared to other systems that require
stringing, hanging, snapping, and tapping multiple lines. In the home
IDE time set up of dialysate concentrates, the Tablo[supreg] Cartridge
took less than 12 minutes on average. With an average time of 8
minutes, an uninterrupted patient can initiate therapy in as little as
20 minutes.\166\ This is a significant improvement in the standard of
care, which can take approximately 45 minutes.\167\ The applicant
asserted that the Tablo[supreg] Hemodialysis System's automatic and
integrated sensors and automated degassing and priming also make the
machine easier to use and quicker to set up and get to treatment.
---------------------------------------------------------------------------
\166\ Outset Medical subset analysis of Home IDE Trial data on
set up time for Tablo Cartridge and concentrates.
\167\ Informal interviews with NxStage patients.
---------------------------------------------------------------------------
The applicant stated that the Tablo[supreg] Hemodialysis System is
the only system with a fully integrated water treatment system that
allows for real-time water purification and dialysate produced on
demand with no need to batch solutions or hang bags of dialysate. In
addition, the applicant noted that it requires only a standard,
grounded electrical outlet and Environmental Protection Agency quality
tap water to operate, obviating the need to store bags of dialysate in
the home, significantly reducing the number of supplies patients need
to receive each month.
The applicant noted that the Tablo[supreg] Hemodialysis System
reduces patient/care partner burden and technique failure.
Specifically, the applicant stated that automation of processes such as
prime and rinse back reduces the overall number of treatment related
steps. In addition, the applicant said that the Tablo[supreg]
Hemodialysis System's easy to use touchscreen interface walks users
through each step of setup, treatment, and take down; the treatment
information displays data that patients most wanted to see. The
applicant asserts that this automation and patient-centric design
reduces technique failure as evidence by results from the IDE study,
which demonstrated a significant increase in treatment adherence and
high rate of study completion compared to the current standard.
The applicant further stated that the Tablo[supreg] Hemodialysis
System eliminates documentation burden and reduces reporting errors,
and that it is the only HD system with 2-way wireless transmission
delivering HIPAA compliant data to the healthcare provider without any
need for additional equipment. This frees patients from the need to
manually document treatment data by hand or on a separate tablet and
ensures higher data accuracy.
The 28 patients who entered the home phase of the Tablo[supreg]
Hemodialysis System home IDE answered weekly if they needed help with
treatment over the prior seven days. The applicant stated that by the
end of the study, 216 of 224 possible responses were obtained. The care
partner burden rating for prior in-home patients who were previously
dialyzing on the incumbent device decreased from 3.1 to 2.4 on
Tablo[supreg]. Among prior in-home patients, 69 percent of patients
reported needing help from a trained individual with their prior device
with 46 percent of respondents stating the help needed was device
related, 15 percent related to cannulation alone, and 8 percent
reported other. By contrast, while on Tablo[supreg], only 38 percent of
patients reported needing help with treatment--only 22 percent needed
help related to use of Tablo[supreg] while 16 percent needed help
related to cannulation. The applicant asserted that this data
underscores a significant decrease in patients needing assistance with
treatment at home.
The applicant stated that Tablo[supreg] Hemodialysis System's
unique features increase patient safety and satisfaction. The applicant
noted that Tablo[supreg] Hemodialysis System's integrated, 2-way
wireless connection provides clinicians with the ability to monitor
patients in real time without any separate equipment necessary. The
applicant asserted that the Tablo[supreg] Hemodialysis System is the
only HD technology with this function, which allows for early
identification and intervention by a patient's healthcare team as a key
safety feature. At 34 inches tall, Tablo[supreg] Hemodialysis System
user interface matches the height of a user while seated in a standard
dialysis chair allowing patients to directly, and quickly engage with
the integrated touch screen to view progress of the treatment, resolve
alarms, and adjust certain functions to tailor the treatment to his or
her needs. As an example, a patient with limited mobility can reach the
interactive touch screen to adjust the flow rate if they feel cramping
coming on. The IDE generated data that demonstrated how the technology
enabled more rapid resolution of alarms. During the home arm of the
study, patients were able to resolve alarms on the Tablo[supreg]
Hemodialysis System in 5 seconds.\168\ The applicant asserted that
rapid resolution of alarms and enhanced communication improve safety by
facilitating rapid correction of any treatment related events, limiting
[[Page 71460]]
treatment interruptions and improving communication between the patient
and provider.
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\168\ Wilcox, Stephen B. et al., Results of human factors
testing in a novel hemodialysis system designed for ease of patient
use, Hemodialysis International 2016; 20:643-649.
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Once approved for home use, the applicant stated that the
Tablo[supreg] Hemodialysis System will provide a simpler, easier to use
system that is likely to increase the number of people who are able to
receive and remain on dialysis at home by addressing many of the well-
documented, key barriers to home dialysis reported in peer-reviewed
literature.
In addressing the way in which the Tablo[supreg] Hemodialysis
System with its cartridge significantly improves clinical outcomes
relative to the renal dialysis services previously available, the
applicant focused on hospitalization and quality of life. The applicant
stated that the Tablo[supreg] Hemodialysis System's 2-way wireless
connection allows for real-time intervention to prevent
hospitalizations. The applicant stated that during the Tablo[supreg]
Hemodialysis System home IDE, the patients using the Tablo[supreg]
Hemodialysis System had an all cause admission rate of 426 per 1,000
patient years. In the general dialysis population, the all cause
admission rate is 1688 per 1,000 patient years and for patients who do
PD, the hospitalization rate is 1460 per 1,000 patient years,
highlighting that the Tablo[supreg] Hemodialysis System may
significantly reduce hospitalizations and lower cost of care.\169\ The
applicant stated that Tablo[supreg] Hemodialysis System's integrated,
2-way wireless connection provides clinicians the ability to monitor
patients in real time without any separate equipment necessary, and is
the only equipment with this embedded functionality which allows for
earlier identification and intervention by a patient's healthcare team
and could prevent unnecessary hospitalizations for dialysis related
events or missed treatments.
---------------------------------------------------------------------------
\169\ United States Renal Data System. 2019 USRDS annual data
report: Epidemiology of kidney disease in the United States.
National Institutes of Health, National Institute of Diabetes and
Digestive and Kidney Diseases, Bethesda, MD, 2019, Executive Summary
Reference Table G2.
---------------------------------------------------------------------------
The applicant stated that the Tablo[supreg] Hemodialysis System can
effectively deliver adequacy with 3-4 treatments per week, potentially
reducing Medicare expenditures on additional dialysis treatments per
week. The applicant said that among home HD patients, Medicare payment
for dialysis treatments was highly variable across different regions at
3.5 to 5.7 per week.\170\ In the IDE for the Tablo[supreg] Hemodialysis
System, the applicant asserted that there was effectively delivered
adequacy with 4 treatments per week with an average session length of
3.4 hours, resulting in an average weekly treatment duration of ~13.6
hours. An average weekly standard Kt/V of 2.8 was achieved and 94
percent of patients achieved an ultrafiltration rate within 10 percent
of the prescribed value.\171\ The applicant noted that a previous study
of Tablo[supreg] Hemodialysis System used in the clinic showed
achievement of a spKt/V of 1.2 based on 3 treatments per week including
for patients over 90 kg. While the frequency of how often patients
should receive dialysis is a clinical decision that should be made
between the physician and the patient, the Tablo[supreg] Hemodialysis
System is the only mobile HD system with clinical data showing
achievement of adequacy standards and ultrafiltration endpoints for 3
and 4 treatments per week regardless of the size of the
patient.172 173 The applicant concluded that in this way,
the Tablo[supreg] Hemodialysis System has the potential to reduce
Medicare expenditures on the billing of additional dialysis treatments.
---------------------------------------------------------------------------
\170\ Wilk, Adam S. et al., Persistent Variation in Medicare
Payment Authorization for Home Hemodialysis Treatments Health
services research vol. 53,2 (2018): 649-670.
\171\ Plumb, T.J., Alvarez, et al. Safety and efficacy of the
Tablo hemodialysis system for in-center and home hemodialysis.
Hemodialysis International, 2019. doi:10.1111/hdi.12795.
\172\ Alvarez, Luis et al. Urea Clearance Results in Patients
Dialyzed Thrice Weekly Using a Dialysate Flow of 300 mL/min,
clinical abstract, presented March 2019, Annual Dialysis Conference,
Dallas, TX.
\173\ Alvarez, Luis and Chertow, Glenn, Real World In-Center
Urea Clearance Experience with a Novel Hemodialysis System, clinical
abstract, presented March 2019, Annual Dialysis Conference, Dallas,
TX.
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The applicant stated that Tablo[supreg] Hemodialysis System's
ability to deliver adequacy on fewer treatments per week may also
reduce vascular access complications due to frequent cannulation.\174\
---------------------------------------------------------------------------
\174\ Agency for Healthcare Quality and Research, End Stage
Renal Disease in the Medicare Population: Frequency and Duration of
Hemodialysis and Quality of Life Assessment, Draft Technology
Assessment, Agency for Healthcare Quality and Research November 22,
2019.
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The applicant submitted several examples in four topics to
demonstrate how the Tablo[supreg] Hemodialysis System improves the
quality of life. The applicant noted that patients value having a high-
quality daily life, ability to live well, and feeling empowered to
control their outcomes over mortality.\175\ The applicant asserted that
the use of the Tablo[supreg] Hemodialysis System at home allows
patients to have an improved quality of life and control over their
outcomes.
---------------------------------------------------------------------------
\175\ Urquhart-Secord, Rachel et al Patient and Caregiver
Priorities for Outcomes in Hemodialysis: An International Nominal
Group Technique Study American Journal of Kidney Diseases, Sept.
2016, Volume 68, Issue 3, 444-454.
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The first topic of improved quality of life focused on sleep and
reduction in fatigue. The applicant noted that kidney patients
participating in an international research collaborative to identify
outcome measures most important to them ranked fatigue/energy as their
top priority.\176\ The applicant reported that patients in the IDE who
were on home HD with an incumbent device experienced a 14 percent
improvement in waking up feeling rested while on the Tablo[supreg]
Hemodialysis System. Additionally, 22 percent fewer patients reported
having trouble staying asleep, and 15 percent fewer patients reported
waking up several times during the night while on the Tablo[supreg]
Hemodialysis System.\177\ The applicant asserted that this data shows
that the Tablo[supreg] Hemodialysis System is able to make a clinically
significant improvement in the quality of life indicator most valued by
dialysis patients.
---------------------------------------------------------------------------
\176\ Ibid.
\177\ Plumb, T.J., Alvarez, L., Ross, D.L., Lee, J.J., Mulhern,
J.G., Bell, J.L., Abra, G., Prichard, S.S., Chertow, G.M. and
Aragon, M.A. (2019), Safety and efficacy of the Tablo hemodialysis
system for in-center and home hemodialysis. Hemodialysis
International. doi:10.1111/hdi.12795.
---------------------------------------------------------------------------
The second topic of improved quality of life discussed by the
applicant was improvement in the patients' experience of hypotensive
events. The applicant submitted that investigators report that a drop
in blood pressure was also ranked in the top 10 of symptoms rated by
patients that impact their quality of life.\178\ The applicant reported
that a total of 12 (40.0 percent) and 8 (26.7 percent) subjects
reported hypotensive events during the Tablo[supreg] Hemodialysis
System treatments during the In-Center and In-Home treatment periods,
respectively, compared to 27 (90.0 percent) subjects reporting
hypotensive events at baseline on another HD machine. All patients who
reported hypotensive events while on dialysis in the study had also
reported hypotension in their baseline history.\179\
---------------------------------------------------------------------------
\178\ Urquhart-Secord, Rachel et al. Patient and Caregiver
Priorities for Outcomes in Hemodialysis: An International Nominal
Group Technique Study American Journal of Kidney Diseases, Sept.
2016, Volume 68, Issue 3, 444-454.
\179\ Outset Medical Data from Home IDE Trial, pg 33 of clinical
report submitted to the Food and Drug Administration, data table 43,
2019.
---------------------------------------------------------------------------
The third topic of improved quality of life was that fewer patients
reported feeling cold. The applicant reported that a total of 15 (50.0
percent) subjects during the in-center treatment period and 12 (40.0
percent) subjects during the In-Home treatment period reported feeling
cold while dialyzing on the
[[Page 71461]]
Tablo[supreg] Hemodialysis System compared to 28 (93.3 percent)
subjects who reported feeling cold at baseline while dialyzing on
another dialysis machine. The applicant asserted that the Tablo[supreg]
Hemodialysis System's design results in tight control of dialysate
temperature and allows patients to easily and accurately adjust
temperature through the graphical user interface.\180\
---------------------------------------------------------------------------
\180\ Ibid.
---------------------------------------------------------------------------
The fourth topic of improved quality of life was patient preference
for the Tablo[supreg] Hemodialysis System. The applicant stated that
the Kidney Health Initiative (KHI), a public private partnership
between the FDA and the American Society of Nephrology, Renal
Replacement Therapy (RRT) Roadmap prioritizes patient-centered
innovation, which includes dialysis equipment that is more portable,
removes barriers to home dialysis and improves patients' ease of use to
increase opportunities for self-care. The RRT, which was developed in
conjunction with patients, also prioritizes patient centered outcomes
and technology that reduces disruption in social and family life.\181\
The applicant reported that among prior home HD users in the IDE trial,
85 percent reported they preferred the Tablo[supreg] Hemodialysis
System to their current equipment.\182\ Patients also rated
Tablo[supreg] as easier to set-up, treat, and take down. Ease of use
ratings comparing the patient's prior device to Tablo[supreg] were as
follows: Set up--3.5 to 4.5, Treatment--3.3 to 4.6, Take Down--3.8 to
4.6.\183\
---------------------------------------------------------------------------
\181\ Kidney Health Initiative, Technology Roadmap for
Innovative Approaches to Renal Replacement Therapy, prepared by the
Nexight Group, October 2018, https://www.asnonline.org/g/blast/files/KHI_RRT_Roadmap1.0_FINAL_102318_web.pdf.
\182\ Chahal, Yaadveer, Patient Device Preference for Home
Hemodialysis: A Subset Analysis of the Tablo Home IDE Trial,
Abstract Accepted by the National Kidney Foundation Spring Clinical
Meeting 2020.
\183\ Outset Medical Data from Home IDE Trial, pg 33 of clinical
report submitted to the Food and Drug Administration, data table 43,
2019.
---------------------------------------------------------------------------
In summary, the applicant submitted that the Tablo[supreg]
Hemodialysis System has the potential to significantly expand the
number of patients who are able to receive home HD and persist on the
therapy. The applicant stated that it is an innovative HD system that
removes most of the device-related key barriers, reduces dialysis-
related symptoms, is mobile and easy to use, and therefore minimizes
dialysis-related disruptions in patients' lives.
(2) CMS Analysis
(a) Summary of Current Technology
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42180),
patients with ESRD who are not able to receive a kidney transplant must
undergo maintenance dialysis therapy. Patients can receive dialysis 3-4
days a week at an in-center HD facility, or they can administer
dialysis themselves at home. Due to the reliance on outpatient dialysis
units, numbers of patients utilizing home dialysis in the U.S. have
remained low. In 2017, only 10.8 percent of US dialysis patients
received home-based therapies.\184\ Patients and caregivers cite
concerns with self-cannulation, fears of needle disconnect and
complications.\185\ Home dialysis use is lower than many other rich
countries.\186\
---------------------------------------------------------------------------
\184\ United States Renal Data System (USRDS). 2019 Annual Data
Report: Reference Tables. https://www.usrds.org/reference.aspx. Last
Access Date Feb 20, 2020.
\185\ Young BA, Chan C, Blagg C, Lockridge R, Golper T,
Finkelstein F, Shaffer R, Mehrotra R; ASN Dialysis Advisory Group.
How to overcome barriers and establish a successful home HD program.
Clin J Am Soc Nephrol. 2012 Dec;7(12):2023-32. doi: 10.2215/
CJN.07080712. Epub 2012 Oct 4.
\186\ Wilkie M. Home dialysis--an international perspective. NDT
Plus. 2011 Dec;4(Suppl 3):iii4-iii6.
---------------------------------------------------------------------------
Most patients administering dialysis at home use PD. However, home
HD has more recently re-emerged as an alternative way for patients to
dialyze at home. Home HD may offer many of the advantages observed with
PD, such as increased flexibility and quality-of-life benefits.
However, adoption of home HD has been limited, with approximately only
1 percent of ESRD patients utilizing this modality.\187\
---------------------------------------------------------------------------
\187\ Mailloux LU, Blagg CR. Berns JS (ed.) Home Hemodialysis.
Uptodate. Nov 18, 2016.
---------------------------------------------------------------------------
Observational studies do not indicate significant differences in
survival when comparing home dialysis to in-center dialysis.\188\ Yet,
there are some potential benefits to home-based dialysis. Prior
analyses have noted that home-based dialysis affords greater patient
flexibility, improved quality of life,\189\ increased likelihood of
employment,\190\ and improved cost.\191\ However, regarding cost
comparisons, it is important to note that many cost analyses of home-
based dialysis include estimates from PD. The machines for HD are
costly and there may be higher rates of infection from self-
cannulation, which could offset any savings. Since such a small
percentage of patients receive home-based HD, it is challenging to know
actual cost without pooling it with PD estimates. Regardless, due to an
Executive order issued in 2019, economic incentives for home dialysis
(both peritoneal and home HD) were increased with the goal of expanding
its use.\192\
---------------------------------------------------------------------------
\188\ Chiu YW, Jiwakanon S, Lukowsky L, Duong U, Kalantar-Zadeh
K, Mehrotra R. An update on the comparisons of mortality outcomes of
hemodialysis and peritoneal dialysis patients. Semin Nephrol.
2011;31:152-158.
\189\ Rubin HR, Fink NE, Plantinga LC, Sadler JH, Kliger AS,
Powe NR. Patient ratings of dialysis care with peritoneal dialysis
vs hemodialysis. JAMA. 2004;291:697-703.
\190\ Muehrer RJ, Schatell D, Witten B, Gangnon R, Becker BN,
Hofmann RM. Factors affecting employment at initiation of dialysis.
Clin J Am Soc Nephrol. 2011 Mar;6(3):489-96.
\191\ Berger A, Edelsberg J, Inglese GW, Bhattacharyya SK, Oster
G. Cost comparison of peritoneal dialysis versus hemodialysis in
end-stage renal disease. American Journal of Managed Care.
2009;15:509-518.
\192\ The White House. Executive order on Advancing American
Kidney Health. July 10, 2019. https://www.whitehouse.gov/presidential-actions/executive-order-advancing-american-kidney-health/ Last Access Date Feb 18, 2020.
---------------------------------------------------------------------------
(b) Description of New Technology
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42181),
the first personal HD system on the market was called the Aksys
personal HD (Aksys Ph.D.) system. It created its own ultrapure
dialysate and was FDA cleared in 2002. It later underwent recall in
2006 due to marketing inconsistencies with system design.\193\
Eventually, the manufacturer shut down operations after difficulties in
securing financing.\194\ In addition to these issues, it was a large
machine that required significant patient utility resources and
specialized maintenance.\195\ Around this time, development of the
Allient dialysis system began, which utilizes a sorbent column to
regenerate dialysate from tap water.\196\ It is still in development
for potential home based therapy.
---------------------------------------------------------------------------
\193\ Food and Drug Administration. Class 2 Device Recall Aksys
Ph.D. Personal Hemodialysis System. Medical Devices Database. June
2006. https://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfres/res.cfm?id=46686.
\194\ Modern Healthcare. Dialyais machine firm Aksys shuts down.
Feb 21, 2007. https://www.modernhealthcare.com/article/20070221/NEWS/70221010/dialysis-machine-firm-aksys-shuts-down. Last Access
Date Feb 18, 2020.
\195\ Mailloux LU, Blagg CR. Berns JS (ed.) Home Hemodialysis.
Uptodate. Nov 18, 2016.
\196\ Ash SR. The Allient dialysis system. Semin Dial. 2004 Mar-
Apr;17(2):164-6.
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Several home dialysis machines are currently available. Recently,
the NxStage[supreg] System One dialysis machine was FDA approved for
510(k) premarket status in August 2017.\197\ It has a smaller profile
than the Aksys machine
[[Page 71462]]
but requires 4 to 6 large bags of ultrapure dialysate and comes with
home storage requirements. The NxStage[supreg] PureFlow SL was
subsequently developed for use with the NxStage[supreg] System One. It
allows patients to prepare dialysate from tap water with a reduced need
to store dialysate bags. The NxStage[supreg] system advertises an
easier experience learning how to administer home dialysis. Within this
arena, the Tablo[supreg] Hemodialysis System has recently emerged and
been approved for use in hospitals and outpatient settings. The
Tablo[supreg] Hemodialysis System is most comparable to NxStage System
One combined with NxStage[supreg] PureFlow, in that it may be easier to
use than conventional home dialysis machines and can be used from a tap
water source. The applicant is currently pursuing approval for use of
cartridges for the Tablo[supreg] Hemodialysis System in the home
setting. While this application centers on reimbursement of the
Tablo[supreg] Cartridge, this cartridge is only compatible with the
Tablo[supreg] Hemodialysis System. The cartridge is made up of a rigid
``Organizer'' which mounts the necessary tubing to allow for greater
ease in set-up. This self-contained and single-use cartridge houses
both the arterial and venous lines, an adaptor to connect the lines, a
saline line, and an infusion line. There is also a pressure transducer
protector, venous drip chamber with clot filter, and an arterial
pressure pod. The applicant noted that the cartridge simplifies
connection to the Tablo[supreg] Hemodialysis System and reduces set-up
time. It would seem that this cartridge would be most useful in the
home-setting, since hospital and clinic settings would normally have
trained personnel to assist with set-up. Although separate from the
Tablo[supreg] Cartridge, the Tablo[supreg] Hemodialysis System also
performs real-time water purification on demand dialysate production.
---------------------------------------------------------------------------
\197\ Food and Drug Administration. Traditional Section 510(k)
Premarket Notification Letter, Number K171331. August 24, 2017.
https://www.accessdata.fda.gov/cdrh_docs/pdf17/K171331.pdf.
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A significant challenge to increasing the use of home dialysis
includes burn out (or technique failure) and return to in-center HD.
According to one recent observational study, approximately 25 percent
of patients who initiate home HD return to in-center HD within the
first year.\198\ A good measure of a home-based system's success would
be in its ability to allow patients to remain on the therapy long-term.
Failure to maintain home HD, and low use of home HD, may be a result of
anxiety and unease that many patients have about performing the
treatment themselves (or with the help of care
takers).199 200 201 This includes fear of self-cannulation
in order to access the blood for dialysis and a lack of self-efficacy
in performing the therapy. By simplifying the process of setting up
dialysis tubing, offered by the Tablo[supreg] Hemodialysis System
cartridge, some patients may be able to successfully perform home HD.
---------------------------------------------------------------------------
\198\ Seshasai RK, Mitra N, Chaknos CM, Li J, Wirtalla C,
Negoianu D, Glickman JD, Dember LM. Factors Associated With
Discontinuation of Home Hemodialysis. Am J Kidney Dis. 2016
Apr;67(4):629-37.
\199\ Cafazzo JA, Leonard K, Easty AC, Rossos PG, Chan CT.
Patient-perceived barriers to the adoption of Nocturnal Home
Hemodialysis. Clin J Am Soc Nephrol. 2009;4:784-789.
\200\ Suri RS, Larive B, Garg AX, et al. Burden on caregivers as
perceived by hemodialysis patients in the frequent Hemodialysis
network (FHN) trials. Nephrol Dial Transplant. 2011;26:2316-2322.
\201\ Zhang AH, Bargman JM, Lok CE, et al. Dialysis modality
choices among chronic kidney disease patients: Identifying the gaps
to support patients on home-based therapies. Int Urol Nephrol.
2010;42:759-764.
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(c) Approvals
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42181),
the applicant has not previously submitted applications for pass-
through or add-on payments. The applicant has received 510(k) marketing
clearance for the machine to be used in hospital and outpatient clinic
use only. As such, the applicant is pursuing FDA marketing
authorization for use in the home setting for February 2020. The
Tablo[supreg] Hemodialysis System cartridge received FDA marketing
approval in December, 2019 and the Tablo[supreg] Hemodialysis System
received FDA marketing authorization for home setting in March 2020.
The applicant noted that upon approval, the company plans to ship that
same month. The technology had an investigational device exemption for
use in the home and which closed after granting of marketing
authorization. It is classified as a Class II device.
(d) Assessment of Substantial Similarity to Currently Available
Technology
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42182),
the NxStage[supreg] One is the only home-based HD system that is FDA
has approved at this time. The Tablo[supreg] Hemodialysis System
differs from the NxStage[supreg] in that dialysate is produced on
demand whereas the NxStage[supreg] requires that patients batch
dialysate or use pre-filled concentrate with the PureFlow. The
Tablo[supreg] Hemodialysis System also includes a cartridge (which is
the portion being evaluated for TPNIES) designed to facilitate the
connection of tubing in the appropriate configuration. This product
treats similar patients, notably patients with ESRD requiring HD.
(e) Assessment of SCI (See Sec. Sec. 413.236(b)(5) and 412.87(b)(1))
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42182),
the Tablo[supreg] Hemodialysis System is a treatment modality, not a
diagnostic tool. With regard to the question as to whether this new
renal dialysis equipment offers a treatment option for a patient
population unresponsive to, or ineligible for, currently available
treatments, we note that patients who are eligible for this treatment
would currently be eligible for in-center HD, home HD with currently
available treatments, and possibly PD.
(f) Clinical Evidence for Claims of SCI
As stated in the CY 2021 ESRD PPS proposed rule (85 FR 42182
through 42183), the applicant included an annotated bibliography in its
application. Many of the articles describe the features of the HD
system: Straightforward and relatively efficient set-up and training,
presence of safety features, water purification system, and wireless
communication. In terms of clinical outcomes and improvements, the
referenced authors have presented or published data on safety,
clearance and treatment times, hypotensive events and cold symptoms,
and patient preference. As these are arguably more important
considerations, we are focusing on the evidence with those claims of
clinical improvement or patient reported outcomes.
Below is a list of references for SCI based on evidence published
from several sources. We summarized the studies grouped by listings
with the most rigorous review to those with the least rigorous review,
specifically, Trials Published in Peer-Reviewed Journals, then Posters
and Abstracts, and ending with Unpublished Data.
Trials Published in Peer-Reviewed Journals
Plumb TJ, et al.\202\ describes the IDE study, which was a
prospective, multicenter, open-label crossover trial evaluating in-
center versus in-home use of the Tablo[supreg] Hemodialysis System.
Thirty patients underwent a run-in period, 8 weeks of in-center therapy
(4 treatments a week), then a 4-week transition period, and finally an
8-week in-home treatment (4 times a week).
[[Page 71463]]
Authors evaluated efficacy in effective removal of uremic toxins, as
measured by a weekly standard Kt/Vurea [gteqt]2.1 and a secondary
endpoint of delivered ultrafiltration within 10 percent of prescribed.
Twenty-eight out of 30 patients completed the study. One patient died
from cardiac arrest and the authors felt it was unrelated to the
treatments. Another patient withdrew prior to starting in-home HD.
There were primary outcomes, secondary outcomes, adverse event rates,
alarms per treatment, and alarm response times between the two groups.
Patients demonstrated high adherence rates of 96 percent, and 99
percent for the in-center and in-home groups, respectively. There is
bias from the open-label study and this is a small study conducted over
a short period of 12 weeks total, 4 weeks of in-home dialysis. Long-
term and larger studies would be helpful to capture any safety signals.
Some authors serve as Chief Medical Officer or consultants for Outset
Medical.
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\202\ Plumb TJ, Alvarez L, Ross DL, Lee JJ, Mulhern JG, Bell JL,
Abra G, Prichard SS, Chertow GM, Aragon MA. Safety and efficacy of
the Tablo hemodialysis system for in-center and home hemodialysis.
Hemodial Int. 2020 Jan;24(1):22-28. doi: 10.1111/hdi.12795. Epub
2019 Nov 7.
---------------------------------------------------------------------------
Kraus M, et al.\203\ is a study involving the comparator
technology known as NxStage[supreg] System, which is a portable HD
unit. This was a prospective, open-label, crossover study comparing in-
center HD versus home HD in 32 patients over 18 weeks total. The
primary endpoint was delivery of 90 percent prescribed fluid volume,
which was achieved in similar fashion and >90 percent in both groups.
There were statistically significant differences in adverse events,
which favored the home HD group. The applicant included this study to
demonstrate similar evidence as well as compare time spent in
performing the home sessions. Treatment durations were slightly shorter
than what was noted in the IDE study above (mean 2.8 hours for
NxStage[supreg] versus mean 3.4 hours with Tablo[supreg] Hemodialysis
System). This study was supported by NxStage[supreg] Medical Inc.
---------------------------------------------------------------------------
\203\ Kraus M, Burkart J, Hegeman R, Solomon R, Coplon N, Moran
J, A comparison of center-based vs. home-based daily hemodialysis
for patients with end-stage renal disease. Hemodialysis
International, 11: 468-477, (2007).
---------------------------------------------------------------------------
Posters/Abstracts
Alvarez, Luis et al.\204\ is a retrospective study, 29
patients underwent HD with the Tablo[supreg] Hemodialysis System at a
lower flow rate than what is used in conventional in-center HD. Average
treatment times were slightly higher in the Tablo[supreg] Hemodialysis
System group compared to those using non-Tablo[supreg] systems. After
patient weight stratification at 90 kg, authors felt that both groups
achieved similar weight changes (extrapolated from pre and post
weights), as well as Kt/Vurea change. This research was funded by
Outset Medical, Inc.
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\204\ Alvarez L, Spry L. Mulhern J, Prichard S, Shallall C,
Chertow G, Aragon, M, Urea Clearance Results in Patients Dialyzed
Thrice Weekly Using a Dialysate Flow of 300 mL/min, clinical
abstract, presented March 2019, Annual Dialysis Conference, Dallas,
TX.
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Alvarez, Luis et al.\205\ utilized lower flow rates of 300
ml/min, and evaluated patients as they transitioned to in-center but
self-directed HD with Tablo[supreg] Hemodialysis System. Patients
underwent 3 times a week treatment and data was collected over a 3-
month period. Based on urea samples and calculated Kt/Vurea, authors
concluded that this treatment resulted in adequate clearance.
---------------------------------------------------------------------------
\205\ Alvarez, Luis and Chertow, Glenn, Real World In-Center
Urea Clearance Experience with a Novel Hemodialysis System, clinical
abstract, presented March 2019, Annual Dialysis Conference, Dallas,
TX.
---------------------------------------------------------------------------
Chahal, Yaadveer \206\ is a study that focused on the
patient experience through surveys and compared the patient's responses
to prior in-home and in-center experiences. As part of the IDE study,
13 participants provided survey responses to compare their experience
with the Tablo[supreg] Hemodialysis System to their prior experience
with in-home dialysis. Of those 13 participants, 85.6 percent found
this system easier to use. While this is promising, the true test of
superiority in this realm would be rates of discontinuation at 1 year.
Issues of self-cannulation and the burden of this responsibility still
remain with this system. The primary study was undertaken by Outset
Medical.
---------------------------------------------------------------------------
\206\ Chahal, Yaadveer. Patient Device Preference for Home
Hemodialysis: A Subset Analysis of the Tablo Home IDE Trial,
Abstract Accepted by the National Kidney Foundation Spring Clinical
Meeting 2020.
---------------------------------------------------------------------------
Unpublished Data
Outset Medical Data \207\ is a limited section, in which
the applicant submitted cold and hypotensive events while on in-center
or in-home HD. From just raw numbers, there were lower percentages of
either sign/symptom within the home dialysis group compared to in-
center.
---------------------------------------------------------------------------
\207\ Outset Medical Data from Home IDE Trial, page 33 of
clinical report submitted to the FDA, data Table 43, 2019.
---------------------------------------------------------------------------
(g) CMS Comments
As discussed in the CY 2021 ESRD PPS proposed rule (85 FR 42183),
only the Tablo[supreg] Cartridge portion of the Tablo[supreg]
Hemodialysis System was evaluated in this application, but it is
important to note that it can only be used with the Tablo[supreg]
Hemodialysis System. Although there are changes to the Tablo[supreg]
Hemodialysis System for home use, the cartridge portion remains
unchanged from its original FDA approval. Therefore, the cartridge
itself is not new. Also, it is unclear as to whether the Tablo[supreg]
Hemodialysis System can be used in-center without the cartridge. As
such, much of the evidence presented in this application is really
about the system itself, such as ease of training, its various
features, and less about the incremental benefit of using the
cartridge. Additionally, the system itself may have its own risks and
benefits which are not within the scope of this application, and
peripherally and incompletely addressed with the provided materials.
For example, a study should be conducted determining the number of
patients who were back in the hospital for a dialysis-related
condition.
In the CY 2021 ESRD PPS proposed rule (85 FR 42183), we stated that
to evaluate the cartridge, it would be helpful to have studies on
whether there are any issues with the components of the cartridge (that
is, any dialyzer reactions to tubing, any issues affecting clearance).
Since the primary intent of the cartridge is to facilitate patient set-
up at home, the most useful evidence would be in the form of larger
studies of patient-reported outcomes, quality of life, analyses of
patient/caregiver burnout, and sustained adherence (beyond 1 year) to
the use of this home-based modality. If the applicant is claiming to
improve the patients' quality of life, then it needs to be proven for
patient-specific outcomes and with a risk-benefit analysis to the
patient. In some of the references cited, the patient factors affecting
home HD are self-cannulation, burdens to caregivers, and concerns for
complications, yet the cartridge has not demonstrated improvements in
addressing these issues.
We stated that the cartridge is a promising concept to encourage
home HD but again, the evaluation of this technology is complicated by
the need to also peripherally assess the system. There does not appear
to be a need for this cartridge in the hospital or clinic setting as
trained personnel should be able to assist with set-up. Within the
larger policy context of FDA approval and the fact that TPNIES does not
currently cover capital-related assets, we believe there are some
irregularities and misalignments in the current application, and we are
concerned that the stand-alone cartridge cannot be evaluated for
meeting the criteria for SCI.
[[Page 71464]]
The Outset Medical application was submitted only for the
Tablo[supreg] Cartridge, which can only be used with the Tablo[supreg]
Hemodialysis System. As background, the Tablo[supreg] Hemodialysis
System originally received FDA marketing authorization for hospital and
outpatient use on November 15, 2016. Without any additional studies
being required, an FDA marketing authorization was issued for just the
cartridge on December 19, 2019. An application was submitted by Outset
Medical to the FDA for home use of only the Tablo[supreg] Hemodialysis
System, not the cartridge. FDA marketing authorization was issued for
the Tablo[supreg] Hemodialysis System on March 31, 2020. Therefore,
with regard to the application for TPNIES for the Tablo[supreg]
Cartridge, it does not meet the newness requirement at Sec.
413.236(b)(2), which specifies that the item is granted FDA marketing
authorization on or after January 1, 2020.
We invited public comment as to whether the stand-alone cartridge
of the Tablo[supreg] Hemodialysis System meets the SCI criteria for the
TPNIES.
The collective comments and our response to them are set forth
below.
Comment: The applicant suggested that because a HD system received
approval for home use, the system and cartridge can be marketed in the
same home setting. Additionally, the applicant stated, because the
system and cartridge must operate together, the SCI should be linked.
The applicant disagrees with the idea of only the cartridge being
relevant.
Another commenter stated that according to the TPNIES policy CMS
finalized for payment in CY 2021, the equipment or supply being
considered for an add-on payment must represent an advance that
substantially improves, relative to technologies previously available,
the diagnosis or treatment of Medicare beneficiaries. The commenter
stated that the evidence submitted by the applicant describes the
features of the Tablo[supreg] Hemodialysis System and only the system.
They noted that the applicant does not offer support for its assertion
that the Tablo[supreg] Cartridge substantially improves the diagnosis
or treatment of Medicare beneficiaries relative to dialysis services
previously available. The commenter stated that because the application
offers no clinical evidence on the cartridge itself, the subject of the
application, it does not meet the eligibility requirements and CMS
should not approve the TPNIES for this product for CY 2021.
A commenter noted that the studies that were performed were only on
the Tablo[supreg] Hemodialysis System and not on the cartridge, which
is the subject of the TPNIES application.
Response: CMS is supportive of new and innovative supplies and
equipment for renal dialysis services. However, the Tablo[supreg]
Cartridge does not meet the newness eligibility criteria of Sec.
413.236(b)(2). Since the publication of the CY 2021 ESRD PPS proposed
rule, we have learned that the Tablo[supreg] Cartridge and
Tablo[supreg] Hemodialysis System have two different dates for FDA
marketing authorizations. The FDA marketing authorization was issued
for just the cartridge on December 19, 2019, which pre-dates the
eligibility date for the TPNIES of January 1, 2020. Therefore, the
cartridge does not meet the newness criterion.
In addition, CMS agrees with the commenters that the application
for the cartridge only included studies applicable to the Tablo[supreg]
Hemodialysis System as a whole and the cartridge by itself does not
show evidence of SCI. Therefore, we are not approving the Tablo[supreg]
Cartridge for as eligible for the TPNIES for CY 2021.
III. CY 2021 Payment for Renal Dialysis Services Furnished to
Individuals With Acute Kidney Injury (AKI)
A. Background
The Trade Preferences Extension Act of 2015 (TPEA) (Pub. L. 114-27)
was enacted on June 29, 2015, and amended the Act to provide coverage
and payment for dialysis furnished by an ESRD facility to an individual
with acute kidney injury (AKI). Specifically, section 808(a) of the
TPEA amended section 1861(s)(2)(F) of the Act to provide coverage for
renal dialysis services furnished on or after January 1, 2017, by a
renal dialysis facility or a provider of services paid under section
1881(b)(14) of the Act to an individual with AKI. Section 808(b) of the
TPEA amended section 1834 of the Act by adding a subsection (r) to
provide payment, beginning January 1, 2017, for renal dialysis services
furnished by renal dialysis facilities or providers of services paid
under section 1881(b)(14) of the Act to individuals with AKI at the
ESRD PPS base rate, as adjusted by any applicable geographic adjustment
applied under section 1881(b)(14)(D)(iv)(II) of the Act and adjusted
(on a budget neutral basis for payments under section 1834(r) of the
Act) by any other adjustment factor under section 1881(b)(14)(D) of the
Act that the Secretary elects.
In the CY 2017 ESRD PPS final rule, we finalized several coverage
and payment policies in order to implement subsection (r) of section
1834 of the Act and the amendments to section 1881(s)(2)(F) of the Act,
including the payment rate for AKI dialysis (81 FR 77866 through 77872,
and 77965). We interpret section 1834(r)(1) of the Act as requiring the
amount of payment for AKI dialysis services to be the base rate for
renal dialysis services determined for a year under the ESRD PPS base
rate as set forth in Sec. 413.220, updated by the ESRD bundled market
basket percentage increase factor minus a productivity adjustment as
set forth in Sec. 413.196(d)(1), adjusted for wages as set forth in
Sec. 413.231, and adjusted by any other amounts deemed appropriate by
the Secretary under Sec. 413.373. We codified this policy in Sec.
413.372 (81 FR 77965).
B. Summary of the Proposed Provisions, Public Comments, and Responses
to Comments on the CY 2021 Payment for Renal Dialysis Services
Furnished to Individuals With AKI
The proposed rule, titled ``Medicare Program; End-Stage Renal
Disease Prospective Payment System, Payment for Renal Dialysis Services
Furnished to Individuals with Acute Kidney Injury, and End-Stage Renal
Disease Quality Incentive Program'' (85 FR 42132 through 42208),
hereinafter referred to as the ``CY 2021 ESRD PPS proposed rule,'' was
published in the Federal Register on July 13, 2020, with a comment
period that ended on September 4, 2020. In that proposed rule, we
proposed to update the AKI dialysis payment rate. We received 4 public
comments on our proposal, including comments from ESRD facilities,
national renal groups, transplant organizations, and nurses.
We also received several comments related to issues that we either
did not discuss in the proposed rule or that we discussed for the
purpose of background or context, but for which we did not propose
changes. These include, for example, AKI dialysis in the home,
modifications to claims and cost reports to monitor AKI dialysis, and
Conditions of Coverage specific to AKI dialysis. While we are not
addressing those comments in this final rule because they are either
out of scope of the proposed rule or concern topics for which we did
not propose changes, we thank the commenters for their input and will
consider the recommendations in future rulemaking.
In this final rule, we provide a summary of the proposed
provisions, a summary of the public comments received and our responses
to them, and the policies we are finalizing for CY 2021 payment for
renal dialysis services furnished to individuals with AKI.
[[Page 71465]]
C. Annual Payment Rate Update for CY 2021
1. CY 2021 AKI Dialysis Payment Rate
The payment rate for AKI dialysis is the ESRD PPS base rate
determined for a year under section 1881(b)(14) of the Act, which is
the finalized ESRD PPS base rate, including the applicable annual
market basket payment update, geographic wage adjustments and any other
discretionary adjustments, for such year. We note that ESRD facilities
have the ability to bill Medicare for non-renal dialysis items and
services and receive separate payment in addition to the payment rate
for AKI dialysis.
As discussed in section II.B.4.d of the CY 2021 ESRD PPS proposed
rule and section II.B.4.d of this final rule, the CY 2021 ESRD PPS base
rate is $253.13, which reflects the application of the CY 2021 wage
index budget-neutrality adjustment factor of .999485, a final addition
to the ESRD PPS base rate to include calcimimetics, and the CY 2021
ESRDB market basket increase of 1.9 percent reduced by the multifactor
productivity adjustment of 0.3 percentage point, that is, 1.6 percent.
Accordingly, we are finalizing a CY 2021 per treatment payment rate of
$253.13 for renal dialysis services furnished by ESRD facilities to
individuals with AKI. This payment rate is further adjusted by the wage
index as discussed below.
2. Geographic Adjustment Factor
Under section 1834(r)(1) of the Act and Sec. 413.372, the amount
of payment for AKI dialysis services is the base rate for renal
dialysis services determined for a year under section 1881(b)(14) of
the Act (updated by the ESRD bundled market basket increase that is
reduced by the multifactor productivity adjustment), as adjusted by any
applicable geographic adjustment factor applied under section
1881(b)(14)(D)(iv)(II) of the Act. Accordingly, we apply the same wage
index under Sec. 413.231 that is used under the ESRD PPS and discussed
in section II.B.4.b of this final rule. The AKI dialysis payment rate
is adjusted by the wage index for a particular ESRD facility in the
same way that the ESRD PPS base rate is adjusted by the wage index for
that facility (81 FR 77868). Specifically, we apply the wage index to
the labor-related share of the ESRD PPS base rate that we utilize for
AKI dialysis to compute the wage adjusted per-treatment AKI dialysis
payment rate. As stated previously, we are finalizing a CY 2021 AKI
dialysis payment rate of $253.13, adjusted by the ESRD facility's wage
index.
The comments and our responses to the comments on our AKI dialysis
payment proposal are set forth below.
Comment: Commenters were supportive of the updates to the AKI
dialysis payment rate for CY 2021.
Response: We appreciate the comments in support of the update.
Final Rule Action: We are finalizing the AKI payment rate as
proposed, that is, the AKI payment rate is based on the finalized ESRD
PPS base rate. Specifically, the final CY 2021 ESRD PPS base rate is
$253.13. Accordingly, we are finalizing a CY 2021 payment rate of
$253.13 for renal dialysis services furnished by ESRD facilities to
individuals with AKI.
IV. End-Stage Renal Disease Quality Incentive Program (ESRD QIP)
A. Background
For a detailed discussion of the End-Stage Renal Disease Quality
Incentive Program's (ESRD QIP's) background and history, including a
description of the Program's authorizing statute and the policies that
we have adopted in previous final rules, we refer readers to the
following final rules:
CY 2011 ESRD PPS final rule (75 FR 49030),
CY 2012 ESRD PPS final rule (76 FR 628),
CY 2012 ESRD PPS final rule (76 FR 70228),
CY 2013 ESRD PPS final rule (77 FR 67450),
CY 2014 ESRD PPS final rule (78 FR 72156),
CY 2015 ESRD PPS final rule (79 FR 66120),
CY 2016 ESRD PPS final rule (80 FR 68968),
CY 2017 ESRD PPS final rule (81 FR 77834),
CY 2018 ESRD PPS final rule (82 FR 50738),
CY 2019 ESRD PPS final rule (83 FR 56922), and
CY 2020 ESRD PPS final rule (84 FR 60713).
We have also codified many of our policies for the ESRD QIP at 42
CFR 413.177 and 413.178.
B. Summary of the Proposed Provisions, Public Comments, Responses to
Comments, and Finalized Policies for the ESRD QIP
The proposed rule, titled ``Medicare Program; End-Stage Renal
Disease Prospective Payment System, Payment for Renal Dialysis Services
Furnished to Individuals with Acute Kidney Injury, and End-Stage Renal
Disease Quality Incentive Program'' (85 FR 42132 through 42208),
referred to as the ``CY 2021 ESRD PPS proposed rule,'' was published in
the Federal Register on July 13, 2020, with a comment period that ended
on September 4, 2020. In that proposed rule, we proposed updates to the
ESRD QIP for PY 2023, and included policies continuing for PY 2024. We
received a diverse range of public comments on our proposals, including
comments from large dialysis organizations, renal dialysis facilities,
national renal groups, nephrologists, patient organizations, patients
and care partners, health care systems, nurses, renal dietitians, and
other stakeholders.
In this final rule, we provide a summary of each proposed
provision, a summary of the public comments received and our responses
to them, and the policies we are finalizing for the ESRD QIP.
C. Updates to Requirements Beginning With the PY 2023 ESRD QIP
1. PY 2023 ESRD QIP Measure Set
Under our current policy, we retain all ESRD QIP measures from year
to year unless we propose through rulemaking to remove them or
otherwise provide notification of immediate removal if a measure raises
potential safety issues (77 FR 67475). Accordingly, the PY 2023 ESRD
QIP measure set will include the same 14 measures as the PY 2022 ESRD
QIP measure set. These measures are described in Table 6 of this final
rule. For the most recent information on each measure's technical
specifications for PY 2023, we refer readers to the CMS ESRD Measures
Manual for the 2021 Performance Period.\208\
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\208\ https://www.cms.gov/files/document/esrd-measures-manual-v60.pdf.
[[Page 71466]]
Table 6--PY 2023 ESRD QIP Measure Set
------------------------------------------------------------------------
National quality forum (NQF) # Measure title and description
------------------------------------------------------------------------
0258.............................. In-Center Hemodialysis Consumer
Assessment of Healthcare Providers
and Systems (ICH CAHPS) Survey
Administration, a clinical measure.
Measure assesses patients' self-
reported experience of care through
percentage of patient responses to
multiple testing tools.
2496.............................. Standardized Readmission Ratio
(SRR), a clinical measure.
Ratio of the number of observed
unplanned 30-day hospital
readmissions to the number of
expected unplanned 30-day
readmissions.
Based on NQF #2979................ Standardized Transfusion Ratio
(STrR), a reporting measure.
Ratio of the number of observed
eligible red blood cell transfusion
events occurring in patients
dialyzing at a facility to the
number of eligible transfusions
that would be expected.
N/A............................... (Kt/V) Dialysis Adequacy
Comprehensive, a clinical measure.
A measure of dialysis adequacy where
K is dialyzer clearance, t is
dialysis time, and V is total body
water volume. Percentage of all
patient months for patients whose
delivered dose of dialysis (either
hemodialysis or peritoneal
dialysis) met the specified
threshold during the reporting
period.
2977.............................. Hemodialysis Vascular Access:
Standardized Fistula Rate clinical
measure.
Measures the use of an arteriovenous
(AV) fistula as the sole means of
vascular access as of the last
hemodialysis treatment session of
the month.
2978.............................. Hemodialysis Vascular Access: Long-
Term Catheter Rate clinical
measure.
Measures the use of a catheter
continuously for 3 months or longer
as of the last hemodialysis
treatment session of the month.
1454.............................. Hypercalcemia, a clinical measure.
Proportion of patient-months with 3-
month rolling average of total
uncorrected serum or plasma calcium
greater than 10.2 mg/dL.
1463.............................. Standardized Hospitalization Ratio
(SHR), a clinical measure.
Risk-adjusted SHR of the number of
observed hospitalizations to the
number of expected
hospitalizations.
Based on NQF #0418................ Clinical Depression Screening and
Follow-Up, a reporting measure.
Facility reports in CROWNWeb one of
six conditions for each qualifying
patient treated during performance
period.
N/A............................... Ultrafiltration Rate (UFR), a
reporting measure.*
Number of months for which a
facility reports elements required
for ultrafiltration rates for each
qualifying patient.
Based on NQF #1460................ National Healthcare Safety Network
(NHSN) Bloodstream Infection (BSI)
in Hemodialysis Patients, a
clinical measure.
The Standardized Infection Ratio
(SIR) of BSIs will be calculated
among patients receiving
hemodialysis at outpatient
hemodialysis centers.
N/A............................... NHSN Dialysis Event reporting
measure.
Number of months for which facility
reports NHSN Dialysis Event data to
the Centers for Disease Control and
Prevention (CDC).
N/A............................... Percentage of Prevalent Patients
Waitlisted (PPPW), a clinical
measure.
Percentage of patients at each
dialysis facility who were on the
kidney or kidney-pancreas
transplant waitlist averaged across
patients prevalent on the last day
of each month during the
performance period.
2988.............................. Medication Reconciliation for
Patients Receiving Care at Dialysis
Facilities (MedRec), a reporting
measure.
Percentage of patient-months for
which medication reconciliation was
performed and documented by an
eligible professional.
------------------------------------------------------------------------
Note: *After consideration of the comments, we are finalizing our
proposal to update the scoring methodology used to calculate the
Ultrafiltration Rate reporting measure so that facilities are scored
based on the number of eligible patient-months, instead of facility-
months, and refer readers to section IV.C.3 of this final rule for a
discussion of this new scoring methodology.
We did not propose to adopt any new measures for the PY 2023 ESRD
QIP measure set.
2. Performance Standards for the PY 2023 ESRD QIP
Section 1881(h)(4)(A) of the Social Security Act (the Act) requires
the Secretary to establish performance standards with respect to the
measures selected for the ESRD QIP for a performance period with
respect to a year. The performance standards must include levels of
achievement and improvement, as required by section 1881(h)(4)(B) of
the Act, and must be established prior to the beginning of the
performance period for the year involved, as required by section
1881(h)(4)(C) of the Act. We refer readers to the CY 2013 ESRD PPS
final rule (76 FR 70277) for a discussion of the achievement and
improvement standards that we have established for clinical measures
used in the ESRD QIP. We recently codified definitions for the terms
``achievement threshold,'' ``benchmark,'' ``improvement threshold,''
and ``performance standard'' in our regulations at Sec. 413.178(a)(1),
(3), (7), and (12), respectively.
In the CY 2020 ESRD PPS final rule (84 FR 60728), we set the
performance period for the PY 2023 ESRD QIP as CY 2021 and the baseline
period as CY 2019. In the CY 2021 ESRD PPS proposed rule (85 FR 42185
through 42186), we estimated the achievement thresholds, 50th
percentiles of the national performance, and benchmarks for the PY 2023
clinical measures in Table 7 using data from 2018.
[[Page 71467]]
Table 7--Estimated Performance Standards for the PY 2023 ESRD QIP Clinical Measures Using the Most Recently
Available Data
----------------------------------------------------------------------------------------------------------------
Achievement threshold Median (50th percentile Benchmark (90th
Measure (15th percentile of of national percentile of national
national performance) * performance) * performance) *
----------------------------------------------------------------------------------------------------------------
Vascular access type (VAT):
Standardized Fistula Rate........ 53.72% 64.96% 77.31%
Catheter Rate.................... 17.70% 10.50% 4.32%
Kt/V Comprehensive................... 93.56% 97.13% 99.24%
Hypercalcemia........................ 1.77% 0.58% (0.59%) 0.00%
Standardized Readmission Ratio....... 1.268 (1.269) 0.998 0.629 (0.641)
Standardized Transfusion Ratio \209\. 1.675 0.830 0.173
NHSN BSI............................. 1.365 0.604 0
Standardized Hospitalization Ratio... 1.248 0.967 (0.976) 0.670 (0.677)
PPPW................................. 8.12% 16.73% 33.90%
ICH CAHPS: Nephrologists' 58.12% 67.89% 78.52% (78.35%)
Communication and Caring............
ICH CAHPS: Quality of Dialysis Center 54.16 (53.87%) 62.47% 72.11%
Care and Operations.................
ICH CAHPS: Providing Information to 74.09% 80.48% 87.14%
Patients............................
ICH CAHPS: Overall Rating of 49.33% (47.92%) 62.22% (60.59%) 76.57% (75.16%)
Nephrologists.......................
ICH CAHPS: Overall Rating of Dialysis 49.12% (48.59%) 63.04% (62.99%) 77.49%
Center Staff........................
ICH CAHPS: Overall Rating of the 53.98% (53.46%) 68.59% 83.03%
Dialysis Facility...................
----------------------------------------------------------------------------------------------------------------
Note: We stated in the CY 2021 ESRD QIP proposed rule that if the PY 2023 final numerical value is worse than
the PY 2022 finalized value, we will substitute the PY 2023 final numerical value for the PY 2022 finalized
value. We also provided the PY 2023 finalized value as a reference in parentheses for clinical measures whose
PY 2023 estimated value is worse than the PY 2022 finalized value.
Data sources: VAT measures: 2018 CROWNWeb; SRR, SHR: 2018 Medicare claims; Kt/V: 2018 CROWNWeb; Hypercalcemia:
2018 CROWNWeb; NHSN: 2018 CDC; ICH CAHPS: CMS 2018; PPPW: 2018 CROWNWeb and 2018 OPTN.
We are now updating the achievement thresholds, 50th percentiles of
the national performance, and benchmarks for the PY 2023 clinical
measures as shown in Table 8, using the most recently available data,
which includes CY 2019 data.
---------------------------------------------------------------------------
\209\ The STrR measure was included in our table in the CY 2021
ESRD PPS proposed rule (84 FR 60728), however these thresholds do
not apply because this is a reporting measure, as is more fully
addressed in response to comment below.
Table 8--Finalized Performance Standards for the PY 2023 ESRD QIP Clinical Measures Using the Most Recently
Available Data
----------------------------------------------------------------------------------------------------------------
Achievement threshold Median (50th percentile Benchmark (90th
Measure (15th percentile of of national percentile of national
national performance) performance) performance)
----------------------------------------------------------------------------------------------------------------
Vascular access type (VAT):
Standardized Fistula Rate........ 53.29% 64.36% 76.77%
Catheter Rate.................... 18.35% 11.04% 4.69%
Kt/V Comprehensive................... 94.33% 97.61% 99.42%
Hypercalcemia........................ 1.54% 0.49% * 0.00%
Standardized Readmission Ratio....... * 1.268 * 0.998 * 0.629
NHSN BSI............................. 1.193 0.516 * 0
Standardized Hospitalization Ratio... * 1.248 * 0.967 * 0.670
PPPW................................. * 8.12% * 16.73% * 33.90%
ICH CAHPS: Nephrologists' 58.20% 67.90% 79.15%
Communication and Caring............
ICH CAHPS: Quality of Dialysis Center 54.64% 63.08% 72.66%
Care and Operations.................
ICH CAHPS: Providing Information to 74.49% 81.09% 87.80%
Patients............................
ICH CAHPS: Overall Rating of * 49.33% * 62.22% * 76.57%
Nephrologists.......................
ICH CAHPS: Overall Rating of Dialysis 50.02% 63.37% 78.30%
Center Staff........................
ICH CAHPS: Overall Rating of the 54.51% 69.04% 83.72%
Dialysis Facility...................
----------------------------------------------------------------------------------------------------------------
Note: Values marked with an asterisk (*) are also the final performance standards for those measures for PY
2022. In accordance with our longstanding policy, we are finalizing those numerical values for those measures
for PY 2023 because they are higher standards than the PY 2023 numerical values for those measures.
Data sources: VAT measures: 2019 CROWNWeb; SRR, SHR: 2019 Medicare claims; Kt/V: 2019 CROWNWeb; Hypercalcemia:
2019 CROWNWeb; NHSN: 2019 CDC; ICH CAHPS: CMS 2019; PPPW: 2019 CROWNWeb and 2019 OPTN.
In addition, we have summarized in Table 9 existing requirements
for successful reporting on reporting measures in the PY 2023 ESRD QIP.
[[Page 71468]]
Table 9--Requirements for Successful Reporting on the PY 2023 ESRD QIP
Reporting Measures
------------------------------------------------------------------------
Measure Reporting frequency Data elements
------------------------------------------------------------------------
Ultrafiltration............. 4 data elements are In-Center
reported for every Hemodialysis (ICHD)
HD Kt/V session Kt/V Date.
during the week of Post-
the monthly Kt/V Dialysis Weight.
draw, and Kt/V date Pre-
is reported monthly. Dialysis Weight.
Delivered
Minutes of BUN
Hemodialysis.
Number of
sessions of
dialysis delivered
by the dialysis
unit to the patient
in the reporting
Month.
MedRec...................... Monthly............. Date of the
medication
reconciliation.
Type of
eligible
professional who
completed the
medication
reconciliation:
[cir] Physician,
[cir] nurse,
[cir] ARNP,
[cir] PA,
[cir] pharmacist, or
[cir] pharmacy
technician
personnel.
Name of
eligible
professional.
Clinical Depression 1 of 6 conditions Screening
Screening and Follow-Up. reported annually. for clinical
depression is
documented as being
positive and a
follow-up plan is
documented.
Screening
for clinical
depression
documented as
positive, a follow-
up plan is not
documented, and the
facility possesses
documentation that
the patient is not
eligible.
Screening
for clinical
depression
documented as
positive, the
facility possesses
no documentation of
a follow-up plan,
and no reason is
given.
Screening
for clinical
depression
documented as
negative and no
follow-up plan
required.
Screening
for clinical
depression not
documented, but the
facility possesses
documentation
stating the patient
is not eligible.
Clinical
depression
screening not
documented, and no
reason is given.
NHSN Dialysis Event......... Monthly data Three types of
reported quarterly. dialysis events
reported:
IV
antimicrobial
start;
positive
blood culture; and
pus,
redness, or
increased swelling
at the vascular
access site.
STrR........................ .................... At least 10 patient-
years at risk
during the
performance period.
------------------------------------------------------------------------
We received a few comments on the PY 2023 ESRD QIP measure set.
Comment: One commenter expressed general agreement with CMS's
policy to maintain current structural ESRD QIP policies. The commenter
also expressed support for the proposed updates to the performance
standards applicable to PY 2023.
Response: We thank the commenter for its support.
Comment: One commenter requested clarification that the
Standardized Transfusion Ratio (STrR) measure will be a reporting
measure. The commenter noted that the measure was listed in the CY 2021
ESRD PPS proposed rule as a reporting measure in the PY 2023 measure
set but was included in the Estimated Performance Standards for PY 2023
Clinical Measures table.
Response: We appreciate the commenter bringing this issue to our
attention. We inadvertently included clinical performance standards for
the STrR measure in Table 7 of the CY 2021 ESRD PPS proposed rule. In
the CY 2020 ESRD PPS final rule (84 FR 60720 through 60723), we
finalized that beginning with the PY 2022 ESRD QIP, we would convert
the STrR clinical measure to a reporting measure and would score the
measure based on the performance standards listed in Table 6 of that
final rule, which provided that the applicable reporting performance
standard for the STrR reporting measure is calculated annually and
requires a facility to have at least 10 eligible patient-years at risk
over the course of the performance period (84 FR 60718). The reporting
requirements for the STrR measure are also included in Table 9 of this
final rule.
3. Update to the Scoring Methodology for the Ultrafiltration Rate
Reporting Measure
In the CY 2017 ESRD PPS final rule, we adopted the Ultrafiltration
Rate reporting measure under the authority of section 1881(h)(2)(B)(ii)
of the Act (81 FR 77912). The measure assesses the number of months for
which a facility reports all data elements required to calculate
ultrafiltration rates (UFR) for each qualifying patient. It is based
upon the NQF-endorsed Avoidance of Utilization of High Ultrafiltration
Rate (>/= 13 ml/kg/hr) (NQF #2701), which assesses the percentage of
patient-months for patients with a UFR greater than or equal to 13 ml/
kg/hr.
In the CY 2017 ESRD PPS final rule (81 FR 77917), we also finalized
a policy to score the Ultrafiltration Rate reporting measure using the
following equation, beginning in PY 2020 (81 FR 77917):
[[Page 71469]]
[GRAPHIC] [TIFF OMITTED] TR09NO20.000
In the CY 2021 ESRD PPS proposed rule (85 FR 42186 through 42187),
we proposed to replace the current Ultrafiltration Rate reporting
measure scoring equation with the following equation, beginning with PY
2023:
[GRAPHIC] [TIFF OMITTED] TR09NO20.001
We stated this proposed update would modify the scoring methodology
for the Ultrafiltration Rate reporting measure so that facilities would
be scored based on the number of eligible patient-months, as opposed to
facility-months. We explained that the facility-month scoring
methodology requires facilities to report every data element necessary
to calculate a UFR reporting rate for 100 percent of its eligible
patients each month in order to receive any credit for successfully
reporting the measure for that month. We stated that the facility-month
scoring approach then counts the number of months in the performance
period that the facility received credit for reporting over the course
of the performance period. For example, under the facility-scoring
methodology, if a facility has 10 eligible patients in January, the
facility must report all required UFR data elements for each of those
10 patients in order to receive any credit for January reporting. We
stated that if the facility only reports the required UFR data elements
for 9 of those 10 patients, the facility receives a zero for January.
In the CY 2021 ESRD PPS proposed rule, we stated that our concern with
this approach is that there may be circumstances, such as when an
eligible patient is hospitalized, when facilities cannot obtain UFR
data for a single patient, and as a consequence, cannot receive any
credit for the data it did report that month (85 FR 42187). When we
finalized the Ultrafiltration Rate reporting measure in the CY 2017
ESRD PPS final rule, stakeholders raised their concern regarding this
issue (81 FR 77914). At the time, we responded that because we defined
the population for this reporting measure by assignment to a facility
for a full month, the facility is still required to provide data even
in cases where a patient may spend part of that month hospitalized
since the data elements are products of ongoing dialysis treatment. We
stated that since we do not restrict facilities from coordinating with
hospitals to obtain relevant data, we believed that such coordination
is appropriate. However, our rationale for this was based on the
reporting requirements prescribed by a facility-month definition.
Furthermore, we stated that coordinating with hospitals to obtain
relevant data continues to be a stakeholder concern in reporting UFR
data. In the CY 2021 ESRD PPS proposed rule, we stated our belief that
the proposed patient-month scoring methodology is more objective
because it scores facilities based on the percentage of eligible
patients across the entire performance period for which they report all
UFR data elements (85 FR 42187). Thus, if a facility has 100 eligible
patients in CY 2020 and reports all data elements necessary to
calculate a UFR rate for 90 of them, we stated that the facility will
receive a rounded score based on a 90 percent reporting rate. We
believe that this methodology will give facilities more flexibility to
receive credit for UFR reporting throughout the 12-month performance
period.
In the CY 2021 ESRD PPS proposed rule, we stated that the
Ultrafiltration Rate reporting measure is intended to guard against
risks associated with high ultrafiltration (that is, rapid fluid
removal) rates for adult dialysis patients undergoing hemodialysis
(HD), because of indications that high ultrafiltration is an
independent predictor of mortality. We stated that faster
ultrafiltration may lead to a number of health risks resulting from
large volumes of fluid removed rapidly during each dialysis session,
with deleterious consequences for the patient both in the short and
longer term. The outcome of this reporting measure is the documentation
of the ultrafiltration measurements, which ultimately contributes to
the quality of the patient's ESRD treatment. We stated that we believe
that calculating the measure rates using the patient-month scoring
methodology better supports our goal of assessing performance on
whether the facility is documenting UFR for its eligible patients,
which we believe will lead to better patient-level outcomes (85 FR
42187).
We also stated our belief that this change is consistent with our
plan to re-evaluate our reporting measures for opportunities to more
closely align them with NQF measure specifications (see 84 FR 60724).
We stated that we believe that this proposed change would make the
Ultrafiltration Rate reporting measure more consistent with the NQF
measure upon which it is based, Avoidance of Utilization of High
Ultrafiltration Rate (>/= 13 ml/kg/hr) (NQF #2701), which reports
results using a ``patient-month'' construction. Although we stated that
we recognize that both the Anemia Management reporting measure and the
Serum Phosphorus reporting measure are also calculated using a
facility-month construction, we stated that we were not proposing to
change the scoring methodology used for either of those measures
because both measures are finalized for removal beginning with the PY
2021 ESRD QIP (83 FR 56986 through 56989). We stated that the proposed
update to the UFR reporting measure scoring methodology will make the
scoring methodology for that measure consistent with the scoring
methodology we are using to calculate the Medication Reconciliation
(MedRec) reporting measure (83 FR 57011). We stated that we also
believed that the utilization of this patient-month scoring methodology
for both the MedRec and the Ultrafiltration Rate reporting measures
better reflects our intent to score facilities based on actions taken
by the facility that impact patient experiences.
We sought comment on this proposal.
The comments on our proposal to update the scoring methodology for
the Ultrafiltration Rate reporting measure and our responses to those
comments are set forth below.
Comment: Several commenters expressed support for the proposal to
change the Ultrafiltration Rate reporting measure's scoring methodology
from facility-months to patient-months. Several commenters expressed
appreciation that the ``patient-months'' construction aligns with the
NQF's Ultrafiltration Rate measure specifications. A few commenters
expressed support for the proposed
[[Page 71470]]
update to the Ultrafiltration Rate reporting measure to use patient-
months because it would ensure the reliability of measure score
calculations and thus enable CMS to better evaluate facility
performance. A few commenters expressed support for the proposed update
to the Ultrafiltration Rate reporting measure, believing that it would
help address difficulties with measure requirements where all data on
all patients had to be included in order to receive credit for
reporting each month. One commenter stated that the proposed update
would score facilities based on actions that impact patient care and
appreciated the move away from ``all or nothing'' requirements.
Response: We thank the commenters for their support. We agree that
the proposed methodology is more outcomes focused, and better supports
our goal of assessing performance on whether the facility is
documenting UFR for its eligible patients, which we believe will lead
to better patient-level outcomes. We also agree that the proposed
update will give facilities more flexibility to receive credit for UFR
reporting throughout the 12-month performance period.
Comment: One commenter expressed support for the proposed update to
the Ultrafiltration Rate reporting measure, but also stated that it
would like to work with CMS on developing an outcome measure that
better assesses quality of care for ultrafiltration.
Response: We thank the commenter for its support and continue to
welcome feedback on ways to improve measures in the program.
Comment: A few commenters expressed concern that the
Ultrafiltration Rate reporting measure may penalize facilities that are
unable to comply with reporting requirements due to circumstances
beyond their control, such as patient non-compliance due to
hospitalization or missed treatments.
Response: We thank the commenters for their feedback. Under the
current facility-month scoring methodology, a facility is required to
report every data element necessary to calculate a UFR reporting rate
for 100 percent of its eligible patients each month in order to receive
any credit for successfully reporting the measure for that month. We
believe the update to the Ultrafiltration Rate reporting measure's
scoring methodology addresses situations in which facilities may
experience challenges collecting data when patients are hospitalized or
miss treatments because it does not require 100 percent reporting for
all patients. We believe that the patient-months construction gives
facilities more flexibility to receive credit for UFR reporting
throughout the performance period because it scores a facility based on
the facility reporting all UFR data elements for eligible patients
across the entire performance period, and does not require reporting
for all eligible patients each month in order to receive the maximum
score on the measure.
Final Rule Action: After considering the comments we received, we
are finalizing our proposal to update the scoring methodology for the
Ultrafiltration Rate reporting measure as proposed, beginning with PY
2023.
4. Eligibility Requirements for the PY 2023 ESRD QIP
Our current minimum eligibility requirements for scoring the ESRD
QIP measures are described in Table 10. We did not propose any changes
to these eligibility requirements for the PY 2023 ESRD QIP.
Table 10--Eligibility Requirements for Scoring on ESRD QIP Measures
----------------------------------------------------------------------------------------------------------------
Minimum data
Measure requirements CCN open date Small facility adjuster
----------------------------------------------------------------------------------------------------------------
Kt/V Comprehensive (Clinical)........ 11 qualifying patients. N/A.................... 11-25 qualifying
patients.
VAT: Long-term Catheter Rate 11 qualifying patients. N/A.................... 11-25 qualifying
(Clinical). patients.
VAT: Standardized Fistula Rate 11 qualifying patients. N/A.................... 11-25 qualifying
(Clinical). patients.
Hypercalcemia (Clinical)............. 11 qualifying patients. N/A.................... 11-25 qualifying
patients.
NHSN BSI (Clinical).................. 11 qualifying patients. Before October 1 prior 11-25 qualifying
to the performance patients.
period that applies to
the program year.
NHSN Dialysis Event (Reporting)...... 11 qualifying patients. N/A.................... 11-25 qualifying
patients.
SRR (Clinical)....................... 11 index discharges.... N/A.................... 11-41 index discharges.
STrR (Reporting)..................... 10 patient-years at N/A.................... 10-21 patient-years at
risk. risk.
SHR (Clinical)....................... 5 patient-years at risk N/A.................... 5-14 patient-years at
risk.
ICH CAHPS (Clinical)................. Facilities with 30 or Before October 1 prior N/A.
more survey-eligible to the performance
patients during the period that applies to
calendar year the program year.
preceding the
performance period
must submit survey
results. Facilities
will not receive a
score if they do not
obtain a total of at
least 30 completed
surveys during the
performance period.
Depression Screening and Follow-Up 11 qualifying patients. Before April 1 of the N/A.
(Reporting). performance period
that applies to the
program year.
Ultrafiltration (Reporting).......... 11 qualifying patients. Before April 1 of the N/A.
performance period
that applies to the
program year.
MedRec (Reporting)................... 11 qualifying patients. Before October 1 prior N/A.
to the performance
period that applies to
the program year.
PPPW (Clinical)...................... 11 qualifying patients. N/A.................... 11-25 qualifying
patients.
----------------------------------------------------------------------------------------------------------------
[[Page 71471]]
5. Clarification of the Timeline for Facilities To Make Changes to
Their NHSN Bloodstream Infection (BSI) Clinical Measure and NHSN
Dialysis Event Reporting Measure Data for Purposes of the ESRD QIP
In the CY 2021 ESRD PPS proposed rule (85 FR 42188), we stated that
under our current policy for the NHSN BSI clinical measure and NHSN
Dialysis Event reporting measure, facilities are required to submit
monthly data on a quarterly basis, and each quarter's data is due 3
months after the end of the quarter (81 FR 77879 through 77881). As an
example, we stated that data collected by facilities between January 1
and March 31, 2021 is due to NHSN by June 30, 2021, data collected
between April 1 and June 30, 2021 is due to NHSN by September 30, 2021,
and data collected between July 1 and September 30, 2021 is due to NHSN
by December 31, 2021. We further noted that after each quarterly data
submission deadline, the Centers for Disease Control and Prevention
(CDC) takes a snapshot of the facility's data for the quarter and
creates a permanent data file. Each quarterly permanent data file is
aggregated together to create the annual CMS ESRD QIP Final Compliance
File, which the CDC transmits to CMS for purposes of determining
whether the facility has met the reporting requirements for these
measures. We also noted that facilities may make changes to their
quarterly NHSN data for purposes of the ESRD QIP at any point up until
the applicable quarterly submission data deadline (85 FR 42188).
In the CY 2021 ESRD PPS proposed rule (85 FR 42188), we stated that
we have become aware that the NHSN system does not prevent facilities
from making changes to their data for purposes of CDC surveillance
after the applicable ESRD QIP quarterly submission deadline has passed.
We also clarified that any changes that a facility makes to its data
after the ESRD QIP deadline that applies to those data will not be
included in the quarterly permanent data file that the CDC generates
for purposes of creating the annual CMS ESRD QIP Final Compliance File.
As we noted in the proposed rule, each quarterly permanent data file
captures a snapshot of the facility's data as of the quarterly
submission deadline, and that file cannot be updated for purposes of
the ESRD QIP because of operational and timing issues.
We received a few comments on this clarification.
Comment: A few commenters expressed support for the clarification
of the timeline for facilities to make changes to NHSN Dialysis Event
and the NHSN BSI measure data. One commenter expressed support for the
clarification, noting the importance of providing accurate information
about bloodstream infections to patients and caregivers.
Response: We thank the commenters for their support.
6. Payment Reduction Scale for the PY 2023 ESRD QIP
Under our current policy, a facility will not receive a payment
reduction for a payment year in connection with its performance for the
ESRD QIP if it achieves a total performance score (TPS) that is at or
above the minimum TPS (mTPS) that we establish for the payment year. We
have defined the mTPS in our regulations at Sec. 413.178(a)(8) as,
with respect to a payment year, the TPS that an ESRD facility would
receive if, during the baseline period it performed at the 50th
percentile of national performance on all clinical measures and the
median of national ESRD facility performance on all reporting measures.
Our current policy, which is codified at Sec. 413.177 of our
regulations, is also to implement the payment reductions on a sliding
scale using ranges that reflect payment reduction differentials of 0.5
percent for each 10 points that the facility's TPS falls below the
minimum TPS (76 FR 634 through 635).
In the CY 2021 ESRD PPS proposed rule (85 FR 42189), for PY 2023 we
estimated based on available data that a facility must meet or exceed a
mTPS of 57 in order to avoid a payment reduction. We noted that the
mTPS estimated in the CY 2021 ESRD PPS proposed rule was based on data
from CY 2018 instead of the PY 2023 baseline period (CY 2019) because
CY 2019 data were not yet available.
We refer readers to Table 8 of this final rule for the PY 2023
finalized performance standards for each clinical measure. We stated in
the CY 2021 ESRD PPS proposed rule that under our current policy, a
facility that achieves a TPS below 57 would receive a payment reduction
based on the TPS ranges indicated in Table 9 (85 FR 42189). Table 11 of
this final rule, is a reproduction of Table 9 from the CY 2021 ESRD PPS
proposed rule.
Table 11--Estimated Payment Reduction Scale for PY 2023 Based on the
Most Recently Available Data
------------------------------------------------------------------------
Total performance score Reduction (%)
------------------------------------------------------------------------
100-57.................................................. 0
56-47................................................... 0.5
46-37................................................... 1.0
36-27................................................... 1.5
26-0.................................................... 2.0
------------------------------------------------------------------------
We stated our intention to update the mTPS for PY 2023, as well as
the payment reduction ranges for that payment year, in the CY 2021 ESRD
PPS final rule.
We have now finalized the payment reductions that will apply to the
PY 2023 ESRD QIP using updated CY 2019 data. The mTPS for PY 2023 will
be 57, and the finalized payment reduction scale is shown in Table 12.
Table 12--Finalized Payment Reduction Scale for PY 2023 Based on the
Most Recently Available Data
------------------------------------------------------------------------
Total performance score Reduction (%)
------------------------------------------------------------------------
100-57.................................................. 0
56-47................................................... 0.5
46-37................................................... 1.0
36-27................................................... 1.5
26-0.................................................... 2.0
------------------------------------------------------------------------
7. Reduction of the Number of Records That a Facility Selected for NHSN
Validation Must Submit
In the CY 2021 ESRD PPS proposed rule (85 FR 42189), we stated that
one of the critical elements of the ESRD QIP's success is ensuring that
the data submitted to calculate measure scores and TPSs are accurate.
The ESRD QIP currently includes two validation studies for this
purpose: The Consolidated Renal Operations in a Web-Enabled Network
(CROWNWeb) data validation study (OMB Control Number 0938-1289) and the
NHSN validation study (OMB Control Number 0938-1340). In the CY 2019
ESRD PPS final rule, we adopted the CROWNWeb data validation study as a
permanent feature of the Program (83 FR 57003). Under that policy, we
will continue validating CROWNWeb data in PY 2023 and subsequent
payment years, and we will deduct 10 points from a facility's TPS if it
is selected for validation but does not submit the requested records.
We also adopted a methodology for the PY 2022 NHSN validation
study, which targets facilities for NHSN
[[Page 71472]]
validation by identifying facilities that are at risk for under-
reporting. For additional information on this methodology, we referred
readers to the CY 2018 ESRD PPS final rule (82 FR 50766 through 50767).
In the CY 2020 ESRD PPS final rule, we finalized our proposal to
continue using this methodology for the NHSN validation study for PY
2023 and subsequent years (84 FR 60727). In that rule, we concluded
that to achieve the most reliable results for a payment year, we would
need to review approximately 6,072 charts submitted by 303 facilities,
and that this sample size would produce results with a 95 percent
confidence level and a 1 percent margin of error. Based on those
results and to ensure that dialysis event data reported to the NHSN for
purposes of the ESRD QIP are accurate, we finalized our proposal to
continue use of this methodology in the PY 2023 NHSN validation study
and for subsequent years.
Additionally, as we had previously finalized for CROWNWeb
validation, we finalized our proposal to adopt NHSN validation as a
permanent feature of the ESRD QIP with the methodology we first
finalized for PY 2022 and are continuing for PY 2023 and subsequent
years. We stated that we continued to believe that the purpose of our
validation programs is to ensure the accuracy and completeness of data
that are scored under the ESRD QIP, and that we believed that
validating NHSN data using this methodology achieves that goal.
In the CY 2019 ESRD PPS final rule, we finalized that a sample of
300 facilities will be selected for the NHSN validation study each
year, and that each facility will be required to submit 20 patient
records per quarter for each of the first two quarters of the calendar
year (83 FR 57001), for a total of 40 records. In the CY 2021 ESRD PPS
proposed rule (85 FR 42189 through 42190), we proposed to change this
requirement and allow facilities selected to participate in the NHSN
validation study to submit a total of 20 patient records for the
applicable calendar year. We also proposed to allow facilities to
submit patient records from any two quarters during the year, as long
as all of the records are from no more than two quarters. For example,
we stated that a facility could choose to submit two records from Q1
and 18 records from Q4, or six records from Q2 and 14 records from Q3,
but it could not submit four records from Q1, eight records from Q2,
and eight records from Q3.
We stated that we had concluded this revised approach would reduce
facility burden by decreasing the required number of patient records
and allowing more flexibility for facilities to choose what records to
submit, while continuing to maintain a sample size that is adequate for
our validation analysis. In reaching this conclusion, we stated that we
had been informed by the CDC's recommendations. We stated that based on
the sample estimation analysis, the CDC recommended the following
factors to improve the precision of estimation of accuracy of dialysis
events reported to NHSN: An expected 80 percent of dialysis events
reporting accuracy from facilities and setting the precision of the
NHSN validation study to a 95 percent confidence level and 1 percent
margin of error, which would require a total of 6,072 chart reviews.
Beginning with the CY 2017 and CY 2018 NHSN dialysis validation, we
stated that we have gradually increased the number of facilities
randomly selected for validation, as well as the number of charts for
review, in order to achieve the 6,000 chart threshold necessary for an
accurate review. Initially, 35 facilities were randomly selected and 10
charts per facility were reviewed. For CY 2019, 150 facilities were
randomly selected and each facility submitted a total of 20 records, to
achieve the total of 3,000 charts available for review. For CY 2020,
the goal was to increase from 150 to 300 facilities, where each
facility would submit a total of 20 records thereby achieving the total
of 6,000 charts available for review, as we had previously finalized
(83 FR 57001). Because a total of 20 records would achieve the 6,000
chart threshold necessary for an accurate review, we stated that we had
concluded that we could reduce the sample size from 40 records to 20
records. We stated that we believed a total of 20 medical records
across a 6-month validation study time frame for a calendar year,
rather than 20 records per quarter would provide a sufficiently
accurate sample size.
In the CY 2021 ESRD PPS proposed rule, we stated our belief that
the reduction in patient records still provides an adequate sample size
for the validation and reduces overall facility burden (85 FR 42190).
We also stated that a recent estimation analysis conducted by the CDC
supports our belief that a review of 20 charts per facility across a
specified validation timeline that are acquired by randomly selecting
approximately 300 facilities would continue to meet the medical record
selection criteria outlined in the NHSN Dialysis Validation
methodology. We stated that this would meet the CDC's recommended
sample estimate to achieve the 95 percent confidence level precision
and 1 percent margin of error, while also reducing facility burden.
We sought comments on this proposal.
The comments on our proposal to reduce the number of records that a
facility selected for NHSN validation must submit and our responses to
those comments are set forth below. We did not propose any changes to
the CROWNWeb validation study methodology.
Comment: Several commenters expressed support for the proposal to
reduce the number of patient records required for submission for the
NHSN validation study. Several commenters noted that the proposed
update will reduce provider burden. A few commenters noted that the
proposed 20 patient records requirement is an adequate sample size for
validation.
Response: We thank the commenters for their support.
Final Rule Action: After considering public comments, we are
finalizing our proposal to update the records submission requirements
for the NHSN data validation study as proposed, beginning with PY 2023.
D. Updates for the PY 2024 ESRD QIP
1. Continuing Measures for the PY 2024 ESRD QIP
In the CY 2021 ESRD PPS proposed rule (85 FR 42190), we stated
that, under our previously adopted policy, the PY 2023 ESRD QIP measure
set will also be used for PY 2024. We did not propose to adopt any new
measures beginning with the PY 2024 ESRD QIP.
2. Performance Period for the PY 2024 ESRD QIP
In the CY 2021 ESRD PPS proposed rule (85 FR 42190), we stated our
continued belief that 12-month performance and baseline periods provide
us sufficiently reliable quality measure data for the ESRD QIP. In the
CY 2020 ESRD PPS final rule, we finalized the performance and baseline
periods for the PY 2023 ESRD QIP (84 FR 60728). We also finalized our
proposal to adopt automatically a performance and baseline period for
each year that is 1 year advanced from those specified for the previous
payment year. Under this policy, CY 2022 will be the performance period
and CY 2020 will be the baseline period for the PY 2024 ESRD QIP.
3. Performance Standards for the PY 2024 ESRD QIP
Section 1881(h)(4)(A) of the Act requires the Secretary to
establish
[[Page 71473]]
performance standards with respect to the measures selected for the
ESRD QIP for a performance period with respect to a year. The
performance standards must include levels of achievement and
improvement, as required by section 1881(h)(4)(B) of the Act, and must
be established prior to the beginning of the performance period for the
year involved, as required by section 1881(h)(4)(C) of the Act. We
refer readers to the CY 2012 ESRD PPS final rule (76 FR 70277) for a
discussion of the achievement and improvement standards that we have
established for clinical measures used in the ESRD QIP. We recently
codified definitions for the terms ``achievement threshold,''
``benchmark,'' ``improvement threshold,'' and ``performance standard''
in our regulations at Sec. 413.178(a)(1), (3), (7), and (12),
respectively.
a. Performance Standards for Clinical Measures in the PY 2024 ESRD QIP
At this time, we do not have the necessary data to assign numerical
values to the achievement thresholds, benchmarks, and 50th percentiles
of national performance for the clinical measures because we do not
have CY 2020 data. In the CY 2021 ESRD PPS proposed rule, we stated our
intent to publish these numerical values, using CY 2020 data, in the CY
2022 ESRD PPS final rule (85 FR 42190). However, we acknowledge that CY
2020 data may be impacted by the nationwide Extraordinary Circumstances
Exception (ECE) we granted to facilities in response to the COVID-19
PHE, which excluded data from the first and second quarter of CY 2020.
We are considering ways to address this and will provide further
guidance in the CY 2022 ESRD PPS proposed rule.
b. Performance Standards for the Reporting Measures in the PY 2024 ESRD
QIP
In the CY 2019 ESRD PPS final rule, we finalized the continued use
of existing performance standards for the Screening for Clinical
Depression and Follow-Up reporting measure, the Ultrafiltration Rate
reporting measure, the NHSN Dialysis Event reporting measure, and the
MedRec reporting measure (83 FR 57010 through 57011). In the CY 2021
ESRD PPS proposed rule (85 FR 42190), we stated that we will continue
use of these performance standards in PY 2024.
4. Scoring the PY 2024 ESRD QIP
a. Scoring Facility Performance on Clinical Measures
In the CY 2014 ESRD PPS final rule, we finalized policies for
scoring performance on clinical measures based on achievement and
improvement (78 FR 72215 through 72216). In the CY 2019 ESRD PPS final
rule, we finalized a policy to continue use of this methodology for
future payment years (83 FR 57011) and we codified these scoring
policies at Sec. 413.178(e).
b. Scoring Facility Performance on Reporting Measures
Our policy for scoring performance on reporting measures is
codified at Sec. 413.178(e), and more information on our scoring
policy for reporting measures can be found in the CY 2020 ESRD PPS
final rule (84 FR 60728). We previously finalized policies for scoring
performance on the NHSN Dialysis Event reporting measure in the CY 2018
ESRD PPS final rule (82 FR 50780 through 50781), as well as policies
for scoring the Ultrafiltration Rate reporting measure, MedRec
reporting measure, and Clinical Depression Screening and Follow-up
reporting measure in the CY 2019 ESRD PPS final rule (83 FR 57011). We
also previously finalized the scoring policy for the STrR reporting
measure in the CY 2020 ESRD PPS final rule (84 FR 60721 through 60723).
In section IV.C.3 of this final rule, we finalized our proposal to use
patient-months instead of facility-months when scoring the
Ultrafiltration Rate reporting measure.
5. Weighting the Measure Domains and the TPS for PY 2024
Under our current policy, we assign the Patient & Family Engagement
Measure Domain a weight of 15 percent of the TPS, the Care Coordination
Measure Domain a weight of 30 percent of the TPS, the Clinical Care
Measure Domain a weight of 40 percent of the TPS, and the Safety
Measure domain a weight of 15 percent of the TPS.
In the CY 2019 ESRD PPS final rule, we finalized a policy to assign
weights to individual measures and a policy to redistribute the weight
of unscored measures (83 FR 57011 through 57012). In the CY 2020 ESRD
PPS final rule, we finalized a policy to use the measure weights we
finalized for PY 2022 for the PY 2023 ESRD QIP and subsequent payment
years, and also to use the PY 2022 measure weight redistribution policy
for the PY 2023 ESRD QIP and subsequent payment years (84 FR 60728
through 60729). We did not propose any updates to these policies. Under
our current policy, a facility must be eligible to be scored on at
least one measure in two of the four measures domains in order to be
eligible to receive a TPS (83 FR 57012).
V. Collection of Information Requirements
A. Legislative Requirement for Solicitation of Comments
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. We
solicited comments in the proposed rule, which published in the Federal
Register on July 13, 2020 (85 FR 42132 through 42208). For the purpose
of transparency, we are republishing the discussion of the information
collection requirements. All of the requirements discussed in this
section are already accounted for in OMB approved information requests.
B. Additional Information Collection Requirements
This final rule does not impose any new information collection
requirements in the regulation text. However, this final rule does make
reference to several associated information collections that are not
discussed in the regulation text contained in this document. The
following is a discussion of these information collections.
1. ESRD QIP-Wage Estimates
To derive wages estimates, we used data from the U.S. Bureau of
Labor Statistics' May 2019 National Occupational Employment and Wage
Estimates. In the CY 2016 ESRD PPS final rule (80 FR 69069), we stated
that it was reasonable to assume that Medical Records and Health
Information Technicians, who are responsible for organizing and
managing health information data, are the individuals tasked with
submitting measure data to CROWNWeb and NHSN, as well as compiling and
submitting patient records for purpose of the data validation studies,
rather than a Registered Nurse, whose duties are centered on providing
and coordinating care for patients. We stated that the median hourly
wage of a Medical Records and Health Information Technician is $20.50
per hour.\210\ We also stated that fringe benefit and overhead are
calculated at 100 percent. Therefore, using these assumptions, we
estimated an hourly labor cost of $41.00 as the basis of the wage
estimates for all collections of information calculations in the ESRD
[[Page 71474]]
QIP. We adjusted these employee hourly wage estimates by a factor of
100 percent to reflect current HHS department-wide guidance on
estimating the cost of fringe benefits and overhead. We stated that
these are necessarily rough adjustments, both because fringe benefits
and overhead costs vary significantly from employer to employer and
because methods of estimating these costs vary widely from study to
study. Nonetheless, we stated that there is no practical alternative
and we believe that these are reasonable estimation methods.
---------------------------------------------------------------------------
\210\ https://www.bls.gov/oes/current/oes292098.htm.
---------------------------------------------------------------------------
We used this updated wage estimate, along with updated facility and
patient counts to re-estimate the total information collection burden
in the ESRD QIP for PY 2023 that we discussed in the CY 2020 ESRD QIP
final rule (84 FR 60787 through 60788) and to estimate the total
information collection burden in the ESRD QIP for PY 2024. We provided
the re-estimated information collection burden associated with the PY
2023 ESRD QIP and the newly estimated information collection burden
associated with the PY 2024 ESRD QIP in sections IV.D.2 and IV.D.3 of
this final rule.
2. Estimated Burden Associated With the Data Validation Requirements
for PY 2023 and PY 2024
In the CY 2020 ESRD PPS final rule, we finalized a policy to adopt
the CROWNWeb data validation methodology that we previously adopted for
the PY 2016 ESRD QIP as the methodology we would use to validate
CROWNWeb data for all payment years, beginning with PY 2021 (83 FR
57001 through 57002). Under this methodology, 300 facilities are
selected each year to submit 10 records to CMS, and we reimburse these
facilities for the costs associated with copying and mailing the
requested records. The burden associated with these validation
requirements is the time and effort necessary to submit the requested
records to a CMS contractor. In this final rule, we are updating these
estimates using a newly available wage estimate of a Medical Records
and Health Information Technician. We estimate that it will take each
facility approximately 2.5 hours to comply with this requirement. If
300 facilities are asked to submit records, we estimate that the total
combined annual burden for these facilities will be 750 hours (300
facilities x 2.5 hours). Since we anticipate that Medical Records and
Health Information Technicians or similar administrative staff will
submit these data, we estimate that the aggregate cost of the CROWNWeb
data validation each year will be approximately $30,750 (750 hours x
$41.00), or an annual total of approximately $102.50 ($30,750/300
facilities) per facility in the sample. The decrease in our burden
estimate is due to using the median hourly wage instead of the mean
hourly wage for Medical Records and Health Information Technicians or
similar staff and is not the result of any policies finalized in this
final rule. The burden associated with these requirements is captured
in an information collection request (OMB control number 0938-1289).
In section IV.C.7 of this final rule, we finalized our proposal to
reduce the number of records that a facility selected to participate in
the NHSN data validation study must submit to a CMS contractor,
beginning with PY 2023. Under this finalized policy, a facility is
required to submit records for 20 patients across any two quarters of
the year, instead of 20 records for each of the first two quarters of
the year. The burden associated with this policy is the time and effort
necessary to submit the requested records to a CMS contractor. Applying
our policy to reduce the number of records required from each facility
participating in the NHSN validation study, we estimate that it would
take each facility approximately 5 hours to comply with this
requirement. If 300 facilities are asked to submit records each year,
we estimate that the total combined annual burden hours for these
facilities per year would be 1,500 hours (300 facilities x 5 hours).
Since we anticipate that Medical Records and Health Information
Technicians or similar staff would submit these data, using the newly
available wage estimate of a Medical Records and Health Information
Technician, we estimate that the aggregate cost of the NHSN data
validation each year would be approximately $61,500 (1,500 hours x
$41), or a total of approximately $205 ($61,500/300 facilities) per
facility in the sample. The reduction in our burden estimate is due to
a reduction in the number of medical records collected and the
utilization of the median hourly wage instead of the mean hourly wage.
The burden associated with these requirements is captured in an
information collection request (OMB control number 0938-1340).
3. CROWNWeb Reporting Requirements for PY 2023 and PY 2024
To determine the burden associated with the CROWNWeb reporting
requirements, we look at the total number of patients nationally, the
number of data elements per patient-year that the facility would be
required to submit to CROWNWeb for each measure, the amount of time
required for data entry, the estimated wage plus benefits applicable to
the individuals within facilities who are most likely to be entering
data into CROWNWeb, and the number of facilities submitting data to
CROWNWeb. In the CY 2020 ESRD PPS final rule, we estimated that the
burden associated CROWNWeb reporting requirements for the PY 2023 ESRD
QIP was approximately $211 million (84 FR 60651).
We did not propose any changes that would affect the burden
associated with CROWNWeb reporting requirements for PY 2023 or PY 2024.
However, we have re-calculated the burden estimate for PY 2023 using
updated estimates of the total number of dialysis facilities, the total
number of patients nationally, and wages for Medical Records and Health
Information Technicians or similar staff as well as a refined estimate
of the number of hours needed to complete data entry for CROWNWeb
reporting. We note that the burden estimate for PY 2023 has been
updated from the estimates in the CY 2021 ESRD PPS proposed rule due to
updated information about the total number of facilities participating
in the ESRD QIP and the total number of patients. In the CY 2020 ESRD
PPS final rule, we estimated that the amount of time required to submit
measure data to CROWNWeb was 2.5 minutes per element and used a rounded
estimate of 0.042 hours in our calculations (84 FR 60788). In this
final rule, we did not use a rounded estimate of the time needed to
complete data entry for CROWNWeb reporting. There are 229 data elements
for 532,931 patients across 7,610 facilities. At 2.5 minutes per
element, this yields approximately 668.21 hours per facility.
Therefore, the PY 2023 burden is 5,085,050 hours (668.21 hours x 7,610
facilities). (Using the wage estimate of a Medical Records and Health
Information Technician, we estimate that the PY 2023 total burden cost
is approximately $208 million (5,085,050 hours x $41). There is no net
incremental burden change from PY 2023 to PY 2024 because we are not
changing the reporting requirements for PY 2024.
VI. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
We have examined the impacts of this rule as required by Executive
Order 12866 on Regulatory Planning and Review, Executive Order 13563 on
Improving Regulation and Regulatory
[[Page 71475]]
Review, the Regulatory Flexibility Act (RFA) (Pub. L. 96-354), section
1102(b) of the Social Security Act, section 202 of the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on
Federalism, the Congressional Review Act (5 U.S.C. 801 et seq.), and
Executive Order 13771 on Reducing Regulation and Controlling Regulatory
Costs.
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Section
3(f) of Executive Order 12866 defines a ``significant regulatory
action'' as an action that is likely to result in a rule: (1) Having an
annual effect on the economy of $100 million or more in any 1 year, or
adversely and materially affecting a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or state, local or tribal governments or communities (also
referred to as ``economically significant''); (2) creating a serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement grants, user fees, or loan programs or the rights and
obligations of recipients thereof; or (4) raising novel legal or policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive order.
A regulatory impact analysis (RIA) must be prepared for major rules
with economically significant effects ($100 million or more in any 1
year). This rule has been designated by the Office of Information and
Regulatory Affairs as an economically significant rule as measured by
the $100 million threshold, and hence also been designated as a major
rule under the Congressional Review Act. Accordingly, we have prepared
a RIA that to the best of our ability presents the costs and benefits
of the rulemaking.
We solicited comments on the regulatory impact analysis provided.
With regard to the ESRD PPS, we did not receive any comments on the
RIA.
2. Statement of Need
a. ESRD PPS
This rule finalizes a number of routine updates and several policy
changes to the ESRD PPS for CY 2021. The routine updates include the CY
2021 wage index values, the wage index budget-neutrality adjustment
factor, and outlier payment threshold amounts. Failure to publish this
final rule would result in ESRD facilities not receiving appropriate
payments in CY 2021 for renal dialysis services furnished to ESRD
beneficiaries.
b. AKI
This rule also finalizes routine updates to the payment for renal
dialysis services furnished by ESRD facilities to individuals with AKI.
Failure to publish this final rule would result in ESRD facilities not
receiving appropriate payments in CY 2021 for renal dialysis services
furnished to patients with AKI in accordance with section 1834(r) of
the Act.
c. ESRD QIP
This final rule finalizes updates to the ESRD QIP beginning with PY
2023, including a modification to the scoring methodology for the
Ultrafiltration Rate reporting measure and an update to the reporting
requirements for facilities selected for NHSN data validation. This
final rule also clarifies the review and correction timeline for the
NHSN BSI clinical measure and NHSN Dialysis Event reporting measure.
3. Overall Impact
a. ESRD PPS
We estimate that the final revisions to the ESRD PPS will result in
an increase of approximately $250 million in payments to ESRD
facilities in CY 2021, which includes the amount associated with
updates to the outlier thresholds, payment rate update, updates to the
wage index, adoption of the 2018 OMB delineations with a transition
period, and including calcimimetics in the ESRD PPS base rate. These
figures do not reflect estimated increases or decreases in expenditures
based on our expansion of eligibility for the TPNIES to certain new and
innovative home dialysis machines when used in the home for a single
patient. The fiscal impact of this policy cannot be determined due to
the uniqueness of each new and innovative home dialysis machine and its
cost.
b. AKI
We estimate that the updates to the AKI payment rate would result
in an increase of approximately $4 million in payments to ESRD
facilities in CY 2021.
c. ESRD QIP
For PY 2023, we have re-estimated the costs associated with the
information collection requirements under the ESRD QIP with updated
estimates of the total number of dialysis facilities, the total number
of patients nationally, wages for Medical Records and Health
Information Technicians or similar staff, and a refined estimate of the
number of hours needed to complete data entry for CROWNWeb reporting.
We note that the estimated costs have been updated from the estimates
in the CY 2021 ESRD PPS proposed rule due to updated information about
the total number of facilities participating in the ESRD QIP and the
total number of patients. We have made no changes to our methodology
for calculating the annual burden associated with the information
collection requirements for the CROWNWeb validation study and CROWNWeb
reporting. We updated the annual burden associated with the NHSN
validation study to reflect our new policy to reduce the total number
of records collected. The finalized updates will reduce the collection
of information requirements associated with the NHSN validation study
by $65,460 per year across the facilities selected for validation that
year.
We also finalized the payment reduction scale using more recent
data for the measures in the ESRD QIP measure set and applying our
finalized proposal to modify the scoring methodology for the
Ultrafiltration Rate reporting measure beginning with the PY 2023 ESRD
QIP. We estimate approximately $208 million in information collection
burden, which includes the cost of complying with this rule, and an
additional $16 million in estimated payment reductions across all
facilities for PY 2023.
For PY 2024, we estimate that the finalized revisions to the ESRD
QIP would result in $208 million in information collection burden, and
$16 million in estimated payment reductions across all facilities, for
an impact of $224 million as a result of the policies we have
previously finalized and the policies we have finalized in this final
rule.
4. Regulatory Review Cost Estimation
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this final rule, we
should estimate the cost associated with regulatory review. Due to the
uncertainty involved with accurately quantifying the number of entities
that will review the rule, we assume that the total number of unique
commenters on the CY 2021 ESRD PPS proposed rule will be the number of
reviewers of this final rule. We acknowledge that this assumption may
understate or overstate the costs of reviewing this rule. It is
possible that
[[Page 71476]]
not all commenters reviewed CY 2021 ESRD PPS proposed rule in detail,
and it is also possible that some reviewers chose not to comment on the
CY 2021 ESRD PPS proposed rule. For these reasons we thought that the
number of past commenters would be a fair estimate of the number of
reviewers of this rule.
We also recognize that different types of entities are in many
cases affected by mutually exclusive sections of this final rule, and
therefore, for the purposes of our estimate we assume that each
reviewer reads approximately 50 percent of the rule. We sought comments
on this assumption in the CY 2021 ESRD PPS proposed rule but did not
receive comments.
Using the wage information from the Bureau of Labor Statistics
(BLS) for medical and health services managers (Code 11-9111), we
estimate that the cost of reviewing this rule is $110.74 per hour,
including overhead and fringe benefits https://www.bls.gov/oes/current/oes_nat.htm. Assuming an average reading speed, we estimate that it
would take approximately 6.25 hours for the staff to review half of
this final. For each entity that reviews the rule, the estimated cost
is $692.13 (6.25 hours x $110.74). Therefore, we estimate that the
total cost of reviewing this regulation rounds to $81,671. ($692.13 x
118 reviewers).
B. Detailed Economic Analysis
1. CY 2021 End-Stage Renal Disease Prospective Payment System
a. Effects on ESRD Facilities
To understand the impact of the changes affecting payments to
different categories of ESRD facilities, it is necessary to compare
estimated payments in CY 2020 to estimated payments in CY 2021. To
estimate the impact among various types of ESRD facilities, it is
imperative that the estimates of payments in CY 2020 and CY 2021
contain similar inputs. Therefore, we simulated payments only for those
ESRD facilities for which we are able to calculate both current
payments and new payments.
For this final rule, we used CY 2019 data from the Part A and Part
B Common Working Files as of July 31, 2020, as a basis for Medicare
dialysis treatments and payments under the ESRD PPS. We updated the
2019 claims to 2020 and 2021 using various updates. The updates to the
ESRD PPS base rate are described in section II.B.4.d of this final
rule. Table 13 shows the impact of the estimated CY 2021 ESRD PPS
payments compared to estimated payments to ESRD facilities in CY 2020.
Table 13--Impact of Finalized Changes in Payment to ESRD Facilities for CY 2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
Effect of
Number of 2021 Effect of Effect of Effect of Effect of Effect of
Number of treatments changes in changes in CBSA change bundling change for total 2021
Facility type facilities (in outlier wage index & 5% cap calcimimetics payment proposed
(A) millions) policy (C) data (D) % policy (E) into base rate update changes (H)
(B) % % rate (F) % (G) % %
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Facilities................................ 7,659 45.3 0.4 0.0 0.0 -0.1 1.6 2.0
Type:
Freestanding.............................. 7,270 43.5 0.4 0.0 0.0 0.0 1.6 2.0
Hospital based............................ 389 1.8 0.9 0.1 0.1 -2.9 1.6 -0.2
Ownership Type:
Large dialysis organization............... 5,890 35.3 0.4 0.0 0.0 0.9 1.6 2.9
Regional chain............................ 956 5.8 0.3 -0.1 -0.1 -3.7 1.6 -1.9
Independent............................... 509 2.9 0.5 0.3 0.3 -2.6 1.6 0.0
Hospital based \1\........................ 302 1.4 0.9 0.1 0.2 -2.6 1.6 0.2
Unknown................................... 2 0.0 1.5 0.0 -0.1 1.3 1.6 4.4
Geographic Location: 2 3
Rural..................................... 1,292 6.5 0.4 0.1 -1.2 0.1 1.6 1.0
Urban..................................... 6,367 38.8 0.4 0.0 0.2 -0.1 1.6 2.1
Census Region:
East North Central........................ 1,223 6.0 0.5 0.1 -0.1 0.5 1.6 2.6
East South Central........................ 606 3.3 0.4 0.0 0.0 -0.8 1.6 1.1
Middle Atlantic........................... 852 5.4 0.5 0.5 0.2 -0.7 1.6 2.1
Mountain.................................. 423 2.4 0.3 -0.5 -0.1 1.0 1.6 2.4
New England............................... 203 1.4 0.4 -0.7 -0.1 0.2 1.6 1.4
Pacific \4\............................... 922 6.5 0.4 -0.1 0.1 0.6 1.6 2.5
Puerto Rico and Virgin Islands............ 52 0.3 0.3 0.1 -0.1 1.1 1.6 2.9
South Atlantic............................ 1,758 10.8 0.5 0.0 0.0 -0.6 1.6 1.4
West North Central........................ 514 2.3 0.6 -0.4 -0.1 0.5 1.6 2.2
West South Central........................ 1,106 6.7 0.4 0.0 0.0 -0.4 1.6 1.6
Facility Size:
Less than 4,000 treatments................ 1,377 2.2 0.5 0.0 0.0 0.5 1.6 2.7
4,000 to 9,999 treatments................. 2,999 12.8 0.5 0.0 -0.1 0.0 1.6 2.1
10,000 or more treatments................. 3,261 30.2 0.4 0.0 0.0 -0.2 1.6 1.9
Unknown................................... 22 0.1 0.5 0.1 -0.1 -3.4 1.6 -1.3
Percentage of Pediatric Patients:
Less than 2%.............................. 7,551 45.0 0.4 0.0 0.0 -0.1 1.6 1.9
Between 2% and 19%........................ 37 0.3 0.4 0.2 -0.1 -0.5 1.6 1.6
Between 20% and 49%....................... 16 0.0 0.4 -0.3 0.0 3.1 1.6 4.9
More than 50%............................. 55 0.0 0.3 0.0 -0.1 3.8 1.6 5.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes hospital-based ESRD facilities not reported to have large dialysis organization or regional chain ownership.
\2\ Facility counts for Urban/Rural uses 2021 CBSA delineation. Under 2020 and previous CBSA delineation, facility counts for urban and rural are 6,355
and 1,304 respectively. For payment percent change columns, appropriate definition of Urban/Rural is used.
\3\ The 1.2 percent drop in total payments among rural facilities (and increase in total payments among urban facilities) is mostly due facilities
shifting from rural to urban status under new CBSA delineation. Controlling for old-CBSA urban/rural status, the change in payment is close to 0
percent.
\4\ Includes ESRD facilities located in Guam, American Samoa, and the Northern Mariana Islands.
Column A of the impact table indicates the number of ESRD
facilities for each impact category and column B indicates the number
of dialysis treatments (in millions). The overall effect of the final
changes to the outlier payment policy described in section II.B.4.c of
this final rule is shown in column C. For CY 2021, the impact on
[[Page 71477]]
all ESRD facilities as a result of the changes to the outlier payment
policy would be a 0.4 percent increase in estimated payments. All ESRD
facilities are anticipated to experience a positive effect in their
estimated CY 2021 payments as a result of the final outlier policy
changes.
Column D shows the effect of the annual update to the wage index,
as described in section II.B.4.b of this final rule. That is, this
column reflects the update from the CY 2020 ESRD PPS wage index using
older OMB delineations with a basis of the FY 2021 pre-floor, pre-
reclassified IPPS hospital wage index data in a budget neutral manner.
The total impact of this change is 0.0 percent, however, there are
distributional effects of the change among different categories of ESRD
facilities. The categories of types of facilities in the impact table
show changes in estimated payments ranging from a 0.7 percent decrease
to a 0.5 percent increase due to the annual update to the ESRD PPS wage
index.
Column E shows the effect of adopting the 2018 OMB delineations and
the transition policy as described in sections II.B.4.b.(2) and
II.B.4.b.(3), respectively, of this final rule. That is, the impact
represented in this column reflects the change from using the older OMB
delineations and basing the CY 2021 ESRD PPS wage index on the FY 2021
pre-floor, pre-reclassified IPPS hospital wage index data to the 2018
OMB delineations and a 5 percent cap on wage index decreases in CY
2021, in a budget neutral manner. The total impact of this change is
0.0 percent, however, there are distributional effects of the change
among different categories of ESRD facilities. The categories of types
of facilities in the impact table show changes in estimated payments
ranging from a 1.2 percent decrease to a 0.3 percent increase due to
these updates to the ESRD PPS wage index.
Column F shows the effect of the final addition to the ESRD PPS
base rate to include calcimimetics as described in section II.B.1 of
this final rule. That is, the impact represented in this column
reflects the change, under the ESRD PPS, for payment to ESRD facilities
for furnishing calcimimetics. Beginning January 1, 2018, ESRD
facilities received payment for calcimimetics under the TDAPA policy in
Sec. 413.234(c). Under our final policy, beginning January 1, 2021, we
will modify the ESRD PPS base rate by adding $9.93 to include
calcimimetics and no longer pay for calcimimetics using the TDAPA. In
addition, calcimimetics would become outlier eligible services under
Sec. 413.237. The categories of types of facilities in the impact
table show changes in estimated payments ranging from a 3.7 percent
decrease to a 3.8percent increase due to these policy modifications.
Column G shows the effect of the final CY 2021 ESRD PPS payment
rate update as described in section II.B.4.a of this final rule. The
final ESRD PPS payment rate update is 1.6 percent, which reflects the
ESRDB market basket percentage increase factor for CY 2021 of 1.9
percent and the final MFP adjustment of 0.3 percentage point.
Column H reflects the overall impact, that is, the effects of the
final outlier policy changes, the final updated wage index and
transition policy, the payment rate update, and the addition to the
ESRD PPS base rate to include calcimimetics. We expect that overall
ESRD facilities would experience a 2.0 percent increase in estimated
payments in CY 2021. The categories of types of facilities in the
impact table show impacts ranging from a 1.9 percent decrease to a 5.6
percent increase in their CY 2021 estimated payments.
b. Effects on Other Providers
Under the ESRD PPS, Medicare pays ESRD facilities a single bundled
payment for renal dialysis services, which may have been separately
paid to other providers (for example, laboratories, durable medical
equipment suppliers, and pharmacies) by Medicare prior to the
implementation of the ESRD PPS. Therefore, in CY 2021, we estimate that
the final ESRD PPS would have zero impact on these other providers.
c. Effects on the Medicare Program
We estimate that Medicare spending (total Medicare program
payments) for ESRD facilities in CY 2021 would be approximately $9.3
billion. This estimate takes into account a projected decrease in fee-
for-service Medicare dialysis beneficiary enrollment of 8.6 percent in
CY 2021.
d. Effects on Medicare Beneficiaries
Under the ESRD PPS, beneficiaries are responsible for paying 20
percent of the ESRD PPS payment amount. As a result of the projected
2.0 percent overall increase in the final CY 2021 ESRD PPS payment
amounts, we estimate that there would be an increase in beneficiary co-
insurance payments of 2.0percent in CY 2021, which translates to
approximately $60 million.
e. Alternatives Considered
(1) Inclusion of Calcimimetics Into the ESRD PPS Bundled Payment
In section II.B.1 of this final rule, we established that beginning
January 1, 2021, we will modify the ESRD PPS base rate by adding $9.93
to include calcimimetics and no longer pay for calcimimetics using the
TDAPA. In addition, calcimimetics would become ESRD outlier services
eligible for outlier payments under Sec. 413.237. With regard to the
methodology utilized to calculate the amount to be added the ESRD PPS
base rate, for the CY 2021 ESRD PPS proposed rule, we considered using
the Medicare expenditures reflecting payments made for the
calcimimetics in CYs 2018 and 2019, that is, approximately $2.3 billion
and dividing by total treatments furnished in both years to arrive at
an amount of $27.08. However, using the most recent calendar quarter of
ASP data available to calculate the ASP-based values as the proxy rate
incorporates the lower priced generic calcimimetics into the
calculation of the amount added for oral calcimimetics. We believe it
is appropriate for the ESRD PPS base rate to reflect generic drug
manufacturer ASP data since we believe that this aligns with how ESRD
facilities would purchase and furnish the oral calcimimetics in the
future.
For the final rule, we considered several alternative approaches:
(1) Using the most recent 12 months of claims data, which would result
in a base rate increase of $11.85; (2) using only 2019 claims data,
which would result in a base rate increase of $11.10; and (3) using
both CYs 2018 and 2019 claims data, which would result in a base rate
increase of $8.52. We believe a robust data set should reflect both the
slow uptake of the injectable calcimimetic and the ramping up of
utilization of generic oral calcimimetics. We view the use of 18 months
as a mid-point between the proposal to use both CYs 2018 and 2019 and
the most recent 12 months of claims data, as requested by commenters.
Accordingly, we have concluded that using 18 months of claims data
resulting in an increase of $9.93 to the base rate is the most
appropriate approach.
(2) Expansion of the TPNIES to Capital-Related Assets That Are Home
Dialysis Machines When Used in the Home for a Single Patient
In section II.B.3 of this final rule, we expanded the TPNIES policy
to allow capital-related assets that are home dialysis machines when
used in the home for a single patient to be eligible for the add-on
payment adjustment. Then, consistent with the policies finalized last
year for other renal dialysis equipment and supplies eligible for the
TPNIES, we would pay 65 percent of the pre-adjusted per
[[Page 71478]]
treatment amount for a period of 2 years. With regard to the duration
of applying the TPNIES for capital-related assets that are home
dialysis machines when used in the home for a single patient, we
considered paying the TPNIES for 3 years. However, we believe that the
expansion is consistent with the TDAPA and other Medicare fee-for-
service add-on payment programs (for example, the IPPS NTAP), and
supports innovation for dialysis in the home setting, the President's
Executive order on Advancing American Kidney Health, and current HHS
initiatives to support home dialysis, while taking into account the
potential increase in ESRD PPS expenditures.
(3) CY 2021 ESRD PPS Wage Index
In section II.B.4.b of this final rule, we adopted the 2018 OMB
delineations with a transition policy. That is, we are adopting the OMB
delineations based on the September 14, 2018 OMB Bulletin No. 18-04
and, to mitigate any potential negative impacts, we applied a 5 percent
cap on any decrease in an ESRD facility's wage index from the ESRD
facility's wage index from the prior calendar year. This transition
would be phased in over 2 years, such that the estimated reduction in
an ESRD facility's wage index would be capped at 5 percent in CY 2021
and no cap would be applied to the reduction in the wage index for the
second year, CY 2022. With regard to the transition policy, we
considered doing a 2-year 50/50 blended wage index approach consistent
with the adoption of OMB delineations in the CY 2015 ESRD PPS final
rule (79 FR 66142). However, we determined that the 5 percent cap on
any decrease policy would be an appropriate transition for CY 2021 as
it provides predictability in payment levels from CY 2020 to the
upcoming CY 2021 and additional transparency because it is
administratively simpler than the 50/50 blended approach.
2. Final Payment for Renal Dialysis Services Furnished to Individuals
With AKI
a. Effects on ESRD Facilities
To understand the impact of the changes affecting payments to
different categories of ESRD facilities for renal dialysis services
furnished to individuals with AKI, it is necessary to compare estimated
payments in CY 2020 to estimated payments in CY 2021. To estimate the
impact among various types of ESRD facilities for renal dialysis
services furnished to individuals with AKI, it is imperative that the
estimates of payments in CY 2020 and CY 2021 contain similar inputs.
Therefore, we simulated payments only for those ESRD facilities for
which we are able to calculate both current payments and new payments.
For this final rule, we used CY 2019 data from the Part A and Part
B Common Working Files as of July 31, 2020, as a basis for Medicare for
renal dialysis services furnished to individuals with AKI. We updated
the 2019 claims to 2020 and 2021 using various updates. The updates to
the AKI payment amount are described in section III.B of this final
rule. Table 14 shows the impact of the estimated CY 2021 payments for
renal dialysis services furnished to individuals with AKI compared to
estimated payments for renal dialysis services furnished to individuals
with AKI in CY 2020.
Table 14--Impact of Final Changes in Payment for Renal Dialysis Services Furnished to Individuals With AKI for CY 2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
Effect of
bundling Effect of Effect of
Number of Number of Effect of all calcimimetics changes in total 2021
Facility type facilities (A) treatments (in wage index in the ESRD payment rate final changes
thousands) (B) changes (C) % PPS base rate update (E) % (F) %
(D) %
--------------------------------------------------------------------------------------------------------------------------------------------------------
All Facilities.......................................... 5,141 296.4 -0.1 4.2 1.6 5.7
Type:
Freestanding........................................ 5,013 290.7 -0.1 4.2 1.6 5.7
Hospital based...................................... 128 5.7 -0.1 4.2 1.6 5.8
Ownership Type:
Large dialysis organization......................... 4,280 250.7 -0.1 4.2 1.6 5.7
Regional chain...................................... 596 30.0 -0.1 4.2 1.6 5.7
Independent......................................... 185 12.1 0.1 4.2 1.6 6.0
Hospital based \1\.................................. 80 3.6 0.0 4.2 1.6 5.9
Unknown............................................. 0 0.0 0.0 0.0 0.0 0.0
Geographic Location: \2\
Rural............................................... 885 46.3 -0.1 4.2 1.6 5.7
Urban............................................... 4,256 250.0 -0.1 4.2 1.6 5.8
Census Region:
East North Central.................................. 892 54.3 0.0 4.2 1.6 5.8
East South Central.................................. 408 21.0 -0.2 4.2 1.6 5.6
Middle Atlantic..................................... 535 33.1 0.4 4.2 1.6 6.2
Mountain............................................ 294 17.4 -0.5 4.2 1.6 5.3
New England......................................... 159 8.6 -0.8 4.2 1.6 4.9
Pacific \3\......................................... 607 45.8 -0.1 4.2 1.6 5.7
Puerto Rico and Virgin Islands...................... 2 0.0 -0.1 4.2 1.6 5.8
South Atlantic...................................... 1,211 68.6 0.0 4.2 1.6 5.8
West North Central.................................. 352 14.2 -0.5 4.2 1.6 5.3
West South Central.................................. 681 33.2 0.0 4.2 1.6 5.8
Facility Size:
Less than 4,000 treatments.......................... 606 23.2 -0.1 4.2 1.6 5.7
4,000 to 9,999 treatments........................... 2,076 106.6 -0.1 4.2 1.6 5.8
10,000 or more treatments........................... 2,455 166.4 -0.1 4.2 1.6 5.7
Unknown............................................. 4 0.2 -0.5 4.2 1.6 5.3
Percentage of Pediatric Patients:
Less than 2%........................................ 5,141 296.4 -0.1 4.2 1.6 5.7
[[Page 71479]]
Between 2% and 19%.................................. 0 0.0 0.0 0.0 0.0 0.0
Between 20% and 49%................................. 0 0.0 0.0 0.0 0.0 0.0
More than 50%....................................... 0 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes hospital-based ESRD facilities not reported to have large dialysis organization or regional chain ownership.
\2\ Facility counts for Urban/Rural uses 2021 CBSA delineation. Under 2020 and previous CBSA delineation, facility counts for urban and rural are 4,246
and 895 respectively. For payment percent change columns, appropriate definition of Urban/Rural is used.
\3\Includes ESRD facilities located in Guam, American Samoa, and the Northern Mariana Islands.
Column A of the impact table indicates the number of ESRD
facilities for each impact category and column B indicates the number
of AKI dialysis treatments (in thousands).
Column C shows the effect of the final CY 2021 wage indices.
Column D shows the effect of the adjustment to the AKI dialysis
payment rate that reciprocates the modification to the ESRD PPS base
rate for CY 2021, consistent with Sec. 413.372. As discussed in
section II.B.1 of this final rule, we modified the ESRD PPS base rate
by adding $9.93 to include calcimimetics.
Column E shows the effect of the final CY 2021 ESRD PPS payment
rate update. The ESRD PPS payment rate update is 1.6 percent, which
reflects the final ESRDB market basket percentage increase factor for
CY 2021 of 1.9 percent and the final MFP adjustment of 0.3 percentage
point.
Column F reflects the overall impact, that is, the effects of the
updated wage index, the final addition to the ESRD PPS base rate, and
the payment rate update. We expect that overall ESRD facilities would
experience a 5.7 percent increase in estimated payments in CY 2021. The
categories of types of facilities in the impact table show impacts
ranging from an increase of 0.0 percent to 6.2 percent in their CY 2021
estimated payments.
b. Effects on Other Providers
Under section 1834(r) of the Act, as added by section 808(b) of
TPEA, we updated the payment rate for renal dialysis services furnished
by ESRD facilities to beneficiaries with AKI. The only two Medicare
providers and suppliers authorized to provide these outpatient renal
dialysis services are hospital outpatient departments and ESRD
facilities. The decision about where the renal dialysis services are
furnished is made by the patient and his or her physician. Therefore,
this update will have zero impact on other Medicare providers.
c. Effects on the Medicare Program
We estimate approximately $56 million would be paid to ESRD
facilities in CY 2021 as a result of AKI patients receiving renal
dialysis services in the ESRD facility at the lower ESRD PPS base rate
versus receiving those services only in the hospital outpatient setting
and paid under the outpatient prospective payment system, where
services were required to be administered prior to the TPEA.
d. Effects on Medicare Beneficiaries
Currently, beneficiaries have a 20 percent co-insurance obligation
when they receive AKI dialysis in the hospital outpatient setting. When
these services are furnished in an ESRD facility, the patients would
continue to be responsible for a 20 percent co-insurance. Because the
AKI dialysis payment rate paid to ESRD facilities is lower than the
outpatient hospital PPS's payment amount, we would expect beneficiaries
to pay less co-insurance when AKI dialysis is furnished by ESRD
facilities.
e. Alternatives Considered
As we discussed in the CY 2017 ESRD PPS proposed rule (81 FR
42870), we considered adjusting the AKI payment rate by including the
ESRD PPS case-mix adjustments, and other adjustments at section
1881(b)(14)(D) of the Act, as well as not paying separately for AKI
specific drugs and laboratory tests. We ultimately determined that
treatment for AKI is substantially different from treatment for ESRD
and the case-mix adjustments applied to ESRD patients may not be
applicable to AKI patients and as such, including those policies and
adjustment would be inappropriate. We continue to monitor utilization
and trends of items and services furnished to individuals with AKI for
purposes of refining the payment rate in the future. This monitoring
would assist us in developing knowledgeable, data-driven proposals.
3. ESRD QIP
a. Effects of the PY 2023 ESRD QIP on ESRD Facilities
The ESRD QIP is intended to prevent possible reductions in the
quality of ESRD dialysis facility services provided to beneficiaries.
The general methodology that we are using to determine a facility's TPS
is described in our regulations at Sec. 413.178(e).
Any reductions in the ESRD PPS payments as a result of a facility's
performance under the PY 2023 ESRD QIP will apply to the ESRD PPS
payments made to the facility for services furnished in CY 2023, as
codified in our regulations at Sec. 413.177.
For the PY 2023 ESRD QIP, we estimate that, of the 7,610 dialysis
facilities (including those not receiving a TPS) enrolled in Medicare,
approximately 24.3 percent or 1,790 of the facilities that have
sufficient data to calculate a TPS would receive a payment reduction
for PY 2023. After finalizing our proposal to update the scoring
methodology for the Ultrafiltration Rate reporting measure, the total
estimated payment reductions for all the 1,790 facilities expected to
receive a payment reduction in PY 2023 would decrease from
$18,247,083.76 to approximately $15,770,179.33. We note that the total
estimated payment reductions for PY 2023 have been updated from the
estimates in the CY 2021 ESRD PPS proposed rule due to updated
information about the total number of facilities expected to receive a
payment reduction. Facilities that do not receive a TPS do not receive
a payment reduction.
Table 15 shows the overall estimated distribution of payment
reductions resulting from the PY 2023 ESRD QIP.
[[Page 71480]]
Table 15--Estimated Distribution of PY 2023 ESRD QIP Payment Reductions
------------------------------------------------------------------------
Number of Percent of
Payment reduction (percent) facilities facilities *
------------------------------------------------------------------------
0.0..................................... 5,590 75.75
0.5..................................... 1,329 18.01
1.0..................................... 372 5.04
1.5..................................... 64 0.87
2.0..................................... 25 0.34
------------------------------------------------------------------------
* 230 facilities not scored due to insufficient data.
To estimate whether a facility would receive a payment reduction
for PY 2023, we scored each facility on achievement and improvement on
several clinical measures we have previously finalized and for which
there were available data from CROWNWeb and Medicare claims. Payment
reduction estimates are calculated using the most recent data available
(specified in Table 16) in accordance with the policies finalized in
this final rule. Measures used for the simulation are shown in Table
16. These estimates also incorporate the finalized update to the
scoring methodology for the Ultrafiltration Rate reporting measure.
Table 16--Data Used To Estimate PY 2023 ESRD QIP Payment Reductions
----------------------------------------------------------------------------------------------------------------
Period of time used to
calculate achievement
thresholds, 50th
Measure percentiles of the Performance period
national performance,
benchmarks, and
improvement thresholds
----------------------------------------------------------------------------------------------------------------
ICH CAHPS Survey..................... Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
SRR.................................. Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
SHR.................................. Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
PPPW................................. Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
Kt/V Dialysis Adequacy Comprehensive. Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
VAT:
Standardized Fistula Ratio....... Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
% Catheter....................... Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
Hypercalcemia........................ Jan 2018-Dec 2018...... Jan 2019-Dec 2019.
----------------------------------------------------------------------------------------------------------------
For all measures except Standardized Hospitalization Ratio (SHR)
and Standardized Readmission Ratio (SRR), clinical measures with less
than 11 patients for a facility were not included in that facility's
TPS. For SHR and STrR, facilities were required to have at least 5
patient-years at risk and 11 index discharges, respectively, in order
to be included in the facility's TPS. Each facility's TPS was compared
to an estimated mTPS and an estimated payment reduction table that were
consistent with the proposals outlined in sections IV.C and IV.D of
this final rule. Facility reporting measure scores were estimated using
available data from CY 2019. Facilities were required to have at least
one measure in at least two domains to receive a TPS.
To estimate the total payment reductions in PY 2023 for each
facility resulting from this final rule, we multiplied the total
Medicare payments to the facility during the 1-year period between
January 2019 and December 2019 by the facility's estimated payment
reduction percentage expected under the ESRD QIP, yielding a total
payment reduction amount for each facility.
Table 17 shows the estimated impact of the finalized ESRD QIP
payment reductions to all ESRD facilities for PY 2023. The table also
details the distribution of ESRD facilities by size (both among
facilities considered to be small entities and by number of treatments
per facility), geography (both rural and urban and by region), and
facility type (hospital based and freestanding facilities). Given that
the performance period used for these calculations differs from the
performance period we are using for the PY 2023 ESRD QIP, the actual
impact of the PY 2023 ESRD QIP may vary significantly from the values
provided here.
Table 17--Estimated Impact of QIP Payment Reductions to ESRD Facilities for PY 2023
----------------------------------------------------------------------------------------------------------------
Number of Payment
Number of facilities reduction
Number of treatments Number of expected to (percent
facilities 2019 (in facilities receive a change in
millions) with QIP score payment total ESRD
reduction payments)
----------------------------------------------------------------------------------------------------------------
All Facilities.................. 7,610 44.8 7,380 1,790 -0.16
Facility Type:
Freestanding................ 7,224 43.1 7,035 1,684 -0.15
Hospital-based.............. 386 1.8 345 106 -0.25
Ownership Type:
Large Dialysis.............. 5,809 34.8 5,690 1,194 -0.12
Regional Chain.............. 944 5.7 923 280 -0.21
Independent................. 534 2.9 491 227 -0.36
Hospital-based (non-chain).. 299 1.3 264 85 -0.28
Unknown..................... 24 0.0 12 4 -0.25
Facility Size:
Large Entities.............. 6,753 40.6 6,613 1,474 -0.13
Small Entities \1\.......... 833 4.3 755 312 -0.33
Unknown..................... 24 0.0 12 4 -0.25
[[Page 71481]]
Rural Status:
(1) Yes..................... 1,292 6.5 1,239 180 -0.09
(2) No...................... 6,318 38.4 6,141 1,610 -0.17
Census Region:
Northeast................... 1,046 6.7 1,002 251 -0.15
Midwest..................... 1,734 8.3 1,664 424 -0.17
South....................... 3,452 20.6 3,370 877 -0.17
West........................ 1,318 8.7 1,285 199 -0.09
U.S. Territories \2\........ 60 0.4 59 39 -0.44
Census Division:
Unknown..................... 8 0.1 8 3 -0.25
East North Central.......... 1,220 6.0 1,172 354 -0.21
East South Central.......... 604 3.3 593 142 -0.13
Middle Atlantic............. 845 5.4 808 222 -0.17
Mountain.................... 419 2.4 406 61 -0.09
New England................. 201 1.4 194 29 -0.09
Pacific..................... 899 6.3 879 138 -0.09
South Atlantic.............. 1,746 10.7 1,703 454 -0.17
West North Central.......... 7,610 44.8 7,380 1,790 -0.16
West South Central.......... 7,224 43.1 7,035 1,684 -0.15
U.S. Territories \2\........ 47 0.3 47 46 -1.57
Facility Size (# of total 386 1.8 345 106 -0.25
treatments):
Less than 4,000 treatments.. 5,809 34.8 5,690 1,194 -0.12
4,000-9,999 treatments...... 2,644 11.9 2,620 488 -0.11
Over 10,000 treatments...... 944 5.7 923 280 -0.21
Unknown..................... 534 2.9 491 227 -0.36
----------------------------------------------------------------------------------------------------------------
\1\ Small Entities include hospital-based and satellite facilities, and non-chain facilities based on DFC self-
reported status.
\2\ Includes American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and Virgin Islands.
b. Effects of the PY 2024 ESRD QIP on ESRD Facilities
For the PY 2024 ESRD QIP, we estimate that, of the 7,610 dialysis
facilities (including those not receiving a TPS) enrolled in Medicare,
approximately 24.3 percent or 1,790 of the facilities that have
sufficient data to calculate a TPS would receive a payment reduction
for PY 2024. The total payment reductions for all the 1,790 facilities
expected to receive a payment reduction is approximately
$15,770,179.33. We note that the total payment reductions for PY 2024
have been updated from the estimates in the CY 2021 ESRD PPS proposed
rule due to updated information about the total number of facilities
expected to receive a payment reduction. Facilities that do not receive
a TPS do not receive a payment reduction.
Table 18 shows the overall estimated distribution of payment
reductions resulting from the PY 2024 ESRD QIP.
Table 18--Estimated Distribution of PY 2024 ESRD QIP Payment Reductions
------------------------------------------------------------------------
Number of Percent of
Payment reduction (percent) facilities facilities *
------------------------------------------------------------------------
0.0..................................... 5,590 75.75
0.5..................................... 1,329 18.01
1.0..................................... 372 5.04
1.5..................................... 64 0.87
2.0..................................... 25 0.34
------------------------------------------------------------------------
* Note: 230 facilities not scored due to insufficient data.
To estimate whether a facility would receive a payment reduction in
PY 2024, we scored each facility on achievement and improvement on
several clinical measures we have previously finalized and for which
there were available data from CROWNWeb and Medicare claims. Payment
reduction estimates were calculated using the most recent data
available (specified in Table 18) in accordance with the policies
finalized in this final rule. Measures used for the simulation are
shown in Table 19.
Table 19--Data Used To Estimate PY 2024 ESRD QIP Payment Reductions
----------------------------------------------------------------------------------------------------------------
Period of time used to
calculate achievement
thresholds, 50th
Measure percentiles of the Performance period
national performance,
benchmarks, and
improvement thresholds
----------------------------------------------------------------------------------------------------------------
ICH CAHPS Survey....................... Jan 2018-Dec 2018......... Jan 2019-Dec 2019.
SRR.................................... Jan 2018-Dec 2018......... Jan 2019-Dec 2019.
SHR.................................... Jan 2018-Dec 2018......... Jan 2019-Dec 2019.
PPPW................................... Jan 2018-Dec 2018......... Jan 2019-Dec 2019.
Kt/V Dialysis Adequacy Comprehensive... Jan 2018-Dec 2018......... Jan 2019-Dec 2019.
VAT:
Standardized Fistula Ratio......... Jan 2018-Dec 2018......... Jan 2019-Dec 2019
[[Page 71482]]
% Catheter......................... Jan 2018-Dec 2018......... Jan 2019-Dec 2019.
Hypercalcemia.......................... Jan 2018-Dec 2018......... Jan 2019-Dec 2019.
----------------------------------------------------------------------------------------------------------------
For all measures except SHR, SRR, and the STrR reporting measure,
measures with less than 11 patients for a facility were not included in
that facility's TPS. For SHR and SRR, facilities were required to have
at least 5 patient-years at risk and 11 index discharges, respectively,
in order to be included in the facility's TPS. For the STrR reporting
measure, facilities were required to have at least 10 patient-years at
risk in order to be included in the facility's TPS. Each facility's TPS
was compared to an estimated mTPS and an estimated payment reduction
table that incorporates the policies outlined in section IV.C and IV.D
of this final rule. Facility reporting measure scores were estimated
using available data from CY 2019. Facilities were required to have at
least one measure in at least two domains to receive a TPS.
To estimate the total payment reductions in PY 2024 for each
facility resulting from this final rule, we multiplied the total
Medicare payments to the facility during the 1-year period between
January 2019 and December 2019 by the facility's estimated payment
reduction percentage expected under the ESRD QIP, yielding a total
payment reduction amount for each facility.
Table 20 shows the estimated impact of the finalized ESRD QIP
payment reductions to all ESRD facilities for PY 2024. The table
details the distribution of ESRD facilities by size (both among
facilities considered to be small entities and by number of treatments
per facility), geography (both rural and urban and by region), and
facility type (hospital based and freestanding facilities). Given that
the performance period used for these calculations differs from the
performance period we are finalizing to use for the PY 2024 ESRD QIP,
the actual impact of the PY 2024 ESRD QIP may vary significantly from
the values provided here.
Table 20--Estimated Impact of QIP Payment Reductions to ESRD Facilities for PY 2024
----------------------------------------------------------------------------------------------------------------
Number of Payment
Number of facilities reduction
Number of treatments Number of expected to (percent
facilities 2019 (in facilities receive a change in
millions) with QIP score payment total ESRD
reduction payments)
----------------------------------------------------------------------------------------------------------------
All Facilities.................. 7,610 44.8 7,380 1,790 -0.16
Facility Type:
Freestanding................ 7,224 43.1 7,035 1,684 -0.15
Hospital-based.............. 386 1.8 345 106 -0.25
Ownership Type:
Large Dialysis.............. 5,809 34.8 5,690 1,194 -0.12
Regional Chain.............. 944 5.7 923 280 -0.21
Independent................. 534 2.9 491 227 -0.36
Hospital-based (non-chain).. 299 1.3 264 85 -0.28
Unknown..................... 24 0.0 12 4 -0.25
Facility Size:
Large Entities.............. 6,753 40.6 6,613 1,474 -0.13
Small Entities \1\.......... 833 4.3 755 312 -0.33
Unknown..................... 24 0.0 12 4 -0.25
Rural Status:
(1) Yes..................... 1,292 6.5 1,239 180 -0.09
(2) No...................... 6,318 38.4 6,141 1,610 -0.17
Census Region:
Northeast................... 1,046 6.7 1,002 251 -0.15
Midwest..................... 1,734 8.3 1,664 424 -0.17
South....................... 3,452 20.6 3,370 877 -0.17
West........................ 1,318 8.7 1,285 199 -0.09
U.S. Territories \2\........ 60 0.4 59 39 -0.44
Census Division:
Unknown..................... 8 0.1 8 3 -0.25
East North Central.......... 1,220 6.0 1,172 354 -0.21
East South Central.......... 604 3.3 593 142 -0.13
Middle Atlantic............. 845 5.4 808 222 -0.17
Mountain.................... 419 2.4 406 61 -0.09
New England................. 201 1.4 194 29 -0.09
Pacific..................... 899 6.3 879 138 -0.09
South Atlantic.............. 1,746 10.7 1,703 454 -0.17
West North Central.......... 514 2.3 492 70 -0.09
West South Central.......... 1,102 6.7 1,074 281 -0.17
U.S. Territories \2\........ 52 0.3 51 36 -0.48
Facility Size (# of total
treatments):
Less than 4,000 treatments.. 1,315 2.6 1,195 265 -0.18
[[Page 71483]]
4,000-9,999 treatments...... 2,803 12.2 2,771 530 -0.12
Over 10,000 treatments...... 3,246 29.7 3,240 961 -0.18
Unknown..................... 246 0.3 174 34 -0.16
----------------------------------------------------------------------------------------------------------------
\1\ Small Entities include hospital-based and satellite facilities, and non-chain facilities based on DFC self-
reported status.
\2\ Includes American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and Virgin Islands.
c. Effects on Other Providers
The ESRD QIP is applicable to dialysis facilities. We are aware
that several of our measures impact other providers. For example, with
the introduction of the SRR clinical measure in PY 2017 and the SHR
clinical measure in PY 2020, we anticipate that hospitals may
experience financial savings as dialysis facilities work to reduce the
number of unplanned readmissions and hospitalizations. We are exploring
various methods to assess the impact these measures have on hospitals
and other facilities, such as through the impacts of the Hospital
Readmissions Reduction Program and the Hospital-Acquired Condition
Reduction Program, and we intend to continue examining the interactions
between our quality programs to the greatest extent feasible.
d. Effects on the Medicare Program
For PY 2024, we estimate that the ESRD QIP would contribute
approximately $15,770,179.33 in Medicare savings. For comparison, Table
21 shows the payment reductions that we estimate will be applied by the
ESRD QIP from PY 2018 through PY 2024.
Table 21--Estimated Payment Reductions Payment Years 2018 Through 2024
------------------------------------------------------------------------
Payment year Estimated payment reductions
------------------------------------------------------------------------
PY 2024................................... $15,770,179.33.
PY 2023................................... 15,770,179.33.
PY 2022................................... 18,247,083.76 (84 FR 60794).
PY 2021................................... 32,196,724 (83 FR 57062).
PY 2020................................... 31,581,441 (81 FR 77960).
PY 2019................................... 15,470,309 (80 FR 69074).
PY 2018................................... 11,576,214 (79 FR 66257).
------------------------------------------------------------------------
e. Effects on Medicare Beneficiaries
The ESRD QIP is applicable to dialysis facilities. Since the
Program's inception, there is evidence on improved performance on ESRD
QIP measures. As we stated in the CY 2018 ESRD PPS final rule, one
objective measure we can examine to demonstrate the improved quality of
care over time is the improvement of performance standards (82 FR
50795). As the ESRD QIP has refined its measure set and as facilities
have gained experience with the measures included in the Program,
performance standards have generally continued to rise. We view this as
evidence that facility performance (and therefore the quality of care
provided to Medicare beneficiaries) is objectively improving. We are in
the process of monitoring and evaluating trends in the quality and cost
of care for patients under the ESRD QIP, incorporating both existing
measures and new measures as they are implemented in the Program. We
will provide additional information about the impact of the ESRD QIP on
beneficiaries as we learn more. However, in future years we are
interested in examining these impacts through the analysis of available
data from our existing measures.
f. Alternatives Considered
In section IV.C.7 of this final rule, we finalized our policy that
facilities selected to participate in the NHSN data validation study
can submit a total of 20 records across two quarters. In the CY 2021
ESRD PPS proposed rule, we stated that we considered retaining our
current reporting requirement, under which facilities must submit 20
records per quarter for each of the first two quarters of the CY, for a
total of 40 records (85 FR 42204). However, we concluded that the
reduction in patient records provides an adequate sample size for the
validation. After considering public comments, we finalized this
approach in this final rule because we believe that it will lower
administrative costs and will reduce the burden on facilities.
C. Accounting Statement
As required by OMB Circular A-4 (available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf), in Table 22, we have prepared an accounting statement showing
the classification of the transfers and costs associated with the
various provisions of this final rule.
Table 22--Accounting Statement: Classification of Estimated Transfers
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
ESRD PPS and AKI (CY 2021)
------------------------------------------------------------------------
Annualized Monetized Transfers............ $190 million.
From Whom to Whom......................... Federal Government to ESRD
providers.
Increased Beneficiary Co-insurance $60 million.
Payments.
From Whom to Whom......................... Beneficiaries to ESRD
providers.
------------------------------------------------------------------------
ESRD QIP for PY 2023
------------------------------------------------------------------------
Annualized Monetized Transfers............ -$16 million.
From Whom to Whom......................... Federal Government to ESRD
providers.
------------------------------------------------------------------------
ESRD QIP for PY 2024
------------------------------------------------------------------------
Annualized Monetized Transfers............ -$16 million.
From Whom to Whom......................... Federal Government to ESRD
providers.
------------------------------------------------------------------------
In accordance with the provisions of Executive Order 12866, this
final rule was reviewed by the Office of Management and Budget.
D. Regulatory Flexibility Act Analysis (RFA)
The Regulatory Flexibility Act requires agencies to analyze options
for regulatory relief of small entities, if a rule has a significant
impact on a substantial number of small entities. For purposes of the
RFA, small entities
[[Page 71484]]
include small businesses, nonprofit organizations, and small
governmental jurisdictions. Approximately 11 percent of ESRD dialysis
facilities are considered small entities according to the Small
Business Administration's (SBA) size standards, which classifies small
businesses as those dialysis facilities having total revenues of less
than $41.5 million in any 1 year. Individuals and states are not
included in the definitions of a small entity. For more information on
SBA's size standards, see the Small Business Administration's website
at https://www.sba.gov/content/small-business-size-standards (Kidney
Dialysis Centers are listed as 621492 with a size standard of $41.5
million).
We do not believe ESRD facilities are operated by small government
entities such as counties or towns with populations of 50,000 or less,
and therefore, they are not enumerated or included in this estimated
RFA analysis. Individuals and states are not included in the definition
of a small entity.
For purposes of the RFA, we estimate that approximately 11 percent
of ESRD facilities are small entities as that term is used in the RFA
(which includes small businesses, nonprofit organizations, and small
governmental jurisdictions). This amount is based on the number of ESRD
facilities shown in the ownership category in Table 13. Using the
definitions in this ownership category, we consider 509 facilities that
are independent and 302 facilities that are shown as hospital-based to
be small entities. The ESRD facilities that are owned and operated by
Large Dialysis Organizations (LDOs) and regional chains would have
total revenues of more than $41.5 million in any year when the total
revenues for all locations are combined for each business (individual
LDO or regional chain), and are not, therefore, included as small
entities.
For the ESRD PPS updates finalized in this rule, a hospital-based
ESRD facility (as defined by type of ownership, not by type of dialysis
facility) is estimated to receive a 0.2 percent increase in payments
for CY 2021. An independent facility (as defined by ownership type) is
estimated to receive no update in payments for CY 2021.
For AKI dialysis, we are unable to estimate whether patients would
go to ESRD facilities, however, we have estimated there is a potential
for $56 million in payment for AKI dialysis treatments that could
potentially be furnished in ESRD facilities.
For the ESRD QIP, we estimate that of the 1,790 ESRD facilities
expected to receive a payment reduction as a result of their
performance on the PY 2024 ESRD QIP, 267 are ESRD small entity
facilities. We present these findings in Table 18 (``Estimated
Distribution of PY 2024 ESRD QIP Payment Reductions'') and Table 20
(``Estimated Impact of QIP Payment Reductions to ESRD Facilities for PY
2024''). We note that these estimates have been updated from the CY
2021 ESRD PPS proposed rule due to updated information about both the
total number of facilities and the total number of small entity
facilities expected to receive a payment reduction. We estimate that
the payment reductions would average approximately $9,770.87 per
facility across the 1,790 facilities receiving a payment reduction, and
$10,748.02 for each small entity facility. We also estimate that there
are 833 small entity facilities in total, and that the aggregate ESRD
PPS payments to these facilities would decrease 0.33 percent in CY
2024.
Therefore, the Secretary has determined that this final rule would
not have a significant economic impact on a substantial number of small
entities. The economic impact assessment is based on estimated Medicare
payments (revenues) and HHS's practice in interpreting the RFA is to
consider effects economically ``significant'' only if greater than 5
percent of providers reach a threshold of 3 to 5 percent or more of
total revenue or total costs. We solicited comment on the RFA analysis
provided. We received no comments on this section.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has fewer than 100 beds. We do not believe this
final rule would have a significant impact on operations of a
substantial number of small rural hospitals because most dialysis
facilities are freestanding. While there are 126 rural hospital-based
dialysis facilities, we do not know how many of them are based at
hospitals with fewer than 100 beds. However, overall, the 126 rural
hospital-based dialysis facilities would experience an estimated 0.2
percent decrease in payments.
Therefore, the Secretary has determined that this final rule will
not have a significant impact on the operations of a substantial number
of small rural hospitals.
E. Unfunded Mandates Reform Act (UMRA)
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2020, that
threshold is approximately $156 million. This final rule does not
mandate any requirements for state, local, or tribal governments in the
aggregate, or by the private sector. Moreover, HHS interprets UMRA as
applying only to unfunded mandates. We do not interpret Medicare
payment rules as being unfunded mandates, but simply as conditions for
the receipt of payments from the Federal Government for providing
services that meet Federal standards. This interpretation applies
whether the facilities or providers are private, state, local, or
tribal.
F. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on state
and local governments, preempts state law, or otherwise has federalism
implications. We have reviewed this final rule under the threshold
criteria of Executive Order 13132, Federalism, and have determined that
it will not have substantial direct effects on the rights, roles, and
responsibilities of states, local or tribal governments.
G. Regulatory Reform Under Executive Order 13771
Executive Order 13771, titled Reducing Regulation and Controlling
Regulatory Costs was issued on January 30, 2017. It has been determined
that this is a transfer rule, which imposes no more than de minimis
costs. As a result, this rule is not considered a regulatory or
deregulatory action under Executive Order 13771.
H. Congressional Review Act
This final rule is subject to the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.) and has been transmitted to the Congress
and the Comptroller General for review.
[[Page 71485]]
VII. Files Available to the Public via the Internet
The Addenda for the annual ESRD PPS proposed and final rulemakings
will no longer appear in the Federal Register. Instead, the Addenda
will be available only through the internet and is posted on the CMS
website at https://www.cms.gov/ESRDPayment/PAY/list.asp. In addition to
the Addenda, limited data set files are available for purchase at
https://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/LimitedDataSets/EndStageRenalDiseaseSystemFile.html. Readers who
experience any problems accessing the Addenda or LDS files, should
contact [email protected].
List of Subjects in 42 CFR Part 413
Diseases, Health facilities, Medicare, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR chapter IV as follows:
PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR
END-STAGE RENAL DISEASE SERVICES; PROSPECTIVELY DETERMINED PAYMENT
RATES FOR SKILLED NURSING FACILITIES; PAYMENT FOR ACUTE KIDNEY
INJURY DIALYSIS
0
1. The authority citation for part 413 continues to read as follows:
Authority: 42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a),
(i), and (n), 1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww.
0
2. Section 413.232 is amended by--
0
a. Revising paragraphs (b) introductory text, (b)(1), (e), and (g)
introductory text; and
0
b. Adding paragraphs (g)(4) and (h).
The revisions and additions read as follows:
Sec. 413.232 Low-volume adjustment.
* * * * *
(b) A low-volume facility is an ESRD facility that, as determined
based on the documentation submitted pursuant to paragraph (g) of this
section:
(1) Furnished less than 4,000 treatments in each of the 3 cost
reporting years (based on as-filed or final settled 12-consecutive
month cost reports, whichever is most recent, except as specified in
paragraph (g)(4) of this section) preceding the payment year; and
* * * * *
(e) Except as provided in paragraph (f) of this section and unless
extraordinary circumstances justify an exception, to receive the low-
volume adjustment an ESRD facility must provide an attestation
statement, by November 1st of each year preceding the payment year, to
its Medicare Administrative Contractor (MAC) that the facility meets
all the criteria established in this section, except that:
(1) For payment year 2012, the attestation must be provided by
January 3, 2012;
(2) For payment year 2015, the attestation must be provided by
December 31, 2014;
(3) For payment year 2016, the attestation must be provided by
December 31, 2015; and
(4) For payment year 2021, the attestation must be provided by
December 31, 2020.
* * * * *
(g) To receive the low-volume adjustment, an ESRD facility must
include in their attestation provided pursuant to paragraph (e) of this
section a statement that the ESRD facility meets the definition of a
low-volume facility in paragraph (b) of this section. To determine
eligibility for the low-volume adjustment, the MAC on behalf of CMS
relies upon as filed or final settled 12-consecutive month cost
reports, except as specified in paragraph (g)(4) of this section, for
the 3 cost reporting years preceding the payment year to verify the
number of treatments, except that:
* * * * *
(4) For payment years 2021, 2022, and 2023, the attestation
specified in paragraph (e)(4) of this section must indicate that the
ESRD facility meets all the criteria specified in this section, except
that, for a facility that would not otherwise meet the number of
treatments criterion specified in paragraph (b)(1) of this section
because of the COVID-19 PHE, the facility may attest that it furnished
less than 2,000 treatments in any six months during the cost-reporting
period ending in 2020. For any facility that so attests--
(i) The facility must also attest that it furnished treatments
equal to or in excess of 4,000 in the payment year due to temporary
patient shifting as a result of the COVID-19 PHE; and
(ii) The MAC relies on the attestation and multiplies the total
number of treatments for the 6-month period by 2.
(h) When an ESRD facility provides an attestation in accordance
with paragraph (e) of this section, for the third eligibility year, the
MAC verifies the as-filed cost report and takes one of the following
actions:
(1) If the MAC determines an ESRD facility meets the definition of
a low-volume facility as described in paragraph (b) of this section,
CMS adjusts the low-volume facility's base rate for the entire payment
year; or
(2) If the MAC determines an ESRD facility does not meet the
definition of a low-volume facility as described in paragraph (b) of
this section, the MAC reprocesses claims and recoups low-volume
adjustments paid during the payment year.
0
3. Section 413.234 is amended by adding paragraph (f) to read as
follows:
Sec. 413.234. Drug designation process.
* * * * *
(f) Methodology for modifying the ESRD PPS base rate to account for
the costs of calcimimetics in the ESRD PPS bundled payment. Beginning
January 1, 2021, payment for calcimimetics is included in the ESRD PPS
base rate using the following data sources and methodology:
(1) The methodology specified in paragraph (f)(2) of this section
for determining the average per treatment payment amount for
calcimimetics that is added to the ESRD PPS base rate uses the
following data sources:
(i) Total units of oral and injectable calcimimetics and total
number of paid hemodialysis-equivalent dialysis treatments furnished,
as derived from Medicare ESRD facility claims, that is, the 837-
institutional form with bill type 072X, for the third and fourth
quarters of calendar year 2018 and for the full calendar year 2019.
(ii) The weighted average ASP based on the most recent
determinations by CMS.
(2) CMS uses the following methodology to calculate the average per
treatment payment amount for calcimimetics that is added to the ESRD
PPS base rate:
(i) Determines utilization of oral and injectable calcimimetics by
aggregating the total units of oral and injectable calcimimetics in
paragraph (f)(1) of this section.
(ii) Determines a price for each form of the drug by calculating
100 percent of the values from the most recent calendar quarter ASP
calculations available to the public for the oral and injectable
calcimimetic.
(iii) Calculates the total calcimimetic expenditure amount by
multiplying the utilization of the oral and injectable calcimimetics
determined in paragraph (f)(2)(i) of this section by their respective
prices determined in paragraph (f)(2)(ii) of this section and adding
the expenditure amount for both forms.
[[Page 71486]]
(iv) Calculates the average per treatment payment amount by
dividing the total calcimimetic expenditure amount determined in
paragraph (f)(2)(iii) of this section by the total number of paid
hemodialysis-equivalent dialysis treatments in the third and fourth
quarter of calendar year 2018 and the full calendar year 2019.
(v) Calculates the amount added to the ESRD PPS base rate by
reducing the average per treatment payment amount determined in
paragraph (f)(2)(iv) of this section by 1 percent to account for the
outlier policy under Sec. 413.237.
0
4. Section 413.236 is amended by--
0
a. Revising paragraphs (a), (b) introductory text, (b)(2), (4) through
(6), (c), (d) introductory text, and (d)(2); and
0
b. Adding paragraph (f).
The revisions and addition read as follows:
Sec. 413.236 Transitional add-on payment adjustment for new and
innovative equipment and supplies.
(a) Basis and definitions. (1) Effective January 1, 2020, this
section establishes an add-on payment adjustment to support ESRD
facilities in the uptake of new and innovative renal dialysis equipment
and supplies under the ESRD prospective payment system under the
authority of section 1881(b)(14)(D)(iv) of the Social Security Act.
(2) For purposes of this section, the following definitions apply:
Capital-related asset. Asset that an ESRD facility has an economic
interest in through ownership (regardless of the manner in which it was
acquired) and is subject to depreciation. Equipment obtained by the
ESRD facility through operating leases are not considered capital-
related assets.
Depreciation. The amount that represents a portion of the capital-
related asset's cost and that is allocable to a period of operation.
Home dialysis machines. Hemodialysis machines and peritoneal
dialysis cyclers in their entirety (meaning that one new part of a
machine does not make the entire capital-related asset new) that
receive FDA marketing authorization for home use and when used in the
home for a single patient.
Particular calendar year. The year in which the payment adjustment
specified in paragraph (d) of this section would take effect.
Straight-line depreciation method. A method in accounting in which
the annual allowance is determined by dividing the cost of the capital-
related asset by the years of useful life.
Useful life. The estimated useful life of a capital-related asset
is its expected useful life to the ESRD facility, not necessarily the
inherent useful or physical life.
(b) Eligibility criteria. CMS provides for a transitional add-on
payment adjustment for new and innovative equipment and supplies (as
specified in paragraph (d) of this section) to an ESRD facility for
furnishing a covered equipment or supply only if the item:
* * * * *
(2) Is new, meaning within 3 years beginning on the date of the
Food and Drug Administration (FDA) marketing authorization;
* * * * *
(4) Has a complete Healthcare Common Procedure Coding System
(HCPCS) Level II code application submitted, in accordance with the
HCPCS Level II coding procedures on the CMS website, by the HCPCS Level
II code application deadline for biannual Coding Cycle 2 for durable
medical equipment, orthotics, prosthetics and supplies (DMEPOS) items
and services as specified in the HCPCS Level II coding guidance on the
CMS website prior to the particular calendar year;
(5) Is innovative, meaning it meets the criteria specified in Sec.
412.87(b)(1) of this chapter; and
(6) Is not a capital-related asset, except for capital-related
assets that are home dialysis machines.
(c) Announcement of determinations and deadline for consideration
of new renal dialysis equipment or supply applications. CMS will
consider whether a new renal dialysis supply or equipment meets the
eligibility criteria specified in paragraph (b) of this section and
announce the results in the Federal Register as part of its annual
updates and changes to the ESRD prospective payment system. CMS will
only consider a complete application received by CMS by February 1
prior to the particular calendar year. FDA marketing authorization for
the equipment or supply must occur by the HCPCS Level II code
application deadline for biannual Coding Cycle 2 for DMEPOS items and
services as specified in the HCPCS Level II coding guidance on the CMS
website prior to the particular calendar year.
(d) Transitional add-on payment adjustment for new and innovative
equipment and supplies. A new and innovative renal dialysis equipment
or supply will be paid for using a transitional add-on payment
adjustment for new and innovative equipment and supplies based on 65
percent of the MAC-determined price, as specified in paragraph (e) of
this section. For capital-related assets that are home dialysis
machines, payment is based on 65 percent of the pre-adjusted per
treatment amount, as specified in paragraph (f)(1)(ii) of this section.
* * * * *
(2) Following payment of the transitional add-on payment adjustment
for new and innovative equipment and supplies, the ESRD PPS base rate
will not be modified and the new and innovative renal dialysis
equipment or supply will be an eligible outlier service as provided in
Sec. 413.237, except a capital-related asset that is a home dialysis
machine will not be an eligible outlier service as provided in Sec.
413.237.
* * * * *
(f) Pricing of new and innovative renal dialysis equipment and
supplies that are capital-related assets that are home dialysis
machines. (1) The MACs calculate a pre-adjusted per treatment amount,
using the prices they establish under paragraph (e) of this section for
a capital-related asset that is a home dialysis machine, as defined in
paragraph (a)(2) of this section, as follows:
(i) Calculate an annual allowance to determine the amount that
represents the portion of the cost allocable to 1 year, using the
straight-line depreciation method, by dividing the MAC-determined price
by its useful life of 5 years.
(ii) Calculate a per treatment amount for use in calculating the
pre-adjusted per treatment amount by dividing the annual allowance, as
determined in paragraph (f)(1)(i) of this section, by the expected
number of treatments.
(iii) Calculate a pre-adjusted per treatment amount to determine
the amount that is adjusted by the 65 percent under paragraph (d) of
this section, by subtracting the average per treatment offset amount
(as determined using the data sources and methodology specified in
paragraphs (f)(2) and (3) of this section, respectively, of this
section) from the per treatment amount (as determined in paragraph
(f)(1)(ii) of this section) to account for the costs already paid
through the ESRD PPS base rate for current home dialysis machines that
ESRD facilities already own.
(2) The methodology specified in paragraph (f)(3) of this section
for determining the average per treatment offset amount uses the
following data sources:
(i) Dialysis machine and equipment cost, total cost across all
dialysis modalities, the number of hemodialysis-equivalent home
dialysis treatment counts, and the number of hemodialysis-equivalent
total treatment
[[Page 71487]]
counts are obtained from renal facility cost reports (CMS form 265-11)
and hospital cost reports (CMS form 2552-10) using calendar years 2017-
2019 cost reports.
(A) Dialysis machine and equipment costs are obtained by summing
lines 8.01 through 17.02 from Worksheet B, Column 4 for renal facility
cost reports, and by summing lines 2 through 11 from Worksheet I-2 for
hospital cost reports.
(B) Total cost across all dialysis modalities are obtained by
summing lines 8.01 through 17.02 from Worksheet C, Column 2 for renal
facility cost reports, and by summing lines 1 through 10 from Worksheet
I-4, Column 2 for the hospital cost reports.
(C) Hemodialysis-equivalent total treatment counts are obtained by
summing lines 8.01 through 17.02 from Worksheet C, Column 1 for renal
facility cost reports, and by summing lines 1 through 10 from Worksheet
I-4, Column 1 for the hospital cost reports.
(D) Hemodialysis-equivalent home dialysis treatment counts are
obtained by summing lines 14.01 through 17.02 from Worksheet C, Column
1 for renal facility cost reports, and by summing lines 7 through 10
from Worksheet I-4, Column 1 for the hospital cost reports. In both
renal facility and hospital cost reports, home Continuous Ambulatory
Peritoneal Dialysis and home Continuous Cyclic Peritoneal Dialysis are
reported as patient weeks, so a conversion factor of 3 is applied to
obtain hemodialysis-equivalent treatment counts.
(ii) [Reserved]
(3) CMS uses the following methodology to calculate the average per
treatment offset amount for home dialysis machines that is subtracted
from the per treatment amount as determined in paragraph (f)(1)(ii) of
this section to determine the pre-adjusted per treatment amount
specified in paragraph (f)(1)(iii) of this section:
(i) Calculates annualized values for calendar year 2018 at the ESRD
facility level for the metrics specified in paragraph (f)(2)(i) of this
section by dividing the numbers of days the cost report spanned to
compute a per-day metric, then multiplying the resulting value by the
number of days in 2018 the cost report covered to compute the metrics
attributable to the period covered by the cost report in 2018. Next,
for ESRD facilities with multiple cost reports covering 2018 the
resulting metrics are aggregated. Finally, each ESRD facility's
aggregated metrics are annualized to cover the full calendar year 2018.
The annualization factor for an ESRD facility is the total number of
days in 2018 divided by the total days in 2018 covered by the ESRD
facility's cost report(s).
(ii) Calculates an estimated home dialysis machine and equipment
cost for each ESRD facility by multiplying the annualized dialysis
machine and equipment cost determined in paragraph (f)(3)(i) of this
section by the ESRD facility's hemodialysis-equivalent home dialysis
treatment percentage. The hemodialysis-equivalent home dialysis
treatment percentage for each facility is calculated by dividing
annualized hemodialysis-equivalent home treatment count determined in
paragraph (f)(3)(i) of this section by annualized hemodialysis-
equivalent treatment count across all modalities determined in
paragraph (f)(3)(i) of this section.
(iii) Calculates an average home dialysis machine and equipment
cost per home dialysis treatment for calendar year 2018 by dividing the
sum of the estimated home dialysis machine and equipment cost in
paragraph (f)(3)(ii) of this section across all ESRD facilities by the
sum of annualized hemodialysis-equivalent home treatment counts
determined in paragraph (f)(3)(i) of this section across all
facilities.
(iv) Calculates the amount subtracted from the pre-adjusted
treatment amount determined in paragraph (f)(1)(iii) of this section by
inflating the average home dialysis machine and equipment cost per home
dialysis treatment for calendar year 2018 determined in paragraph
(f)(3)(iii) to calendar year 2021. The average home dialysis machine
and equipment cost per home dialysis treatment for calendar year 2018
is inflated to calendar year 2021 by multiplying this value by the
payment rate update factor required under section 1881(b)(14)(F)(i) of
the Social Security Act for calendar years 2019, 2020, and 2021. This
value is then divided by a scaling factor to be converted to the ESRD
PPS payment scale. The scaling factor is calculated by dividing the
calendar year 2018 total cost per treatment inflated to calendar year
2021 by the average ESRD PPS payment per treatment projected for
calendar year 2021.
(v) Effective January 1, 2022, CMS annually updates the amount
determined in paragraph (f)(3)(iv) of this section by the ESRD bundled
market basket percentage increase factor minus the productivity
adjustment factor.
0
5. Section 413.237 is amended--
0
a. In paragraphs (a)(1)(i) through (iii) by removing the semicolon at
the end of the sentence and adding a period in its place;
0
b. In paragraph (a)(1)(iv) by removing ``; and'' and adding a period in
its place; and
0
c. By revising paragraph (a)(1)(v).
The revision reads as follows:
Sec. 413.237 Outliers.
(a) * * *
(1) * * *
(v) Renal dialysis equipment and supplies, except for capital-
related assets that are home dialysis machines (as defined in Sec.
413.236(a)(2)), that receive the transitional add-on payment adjustment
as specified in Sec. 413.236, after the payment period has ended.
* * * * *
Dated: October 28, 2020.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
Dated: October 28, 2020.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2020-24485 Filed 11-2-20; 4:15 pm]
BILLING CODE 4120-01-P
